HomeMy WebLinkAboutJANUARY 16,1990_3
1
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0/1690
32:0010
CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK
INVOCATION
PLEDGE OF
ALLEGIANCE
ROLL CALL
MINUTE
APPROVAL
(Jan, 2,
1990)
(APPROVED)
ORD, & RES,
READ BY
TITLE ONLY
PERSONNEL
BOARD
(Ciraulo)
O/jO. /10
C/~lllj(.O
/IJ..s~
CLOSED
SESSION
M I NUT E S
CITY COUNCIL OF THE CITY OF ARCADIA
and the
ARCADIA REDEVLELOPMENT AGENCY
REGULAR MEETING
JANUARY 16, 1990
The City Council and the Arcadia'Redevelopment Agency met in
a regular session at 7:30 p, m" January 16, 1990 in the
Arcadia City Hall Council Chamber,
Rev, Alfred Carter, Christian Center of Arcadia
,
Councilmember Mary Young
PRESENT; Councilmembers Gilb, Harbicht, Lojeski, Young and
Chandler
ABSENT: None
On MOTION by Councilmember Gilb, seconded by Councilmember
Young and CARRIED, the Minutes of the Adjourned and Regular
meetings of January 2, 1990 ,were APPROVED, as corrected,
Councilmember Harbicht ABSTAINED since he was not present 'at
the January 2, 1990 meeting,
"
It was MOVED by Councilmember Young, seconded by Council-
member Lojeski and CARRIED that Ordinances and Resolutions
be read by title only and that the reading in full be
, , WAIVED,
PRESENTATION
On behalf of the City Council, Mayor Chandler presented
a plaque to Mr, Joe Ciraulo, outgoing member of th3
Personnel Board for distinguished service on the ~uard,
1989-90, ' Councilmember Lojeski presented Mr, Ciraulo
with his Board nameplate and added his appreciation for
Mr, Ciraulo's service to the City while on the Board,
CITY ATTORNEY
The City Attorney announced that "the City Council
and the Arcadia Redevelopment Agency met in a CLOSED
SESSION this evening pursuant to Government Code Section
54956,8 to give instructions to the City's negotiator
regarding the potential acquisition of property on ,
First Street, south of the railroad, formerly the
Indiana Street property, and to direct the negotiato~
with regard to the potential acquisition of that
property and discussions with Jim Kuhn and Keith Brown,
Additionally, pursuant to Government Code Section
54956.9(a), the Arcadia Redevelopment Agency met in a
CLOSED SESSION to discuss the lawsuit of the Arcadia
Redevelopment Agency vs, Kiewit",
1jl6j90
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PUBLIC
HEARING
(Modi fica 'n
MM 90-001 -
201-251
Santa Clara
St,) ,
(APPROVED)
o~80 _ 1;,;~'
/'IN &fa- ()()I
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",.'-
32:0011
The applicant, the Chandler Group, is requesting modifica-
tion for 156 parking spaces in lieu of 179 spaces required
for a new building at 201-251 Santa Clara Street, The
applicant has noted on the plans that there are 39 on-street
spaces located on Santa Clara Street near or adjacent to
their property, In addition, a parking analysis has been
prepared by the traffic engineering firm of Barton-Aschman
Associates for the proposed project, Their summary states
that the proposed parking supply would be sufficient to meet
the expected demand generated by the proposed office building
under virtually all circumstances, The information submitted
by the applicant would seem to support the requested
reduction; however, there are, other factors which must be
taken into consideration, First, the specific office uses are
not known, Second, it should be noted that there are vacant 1
parcels adjacent to and across the street from the site which
have not been developed and the development of these
properties could result in future demand for on-street parking
in this area, In addition, on-street parking should not be
counted for meeting any of the on-site parking spaces, The
Planning Department recommends approval subject to the
imposition of conditions of approval which will permit the
City to impose additional conditions should pedestrian or
vehicular problems result from intensive use of the on-street
parking or from insufficient availability of on-site parking,
Mayor Chandler declared the hearing OPEN,
Roger Wolfe, Project Manager, Chandler Group stated, in part
that they have provided substantially less parking than this
in other projects and the parking has always proved to be
adequate; they are trying to improve the quality of the
project, They accept the conditions that have been requested
by the Planning Director, Councilmember Harbicht inquired if
the original plans had been changed, Mr, Wolfe replied that
originally they had had a different parking layout; they had
had more parking stalls on site, In negotiations with the
Planning Department, there were concerns about circulation,
etc" and that number was reduced, They could revise their
plans to provide more parking spaces, but because of the
circulation problem, this would be unacceptable to the
Planning Department, Councilmember Gilb noted that it was his
understanding that the size of the buildings had been
increased, Mr, Wolfe replied that during the planning process
the size of the buildings had been reduced and then increased
again, A brief discussion ensued concerning the on-street
parking and the feasibility of future parking restrictions
should problems develop,
No one else desiring to be heard, the hearing v, - CLOSED on
MOTION by Councilmember Lojeski, seconded by Councilmember
Harbicht and CARRIED,
1
Councilmember Harbicht noted that he thought it was
appropriate to review parking on a case-hy-case basis, In
this particular case, he does not feel that the on- street
parking should he considered; the builders of this building
don't own the street, On-street parking is present virtually
everywhere in the City, He does not see any good reason to
relax City standards in this particular, case; the ,builders
want more building on the space and less parking, He is not
in favor of approval, Councilmember Young agreed and pointed
out that that area has'a lot of 'undeveloped area and changing
area and that in the future, problems could be encountered by
reducing the parking requirements-:" She is not in favor of the
.CO' .
reduced number, Councilmember Gilh noted that the property
. ,:.':Ji::;
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1/16/90
2
f
1
1
2,
SR, CiT,
COMSN,
(Title III
1990/91
Grant Funds
Application)
(APPROVED)
OI.,;Jt) .10
1/ /Ie lJj {,'r# I{/.:.
3,
32:0012
across the street is already developed and the 39 street
parking spaces are in the immediate area, With the
recommendation of the staff and the on-street availability,
he is in favor, Mayor Chandler agreed with Councilmember
Gilb; he does not feel that the 23 parking space reduction the
developer is requesting in that particular area would create
much of a problem, He would like to see the project move
ahead, Councilmember Lojeski said he did not have a problem
with this; the on-street parking could be utilized by tenants
or customers of the building; it is not likely that patrons
of the hotel nearby would be parking on the street, ,He does
not see this as a problem, He is in favor, He does not feel
this will be setting a precedent,
It was then MOVED by Councilmember Gilb, seconded by
Counci1member Lojeski and CARRIED on roll call vote as follows
that MM 90-001, request for modification for 156 spaces in
lieu of 179 p~rking spaces at 201-251 Santa Clara Street be
APPROVED subject to conditions of approval imposed by the
Planning Department as outlined in the staff report of January
16, 1990,
AYES:
NOES:
ABSENT:
Councilmembers Gilb, Lojeski and Chandler
Councilmembers Harbicht and Young
None
ROARDS AND COMMISSIONS
For the past twelve years, Arcadia Senior Services have
received federal funds under the Older Americans Act to
provide social services to older persons in Arcadia and Temple
City,
It was MOVED by Councilmember Lojeski, seconded by
Councilmember Harbicht and CARRIED on roll call vote as
follows that staff be AUTHORIZED to write and submit a
proposal for funding for the TITLE III GRANT PROG~ in an
amount of approximately $85,000 for Arcadia and Temple City
services for 1990/91 and that the same services continue that
are now contracted for, That fifty percent of the time of the
Senior Citizens Supervisor, four percent of the time of the
City Treasurer, the value of the office space and the value
of the volunteers' time be provided as match, That staff be
AUTHORIZED to enter into a contract for the 1990/91 fiscal
year~ and that the Director of Recreation be AUTHORIZED to
sign the application and the contract,
AYES:
Councilmembers Gilb, Harbicht, Lojeski, Young
and Chandler
None
None
NOES:
ABSENT:
AUDIENCE PARTICIPATION
Chris Vance, 417 South Second Avenue, stated, in part, that
he had been reading in the newspaper about eminent domain
action by the Redevelopment Agency, He feels badly about
this; tha~ this action is motivated by money; it's not as if
it were for a park or a school, Council is not working for
the small' business, He would appreciate it if Council could
think more about these people rather than.the.big businesses,
Councilmember Harbicht commented that the primary purpose of
redevelopment is to eliminate blight in this project as well
as other projects contemplated, Mr, Vance replied that when
these Councilmembers came onto Council, they had promised that
eminent domain would not be used,
1/16/90
3
4,
5,
5a,
ROLL CALL
Sb,
MINUTE
APPROVAL
(Jan, 2,
1990)
(APPROVED)
5c.
RELOCATION ?LAN
(NW Corner ?roj.
2nd Ave. &
Htg. Dr.)
(APPROVED)
() 6 8(). t.fI3
5d.
HEARING RE.
ACQUISITION
OF WINGARD &
PAIS PROPERTIES
(101 N. Second
Ave. & 152 E.
Santa Clara)
(Feb. 20, 1990)
32:0013
CITY COUNCIL RECESSED IN ORDER TO ACT AS
THE ARCADIA REDEVELOPMENT AGENCY
PRESENT: Agency Members Gilb, Harbicht, Lojeski, Young and
Chandler
ABSENT: None
On MOTION by Member Lojeski, seconded by Member Young and
CARRIED, the Minutes of the Meeting of January 2, 1990 were
APPROVED, Member Harbicht ABSTAINED since he was not
present at: Lhe January 2, 1990 meeting,
1
The Assistant City Manager for Economic Development presented
in detail the background of the redevelopment process, includ-
ing reasons for decisions made in selecting certain sites;
procedures for obtaining various properties for development;
time schedules; procedures mandatory under law for relocating
owners and/or tenants of the properties,
A Relocation Plan is required by the Arcadia Redevelopment
Agency's "Relocation Rules and Regulations for Implementation
of the California Relocation Assistance Law" when seven or
more households will be displaced by a redevelopment project,
Since a total of 11 households will be displaced by the North-
west Corner Redevelopment Project, staff asked the Agency's
relocation consultant, Port & Flor, Inc., to prepare a
relocation plan (attached to staff report dated January 16,
1990), The Plan identifies the relocation needs of all the
households and the resources available to them; it also
identifies the procedural steps to be followed for the
relocation of these households,
It was MOVED by Member Harbicht, seconded by Member Young and
CARRIED on roll call vote as follows that the Relocation Plan
for the Arcadia Redevelopment Agency Central Redevelopment
Project, as presented, be ADOPTED,
AYES:
NOES:
ABSENT:
Members Gilb, Harbicht, Lojeski, Young and Chandler
None
None
For the record, staff explained that the incre.._~d benefi~s
for tenants outlined earlier as increasing from $4,000 .,.,
$7,250 should be $4,000 to $5,250, In response to a questi, 'I
from Member Gilb, staff explained that amount is the
"differential payment"; the money to move is a totally
separate payment, The "differential payment" is to make up
the difference in the amount of rent they are now paying and
what they will be paying in their new location,
The Agency forwarded offer letters to the parties named below
in September 19'89. Negotiations for the acquisition of the
properties have been unsuccessful to date, Wingard - 101
N, Second Avenue and Pais - 152 E, Santa Clara Street, A
hearing date of February 20, 1990 to consider the use of
eminent domain in the acquisition of these properties is
recommended, These hearings would mark the beginning of the
condemnation process.
