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HomeMy WebLinkAboutSEPTEMBER 1,1992 I I Gnu '\ ~ 0'<'1'/19"", ,,, 3'4': 0 2 77 CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY ' CLERK a. ROLL CALL b. COMMERCIAL REAL ESTATE BROKERS (NW & SW Corner Sites - Htg. Dr. & 2nd Avenue) ALLE CO. J650 -(;'N/'/f; MINUTES CITY COUNCIL OF THE CITY OF ARCADIA and the ARCADIA REDEVELOPMENT AGENCY ADJOURNED REGULAR MEETING (STUDY SESSION) SEPTEMBER 1, 1992 The City Council and the Arcadia Redevelopment Agency met in an Adjourned Regular Meeting (Study Session) at: 5:30 p. m., Tuesday, September 1, 1992, in the Conference Room of City Hall Council Chambers. PRESENT: Councilmen Ciraulo, Harbicht, Loj eski, Margett and Fasching None ABSENT: Consideration of presentations for an exclusive listing for the Northwest Corner and Southwest Corner sites (Huntington Drive and Second Avenue) by commercial real estate brokers. John AIle and Linda Palmer, representing the Alle Company of Pasadena, presented their proposal for the marketing of the Southwest and Northwest Corner sites and responded to the Agency's questions. Mr, Alle noted that the procedure for marketing these sites would heavily utilize mailings to supplement direct canvassing and direct contacts. They propose to use direct mailings to owner-users type of prospects. The firm consists of twelve (12) brokers and two (2) offices in Pasadena. The Alle Company probably does their greatest volume of work in the tri-city area. They are very active within the Asian community who, Mr. Alle stated, seem to be the most active players in commercial real estate at this tine. The Asian investors are heavily into land-banking, The Alle Company propose to cooperate as much as they can with the rest of the brokerage community. They will make it very easy for other brokers who want to work with them, if the Alle Company does not bring in the buyer. Mr. Alle said he would sit down with staff, go over the types of uses he and staff think would be appropriate for both sites, and put: together a target market. They will then focus their mailings to such, which will be sent out every ten days or two weeks to a different retail or office group, etcetera. They propose to also utilize advertisements in the Los Angeles Times and the Wall Street Journal, as well as some Asian newspapers. Further, one of their first target groups would be Asian banks. In response to a question from the Agency, Mr. Alle stated that at this time they would not change the zoning on these properties ,.. they do not: wish to commit to a change in land use, however, Mrs. Palmer added that their marketing package to carry to offices out: of state will explain the properties and also the facts and background of Arcadia; what the goals are of the City; the economic base and so forth. The Alle Company has quite a few contacts with developers, Mr. Alle noted, and also has had over $110,000,000 in sales and leasing in Pasadena on the west side, with investors nationwide. 1 9/1/92 34:0278 CB COM'L Mr. Carl Anderson and Brook Blakesley presented the CB marketing method and experience in this field. Mr. Blakesley has been in the commercial real estate business for twelve (12) years, and stated in part that CB Commercial has built a redevelopment project in Fountain Valley of 400,000 square feet with Pacific Mutual. In Riverside CB had a 300-acre project; also the Fullerton Towne Center which was a 35-acre redevelopment proj ect and was a six-year process to complete. Mr. Anderson commented in part that he has been in commercial real estate for almost thirteen (13) years. He is vice- president of CB Commercial and has been fully involved in the type of proj ects similar to the Northwest and Southwest Corner sites, this in reference to the Gribble project on Huntington Drive in Arcadia, Arcadia Gateway Center. Mr, Anderson noted that he is an Arcadia resident and is very interested in seeing quality development in the City. Mr. Blakesley presented the background of CB Commercial which is a privately held company based in Los Angeles with twelve (12) offices in Los Angeles, Ventura and Orange Counties. They have approximately 144 office specialists and 90 retail specialists serving those areas. Each CB office maintains a database of users, tenants, and developers, CB will use this information in their marketing efforts which they have proposed for the Northwest and Southwest Corner sites. In addition, CB provides fee services, appraisal consultation, financing and property management. Both Mr. Blakesley and Mr. Anderson work the San Gabriel Valley and have developed many personal contacts, Mr. Anderson noted, They feel that, for this project, they will end-up with probably two groups: a user such as CIGNA; or a developer with a tenant where elements of the transaction would include the land value, the rentals and the construction costs. Mr. Anderson commented also that the market is changing so fast that old data previously received cannot be relied upon; the commercial real estate business is changing and CB has the capability to provide the Agency with current market data so that they can ground a particular transaction within the marketplace, Further, the old appraisal basis cannot be relied upon at this time since appraisals do not take into consideration what may happen in the future, Traditional financing is not happening at this time, Mr, Anderson noted, non-traditional financing such as Agency participation may 'be very important for the Agency to consider, In response to Chairman Fasching, Mr, Anderson commented that he views the sites in question as office sites. Although, they are not discounting retail destination sites because the properties are located on Huntington Drive. In reference to CB's marketing strategy, Mr, Anderson stated in '\ part that his company is prepared to pay for periodical advertising and newspaper advertising, and whatever else the Agency may feel is necessary to promote the sites, However, it is his belief that the property is going to sell based on personal contact with people and users in the marketplace that he and Mr. Blakesley know, and in convincing them that they can build a development at these sites cheaper than they can purchase an existing product, retrofit it, and put a tenant in, CHARLES DUNN CO. Jeff Bowen, representing the Charles Dunn Company stated in part as background information that he has lived in Arcadia since 1950; he attended Arcadia schools and his children as well; he has been very active in the community in various organizations. The Charles Dunn Company has been in existence for 70 years and is still managed by the sons of Charles Dunn. Mr, Bowen's marketing approach to the Northwest and Southwest Corner sites would be to treat these sites separately. The 0,6 ~C_ 2'1'1/'16 2 9/1/92 I I I I HAYES COMPANY tJ680 - ZI.('1/ Y6 34:0279 two parcels, he noted, are not going to sell to the same person ... they're different uses, He would market them separately with a different brochure for each parcel. The Charles Dunn Company is a part of Encore International, which is an international and national network of 112 independent real estate companies, as opposed to branch offices of one major company. Additionally, these independent real estate companies were "hand selected" and Charles Dunn Company will feed off of this network and will get the Arcadia parcels into the network of information on properties. Mr. Bowen stated that he sees two separate uses for these sites: 1) If the Northwest Corner parcel is retail, it should be destination- only oriented, An office supply type of retail was used as an example. If the Southwest Corner site were to be retail, the "signage and so forth becomes critical". If the Southwest site were to be an office building it would be on a main thoroughfare and is more easily found then the Northwest Corner site. Mr. Bowen noted also that properties have decreased in sales value approximately 30% since 1988 or 1989, which means that rentals are down also. This means these two parcels are worth less than,they were worth in the 1988-89 time frame. Dave Powell and Mr, Dan Hayes were present on behalf of the Hayes Company of Pasadena, Mr. Powell stated in part that he has had a lot of experience in this area having worked for the Redevelopment Agency in Duarte twice, and also two projects in Arcadia on Huntington Drive. Mr. Hayes was involved with the City of Pasadena. The brokerage business is hard work and has to be done right ... many people have to be contacted, Finding the right developer for these parcels who will come in and put down 40% equity probably isn't realistic for an office building type project. Mr. Powell stated that he has never heard from the Agency of what they want brokers to do on the two projects under discussion. At one time retail was wanted on the Southwest ,corner site, then it was an office building, then it was a restaurant ... and now we are back to a vacant lot. Member Harbicht commented that the Agency has been very specific as to what they are looking for on these parcels and staff had outlined the Agency's thinking. He then asked Mr, Powell, "If we were to have an exclusive listing with you, what would you do differently that would enhance the chances of getting the property marketed?". This in reference to Mr' Powell's previous experience with the Southwest Corner site, Mr. Powell responded in part that the difference is in the responsibility an exclusive listing places on a broker, since the broker can be fired if he does not perform. The Hayes Company will contact every retail developer "left standing". If that does not work they will go to every retail tenant "left standing that is still expanding". His firm has given special emphasis to working with every city along the 210 Freeway corridor. He believes, over the past 12 years or so they have been one, if not the most active commercial firm along the corridor. The Hayes Company will make a commitment to the Agency and they are going to see it through, and they probably will succeed. They will develop a strategy in conjunction with the City's wishes. Further, although there is very little expansion going on, Hayes & Company have an all-cash offer on the Johnson and Johnson property in Pasadena, which is a nine-plus acre site and Johnson and Johnson are delighted with the offer. In response to Agency Member Harbicht, Mr. Powell said that the Hayes and Company relationship with the Asian developers is not too strong, although they have worked with a number of Asian developers who were not real active in the San Gabriel Valley doing the kind of projects as the project under discussion. 3 9/1/92 34:0280 At the conclusion of the presentations Chairman Fasching commented that before the selection of a broker is taken up at a regular meeting, the Agency would like the new City Manager, Don Duckworth, to get involved and become familiarized with the proposals presented this evening. The next step would then be to get his input and make some kind of a decision and direction as to which way to proceed. An exchange ensued between Agency Members related to placing the selection of the broker on the next meeting agenda, September 22nd. Member Harbicht will not be in attendance on the 22nd. It was determined that the item will be placed on the October 6th agenda. Member Lojeski felt that it would be appropriate to formulate a letter thanking all four brokerage firms for their proposals. ADJOURNMENT At 6:45 p. m. the City CounCil/Arcadia Redevelopment Agency Study Session ADJOURNED sine die. I ATTEST: ~j~~~ D. Alford, ty Cle~ I 4 9/1/92