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HomeMy WebLinkAboutMARCH 6,1990_2 I I 0110- ':;D 0.:10' C;O 32:0047 CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK MINUTES CITY COUNCIL OF THE CITY OF ARCADIA and the ARCADIA REDEVELOPMENT AGENCY REGULAR MEETING MARCH 6, 1990 The City Council and the Arcadia Redevelopment Agency met in a regular session at 7:40 p. m., Tuesday, March 6, 1990 in the Arcadia City Hall Council Chamber. INVOCATION Minister Gary Stouffer, Church of Christ PLEDGE OF ALLEGIANCE City Librarian Kent Ross ROLL CALL PRESENT: Counci1members Gilb, Harbicht, Lojeski, Young and Chandler ABSENT: None MINUTE APPROVAL (Feb.20, 1990) (APPROVED) On MOTION by Counci1member Young, seconded by Councilmember Lojeski and CARRIED, the Minutes of the Adjourned and Regular Meetings of February 20, 1990 were APPROVED. Council- member Harbicht ABSTAINED, since he was not present at the February 20, 1990 meeting. ORD. & RES. READ BY TITLE ONLY It was MOVED by Councilmember Harbicht, seconded by Council- member Lojeski and CARRIED that Ordinances and Resolutions be read by title only and that the reading in full be waived. CITY ATTORNEY CLOSED SESSION The City Attorney announced that, "pursuant to Government Code Section 54956.9(a), the Arcadia Redevelopment Agency met in CLOSED SESSION to discuss the case of Arcadia Redevelopment Agency vs. Jackson". PRESENTATION AMERICAN RED CROSS Mayor Chandler then read a Proclamation from the City of Arcadia proclaiming the Month of March as Red Cross Month and calling upon the Citizens of Arcadia to support the Arcadia Chapter of the American Red Cross through financial assistance or volunteer services to continue this vital service to our community. This proclamation was presented to the Chairman of the Board of the American Chapter of the Red Cross, Mr. Hal McCann and to Mr. Jim Parker, Executive Director. -1- 3/6/90 1. tJ?Jo-~o Be-s r D/5 f ,v.s I' 32:0048 AUDIENCE PARTICIPATION Thomas Crosbv, 601 South Old Ranch Road, President, Santa Anita Homeowners' Association, stated, in part that recently a sixteen year old was involved in a serious accident when he was traveling at 70 miles an hour on Old Ranch Road and struck another auto, the occupants of which had to be taken to the hospital; one of them a 6 year old boy. Some of the streets in the Village area are attractive to drivers who like to race their cars. He inquired of Council if it would be possible to install speed bumps or radar traps, or both, to help solve this problem. Mayor Chandler suggested that Mr. Crosby discuss this problem with the two Police Captains present at the meeting. I Scott Downie, 1104 Rancho Road, stated, in part, that he had attended a February Council meeting at which time Council made a decision regarding the transfer of the trash pickup contract from Best Disposal Company to Newco. It is his contention that since Best Disposal is declaring bankruptcy, this contract should have been put out to bid and numerous trash companies invited to bid upon it. He noted that Monrovia residents paid less for bin service than Arcadia residents; also, that San Marino had trash pickup by four different companies, thereby making the price competitive. He also called Council's attention to the fact that trash pickup on Foothill Blvd., which is a very busy street, caused traffic slowing and a possible hazard when the trash cans are blown or fall onto the street. He suggested that those residents on Foothill Blvd. be encouraged to arrange for bin service. Councilmember Harbicht responded, in reference to Mr. Downie, that there has been some misstatement of facts. The contract does not run out in 90 days; it is a multi~year contract; there are built-in cost increases each year which were negotiated at the time the contract was signed. The terms of the contract are set and will continue to be set until the end of the contract term. Also, to pick one rate out of a complex rate structure does not necessarily mean that the people of Arcadia are paying more for trash collection, because they could be paying less for their individual service. The contract has been negotiated and was compared point by point during the negotiations; it was done in a competitive bid situation. He is satisfied that the contract is a good one for the people of Arcadia. He also pointed out that whether or not this company is bankrupt, they have not violated their contract; they are living up to the letter of their contract. The company they intend to sellout to has been investigated thor~ughly and that company will be bound by the terms of the contract with Best Disposal. This is a good contract for the people of Arcadia; they are being well served. Councilmember new company. contract to. I Lojeski noted that the City did not Best