1/16/90
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1
RESOLUTION
NO. ARA-153
(ADOPTED)
M;~()' l{t-J
Lc!1}e:o.CU.; ;'f,,) tV
RESOLUTION
NO. ARA-154
(ADOPTED)
06 fJe? . t-It?
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5e,
HEARING RE.
EMINENT
DOMAIN
PROCEEDINGS
(Willson Prop.-
117 N. 2nd Av.)
06 ~'(). (/6
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The Assistant City Manager for Economic Development then read
the titles of Resolution No, ARA-153; "A RESOLUTION OF THE
ARCADIA REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA,
CALIFORNIA SETTING A HEARING CONCERNING THE PROPOSED ADOPTION
OF A RESOLUTION OF NECESSITY IN CONNECTION WITH THE
ACQUISITION OF CERTAIN PROPERTY (WINGARD)" and, Resolution
No ARA-154: "A RESOLUTION OF THE ARCADIA REDEVELOPMENT AGENCY
OF THE CITY OF ARCADIA, CALIFORNIA, SETTING A HEARING
CONCERNING THE PROPOSED ADOPTION OF A RESOLUTION OF NECESSITY
IN CONNECTION WITH THE ACQUISITION OF CERTAIN PROPERTY
(PAIS)",
It was then MOVED by Member Gilb, seconded by Member Young and
CARRIED on roll call vote as follows that Resolutions No, ARA-
153 and No, ARA-154 be and they are hereby ADOPTED,
AYES:
NOES:
ABSENT:
Members Gilb, Harbicht, Lojeski, Young and Chandler
None
None
Resolution No, ARA-147 set a hearing for this date on the
commencement of eminent domain proceedings for the Willson
property at 117 North Second Avenue, Prior to setting the
hearing, the Agency established just compensation and made an
offer to the owners to acquire the property for the full
amount established as just compensation pursuant to Government
Code Section 7267,2. Staff has transmitted a notice of this
hearing and the Agency's offer to acquire the property to the
owners, Staff has conducted a full review of the
environmental impacts associated with the acquisition of the
property as required.
The Assistant City Manager for Economic Development then read
the title of Resolution No, ARA-155: "A RESOLUTION OF
NECESSITY OF THE ARCADIA REDEVELOPMENT AGENCY OF THE GITY OF
ARCADIA, CALIFORNIA, INSTITUTING THE COMMENCEMENT OF EMINENT
DOMAIN PROCEEDINGS IN CONNECTION WITH THE ACQUISITION OF
CERTAIN PROPERTY FOR REDEVELOPMENT PURPOSES (WILLSON)",
Chairman Chandler declared the hearing open for those with a
possessory interest in the property,
Robert Willson, 1535 Loganrita, stated, in part, that he is
not against some condemnation; however, he feels that perhaps
the environmental impact study submitted to the " may D"t
have taken everything into consideration when tr ',bmitt,d
it to the City, Possibly they were unaware ( _de off; "
buildings and maybe stores and restaurants on the northe".,::
side of Second Avenue and Santa Clara, Also, possibly (.,,0
development of the east side of Second Avenue, north to tho
freeway, is also proposed for redevelopment by the owner; also
the property on Second Avenue, south of Santa Clara which is
on the agenda tonight, This will increase the traffic problem
from Second and Santa Clara and also on Huntington Drive, He
noted accidents that 'had occurred in that area, He outlined
in detail the establishment of his business in Arcadia; noted
that it has been prospering and that the apprais~d value
presented by the City was considerably less than the actual
value of the property, He noted that he has tried throughout
the area to locate a building to relocate his business and was
unsuccessful in finding anything comparable at that price,
This eminent domain proceeding will cause him considerable
financial and personal hardship, He requested that the Agency
1/16/90
5
32:0015
not condemn his property until they can get the best possible
deal from a developer, He requested that the Agency give him
enough time to find a building; he has contacted seven real
estate agencies and is trying honestly to find another
building,
He stated that some time ago a developer had informed him
that the Agency would acquire his property for the developer,
In taking his building, the Agency is taking a very important
part of his life; he had intended to have the income for his
retirement and eventually to pass the business on to his
children, His business is located in a very desirable area;
he has seven rental units on the property also '" all rented,
He requested that the Agency Members put themselves in his
position; he wants to be fair and just with the City; and,
wants the City to be fair with him, The offer from the Agency
is far below the real fair market value of his property,
I
~
Member Harbicht responded that Mr, Willson's comments were
appreciated and were reasonable, The redevelopment process
is a long one and the Agency needs to move along in an orderly
fashion in acquiring property and negotiating with developers,
etc, In reply to the developer Mr, Willson referred to; the
Agency has not, as yet, selected a developer for that area,
There will be no problem with giving enough time for Mr,
Willson to relocate; this is a very long process, The
condemnation is starting a process; however, the Agency would
prefer to negotiate and purchase it at a price which is fair
to both parties, The value has been established by certified
appraisers; the Agency wants to be fair and pay Mr, Willson
what his property is worth, If Mr, Willson has an appraisal
from a certified appraiser which says the Agency's appraisers
are wrong, the Agency would want to see this; the Agency wants
to pay a fair price, It is hoped that dialogue with the staff
will continue until a reasonable settlement is reached,
t,
.'
Mr, Willson responded that he thought that eventually during
the eminent domain proceedings, there would be a point where
he would have to pay rent to the City for the use of his
property; whereupon he would be paying mortgage payments and
rent simultaneously, The Agency replied his would not happen;
if he were to be paying rent, the Agency would own the
property so there would be no mortgage payments, Mr, Willson
reminded the Agency that he would have to buy "nother
building, Mr, Willson said he did not want to spend the money
to have the property appraised at his time because later in
the condemnation proceedings it would have to be updated and
he would be paying for two appraisals, He reiterated that the
value of the property was greater than the Agency's offer,
It was then MOVED by Member Lojeski, secondp' ',:, MemloQr
Harbicht and CARRIED on roll call vote as '~J.ows th,'t
Resolution No, ARA-155 be and it is hereby ADOPTED,
AYES:
NOES:
ABSENT:
Members Gilb, Harbicht, Lojeski, Young and Chandler
None
None
I
5f,
ADJOURNMENT
.' ,
The meeting ADJOURNED to 7:00 p, m" February 6, 1990,
6,
CITY COUNCIL RECoNvENED
7,
CONSENT ITEMS
7a, APPROVED Final Map No, 42936 for a 23-10t subdivision (22
FINAL MAP
42936 1/16/90
(Whispering Pines 6
Subdivision)
0J60. 60
-;;: l/.,J 136
7b.
CONTRACT
0'1$0 - ?f) AWARD
~I SI17i3r/(StriPing ~
fb~ HK Pavem~nt Mark's
Var. Streets -
Job No. 662)
1 '
7c, ,
ADVERTISE
07J()-IO FOR BIDS
f-!. ""IeI1~~(Custodial
Ma1nt. Serv,)
J
,0 ...,C/(J~1S
7d.
SWIMMING
POOL RENOV'N
(Arcadia High
School)
rJ/S;;; .30
scf..o,J!s
7e.
NAT'L BICENT,
<;:OMPETITION
(Arcadia High
Exp'enses)
7f.
..r. V EQUIPMENT
0" '-t() . I PURCHASE
G.;.,', 'U!cr's(Laser Imaging
'Sys tem - City
Clerk's Office)
7g.
o ~q() - 50 PURCHASE OF
, j' EMERGENCY
q - :'- TELEPHONE NO.
Sl-,';';~ erS STICKERS
7h.
I/tJ60 - ('e;PROPERTY TAX
&C>. '0$ (J~ALLOCATION LAW-
~;. . SUIT (Calif.
,-( I.... -' Contract
Cities Assoc.)
32:0016
buildable lots and one lot for street purposes), extension of
Whispering Pines subdivision (filed by Bart Stryker on
behalf of Chuck Bluth), This approval is subject to the
condition that all Public ~orks improvements shall conform to
prior requirements as stipulated in Resolution No, 5274
approving Development Permit 85-1 adopted January 22, 1986,
APPROVED contract for traffic striping and pavement markings
~o ,the low bidder, Pacific\Striping, Inc., in the amount of
$40,576,60 - Job No, 662, Funds in the amount of $51,000 have
been budgeted in the 1989-90 Puhlic Works Operating Budget for
this project, Funds' in the amount of $50,000 to be
appropriated to cover the cost of the project including
engineering, construction, inspection, and contingencies; all
informalities in the bid or bidding process to be waived; the
Mayor and City Clerk AUTHORIZED to execute a contract in a
form approved by the City Attorney,
AUTHORIZED staff to advertise and receive bids for contract
custodial maintenance services, The estimated annual cost,
including contingencies, for contract custodial maintenance
services is $9,000. The estimated cost for the remainder of
Fiscal Year 1989-90 is $4,000 and can be accommodated within
the current budget,
AUTHORIZED payment of $19,442 to the Arcadia Unified School
District, which is one-third of the $58,326 cost of the pool
renovation based on the original contract concerning pool
construction (two-thirds District and one-third City), Funds
to be taken from the Parks and Recreation Facilities Fund,
APPROVED appropriation of funds in the amount of $500 to
assist with travel expenses to Sacramento for Arcadia High
School students so they may participate in the National
Bicentennial Competition, They have won the area competition
AUTHORIZED purchase of the Computer Challenge laser imaging
system for the City Clerk's Office in the amount of $24,500
(plus tax) from the Capital Outlay Fund. APPROVED waiving the
City's formal bid procedure since this purchase represents
significant savings to the City as a result of the Arcadia
Police Department's involvement with Computer Challenge
Corporation in the development of this system.
APPROVED appropriation of $2,460 from the General Fund and
AUTHORIZED printing and distribution of sticke~. '~dicating
the emergency and non-emergency telephone numbers :"'c the Fire
and Police Departments,
APPROVED payment of $5,750 in support of the lawsuit by the
California Contract Cities Association challenging the
constitutionality of the State's method of allocating property
tax revenues among cities since Proposition 13 was passed in
1978.
