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HomeMy WebLinkAboutSPJT Minutes 1985-01-09SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 1 In the Council Chambers of the City of San Rafael, January 9, 1985 at 7:30 PM. Special Joint Meeting: Present: Lawrence E. Mulryan, Agency Chairman/Mayor Dorothy L. Breiner, Agency Member/Councilmember Gary R. Frugoli, Agency Member/Councilmember Richard Nave, Agency Member/Councilmember Jerry Russom, Agency Member/Councilmember Absent: None Also Present: Robert F. Beyer, Executive Director/City Vanager; Jeanne M. Leoncini, Agency Secretary/City Clerk; Gary T. Ragghianti, Agency Attorney/City Attorney REDEVELOPMENT AGENCY/CITY COUNCIL 1. REVIEW OF FOUR PROPOSALS FOR SECOND AND LINDARO PROJECT SITE (former PG&E CORPORATION YARD) (RA) - File R-239 Redevelopment Program Manager Ours reported that as a result of seeking a developer for the former PG&E site, four proposals have been accepted for consideration. a. Transamerican Realty had two parts - 280 rental units and 200 room hotel, offering at $3,100,000. Second part is a backup proposal of 280 rental units and a 38,000 sq. ft. supermarket, offering $2,800,000. b. Topa Management of Los Angeles - 230 rental units and 35,000 sq. ft. retail and office complex, offering $4,480,000. A second plan was for 116 rental units and 45,000 sq. ft. Albertson's super market and 18,000 sq. ft. of retail, offering $4,250,000. C. U/C Construction of San Francisco - 376 rental units, offering $4,500,000. d. American Diversified of Larkspur - 300 rental units, 116,000 sq. ft. office space, 35,000 sq. ft. retail and 5,000 sq. ft. restaurant, offering $5,500,000. All plans have been reviewed by the various Boards in the City including Keyser Marston Associates, Inc. who reviewed the economics of the plans with the City's Public Works Department reviewing the traffic impacts. One factor is the net purchase price to the City from the developments. American Diversified - $5,188,OOO;U/C Construction - $3,456,000; Transamerica Realty - $2,851,800;Topa - $3,856,900. A number of issues are to be addressed before making a final selection such as: The land use; Revenue generation; Feasibility of land use in light of other developments; Importance of absence of contingencies; The net purchase price. Mr. Ours indicated that two proposals, Transamerica Realty and American Diversified lead the field when all factors are considered. Staff indicated that a hotel to be built in the downtown area which is a part of the proposal of the Transamerica Realty is an exciting plan if it is feasible. However, a feasibility study must be completed and this could delay getting the project started by 90/120 days, and an additional carrying cost would result to the Agency on the interest being paid on the Quail Hill note. Also, there is an approved hotel site at the Civic Center, and they have questioned the feasibility of having two hotels in San Rafael. Should the Agency desire a hotel on the site, it is recommended that staff be instructed to negotiate an agreement with Transamerica calling for a feasibility study to be paid for by Transamerica and the cost of the agreement will be the interest cost to the Agency for holding the property until such time as an exclusive right to negotiate for the purchase of the property is signed, or Transamerica is no longer interested; then negotiations would commence with American Diversified. SRRA/SRCC FI1`ZLlTES (Special Joint) 1/9/85 Page 1 SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 2 Should the Agency decide a hotel is not appropriate at this time, it is then recommended that staff be instructed to negotiate an exclusive right to negotiate for the purchase of the site with American Diversified. Agency Chairman/Mayor Mulryan suggested having the second item on the agenda be a part of the first item as they were both related. 2. REPORT RE LETTER FROM STATE DEPARTMENT OF HEALTH SERVICES RE PG&E SITE (ED/CM) - File R-239 Agency Chairman/Mayor Mulryan asked Mr. Ours what is the expected time when a final answer from the State would arrive concerning contaminants found on the site; when will the mitigation plan be filed; how long will it take before the mitigation is accepted or rejected; and how long will it take for mitigation to occur. Executive Director/City Manager Beyer responded that PG&E has hired the same firm that is working at Fairchild, who is putting together two or three proposals which hopefully will be presented to PG&E by the end of the month. The report will then be presented to the State Health people and at that time a solution to the problem will be worked out. Mr. Beyer stated while it looked like there are three options, that, depending on the cleanup proposal approved, the final conditions could be modified. Meetings are being held between the City and PG&E in processing the cleanup, and it is estimated that the property will be available about a year from now, depending on the type of cleanup necessary,and how the State interprets what the cleanup will do and if it impacts the land uses