HomeMy WebLinkAboutSEPTEMBER 1,1992
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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.
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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
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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
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HAYES COMPANY
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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.
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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:
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D. Alford, ty Cle~
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