ALL OF THE ABOVE CONSENT ITEMS WERE APPROVED ON MOTION BY
COUNCILMEMBER HARBICHT, SECONDED BY COUNCILMEMBER LOJESKI AND
CARRIED ON ROLL CALL VOTE AS FOLLOWS:
AYES:
Councilmembers Gilb, Harbicht, Lojeski, Young and
Chandler
None
None
NOES:
ABSENT:
1/16/90
7
8,
8a.
Oq~O- .;)0 RR.. CROSSING
. IMPROV.
R N. /..') r, dr!J~second Ave.
& Htg. Dr -
Job No. 656)
(Alt~ 1/3
APPROVED)
8b,
, "
p, W. FIELD
PERSONNEL
CLASSIFICATION
MODIFICATIONS
(APPROVED)
Of);)O-I()
PN
9,
9a.
RESOLUTION
NO. 5516
(ADOPTED)
O/~O
On~ k~
32:0017
CITY MANAGER
Pursuant to request of the Council at their regular meeting
on November 21, 1989, Engineering staff conducted further
study and considered three alternatives utilizing brick veneer
for the beautification of the Atchison, Topeka and Santa Fe
overhead bridge crossing at Huntington Drive and Second
Avenue, These alternativ~s are outlined in detail in staff
report dated January 16, 1990, Staff supports use of
Alternative No, 3, The total Engineer's estimate is $116,000
which is below the $147,287 authorized for the project in the 1
1989-90 CDBG Funds, In reply to a question from Councilmember
I ' . I I. J
Harbicht, staff noted that the wingwalls, sidewalK walls and
soffits, if painted. would require continual maintenance and,
if newly painted, might attract graffiti,
It was then MOVED by Councilmember Harbicht, seconded by
Councilmember Gilb and CARRIED on roll call vote as follows
to APPROVE improvement of the A, T, & S, F, railroad crossing
at Second Avenue and Huntington Drive utilizing Alternative
No, 3 (staff report dated January 16, 1990); and to AUTHORIZE
the Public Works Department to proceed with the preparation
of plans and specifications, '
AYES:
Councilmembers Gilb, Harbicht, Lojeski, Young and
Chandler
None
None
NOES:
ABSENT:
Councilmember Harbicht noted a good job done oy staff on this
project, particularly by the Public Works Director,
Attached to staff report dated January 10, 1990 is 0 legal
opinion prepared by a member of the ~aw firm of Liebert,
Cassidy & Frierson concerning minimum education requirements
for specific job specifications, The City Attorney concurs
in the opinion, which recommends against attaching educational
requirements to certain classifications where no validated
correlation can be made to performance of duties.
It was MOVED by Councilmember Gilb, seconded by Councilmember
Young and CARRIED on roll call vote ~s follows that classiica-
tion modifications for Maintenance Worker, General Repairman,
Equipment Operator, Sweeper Operator and Public 1J~_.',-" Foreman,
as proposed in attachments to staff report date. "lUary 10,
1990, be APPROVED,
AYES:
NOES:
ABSENT:
Councilmembers Gilb, Lojeski, Young and Chandler
Councilmember Harbicht
None
1
CITY ATTORNEY
The City Attorney presented and read the title of Re~olution
No, 5516: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, HONORING BILL SHOEMAKER FOR HIS
PROFESSIONAL SPORTS CAREER",
It was MOVED by Councilmember Gilb, seconded by Councilmember
Young and CARRIED on roll call vote as follows that Resolution
No. 5516 be and it is hereby ADOPTED.
1/16/90
8
9b.
CLAIM OF
GARRETT YAZELL
(DllNIED)
10 '10. I/o
ya z ell
1
10.
11,
LOJESKI
(Thrifty Drug -
Live Oak - Prop.
Maint. )
N-SP
Personnel Bd.
(Legal Opinion)
NM~
Santa Clara Sr.
(Parking
Limitation)
/lJ.SP
Parking Codes
Report
N~P
1
12. ,
ADJOURNMENT
(Feb. 6, 1990,
7:00 p. m.)
ATTEST:
3L:UU1~
AYES:
Councilmembers Gilb, Harbicht, Lojeski, Young and
Chandler
None
None
NOES:
ABSENT:
On recommendation of the City Attorney, the claim of Garrett
Yazell was DENIED on MOTION by Councilmeniber Loj eski, seconded
by Councilmember GUb and CARRIED on roll call vote as
follows:
AYES:
Councilmembers Gilb, Harbicht, Lojeski, Young and
Chandler
None
None
NOES:
ABSENT:
MATTERS FROM STAFF
None
MATTERS FROM ELECTED OFFICIALS
Called atterition to the alleyway behind the Thrifty Drug on
Live Oak Avenue where debris, old sofas, etc, have been
dumped, Code Enforcement Officer to look into the matter,
,
Would like to see the legal opinion from Liebert, Cassidy &
Frie~son, discussed under Item 8b, presented to the Personnel
Board for their information,
Noted that owners of businesses on the north side of Santa
Clara Street had inquired about the status of their petition
to establish parking limitations on that street, They feel
the parking time is too long and if it is reduced, there will
b'e a turnover and ,provide space for their customers; also
employees from the post office across the street park in front
of their businesses,
Inquired about the report on the current parking codes in
process of preparation by staff. Staff replied they have been
contacting other cities to learn wHat their parking codes are;
the relationship between building size and use; and the number
of parking spaces required, The completed re"...,.. will be
available at the February 6, 1990 Council Meetin- ,
At 8:45 p, m" the meeting ADJOURNED to 7:00 p. m" February
6, 1990 in the Chamber Conference Room to conduct the business
of the Council and Agency and CLOSED SESSION, if any,
necessary to discuss personnel, litigation and evaluation of
properties,
d~
Chandler, Mayor
1/16/90
9
I
I
T RAN S C RIP T
(Insofar as decipherable)
RELATING TO
PRESENTATION OF PROPOSED DEVELOPMENTS FOR THE
SECOND AND HUNTINGTON REDEVELOPMENT PROJECTS
ARCADIA REDEVELOPMENT AGENCY STUDY SESSION
JANUARY 16, 1990
I
I
I
WARREN LORTIE
WLA ARCON
(Proposal -
NW Corner
of Second
Avenue and
Huntington
Drive)
AGENCY MEMBER
YOUNG
LORTIE
T RAN S C RIP T
(Insofar as Decipherable)
""""you're familiar with my firm, I've done development here
in this City before. I'm an architect and a general contractor, and I've
been doing combined architectural contracting as an operation for about
15 years, developing my own projects and projects for other partners,arid
businesses that want to develop equity in their businesses, We've done
a lot of work with redevelopment agencies, You're familiar with the one
I've done here. I've also done them in Buena Park, Pasadena, Corona and
Huntington Beach, That's my experience, As an owner and a manager I
am very familiar with the problems of developing odd-shaped lots, odd
located lots, It's often that people bring to me their problems in orde
to try to get a solution, I feel this 3,8 acre site is a problem, It has
a lot of inherent problems with rail; the lack of real, what I call
commercial, exposure; and then the difficult shape, All kind of blenJ
together to compound, with utilities and existing easements and acces
problems to the neighbors, We put together a proposal and we have n
specific contracts with anyone in mind, It's a very large site, I
doesn't lend itself to a single user, But it does lend itself to several
smaller users, or break it up into what would be an R & D upper, higher
quality industrial park, We have talked to several users who are very
interested and we are very confident that these are real and we would be
able to complete projects of the nature that we have proposed here today,
If you've been through the packet you can ask - maybe you should just
present questions if you have them, A very brief summary would be to use
the Santa Clara street frontage for the most developed building, which
could even be 100% office, if we get that kind of feedback, We are talking
with an engineering firm and if that went through it would be 100% office
Use, The one facing the hotel toward Second Avenue would be a mixed use
building, Companies that require a lot of office space, because we need
to generate a higher value, but that also need some warehouse space, some
manufacturing space adjacent, This is an area in the City where you can
allow that and we should utilize that capability, Getting down toward the
rail, toward the triangular section, it's much more difficult, I've just
proposed a one-story destination retail type use, A light fixture outl
let's a perfect type of a user for that, It's close enough to a majo
intersection, but there's access for the public at a cost they can affor
for the extra space requirement,
Is that type of a business looking for a facility?
Wallpapers, carpeting - these people need a lot of footage, They're
looking for areas, They can't locate in some of the newer parks, The
prices are just out of sight, They really can't afford the $30/square foot
that prime commercial space is demanding where it's allowed, Given that
type of use for the property, we've backed into a value of approximately
$16/square foot, That is the price that was paid for the corner of First
and Huntington about 2-1/2 years ago, And we put the office building there
at a fairly high rent, But as it turned out, the rent has been consistent
with the market and the pro forma for that building has been almost exactly
On our proposal from the beginning, We have not missed a step, The
investors are secure, The financing's secure, The proj ect proceeded
Without a hitch, I prefer to analyze projects that way, I don't like tl
deal speculatively. I don't like to go out with a price that I hope that
maybe we'll achieve it. If we don't, well, we'll just walk away from it,
We would like to propose something that we know we can accomplish, An
that's how we've approached this one, There's been some concern by staf,
that the price is relatively low to the acquisition cost by the City, I
can't help that. There's nothing I could really do to mitigate that, The
only proposal that we were willing to make was that we, conform some fori
of negotiation to participate in some way in the property, rather than for
a contract for a fixed hard price, And that would take some negotiation
We'd have to decide how to set some benchmarks so that we could participate
in profits if they were possible, If either we can derive a higher income
or a higher sales revenue from the site than we anticipate, that we would
share that, We're open to that, but I think it would have to be in some
form of a protective negotiation process. And I don't know that we've ever
done -I've certainly never proposed it and it's not been proposed with me,
But I wanted to open that for discussion, or at least perhaps in later -
maybe a study session at a later time where we can be more specific and
1
AGENCY MEMBER
HARBICHT
LORTIE
I
,
I
I AGENCY MEMBER
GILB
I LORTIE
'I. ~ ,', .,
discuss that at length, Does anyone have any questions for me on the
proposal that we made?