Disposal selected Newco to The City did not bring Newco into solicit the sell their the City. The City Manager stated that Arcadia's service is far superior to that of San Marino and always has been. San Marino is served by several trash companies; they have trucks on the streets every day of the week. The rates for Arcadia are comparable across the board with other cities in the Valley; the rates are excellent for the service we receive. The City would like to go to bid now and choose a firm; unfortunately we cannot do that because Best Disposal has the contract. Unless they default on their contract, the City cannot legally go out to bid. The contract has three or four years to run. At that time the City can go out to bid. 3/6/90 -2- I I 2. 3. 3a. ROLL CALL 3b. MINUTE APPROVAL (Feb. 20, 1990) (APPROVED) 3c. HEARING RE. EMINENT DOMAIN PROC. (Cordova) (157 E. Wheeler) 064'0-<lfo tD IJCQlAlSriloN 32:0049 Councilmember Gilb stated that about sixteen years ago when he first came on Council, there was a trash company that defaulted; there was trash left on the streets for " to 6 days. When they gave the contract to Best Disposal, they cleaned up the City that afternoon and the next morning. It's easy to suggest going out to bid on this, but some of the companies involved do not have the necessary equipment. As far as Best Disposal is concerned, they have lived up to their contract; they clean up the town and that is all that is required. And as far as Foothill Blvd. is concerned he would like Mr. Downie to tell those residents that they can not use their trash cans and have to have bin service; he is not going to do it. Driving in and out of those driveways would not be any safer than picking up the cans. With regard to the comments about Monrovia's cheaper rates, that was true for the backyard pickup, and he was very unhappy about it. For the backyard pickup, many of the driveways in Arcadia are much longer than those in Monrovia and take longer to go in and out of. Those rates have been adjusted since that time in Monrovia. The City Attorney added that Best Disposal has not been adjudicated bankrupt; they have filed for a reorganization and are seeking to get the bankruptcy court to approve the acquisition of the contract by Newco and get some protection from their creditors. CITY COUNCIL RECESSED IN ORDER TO ACT AS THE ARCADIA REDEDELOPMENT 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 February 20, 1990 were APPROVED. Member Harbicht ABSTAINED since he was not present at the February 20, 1990 meeting. The Agency Counsel announced that "as previously announced, on Items 3c, d and e, Member Lojeski will be ABSTAINING with regard to a potential conflict of interest, so he will not be participating in the vote on those items". The request to adopt Resolution of Necessity instituting condemnation of certain real property (Cordova) has been continued from February 20, 1990. Resolution No. ARA-149 set hearings for this date on the commencement of eminent domain proceedings for the Cordova property. 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. Also in compliance with Ca11,fornia Redevelopment Law, the Agency provided Owner/Tenant Participation Opportunities to the owners. Staff has conducted a full and adequate review of environmental impacts associated with the acquisition of the property. In response to a question from Member Gilb, the Assistant City Manager for Economic Development explained that there are two actions contained in this single item. One is a Resolution of Necessity for the Cordova property, 157 East Wheeler. The second is for the Wingard property, 101 North Second Avenue. In the event that the Agency tonight, after hearing any testimony offered by the respective owners or people with an interest in that property, determines that they wish to pass or adopt these Resolutions of Necessity, it requires a" - 0 vote. If it is approved, the Agency will then file this with the' Agency. Attorney; the Agency Attorney will then file it 3/6/90 -3- ob8o-l.fC, RESOLUTION NO. ARA-156 (ADOPTED) MOTION 3d. HEARING RE. EMINENT DOMAIN PROC., fWingard) (101 !t. Second Ave.) tfr 00 to -1./6 L-D ,/'Ir,/ISIT, 1M 6{, 7C- <f~ RESOLUTION NO. ARA-158 (ADOPTED) 32:0050 with the Superior Court in downtown Los Angeles in approximately one month from this date. The case will be calendared for a hearing and, given the normal time, it will take about a year for it to come to Court for a full trial. In the meantime, the Redevelopment Agency staff will continue to negotiate with the families in an effort to resolve it before we ever get to that trial. In the past, no cases have gone to trial. Member Gilb inquired if there were homes in Arcadia that could be purchased for $225,000. He had talked to a real estate agent who said