proposed. Agency Member/Councilmember Frugoli asked what the actual purchase price was that the City paid for the PG&E property. Mr. Ours indicated it was an exchange of property which included the Quail Hill property at a cost of $3,750,000 for the purchase of land plus the Bacci property, for a total of $4,500,000. There is $3,100,000 owed on the Quail Hill property with quarterly interest payments of approximately $80,000 being paid. Agency Chairman/Mayor Mulryan then called upon the representatives of the proposers. Attorney Albert Bianchi, representing TRANSAMERICA REALTY, agreed with Executive Director/City Manager Beyer on the time frame of one year for the cleaning up of the property. Mr. Bianchi covered mitigation plans with PG&E to the State of California; the letter from the State's Department of Health Services and the Transamerica Realty proposal, and asked that the City be required to have all of the contaminants removed so the property can be used in an unrestricted manner and without a Deed Restriction. Mr. Bianchi indicated that if there were to be a delay of any sort occasioned by the inability or unwillingness of Transamerica Realty to move forward, they will pay for that delay from the time the property is ready on the part of the City to be delivered or conveyed to the buyer. On the subject of having two hotels in San Rafael; Mr. Bianchi stated that, if a feasibility study shows that two hotels can be sustained in San Rafael, it would only benefit the City. However, presently, the second hotel is processing their application. The burden therefore is on Trans- america Realty to show the feasibility of having a second hotel, and if it proves to be unfeasible, the City would not want it and neither would Transamerica. Mr. John Hoffmire of AMERICAN DIVERSIFIED indicated that in conversations with PG&E, he has been informed that the site would be corrected without the necessity of hauling all the material away. Mr. Hoffmire indicated that their project does not have any conditions attached to it and American Diversified is ready to go forward, and stated that a time delay could be used by them in preparing for construction. American Diversified is also offering the full price for the property. SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 2 SRRA/SRCC MINUTES (Special Joint) 1/9/85 page 3 Mr. Joseph Fitzpatrick of the U/C CONSTRUCTION indicated that the need of the community in San Rafael is housing and that he has increased his proposal from 376 units to 410 units. Agency Chairman/Mayor Mulryan inquired of Mr. Fitzpatrick if his project was dependent on the subsidized financing, and Mr. Fitzpatrick replied in the positive. Mr. Abraham Yang, consultant with Joseph Fitzpatrick's Development Company commented on the following points: 1) That this site, being one of the few sites available for affordable housing will not meet with neighborhood opposition, and 2) Although there are other sites to continue commercial development, this may be San Rafael's only chance in developing housing within close proximity to the downtown area, transportation, recreation facilities and freeway access. Mr. John Wallace with the Carpenter's Union and Building Trades, who also represented the Ecumenical Association for Housing, informed the Council of the Disposition and Development Agreement dated July 5, 1983, with Descon Partnership on the first phase of this project which was moving PG&E to the Andersen location, which has, under Part 6 - General Provisions, an applicable law section. Paragraph 610 states in full; "This agreement shall be interpreted under and pursuant to the laws of the State of California". He then stated that they believe that th,e labor code sections that apply to these agreements should be specifically mentioned to protect the public's interest from fraud, cash payments and substandard pay for substandard work. He then recommended the addition of two paragraphs under Section 3, Construction and Improvements. "1) 3.12 - The prevailing rates of hourly wages applicable to the work to be performed have been determined by the State of California, Department of Industrial Relations, pursuant to Sections 1770, 1773 and 1773.1 of the Labor Code. Said rates apply to this Disposition and Development Agreement. Copies of the determination are on file with th-e office of the Department of Public Works, City of San Rafael. 