Basically, you're talking about office, industrial and retail", a little
bit of everything,
The retail and the manufacturing are in the same - actually, they're all
in the same camp, If you go to the higher end R & D parks, you get
engineers - soil engineers, civil engineers, that need a lot of space,
They need places to park trucks and equipment, They need a lot of office
space, but they don't justify and they can't afford the $1. 75 to
$2.00/square foot range, So they'll take an industrial building and modify
it to put in additional office space, Provided you park the building for
it, there's no reason not to build that for it, And that's what we're
really looking to do here, This is very typical Irvine, south Santa Ana
in Orange County, This area's been a real focus to just north of the
ai~port for what they've called - R & D parks, Really high-end industrial
us<ars, When you move down the scale or toward the destination retail user,
this is really not a store front on a major street, This is someone like
a carpet distributor or a wallpaper warehouse or a light fixture
manufacturing outlet where they need a large showroom and they need a large
warehouse, They're retailing, but their retail traffic is really very
small compared to the storage and the warehouse, So they need a lot of
space, they need to be in a good accessible location, but they also fall
into these parks - these R & D parks. The typical R & D user, the one we
se<a most of all, is the engineering firm that is maybe aerospace or high
tech where they're manufacturing electronic equipment, Something where
th<ay have a small manufacturing need, but it has a high intensity, Either
ve~y expensive work tables, very expensive work force, and not a lot of
ar<aa, Usually air conditioned, carpeted, It's definitely a real upgrade,
They, again, can't afford $2,OO/square foot, or will not pay that, Then
they go into a park and they're looking more for $1,00 to $1,25 as a rent,
And I think this site is a good location for that kind of use, I think
it would be a good transition use for what's there, You've got rail on
the back side, You've got a hotel parking lot on the far side, You have
some other smaller industrial pre-existing users on the north, It's a
mixed bag now, The mix could change. To be honest, if someone came in
and wanted to convert the entire park to office use, a large engineering
firm that needed 40,000 square feet of office, I would probably re-
configure the building so that we could do that, The bUildings that I've
proposed have tried to leave the infrastructure in place, It made me
realize it, but there's one street and an alley there now, There's a lot
of infrastructure under those streets that would be difficult to move,
difficult to change, There are a lot of pre-existing easements that are
going to take a lot of time and a lot of expended financing to get rid of
them, You'd better just leave them, if it's possible. The plan can be
worked around them. Abandon the streets, Convert the streets to easements
and try to minimize the cost of this, It throws the property over to the
private developer - private developments - so that it goes on to the tax
basis. That's the primary purpose of all this, We buy the property, So,
eVen though we're looking at a $16/square foot purchase price, we're also
buying the street area that's wi thin that park, I don't know if we've done
an analysis, I didn't see a staff report on this, so I wasn't sure where
we were, You know, how our conversations were going to go tonight,
You know, you're talking about an engineering type of building, Parson's
building just sitting there, They've been trying to rent it since God
knows when, Isn't that an engineering type building that they can't
unload?
If it was built as an office building, they need to rent it for office
rent, If it was built as an industrial building, that is at a low cost,
you know, they're minimum development, minimum, They hang the fixtures
instead of putting in the full ceilings, They use all open office
furniture and large area air conditioners, They do things to make it where
it's much more economical to build it, They built it as an office building
and then they try to rent it to engineering, but it doesn't work, They're
trying to rent it out at $1.75 to $2,OO/square foot, Engineering companies
that need that extra space, they can't afford it, They need to go
somewhere else and they'll continue to seek a second class location until
they can find something for under $1,25, Typical, These are your big
civil engineers that are heavy on the construction side with surveyors and
2
equipment, And we are talking with one firm, that's why I'm focusing on
that,
HARBICHT
What would be the appearance of these buildings directly across from the
hotel? The ones fronting on Second,
LORTIE
I've used just the example of California State Bank, That's a concrete
tilt-up structure, It has very low, what I'll call architectural amenity,
on the elevations, It's just simple flat concrete painted a nice color,
It has bands of windows, This type of building would be very similar to
that, Concrete tilt-up would be the type of construction, One and two
story; bands of windows; very commercial look to it, From the streel
elevation the appearance would be like a two story office building, Th
warehouses would all be back in, tucked in behind. But you always wan
your street to be your identity elevation, and that's where your signage
would be and your identity for the clients and tenants, The one building
that's down on the south end is really a filler, It's an amorphous Shapes
That's the space that's left over, It's going to be dictated by what typ
of user steps forward,
I guess I was thinking more in terms of the light industrial isn't going
to have vehicle doors in the front,
HARBICHT
LORTIE
No, nothing facing the front, It would have vehicle doors, but they
wouldn't be facing the street, I think if you see by the plan - if you
look at your plan - I don't know if you're passing these out - but the
truck doors that are located on our preliminary plan are all located inside
the project, They're hard to read, but on the center building they're on
each side. You see, your offices are on either side, so your street is
getting an office elevation, The doors are into the two warehouse areas
here, So it's a back-to-back tenant here, Front doors in this building
would be back here, Same thing on the back side, You'd have offices on
the two streets and the truck doors here would just be along the back
facing the railroad track, Your frontage here would be like a one story
typical retail building, but it would be concrete tilt-up, Here these
would be two story office elevations with windows, standard commercial type
of elevation, reflective glass, energy-saving glass, This one project il
one we just finished for an environmental protection company, They mak
tank linings and pond linings, They have a need for a large warehouse
but they had 8,000 square feet in this building, So we put all the offices
up in front, and from the street it has the appearance of a two story
office building,
YOUNG
Do you anticipate setting these back from the curb the way that is?
LORTIE
Yes, I think we've got double parking all the way through this, So, in
the case of the small building, that's 45 feet to the front of the parking
and then there's another 10 foot setback and then the others would be over
65, These are renderings from two projects, This one we're building now
GILB
The one we're looking at there, is that the Serrot?
LORTIE
Yes, Serrot's the tank lining, That's a 26,000 foot building with
feet of office in the front, And we,just finished that,
YOUNG
How wide is that grass area there?
8,000
I
LORTIE
This one in this project?
LORTIE
Yes, It looks pretty wide,
This one was very wide because they didn't put sidewalks in this projectl
So, you're seeing - this was an indus trial park that's under planne
development by Lusk and they have about a 15 foot grass area before the
property line, And then the setback to property is only 10, but """
YOUNG
YOUNG
That certainly enhances that,
LORTIE
." you get 25 feet that way, That makes a big difference, Not typical
in industrial parks, There was also a minimum lot size here of about
40,000 feet, so they're all large buildings and they needed that setback,
3
This is the Elk's Club we just started in Huntington Beach, This will only
be a one story building highly upgraded. Because if you're familiar with
them, they have banquet facilities and meeting facilities inside, So it
will be fully developed inside as a finished banquet, eating, lounge and
meeting room, But, we'll build it with concrete tilt-up standard
technology, so that the price of this building will be very economical for
that, And it's consistent with the type of building we're talking about
in this, I really just brought these as examples of two tilt-ups that are
on the boards, Actually, one that's just finished and one that's just
begun construction that we're doing right now,
ICHAIRMAN
CHANDLER
Excuse me, I got here just a little late, I apologize, Did you - you
mentioned that it may be like a furniture store or a carpet store or a
paint store, something like that, Was there anything in particular or
anybody even show any kind of outside interest or was there a particular
outfit that's searching for a spot? I know we have - Dunn Edwards has a
nice showroom over here on Colorado and right on our own Huntington Drive
there's a new carpet flooring business and I just kind of think maybe it's
a pretty competitive area for that, I don't really know,
J
LORTIE
That's just an observation we've made, It's also in analyzing the site,
you know, that's a good use for that corner, So that's where we put it,
Well, we haven't marketed, We have no rights to market, And that's one
particular user we haven't talked to, Because that does take a specific
marketing effort to that, We do have lots of relationships with the office
end in this and the upper end, And we have spoken with some of the users
that are there now, So we know of their interest and we've been approached
by some other businesses in the area, So, we know the kinds of people that
are already speaking for this property, This one is one we need to do some
marketing in order to attain that tenant, We don't have one in hand,
GILB
Where's the carpeting business at?
CHANDLER
On Huntington Drive on the south side,
IEXECUTIVE
DIRECTOR
WATTS
The hardware store used to be in there,
YOUNG
Oh, right next to Home Savings?
LORTIE
Because Arcadia has a little problem right now with the strip commercial
that's being developed, You don't really have shopping centers, And if
you don't have a destination oriented traffic, they aren't going to find
you, So, your Dunn Edwards paint stores can survive because they are a
destination retail point,
CHANDLER
Yeah, and I think that Dunn Edwards thing is really neat, It's in a good
location, I just wondered if that's what you had in mind - something
similar to that,
LORTIE
Sinclair Home Decorating Center, light fixture, manufacturers supplier -
anyone that needs a large showroom like furniture, cabinetry, things like
this, I don't see any of this being heavy on the manufacturing or the
industrial aspect, It can't be, Not at these prices, They'd have to go
somewhere else, Any other questions? What do we do now?
I,,~
The Agency has a choice to decide whether to proceed with you or they can
postpone action until a future time, It's before the Agency,
IGILB
WATTS
Do we have to decide right now if we're going to sell this for $16 a foot?
Is that what you're saying?
,
No, I think it would be appropriate now to move on to the next presentation
and we can reserve the discussion on this later,
GILB
OK,
KINNAHAN
Is there anything else, Warren, that you wanted to tell the Agency?
4
GILB
Are you under time
commitments? Anybody's
not going to go?
you aren't under time constraints with any
waiting to find out if it's going to go or it's
LORTIE
Well, you never know,
GILB
No, I mean - but you said you didn't really have anybody in mind, You've
got some things cooking, but nothing
LORTIE
Yeah, for the other two buildings we do have someoody,
GILB
I mean, you don't have a guy coming in saying to you to get it tonight oJ
I'm going someplace else,
No, but real estate's like that, You know, you never - people pin you down
and it turns out it's not real, People don't turn you down and it turns
out they went somewhere else, We need to - maybe I could get a little morl
clarification on what we're doing, What do you do next on this? Becaus
you're a mystery to me.
Who's a mystery to you? Who's a mystery?
LORTIE
GILB
LORTIE
The process, I guess, is a mystery,
GILB
It's a bigger mystery to us and we're the ones running it,
CHANDLER
Pete Kinnahan, when he gets done talking to the City Manager, will""
Pete, would you please be kind enough to tell him exactly what to
anticipate from here, I mean, what we're going to do?
LORTIE
So I'll know how to plan,
GILB
We like bigger numbers, by the way, than 16, I mean, I just thought I'd
throw that in,
LORTIE
Are we negotiating here?
GILB
No, no. No, I just thought that thrills me a little more,
I
KINNAHAN
I think right now they want to just basically consider it some more,
They've heard your presentation, They will at some future point, and I'm
not sure when that will be, consider it and make a decision what they want
to do, And as soon as they do, I'll let you know, I don't think it's
going to take long,
LORTIE
I didn't know if that was something where ~ meet again in order to
continue to discuss it or it's something where I just wait for an answer?