he had found two or three homes in Arcadia that can be brought for that price. Staff agreed there are a few. The Assistant City Manager for Economic Development then read the title of Resolution No. ARA-156: "A RESOLUTION OF NECESSITY OF THE ARCADIA REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, CALIFORNIA, INSTITUTING THE COMMENCEMENT OF ~INENT DOMAIN PROCEEDINGS IN CONNECTION WITH THE ~CQUISITION OF CERTAIN PROPERTY FOR REDEVELOPMENT PURPOSES (CORDOVA)". I The hearing for those with a possessory interest in the property was then opened. MARGARET TORRES, EI Monte, in regard to the property at 157 E. Wheeler, Mrs. Torres stated, in part, that she feels the City has been given unfair power to condemn property for redevelopment purposes. Most people cannot afford the financial impact, let alone the stress. She wondered if this is really for the good of the community or just to fatten someone's pocket. As for a fair price, if they had ten appraisals, they would all be different. If the appraisers were hired by the City rather than the landowners, the price would, of course, be lower. So far they have been unable to find property equal to what they have for the price being offered by the City for their property. Nothing is available in the prime area where they are now. The City is taking the land that their parents worked and sacrificed for. It is ironic that the City logo should be "Community of Homes". It was then MOVED by Member Harbicht, seconded by Member Young and CARRIED on roll call vote as follows that Resolution No. ARA-156 be an it is hereby ADOPTED. AYES: NOES: ABSENT: ABSTAIN: Members GiIb, Harbicht, Young and Chandler None None Member Lojeski The request to adopt Resolution of Necessity instituting condemnation of certain real property has been continued from February 20, 1990. Resolution No. ARA-153 set hearing for this date on the commencement of eminent domain proceedings for the Wingard property. Pursuant to Resolution No. ARA-153 , staff has transmitted a hearing notice and the Agency's final offer to acquire the property to the owners. Prior to setting the hearings, 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. Pursuant to California Redevelopment Law and Resolution No. ARA-IO, the Agency provided Owner/Tenant Participation Opportunities to the owners of the property. In compliance with the California Environmental Quality Act of 1970, as amended, staff has conducted a full and adequate review of environmental impacts associated with the acquisition of the property. I The Assistant Manager for Economic Development then read the title of Resolution No. ARA-158: "A RESOLUTION OF NECESSITY , OF THE ARCADIA REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, 3/6/90 -4- 32:0051 CALIFORNIA, INSTITUTING THE COMMENCEMENT OF EMINENT DOMAIN PROCEEDINGS IN CONNECTION WITH THE ACQUISITION OF CERTAIN PROPERTY FOR REDEVELOPMENT PURPOSES (WINGARD)". The hearing for those with a possessory interest in the property was then opened. I Karen Win"ard, 3lS Pleasant Street, Pasadena, stated, in part, that she is the Secretary-Treasurer of Nelson Ii< Wingard, Ltd., the daughter of Eugene and Esther Wingard who live at 1651 North Santa Anita Avenue, Arcadia, and who own tlle property the Agency is now considering condemning' at 101 South Second Avenue. She noted correction in that the owners did submit a timely letter expressing interest in participation in any proposed development contemplated for the project area. She noted anther correction in the amount offered by the Agency for the property from $255,000 to $263,797, or $66.83 a square foot, which she feels is still far from reasonable when other industrial properties in the same area have sold in recent years for nearly three times that much. She further stated that her parents had lived in Arcadia for nearly fifty years. They cannot help but question whether the public interest is best served by the Redevelopment Agency's acquisition of this business property. Her parents and grandparents built the cabinet shop on that property in 1948; it was specially designed for its purpose. It would be difficult to replicate such a building today especially for the amount of money the Agency is offering. In a more heritage conscious community, such a building would probably be a candidate for preservation. It is a functional building, structurally sound and in a good state of repair. The Agency says this neighborhood is blighted; apparently a necessary finding if redevelopment is to proceed legally; it is a subjective definition. The properties are kept up and the owners have watched with dismay the non-enforcement of the parking law along Wheeler Avenue, where the City impound lot is located. Properties in less desirable locations have been quoted to them