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HomeMy WebLinkAbout10/22/1998 Minutes - Jt. Meeting with RDA2 MINUTES OF THE CITY COUNCIL JOINT CITY COUNCIL/REDEVELOPMENT AGENCY MEETING OCTOBER 22, 1998 COUNCIL CALL TO ORDER: Mayor Herrera called the City Council meeting to order at 5:13 p.m. in the South Coast Air Quality Management District Auditorium, 21865 E. Copley Drive, Diamond Bar, California. AGENCY CALL TO ORDER: Chairman Huff called the Redevelopment Agency to order at 5:13 p.m. PLEDGE OF ALLEGIANCE: Mayor Herrera. CITY COUNCIL ROLL CALL: Council Members Ansari, Huff, O'Connor, and Mayor Herrera. Mayor Pro Tem Chang was absent. AGENCY ROLL CALL: Agency Members Herrera, O'Connor, Vice Chairman Ansari and Chairman Huff. Agency Member Chang was absent. PUBLIC HEARING: 2.1 DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND TOOLEY & COMPANY - Tooley & Co., the developer, has entered into an agreement for purchase of Lot 2 in the Gateway Corporate Center, which site is located within the Redevelopment Project area. The developer intends to construct two office buildings with three stories and 82,944 gross sq. ft. each. The developer intends to lease a portion of the project to a Fortune 500 company which will employ approximately 400 employees and has requested Agency assistance in acquisition of the site. Mayor Pro Tem Chang arrived at 5:18 p.m. CM/Belanger reported that the project was approved by the Planning Commission at its October 13, 1998 meeting. One of the goals of the Redevelopment Agency Plan adopted in July 1997 was to attract and enhance business within the project area. This project, as proposed, accomplishes the goal of business expansion/business attraction within the project area and meets the goals and objectives of the Redevelopment Project Area Plan. Chair/Huff declared the Public Hearing open. Dave Sears, Tooley & Co., presented an overview and renderings of the proposed project. One of the key criteria in attracting key tenants to the area is to provide a development with an over -standard parking facility. This development has 4.5/thousand parking stalls per rentable sq. ft. He presented a letter from Travelers Insurance Group stating that Travelers has committed, subject to the outcome of OCTOBER 22, 1998 PAGE 2 JOINT COUNCIUREDEV. AGENCY tonight's discussions, to occupy approximately 60,000 sq. ft. as anchor of this project, bringing in excess of 350 individuals into the project. Travelers looks forward to becoming a corporate citizen of D. B. Felice Acosta, Rosenow, Spevecek Group, presented the Disposition and Development Agreement with Tooley & Co. and discussed the Summary Report required by California Health and Safety Code 33433. The Summary Report was provided on the date of publication of the first public notice for the hearing, October 8, 1998, and was available at City Hall for public inspection. The report describes the general aspects of the financial agreement and any other pertinent terms that would have an impact upon these deliberations. John Yonai, Rosenow, Spevecek Group, reviewed the economic value of the project. The proposed terms of the land contract that Tooley & Co. has entered into with the owner of the property is at a cost of approximately $12.25/sq. ft. for a total of $5,666,012.50. The developer is seeking a write-down of approximately $1.966 million. Review of the detailed construction estimate provided by Tooley & Co. indicates that their costs are reasonable and that the amount of assistance required supports their request and provides a reasonable return to the developer. The amount of land write-down from about $12.25/sq. ft. for land to $8.00/sq. ft. is justified. Dave McEwen, Straddling, Yocca, Carlson & Rauth, reviewed the terms of the draft of the Disposition and Development Agreement which provides for acquisition of real property from AEW, the current property owner and the immediate and simultaneous sale .of that property to Tooley & Co. for a discounted price of the amount of the Redevelopment Agency assistance to this project. In order to accomplish this transaction in a timely manner, the developer is advancing the full acquisition cost of the property and in turn is taking back a note in the amount of $1.966 million. The note provides for periodic payments of two installments to the developer upon satisfaction of certain conditions precedent. The first condition is the production of a lease with The Travelers Group which provides for a 10 -year term when they relocate to the proposed facility. At that time, the first installment of the developer loan is due. Upon completion of the project and the receipt of a favorable judgement in the pending litigation, the balance of the developer note is due and payable. He pointed out that the timing of the balance payment is important because the terms of the agreement provide for an adjustment of the full amount of the payment by the Redevelopment Agency should the developers cost of developing the project be less than 90% of the OCTOBER 22, 1998 PAGE 3 JOINT COUNCIUREDEV. AGENCY projected cost. He explained other provisions contained within the development agreement. AM/Herrera asked for clarification of the due date of the first installment. Mr. McEwen responded that the first installment payment is due upon presentation of a fully executed lease from The Travelers Group. In response to AM/Chang, Mr. McEwen confirmed that there is no upward adjustment of the Redevelopment Agency's assistance in the event that the developer's costs exceed the amount of the projected hard costs. AM/O'Connor asked for an explanation of the Redevelopment Agency's Revolving Loan Fund, Mr. McEwen explained that, within Redevelopment Law, there is a provision for the City to make a loan or a grant to the Redevelopment Agency for some amount of money. That money can then be used by the Redevelopment Agency to acquire land or prepare land for development in the Redevelopment Project Area. The Redevelopment Revolving Fund was established by Council on Tuesday, October 20, 1998. Mr. Sears verified for AM/O'Connor that the actual contract amount is $5,666,012.50. Mr. McEwen and CM/Belanger discussed proposed changes and corrections with respect to the Disposition of Development Agreement. In response to AM/O'Connor, Mr. McEwen stated that the pending litigation has gone to trial and all persons interest have been named. There is no money involved in the pending litigation and the only potential remedy against the Agency is invalidation of the Redevelopment Plan. In response to AM/O'Connor, Mr. Sears explained that the parking size was increased with the intent that it would render the project more marketable for future tenants. No additional costs are associated with construction of the additional parking. In response to Chair/Huff, Mr. McEwen stated that the language of the agreement should be limited solely to the monies contained in the OCTOBER 22, 1998 AGENCY PAGE 4 JOINT COUNCIL/REDEV. Redevelopment Revolving Fund. The documents will be cleaned up and adjusted before final execution. Art O'Daly congratulated the City and the Redevelopment Agency for attracting a quality organization to the City. Following discussion, M/Herrera moved, C/Ansari seconded, to adopt Resolution No. 98-65 entitled "Resolution of the City of Diamond Bar, California approving a Disposition and Development Agreement By and Between the Diamond Bar Redevelopment Agency and Tooley & Company. Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS - Ansari, Huff, O'Connor, MPT/Chang, M/Herrera NOES: COUNCIL MEMBERS - None ABSENT: COUNCIL MEMBERS - None Moved by AM/Herrera, seconded by Chair/Huff, to adopt Resolution No. RA98-9 entitled "Resolution of the Diamond Bar Redevelopment Agency of Diamond Bar, California, Approving a Disposition and Development Agreement By and Between the Diamond Bar Redevelopment Agency and Tooley & Company. Motion carried by the following Roll Call vote: AYES: AGENCY MEMBERS - Chang, Herrera, O'Connor, VC/Ansari, Chair/Huff NOES: AGENCY MEMBERS - None ABSENT: AGENCY MEMBERS - None 3. ADJOURNMENT: There being no further business to conduct, Chair/Huff adjourned the Redevelopment Agency meeting at 6:36 p.m. and M/Herrera adjourned the City Council meeting at 6:36 p.m. Al�n LYNdA BURGESS�City Clerk ATTE T: Mayor ATTEST: - Chairman �Z L) LYNDA BURGESS, Agency Secretary