KINNAHAN
Yeah, The Agency may later this evening, in session, may decide it, They
may decide to hold over and meet again, They may decide to hold it until
February 6, You know, I really can't answer your question. But they will
have to make a decision as to what to do and I'll be sure and let you know,
You're welcome to stay,
LORTIE
We have another presentation, so we'll be around, ,
The next presenters were for the southwest corner, That's the Champion
Development Company, I don't see them here yet and they are expecte
imminently, If they're not here in a few minutes, I would suggest we take
Warren if he's ready to go on with his "",','
KINNAHAN
CHANDLER
Why don't we go ahead and take him, period and keep going, I got here latl
and he can catch up with me,
KINNAHAN
OK, Warren, would you like to go ahead with the southwest corner,
LORTIE
I missed something, I was talking, Champion's not here?
KINNAHAN
Champion's not here yet and, if you're ready, would you like to go ahead
with your presentation?
5
LORTIE
H, SCHAEFER,
SCHAEFER
BROTHERS
CORPORATION
I
J
LORTIE
H, SCHAEFER
LORTIE
I
I YOUNO
LORTIE
I
Well, now it's time for me to be urouerlv introduced, This is my partner,
Howard Schaefer, one of the Schaefer brothers, and representing them
tonight,
Thank you, Actually, we're in joint venture between Schaefer Brothers and
WLA ArcOn to do a development on the southwest corner, I'd like to
introduce the other partners, I have my brother Jim, He's over there,
The person who started it all, my mom, Evelyn, And Dave Powell has also
been helping us as far as the property here. Our family represents
primarily the financial interests as far as raising the equity capital to
get the project going, negotiating with potential tenants, and so forth,
We're happy to be in conjunction with Warren, because Warren, in the
project that we did on First and Huntington, we were extremely impressed
by the capability that he showed, He said there were no hitches in doing
that project, but we do know that there were a few hitches and he was able
to overcome them quite well, especially when we discovered that there Was
an old jail in the bottom of that ground, But we found him extremely
capable and helpful to us as far as being up front with our investors to
make SUre that the project came in on budget with a quality building that
could satisfy not only the tenants, but also our investors, I think ~uch
of the discussion is probably going to deal with the technical problems
of constructing the type of building and what should be done there, I
think for the Council here probably the best thing would be to have Warren
come here and answer and discuss maybe the questions that you may have.
So, I'll bring Warren back here, Warren has had - how many years
experience in constructing buildings - 20, 25 years?
In 1974 I was licensed as an architect, And I started building in '77,
So it's been 12 years as a combined architect and contractor,
But, actually, the most important thing that impressed us about Warren was
that he's a graduate of SC and I'm a graduate of SC, so".
That may not have been helpful, Howard, but thank you anyway, This is
another problem site, I don't know why you give us all the fun ones, but
apparently we missed the (inaudible), It's a challenge site, I read
through the staff report and was very concerned with some of the direction
of that report, I may try to specifically hit some of the items that I'm
concerned about because l think maybe we've been askewed in representation
a little bit in the wrong direction, When we looked at the original site
we had an offer prepared for $22/square foot, I didn't do the map, I
don't know what that is. But this was our decision. We were presented
with a drawing that showed the inclusion of the island that was prepared
by a traffic engineer and it said that it's been suggested this is really
a better site, Would you consider doing this? We said, sure, And so
we based a plan on it. Not contemplating A and B, maybe option 1 and 2?
Although, I think we did have verbal discussion that if you had the smaller
side only we'd be glad to pare it down and do just that part of it,
Although we had not studied it, so I have no numbers for that as to what
the balance would be between commercial and office use, Adding the island
we saw as a problem, It's not a true 100% use of property, The island
is full of things, Lots of costs to make the island usable for - whether
it's a restaurant or anything else. You have to somehow take the utilities
and the things that are in the island and make them so that we can travel
over them, park on them, do whatever it is that will make the property
usable,
What's in the island?
According to these drawings, there's all kinds of stuff, It used to be -
Second Avenue used to ,run straight through there, and so a lot of the
original utilities - sewer, water mains, I think the biggest one is the
Edison lines - are underneath the ground in that island, So, they need
to stay there, We can't run a parking garage into that island, So what
you're really offering there is a surface use. We can park on it, We had
to come up with a number, We just came up with a number, We added
$100,000 to our offer, So, we need to be sure that when we're - I would
like to get that amended in our presentation, that if we're talking about
Plan A, which is the smaller site, then our offer was $22 a foot, not based
on the same pro rata per square foot offer, Because when you added the
island together you came out with $19 and something, which is not what our
offer was, It was $100,000 more for the island.
6
KINNAMAN
We'll have to check into that, I guess, that could have been an oversight.
LORTIE
OK, And I really don't - see, we didn't make a split offer. We didn't
make a split offer. We made an offer for what we thought was a site, We
didn't realize that there was really - we were to make Offer A and Offer
B, We didn't realize that, So, it was a problem, We didn't present it
that way. So, we won't have phone conversations (inaudible), So that
would be one ".,
HARBICHT
Excuse me,
$22jsquare
island and
a question, What you're saying is - and you were talking
foot - you were talking about the entire site including
the street,
thl
LORTIE
No,
For the original site, which does not include the island,
GILB
No,
It don't include nothing,
.,1
YOUNG
It includes the street,
LORTIE
When you extend the site and take the island, we took that as a value
we added up the number of cars we could park there - I forgot what it came
to - 25 cars or something like that.
YOUNG
Then enlarging the site by the width of the street, you're not considering
that then ,when you talk with the island and without the island?
LORTIE
That little street? As I recall the utilities are in and out of that
street portion, And in moving the street, you have to move the signal;
you have to rebuild - the street has to be removed; and then all of the
curbs around the island have to be rebuilt,
YOUNG
This is the little right turn street,
LORTIE
All of the curbs around the island have to be rebuilt, The entire street
frontage from somewhere before the transition all the way around the island
has to be redone, There's a huge amount of off-site improvements oUI
there, I don't know if that's been fully addressed in the other proposal
I didn't review it for that, but after we deducted that cost we felt th
net increase in value was about $100,000, That was the basis of our offer,
I just wanted to clarify that, So if the island's not included, we need
to have an amended price for the basic portion, Which would be $1,500,000,
KINNAMAN
It's easier for me to calculate in terms of per square foot,
site was going to be $22jsquare foot, That's not including
With the island it's $19,59,
The smaller
the island,
LORTIE
Basically, And you could look at that another way, You take out $150,000
worth of improvements and the island's really worth a quarter of a million,
OK, In the income projections for our project, in our proposal is a pro
forma showing that we expect the medical facility with underground parking
to have a total cost of $4,360,000. And l reviewed the numbers again
tonight, I don't see how the cost can be less than that, But in the staff
report it says that we proposed that the cost would be $3, 700,OO-something,
That one number difference affects the tax income of $10,000 a year. 5J
we need our tax revenue formula up by a considerable amount, l don't know
where the $3,700,000 comes from. The staff came up with a totally
different number for what they estimate the value of our project to be
We just finished an office building with a parking structure, So we know
what the costs are, I would love to build it for what they said, I've
never had that happen where they actually downgraded our values, They
always argue to upgrade them and then lock us into them for tax revenuel
I've never had any staff try to tell us that they'd like it to be lower
So those two numbers are confusing, If nothing else, I think we need t
really focus on the accounting and be sure they're accurate before we make
a decision based on those numbers,
KINNAMAN
Warren, if I could - it might help both yourself and the Agency to
understand how we calculated those numbers, Because we look at it from
what taxes are actually paid and what the assessor will assess at the time
he goes out to value a project. Some of the things that you may be
7
including in your analysis are not picked up by the assessor, Some are,
So" ,
LORTIE
I'd have to - I've never had it any other way, I've never been able to
convince the tax assessor that it was any less than what I paid for it,
That's a bench, They argue that it's worth more, If I pay $4,360,000 -
which is the combination of the land and all of the construction - I can't
get them to assess it for less than that, I've never been able to,
GILB
ILORTIE
I don't think anybody can,
I
I've built a lot of projects, Pete, I've never had an assessment at lower
than my construction loan and what the appraiser comes out and says, well,
let's see, here's - and he adds it all up, And you're lucky if that's
where they stop, If they stop at cost, It's a very highly developed
building, You know, a medical building has a much higher tenant
improvement cost than a regular office building, It probably would equate
to what's been referred to as a three story conventional office building,
The total package is probably a very similar cost, Because you have to
park a much greater number of cars per square foot of building, We're
building a parking garage that's over a million dollar structure, They
tend to equal out and be pretty close, So that a three story building
really would equate to what we've got, rather than be something maybe more
beneficial as I think the recommendation said a three story might be more
beneficial than what was proposed, In the case of the office building,
we are talking to two different groups that we're very confident, given
the interest we've already experienced, this is not a speculative building,
We're also speaking with a restaurant in the Arcadia area, It's an evening
steak house type restaurant, What I'd consider on the upper end of the
menu scale, And they're currently generating $2,000,000 a year in revenue,
I can't promise $2,000,000 a year, I don't know what your sales tax
projection was, but I think on your high end it was $15,000 a year, So
that would be equated to $1,500,000, So that would certainly be a
reasonable assumption, If that's added to what we feel is the real market,
the real value -appraised value of the property, There was some comment
about the location of the buildings on the site and I think that I've -
maybe I'm reacting to a lot of comments that I've had about locating
buildings up too close to the street, I've been getting some - of course,
I have a feeling no matter where you locate it, there's some that like it
and some that don't, But we did locate the last one up against the street
because at that location and at that time it was desired to keep something
in the same fabric of main street - where the buildings are zero lot line
and they're right up front, And I think we very successfully upgraded the
scale of the street there, That it enhanced all of the fronts and that
where there was a big hole, not it kind of increased the feel, the scale,
the identity of those buildings that are there, This corner -I didn't see
that as a problem, Just the opposite, We have a railroad track across
the street that we would like to get as far away from as possible, Whether
we can do ball bearing supports or whatever, If I could somehow put a four
story building way over in the corner as far away from the tracks as
possibly we could, But that was our primary intention, to get the building
over there, As far as locating it on the street, we're really reacting
and trying to create a setback, I see nothing on the side of the street
there that gives me a clue as to what's going to happen, I would hope that
you'd bulldoze most of what's there, But that's just a suggestion, I
don't see a theme. We've got the Merrill Lynch that used to be a bank,
And there's a little paint store, And some vacant land and a gas station
on the corner. I'm confused, because the comments were something like,
we don't fit what's there, I would hope not, I really propose we don't
fit what's there and that we maybe set a pattern for what would be
developed along the block, And if you are pushing to go against the
street, our project can do that as well as be in the back, The parking
modules fit either way, If you'd rather have us against the street; I
think it's appropriate that would be something we'd work out in the ERN
and the design proposal, rather than actually evaluate our proposal based
on where we showed the building in the initial plan, I'd rather focus on
use and experience, quality of project, and the prospect of a successful
project versus speculation, We're going to focus on ourselves, The joint
use parking agreement that we've requested is very normal and you've done
your analysis based on a 4,000 foot restaurant, But what I stressed was,
we really need a joint use agreement before we can determine how big the
restaurant can be, I'm anticipating it won't be less than 6,000 based on
J
I
I
8
CHANDLER
GILB
CHANDLER
LORTIE
KINNAHAN
LORTIE
CHANDLER
LORTIE
HARBICHT
LORTIE
CHANDLER
DAVE POWELL,
GRUBB & ELLIS
REALTORS
CHANDLER
HARBICHT
POWELL
'HARBICHT
YOUNG
LORTIE
HARBICHT
POWELL
a joint use of 40 stalls, I think we had some preliminary discussions and
that was a very small percentage and was a reasonable number, And that's
why we made the presentation at that number, It was not meant to be - I'm
not requesting something extra, I believe you've normally given joint use
where you had a restaurant and other users in a common parking facility,
And I'm not sure that came off - I wasn't feeling confident about how you
presented that in the staff report, But we're anticipating that would be
a conventional level of joint use parking and that 6,000 feet then would
be allowed in the restaurant facility. The users we're talking about are
not unhappy with the configuration and I would prefer that we let the users
and the tenants determine what is financially feasible, provided you have
an economic entity underwriting the project. We've got enough project)
in the City that are upside down or taken over by banks and turn up empty,
I don't want one of those either.