2) 3.13 - Contractors for the developers shall show proof of participation as a signatory to a recognized apprenticeship and/or training program under Chapter 4 (commencing at 3070) Division 3 of the California Labor Code and certified by the State of California Division of Apprenticeship Standards, where such programs exist for the work to be performed." Mr. Wallace, on behalf of EAH also urged that affordable housing be built on the site. Agency Chairman/Mayor Mulryan indicated to Mr. Wallace, that the two additional paragraphs which he read would be referred to the Agency/ City Attorney for review and report back to Agency/Council on the effect it might have on the bid proposal. Mr. Richard Tarrant, attorney representing Mr. Joseph Shekou, the developer and owner of the Civic Center North project,indicated Mr. Shekou is in the process of developing plans for the construction of a 200 room hotel on that property. Mr. Tarrant referred to his letter to the Agency/Councilmembers on this subject, and responded to some of the statements by Mr. Albert Bianchi. Mr. Tarrant asked that there be no competition with them on the hotel, and mentioned there was a far more superior site along the West Francisco Boulevard area, insofar as visibility is concerned, and if, in fact, the market determines that the competition for Mr. Shekou in an unsubsidized manner is warranted, it will materialize, and a Developer will come forward with an appropriate proposal that will not involve publi(e: subsidy of the program. Mr. Tarrant, in responding to Mr. Bianchi's statement that Agency/Council wait until a feasibility report is made re having two hotels in San Rafael, stated that this would result in Mr.. Shekou having his plans in abeyance until the issue is resolved. Mr. Paul Gibbs, General Manager of the Clarion Hotel in San Rafael, stated that currently, there is 60i0 occupancy in his 230 room hotel, and indicated that in his opinion, the market cannot stand an additional 400 room addition, besides.. Mr. Shekou's proposed hotel at the Civic Center. SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 3 SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 4 Mr. Richard Gosse, representing San Rafael Citizens for Better Government, reminded the City that one of the proposals recognizes the need for housing and urged support for.the U/C CONSTRUCTION proposal. Mr. Stanley Ott commended staff and the Agency/City for the action on the Housing Element and indicated for the record, that as a member of the San Rafael Housing Corporation, their action is on record favoring the maximum housing and the use of the site as a housing opportunity site. Council/Agency then recessed for five minutes to causus. Meeting was reconvened and Agency Member/Councilmember Breiner commented on Table 2 of the staff report on Retail Sales Tax, indicating that the number of housing units on a piece of property would affect the retail traffic on the site,and the retail sales tax generated was not quantified in the report,and should be addressed. Agency Member/Councilmember Frugoli spoke to what a hotel occupancy tax would generate; also, the difference in price whereby American Diversified is paying $5.5 million compared to Transamerica Realty paying $3.2 million, which would take perhaps 7 or 8 years to make up the difference. Mr. Frugoli pointed out that Agency/Council had made a commitment when the Northgate Plan went into effect, to have a hotel built at the Civic Center. Agency Chairman/Mayor Mulryan agreed with Agency Member/Councilmember Frugoli's comments and agreed with Mr. Tarrant's comment that if property is sold at anything below market, that is a subsidy. Agency Member/Councilmember Russom asked staff if they had any idea! what the level of cost would be to clean up the site so there would be no Deed Restriction and how long it will take to get that information. Executive Director/City Manager Beyer responded that it probably would be at the end of January before any information is available. Agency Chairman/Mayor Mulryan inquired of Executive Director Beyer, whether he thought it would be premature to have a decision made tonight and Mr. Beyer replied he did not, because based on meetings with PG&E and the State, that this will be a developable site without any Deed Restriction to hamperthe financing. The issue is the cost to clean the site and if PG&E will pay for it. Mr. Beyer urged that a decision be made tonight. Agency Members/Councilmembers determined that two out of four proposals were most attractive; Transamerica Realty and American Diversified, and acknowledged that Transamerica Realty's proposal was an excellent one. After further discussion, Agency Member/Councilmember Frugoli moved and Agency Member/Councilmember Breiner seconded, to award the Exclusive Rights to American Diversified to enter into negotiations for a Development Agreement with the City based on the overall proposal submitted,and a decision that the City cannot allow for the time to await a study on whether or not a second hotel proposed by Transamerica Realty would be feasible. Also, the price the Agency will recieve from American Diversified is approximately $1 million more than the City orignally paid for the property. AYES: MEMBER/COUNCILMEMBERS: Breiner, Frugoli, Nave, Russom & Chairman/ Mayor Mulryan NOES: MEMBER/COUNCILMEMBERS: None ABSENT: MEMBER/COUNCILMEMBERS: None SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 4 SRRA/SRCC MINUTES (Special Joint) 1/9/85 Page 5 The special joint meeting adjourned to the regular City Council meeting on January 21, 1985. JEANNE M�'I INI, genc Secretary/City Clerk APPROVED THIS DAY OF 1985 AGENCY CHAIRMAN/MAYOR OF THE CITY OF SAN RAFAEL SRRA/SRCC MINUTES (Speical Joint) 1/9/85 Page 5