Excuse me, Pete, what he's talking about - is he in the real world here
with this sharing the parking places and all that when we have a restauranl
involved?
Yeah, the restaurant's open at night and the businesses close at 5:00,
Right, But it also may be open at noon,
Well, what is your policy? What has been your policy? You have a couple
of joint use agreements,
We have a policy that you meet Code, And if you don't meet Code, you come
in for a modification. And in that often there is a traffic study, or a
parking study, prepared by a consultant which analyzes it and if it meets
the approval of the Planning Commission and the Council, it's approved,
The Council's been pretty strict on that historically, and they probably
would continue to be so in the future, But it's possible,
I'm not proposing that there be a shift from your normal policy. But we
had just done some preliminary discussions and we tried to come up with
a number that looked like it was one that would be within the range of
reality, We're not trying to get something for nothing,
You mean near Code?
Is that what you're talking about?
I
Yeah, I think we've parked both facilities on Code with the reuse of the
40 spaces was the overlap, So, you figure parking for this one, parking
for this one, and you allow 40 spaces to be shared, So ."
How many total spaces are you talking about?
l50? You asked a technical question, There's about 150,
Was that up to Code or less than our Code, Do you know?
Well, your Parking Code for medical in this town is 6 per 1,000, The
Parking Code for a restaurant is 10 per 1,000 feet of floor area, Assuming
a 6,000 foot restaurant with 5,000 feet of floor area, you need 50 spots
for there; 6 per 1,000 on the 13,000 foot medical office building would
be an additional 96, You'd come up with 146,
OK,
So you seem to be in the ballpark,
I
Are restaurants on gross floor area or '"
Yes,
So it's a 6,000 square foot restaurant, It's not 5,000,
I
That's the way I understand it,
We're proposing a 6,000 foot,
No, but Dave was saying that "
OK, It's 152, but I don't know what he put in (inaudible),
9
LORTIE
And Pete's right, We need to resolve that request. That's a part of our
proposal, But the analysis for economics was based on 4,000 square feet,
And so, you know, presuming we're going to go to 5,000 or 5,500 or 6,000
or more, based on maybe some other use restrictions, the income would be
much higher.
CHANDLER
And you had a
blue, right?
nearby?
specific steak house in mind, Not just somebody out of the
And that person is not already in the City of Arcadia, but
I LORTIE
YOUNG
Yeah, well, both, I really - I'm not '"
Is this going to be a ground floor restaurant or are you considering
putting it up on top7
Jwm,
The main restaurant would be on the ground floor, What they're looking
at upstairs would be for places for Rotary Club and, you know, the small
charter dining rooms, banquet rooms, They don't get used continuously,
They get used at specific times,
YOUNG
Well, I was just thinking, the view from upstairs is certainly better than
down below looking at the side of a railroad
LORTIE
I didn't really mean to - it's so easy for me, though, I'm so picky, I
apologi~e, Pete, if I stepped on your toes, I wanted to be more positive
about our presentation, We have done a lot of nice work and I think what
we've done in Arcadia I'm very proud of, It's one of the nicest projects
that I'Ve ever participated in, The Schaefers and I have had to work out
a lot of things in developing a partnership and developing an economic and
development relationship, We don't want to see that die. We want to
continue. We've been looking for an opportunity to do it for over a year
and a half now, It's been very hard, Property, as you know, has been
difficult to find, When it is available it has problems related to it,
We saw these two sites, both of them as being a great opportunity for us
to join forces and bring the Schaefer's economic strength and my
development background and experience together and try to do two more good
projects for the City, So, we wanted you to focus on that and realize that
we are ~epresenting some very real people, We have what I think are some
people that would like to participate in these projects, both as investors
and tenants and so it's that kind of a project, I would like to think that
we also met what I felt was the spirit and the intent of the RFP that you
asked for, a certain type of project. And we said this is what they want,
Let's do that project, And we came up with what we thought was the best
proposal for that type of project, Had you said, this is our preference,
maybe as a commercial site the site might have been worth $30 or more,
I mean, I'm sure you already did your economic studies before this and you
knew that for certain users, retail sites are very valuable, A Burger King
would probably pay you $40/square foot. So, you know, it's a matter of -
first you have to plan what you want there, We felt you were right, Your
thoughts were consistent with ours, An office facility and a restaurant
on the corner where the noise factor of the trains was not so critical was
consistent with what we wanted to do and so our proposal followed that,
Unfortunately, the price and the value of the land go with that, So, I
have to say that I'm not apologizing for our offer, I thought we did our
homework, But - any questions on this project while you've still got me
on the hook? Anything to add? Did I forget something?
I
I '~"M
You did a fine job,
KINNAHAN
I
Warren, your question probably is, what happens next again? There's a
couple of new facts that came to staff's attention, One is the $22/square
foot thing, which was, we felt, not in the proposal, It's been clarified
at the table,
LORTIE
It really wasn't, but I didn't have a proposal for the smaller side,
KINNAHAN
OK, So we've extrapolated it and you're now saying it's $22, So that has
an impact on the smaller proposal, The issue that you've raised about the
(inaudible) of the project is one that I frankly would contest with you,
But I won't do it here at the table, We'll take a look at it,
10
LORTIE
KINNAHAN
LORTIE
KINNAHAN
LORTIE
KINNAHAN
LORTIE
KINNAHAN
WILSON,
CHAMPION
DEVELOPMENT
TILLBERG,
CHAMPION
DEVELOPMENT
Yeah, because we could have done some calculator problems, But I think
we do have a problem in the numbers. Just the presentation that we said
it was 3.7 and our proposal says its 4,3, You know, just that discrepancy,
Somebody missed a button the calculator,
We'll certainly take a look at it, And your point is true that if that
is true and they'd add $10,000 to the tax increment,
Which makes a big difference,
Yeah, We'll take a look at that, What I think the Agency might want to
consider is that they'll take your preparation here and your presentatiol
along with CDC's, which is to follow, and we'll bring it back to the Agenc
probably at their next meeting, which is February 6, for their considera-
tion and action at that time, '
Did CDC come?
I
Yes, they have shown up.
Thank you,
This is the Champion Development Company and Chris Wilson is on the right
and Richard Tillberg is on the left and I'll let them go from there,
I guess we first owe everybody an apology for missing our 6:00, I guess
you've all had a chance to read our proposal, I'll spend a couple of
minutes to tell you a little bit about who Richard and I are and a little
bit about Champion Development, Our company, first of all Richard is our
Director of Redevelopment for Champion Development Company and I'm the
Director of Acquisitions for L, A, County, And Champion Development
Company was founded two years ago by the President of our company, Bob
Champion, He left a development company and signed a joint venture
relationship with Long Beach Savings and Loan,
,
Very, very briefly - our company was formed two years ago by Bob ChamPionl
who has had 14 years experience in retail development and leasing and wa
actually a retailer himself, He worked for a number of other companie
and decided it was time to go off on his own, After he had formed his
company he was approached by the Chairman of the Board for Long Beach
Savings and Loan, now Long Beach Bank, coincidentally, and they entered
into a joint venture partnership between the two companies, This is a
little different from a lot of joint ventures with development entities.
We are in the enviable position of having the bank half own our company.
So that when we go out and make an offer on a piece of property, we have
the bank behind us to do construction financing, to do the equity
financing, The bank is there on every project, as opposed to our trying
to find a project and then running around and trying to find financing for
that particular item, So I think that's an important issue to remember
that our firm is capitalized at $10,000,000, I believe, and that money is
available for the development properties, We have under construction or
in escrow some 50 different projects representing in excess of 1,500,000
square feet of retail development, That's what,we do, retail, We don't
do anything else, We concentrate on doing neighborhood, specialty and
smaller niche centers, So that we find a piece of property, we find thJ
tenants that will fit that property, we make an offer, we build the
building, We're also doing a lot of work with redevelopment agencies and,
obviously, this is a redevelopment project, We have a disposition an
development agreement with the City of Temple City, your neighbor, for the
corner of Las Tunas and Rosemead, It's going to be an 11 acre site, It's
going to be a promotional center - 110,000 square foot development anchorel
by T, J, Max, Music Plus; those are the two we have now, We have lent th
redevelopment agency $4,000,000 of our money to buy the land, That's goin
to be collateralized by the land, Additionally, we are prepared to lend
the agency up to $500,000 uncollateralized, collateralized only by the
property tax increments, for their cost of relocation and fixtures and
equipment and that sort of thing, We have a 18 acre retail development
in Monterey Park, It's the old Atlantic Square. We're purchasing that,
We're going to take down 3 of the 4 buildings, We're going to bring in
a Ralph's. We're going to bring in a Thrifty's, Music Plus, possibly a
Ross, It's going to be a major redevelopment for south Monterey Park,
11
We're also working with redevelopment agencies in Vista, Tustin, Costa
Mesa, Campbell up north, So we have experience working with redevelopment
agencies, We think we know how to do it, The particular site plan and
the leasing aspect of this project is, I think, a very important aspect
of what you all are going to get back once this thing is finished in a
Year, a year and a half, What I'd like to do is ask Chris to zero in on
how our site plan works, how our leasing program will work, and then what
I will do is I'll finish up, very briefly review our pro forma and our
development team and then open the floor for questions, if you have any,
IWILSON
One question, When we originally received the Request for Proposal, we
had a major tenant in mind for the site - Pier I Imports, Richard didn't
mention, but we have a development track record in the City of Arcadia,
In 1987 we bought the northwest corner of Baldwin and Arcadia from Wells
Fargo and we built a Blockbuster Video and an Egghead Software on the
property, During the time we were marketing that property, we were
contacted by Pier I Imports, who was looking to locate in the City, But
We couldn't come to economic terms, so we didn't make a deal with them.
But, I was aware of their continued interest in the City, as many of you
are, with the approaches that they've made on another property on
Huntington Drive, So, the site plan that you see in your packets contem-
plate an 8500 square foot Pier I Imports free standing building, During
the time that we presented the proposal to you folks and tonight, we had
a chance to meet Pier I Imports at the site and the results of my meeting
with them wasn't fantastic, They didn't completely pass on the site, but
had told us it wasn't exactly the identity that they were looking for in
the City, They really wanted to be a little bit further west down near
Baldwin and Huntington because they want to be closer to the Mall and they
See that Baldwin corridor is really the key commercial corridor for them,
But didn't pass on it altogether, And at this point in time this site is
in front of committee review at Pier I, I could have an answer any time,
As a matter of fact, I was hoping to have one today, I called them, but
We didn't get one, I called Mr, Kinnahan once I met with Pier I and asked
Pete whether he felt that we should continue with our proposal based on
Pier I's lack of real serious interest, And Pete said that the City was
reviewing our proposal based on a retail concept and not specifically with
Pier I as driving the deal, So, we continued and here we are, So I think
that a way I'd like to talk about the site plan is from its viability as
a retail project standing with anchor tenants, I'd first like to say that
We presented our two proposals using the small street dedication and not
using it, based on staff recommendations, It is my opinion that the very
best retail site plan includes the use of that piece, And it was never
driven home more astutely than when I drove up to see Pier I and he said
to me, if you don't have this little street and this small green belt, I'm
leaving right now,
J
I
CHANDLER
Excuse me, if you don't have it as part of the land or if you don't leave
it for us to look at,
WILSON
If you don't have it as part of the project and I'll tell you why, Because
the site has no retail identity without it, It is a corner location, but
it is a secondary corner location, It doesn't have the impact as you come
underneath that bridge and you approach it if you don't have that whole
area there, And unlike the other folks who are pitching this proposal,
it really works for us because we can park on it and it increases our
overall parking ability and our ability to give 3 or 4 high identity users
more square footage, So, for us, it works and I would really only prefer
to talk about that one because I think that I wouldn't be able to attract
the high identity retailers that I know you guys want without it. So with
that in mind, our revised site plan to accommodate a lack of a Pier I on
this site plan would probably be to break up that 11,000 square foot
building into two free standing 5,000 square foot buildings so that we'd
have two 5,000 foot buildings and an 8,000 square foot building and go
after 3 tenants of that category, I'm doing a very similar development
to this in Pasadena on Colorado across from Fedco, just west of Rosemead
Boulevard, The City of Pasadena passed the Pride Initiative which
eliminated "mini-mall strip center development" and forced development on
to single tenants on to single lots, So what we did is we remodeled Bob's
Big Boy restaurant and built, for our building, 3 single tenant 3,000 foot
buildings on legal lot lines similar to this with the buildings up front,
heavy landscaping, similar parking requirements, So the site plans in
front of you would be only modified to accommodate 3 tenants, At this
I
I
12
point I don't have any letters of interest with me tonight to bring to you,
We really didn't have a whole lot of time from the point that Pier I bailed
on me to go out to the market place, But I will tell you that I'm very
confident that the site works for the types of tenants that I'm talking
about, And I'll tell you why, The site is really a Monrovia-adjacent
parcel, It is in the City of Arcadia, but the real true retail activity
in Arcadia is further down on Baldwin and we'd be looking towards people
that couldn't locate in Monrovia because there's just nothing there, who
want to be on Huntington Drive and have that strong presence, And there's
a tremendous amount of retail demand right now in Monrovia because you
can't find anything, There's no properties that are available on
Huntington Drive right now in Monrovia, We'd probably be looking fOI
tenants like electronics users, a Pier I type of concept that we'd 100
for, probably look for maybe a free standing clothing guy in the 3,000 t
4,000 foot range, We'd not be looking to do food in anyone of those
buildings, And I think that's pretty much the (inaudible).
HARBICHT
What is the size of the 3 buildings?
'0 wh., , woo" ., ,JIll
WILSON
We contemplate 19,000 square foot on the property,
HARBICHT
5, 5 and 9?
YOUNG
Yeah, The typical thing that I need to keep in mind is that we pro
formaed our Pier I deal at $24 a foot with a $14 contribution to their
T,I,'s and a $45 building, which is their deal, We're negotiating with
Pier I right now, and I know they would have made that deal, So now I've
got to be very sensitive to breaking up those buildings to be able to
achieve the same type of rental factor that we were going to achieve from
them, So, there are not as many 9,000 square foot users paying that rent
as there are 5,000 foot users, So I'd be looking to achieve the $24 rent
in Pier I in the two 5,000 foot buildings and reduce my $21,60 rent, which
is what I had pro formaed the shop space in, 11,000 feet, into that 9,000
foot building, Because Pier I in its size range is the top of the market
in terms of what they'll pay,
What size building would they use? ,'II
They could fluctuate between 8,000 and 10,000 square feet, And if their
deal were to happen for us, it would really, I think, change the structure
of the architecture in general for the whole project, which is maybe a
thing to get into at this point, Pier I's building - we Xeroxed copies
of it in the packages, I don't know if anybody got to see an original of
it, But Pier I's not doing any deals now that are not of their prototype
building, which is wood beamed, dark blue roof, that kind of profile, which
is the way the other buildings would come off as well, If they did not
go on to the site, I'd be looking for more specialized architecture and
I think what would work best there is similar in keeping, architecturally,
with what Mr. Gribble did adjacent to us. I mean, because it was, at least
to the staff's understanding that there was a possible exterior remodel
of the bridge incorporating brick facia, And if that was to happen, l
think that our architecture should pick that up also,
WILSON
WILSON
GILB
Let me get back to this Pier I building, We saw a picture when they camel
in before, Is that the type of building you're talking about?
Exactly,
WILSON
CILB
You know, that building looks like it belongs in the northwest to me,
WILSON
I know it does,
Why do they wanl
GILB
You see those allover Idaho and Montana and Washington,
that down here?
WILSON
I'll tell you what the retailers are doing today, and we are facing
ourselves with another tenant we built for, and that's Music Plus, My
company has built to suit for Music Plus in about 10 of their different
locations, The retailers today are using their buildings as their identity
in the market place and as their signage, Because as signage becomes more
restrictive and more generic in communities, the tenants are looking to
13
use their buildings as their identity,
to a McDonald's and there was no sign
McDonald's, Music Plus is the same way,
completely different",
Like a McDonald's, If you went
on it, you'd know that it was
Every one of their buildings is
GILB
I was very surprised when I saw that building,
wrong pictures with them, to be very honest,
the wrong part of the country,
I thought they brought the
I thought, gee, they're in
WILSON
I know, You should see the tough time they're having making the deal in
towns like Tustin, Newport Beach, So." and see, they're on such a strong
expansion program right now, that if they don't get their deal, they'll
just find another community to build it, I mean, they just won't budge
from what they have to have,
I
I:::'
WILSON
I saw one of those buildings up, I think it was in San Jose, And it really
- it was free standing in a center, But it looked very nice.
Isn't there one down on South Lake in Pasadena?
Yeah, but it's an old one,
GILB
Yeah, That's what I was thinking about when I was waiting to see the '"
YOUNG
It's been just a commercial store building,
WILSON
The Pier I of today is not the Pier I of 3 years ago, It's completely
different. They're paying much higher rents, They're doing much higher
volumes, They want interesting looking buildings.
GILB
It looks like it should be in Cheyenne, Wyoming,
HARBICHT
The other 10,OOO?
WILSON
IHARBICHT
WILSON
Would be in two free standing users,
commit" ,
And I tell you, I just can't
Not the two 5,000's.
Oh, the other, What would the 9,000 square foot tenant be?
HARBICHT
The 9,000, I'm sorry, Single tenant?
WILSON
Oh, yeah, Single tenant, And what would it be? You know", let me tell
you when I market a building and I'll give you an idea of who it would be,
I just bought a building in Newhall, We bought a 25,000 square foot market
that was 140 by 160 feet, We demised it up into a 13,000 foot space that
had 160 feet of depth, And we just went out to every single user that
could take 10 to 15,000 feet and we marketed that building -who was not
in the area, And we wound up finding a high end specialized electronics
user who was going to relocate from another community adjacent to Newhall
to put their store in this building, And they sell televisions and
appliances, Almost like a little mini Circuit City, So, to answer your
question what would go there, I don't know exactly, 'But, when I - I did
the marketing for the building on Baldwin and Arcadia and I had that entire
building leased to independent tenants, small little strip center type of
retailers. They all had deposit checks signed, And we waited until we
found the right large tenant. Almost to the point where we couldn't pay
interest any more to keep the building going, l mean, we wanted to do a
larger tenant deal there, It's more valuable for us, It's not just good
for the community, The building's worth more and it's easier to build.
And that's really what we would do here, We just identify every 10,000
foot user that wasn't within three miles and put it out,
t
I
TILLBERG
And I think one point we should add is that we have a computer system where
we have computerized virtually every tenant in Southern California and we
have every intersection in Southern California and we have every tenant,
And we upgrade these constantly, Chris and I, Bob Champion, John Champion,
are out on the streets looking for tenants, looking for sites. And as we
find things we just bring this in, We have an operator whose job is
nothing else than to input information as it comes in, When the time comes
we'll just bring out our list and start calling,
14
WILSON
And what makes our development company a little different ,than others is
that every project that we build is listed exclusively through a major
brokerage house - Coldwell Banker, Grubb & Ellis - those are two of the
biggest, And then if an area has niche brokers in an area, we want to use
them, We do no leasing in house, And as a result of that, we tap into
their network of tenants for our projects, And on this project we will
be using Coldwell Banker to do the leasing on it, I've chosen Coldwell
Banker to do the leasing on this because they are working for me in three
other surrounding communi ties, They have my Pasadena on Colorado Boulevard
listed, We have a 10,000 foot project on Arroyo Parkway in Pasadena that
they also have listed, And then we have a project on Colorado just easl
of Brand in Glendale that they also have listed, So they're contactin
the same people and this project just falls in line with that marketin
program,
TILLBERG
And I think what we'd like to make sure that is put out tonight, because -
of the fact that we thought we had Pier I and now we don't, is that in thl
event the Agency does elect to enter into an exclusive with us, we wil
commit to have letters of intent prior to the execution of the DDA on the
major tenant, So that you all know what you're getting, You're no
getting promises, then you get something else, We had hoped to have a
letter of intent even prior to the exclusive, And we may still have that,
At Pier I the man came out from Fort Worth, Texas and he took a look and
he went back and they're doing their thing, But what we will do to make
sure that you all have the level of confidence that you would have had had
this been Pier I, that prior to the execution of a development agreement,
we would have a firm letter of intent from a major tenant,
WATTS
That's comforting information, but I have a question along those lines,
I think the City Council would be very concerned before even entering into
an exclusive that they have a certain comfort level that you have a good
chance to obtain three large tenants and not come back to us at the end
of the negotiation period and say, well, we gave it our best shot and now
we're going to have a mom and pop yogurt, a nail shop, mom and pop video,
etc, A donut shop '"
GILB
A washateria,
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WILSON
We have just the greatest washateria,
GILB
They're really my favorite,
WATTS
And I think you guys know from talking to Keith the, kind of things we're
looking for, I think what the Council would like to hear tonight is how
sure are you that you can get three tenants of that size of the quality
you know we want on that site?
GILB
Let me just address it from a marketing standpoint, because I think that's
what it comes down to, I mean, who's it going to be and how are you going
to get it, When I - before I came to work for Champion Development Company
I was the leasing agent for Grubb & Ellis in the City of Industry, And
when Stanley Gribble was awarded the project immediately east of here, I
did the leasing for him, I worked on that project for the better part of
a year. And my partner and I were the ones that did the General Telephone
deal, I was not responsible for any of the smaller tenants that are the ref
Who did the salsa shop?
I don't know who's responsible, I did not do that, I am more than
personally aware of the pressures that he was under to deliver a strong,
large, not mini-mall type tenants, Because every time I brought one tl
him, he came to a table like this and got hammered, And so I recogniz
your sensitivity to that type of deal, But - and one other thing, too
is that if I could have put a major tenant out on to one of those two
restaurant pads, we would have done it, I mean, I had people that were
interested, Now this was awhile ago, This was two years ago that we were
marketing that building, So, to answer your questions specifically,
tonight I can't do it, Because I don't know who they are, But I can tell
you that there's tenant interest along Huntington,Drive because if you
drove from our site east through Monrovia you wouldn't see a vacant parcel,
except for the one that's on that Lucky Center which is in litigation,
WILSON
WILSON
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which is where Armstrong's nursery used to be, that's available. You just
- there's nothing there,
WATTS
Let me be more specific. I agree with you, There's no doubt that you can
fill up every inch of the commercial area between here and Monrovia, but
we're not concerned so much with that as the type of user, the size of
user, And your confidence that you - now, Stan Gribble got hammered at
this table, but it didn't seem to do any good because we ended up with a
nail shop,
I WILSON
WATTS
I understand,
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OK? We don't want to see that happen again and unless you can really say,
hey, you don't have to tell us who they are, but you know the kind we want
and the size we want, And I'd like you to tell us tonight whether or not
you strongly feel you can deliver those because we don't even want to get
an exclusive with you if you've got doubts,
TILLBERG
Will you excuse us for just one second?
HARBICHT
The other one was configured differently, too,
KINNAMAN
You mean Gribble's?
HARBICHT
Yeah,
WATTS
But, this can too, They can just say, well, we can't make it with three,
We come back and we'll give you ten,
TILLBERG
What we'd like to suggest - and this just came up - is perhaps a compromise
between your request and what we originally stated, And that is - let me
back up - without an exclusive right we don't have site control, We went
out, we got a letter of intent from Pier I and that went away, We can go
back out and try again, but the first questions will be, when are you
breaking ground? Would there be some solution whereby we could have a
performance deadline prior to the termination of the exclusive right so
that you don't put your time and effort into a three month process and on
the 29th day of the third month, we come in and say, well, you know, we
can't do anything. We have some time where within 45 days or within 2
months we have to provide evidence, That gives us - if you'd like to go
with this firm - if you'd like to go with us - that gives us the comfort
,of knowing that the Agency is involved and that there is a answer at the
end of the road, And that gives you the faith that if this is not going
to work, you'll know early on.
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KINNAMAN
If I can, I had a discussion today with our Special Counsel on that to make
it either an ERN which is two-phased or simply a very simple short ERN
that's basically you put some money up - this is theoretically speaking -
it could apply to you or the other developer - and you would have a period
of time to produce a letter of intent - two months - at the end of two
months you produce the letter, We take a look at it, If we like it, in
the third month of this short form ERN, we will develop the full ERN and
proceed from there, The problem is the money and the thought is that the
good faith is $10,000 is the number that I was throwing around, It's
written in our ERN right now, If the Agency does proceed and goes on to
an ERN, then the $10,000 covers the whole thing. If you don't produce the
tenant, then the $10,000 stays with the Agency. Now, the other side is
that if in good faith you bring a tenant and we decide we don't like it,
then the compromise of that would be that we split it - we keep $5,000,
you get $5,000 back, Now those are just concepts that I throw out to
respond to your comment about compromise.
t
I GILB
Well, there's not going to be any way they're
The only way they could ever lose is $5,000,
in,
going to lose their $10,000,
They can just bring anvbodv
TILLBERG
Well, I don't think we should be negotiating at the table, however
WATTS
I think we both understand what we're trying to do here, but we're
obviously going to be looking for some comfort blanket early on so that
we don't spin our wheels, Because we knowhow easy it is to get the yogurt
and donut shops, That's not what we want,
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TIUJlERG
Well, when we lost - or when we for all intents and purposes lost Pier I -
they may still come, but for tonight's discussion, we don't have them,
We said - we submitted a proposal, We cannot perform on the proposal,
The only thing to do is back out because we don't want to not be able to
perform, And we called staff and staff said, you know, why don't you
continue in the process, Everyone will know what you did, So we want to
make sure that you understand that when we submitted to Pier I, we thought
we had them - we may still. We believe that there are tenants out there,
A period of time - 45 days, 2 months - with something in our hand that
says, yes, this is a real deal, I think that is very fair, Does that make
sense to you?
It's subject to just working out with P~te the specifics on the timing an~
what the performance entails in terms of the square footage, I think it's
fine, To tell you the truth, since we got the word from Pier I - which
has been 30, 45 days - we've been out to a few people but it happened righ1t,
at the holidays and people are going back to work - you know, if we ha
45 days we could know at the end of that time if, we had the types of
tenants you were looking for,
I'd like to clarify one thing, Earlier you said that - I think with regard
just to Pier I - you needed the full corner including the island section,
Is that any tenant that YOU'd be proposing?
WILSON
WATTS
WILSON
Yes, l do, Because the site is not a triple A retail site as it is, It
just isn't, It just doesn't have the activity and the synergism of the
other retail businesses around it, And what makes that site go is the fact
that if you're a retail tenant, you can't find anything out there right
now, There's nothing else available, I believe you're going to find
people that are going to take a secondary B+ site just to be in the area,
CHANDLER
Were you guys on the list for the northwest corner as well?
TILLBERG
No, we were not, That's an industrial site and we don't do industrial,
CHANDLER
Oh, so you just weren't interested - no interest whatsoever,
I
TIUJlERG
No interest,
YOUNG
Just as a personal observation about Pier I, I think that would be a great
asset to the town, And that's my personal feeling, There is not a store
like that around close, I mean, Cost Plus is over in Pasadena, which is
the closest, So, I lean toward that type of a retail store, I think it
would be a great asset,
WILSON
Believe me, it would be a great deal, And it would be good for the
community, and it would'be good from a development standpoint, and if I
could get them to commit'.,.
TILLBERG
Are there any other questions on the leasing and retailing aspect? We can
tie the rest of this up fairly quickly, I understand you have a timing
thing.
WATTS
You have 5 minutes.
f
Then I'll make this very quick, The pro forma that we submitted, I'm going
to be referring to Attachment 2-b because that is the larger site, As you
can see from that we're proposing to - you may be able to read it, I can'l
- $25,88 per square foot, We feel that the site justified that value,
As Chris did say, the rents that we had anticipated are - for Pier I spac
- high because that's what Pier I can do. In response to the question over
here, what we would do is we would basically flip so that our Pier I
leasing would go - if we did not get Pier I - to the two 5,000 square foot
buildings, And then the 9,000 would be at the other lease rate, In
response to a phone call I had with Pete two or three weeks ago, the velue
that we had put in for our fees and permits was strictly a function of our
having been surprised by a $300,000 "Parks" fee, which we hadn't known
about, in another city,
CHANDLER
You have less than 5 minutes.
TIUJlERG
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GILB
Santa Monica?
TILLBERG
Monterey Park, So, after we absorbed $300,000 we said, gee, we don't
really want to do that again, We can - we understand that the water
connections is a construction cost - I don't think that's' a problem, Our
development team, and we're very proud of the fact that our company is a
team effort, we have two project leaders on each project. So someone is
always available, We work closely together, Chris and I work so closely
together that we're in the same office, Our team also consists of T, W,
Layman, the architect that we used on many of our designs, We have Carmona
Financial, who is our financial consultant, And he will help us work with
the financial community, As Chris said, David Esterkes is going to be our
leasing agent, He's got a lot of experience in this area, He's a Coldwell
Banker man. So we believe that we've assembled a team that, once we get
the go-ahead, we can just hit the ground running and we can really move
this thing along, Our counsel is Richard, Watson and Gershon, I don't
know if you're familiar with them, but they've got a great deal of
experience with redevelopment, I, myself, have 14 years experience in
redevelopment component in Southern California, So, we believe that we
can bring to this side of the table the experience of redevelopment, the
experience of development, the experience of leasing, financing - put it
all together and produce for Arcadia a high class retail center at that
corner of the downtown, which will set the tone for downtown going further
west.
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I
TILLBERG
Thank you all very much for your time. If you have any questions in the
next minute and a half, we'd be more than happy to answer,
WATTS
Thank you, gentlemen. I think what we're planning on doing now is having
the Council mull over these proposals. We will probably have a revised
staff report to the Council in the light of various new bits of information
that we've received tonight and put it on the agenda for the Council at
their next Council meeting.
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