for twice the amount of money the Agency has offered. The Agency is attempting to discard, as blighted, a functional mixed-use neighborhood. Can an, as yet undetermined, development be of greater value than a functioning neighborhood? She argues that it can not. I In response to a question from Member Gilb, staff responded that the Agency has included the Wingard's interest in participation in the subsequent RFP which went out two weeks ago. However, the Agency's primary interest is in commercial rather than industrial development. The Resolution, if passed, will not eliminate the Wingards from negotiating for possible participation. In reply to a question from Member Gilb, staff replied the Wingard's participation can take any one of a number of forms. Their land could be incorporated into a larger development, or their use could be incorporated by selling land and building and moving into a larger development, or even as part owner. Their parcel is in the middle of the development site, so the possibility of the land remaining in their ownership is quite remote. Member Harbicht noted that he understands that there is a lot of concern here; it is unfortunate that people have to be displaced. However, to clarify a few items, the purpose of redevelopment is not to make money; the purpose of redevelopment is to eliminate blight. That is why the law was passed by the California legislature. One of the things that is a necessity for redevelopment is the power of condemnation. Eminent domain has been in the law for years and years. That is how the freeways were built; they were built over land that had been private property. It is something that government has the right to do. It is necessary to make a finding if public interest requires this to be done. He feels this project makes sense and it needs to be done ... this is a blighted area. '\ 3/6/90 -5- MOTION 3e. SOUTHWEST , CORNER PROJ. PROPOSAL REV. (ERN TO WLA ARCON/SCHAEFER) (APPROVED) () b to -'-f'f Sfv' (,DqI.,Mt.fI.. ~Ro:r T R A N S C R I r T A V A I j., A B L E 3f. ADJOURNMENT 32:0052 It was then MOVED by Member Harbicht, seconded by Member Gilb and CARRIED on roll call vote as follows that Resolution No. ARA-158 be and it is hereby ADOPTED. AYES: NOES: ABSENT: ABSTAIN: Members Gilb, Harbicht, Young and Chandler None None Member Lojeski At its February 20, 1990 meeting, the Agency deferred consideration of the Southwest Corner Project Review to this date. At that time, Chairman Chandler, as well as ~embers Gilb and Yo~g were concerned about the possible loss of the traffic island at Second Avenue and Huntington Dr. The Assistant City Manager for Econoll!ic Deve~opment noted that the present estimated project cost is $2,200,~00. I Warren Lortie, on behalf of WLA Arcon/Schaefer Bros., set forth, in some detai~, the propose4 p~~n~ ~or th~ s~te, not~ng they are negotiating with a retai~ or a ~ser for th~ propo~ed office building which would gener~te r~t~~~ ~~~es and ~~~e~ tax revenues; also there is a commitll!~nt ~or ~ resta~r~nt o~ the corner. After considerable discussion, it w~~ ~O~D ~y ~ell!b~; G~~b, seconded by Member Young alld CARRIE)) o~ roll cal~ vote ~~ follows that the Agency ACC~~T the new propo~al a~ ~ut~~n~d in the map to include the portion o~ the tr~~~~c ~s~~n4 ~s outl~ned there for the new co~~~g~r~~ion of the ~ot. AYES: ~OES: ABS~N+: ABS~AIN: ~embe~s Gi~b, ~~rbicht, Yo~g ~n4 Gh~ndl~r None ~one ~ember Lojeski Chris Wilson, Champion Development, stated, in part, that his cOlI!pany is interested in a retail proje~t' an4 '~s in support of the plans for the expanded site, 'just passed, They do'not have a commi~m~nt at the present till!e' and ~eel th~t th~ parking restrictions in the City are severe. . . .. , . ""'. . . . . , Howard Schaefer, Schaefer Brothe~s, stat~d, in part that h~ agreed that the 'best use of the projec~ site, wou14 be tha~ of an office building alld a quality restaurallt. TIl~y hav~ a commitmellt from a well-~oVl1 quality' ~e~~au~allt for th~ ~H.., Chairman Chandler inquired of the name of the -~estau~allt referred to. Whereupon Hr. Schaefer introduced Charles Sturniolo, 102 Hill Run, "Monro~la, owner of the Derby Restaurallt, WhO stated that th~re'a~e pla~s to '~elocate'th~ Derby Restaurant to the new site under' discussion. This relocation is ~ecessary because of the expen!le of repairs "to the buildillg whicll are neceSl!lary followfng the earthq~k~. unless the Derby is moved to another site. Considerable I discussion ellsued cOllcerning th~ DerbiR~staural!t ~eloca~ioll' Chairman Challdler felt the Ilerby i" a' leg~lld ~Il ~~~aciia allcl he would like to see it relocate4, .' , It was MOVED by ~ember Ha~bicht, ~~cond~4 ~y M~mb~~ YOUllg ~nd CARRIED on roll call vote as follows that the Agency commence p.~got1atiop.s Oil an Exclu~f..re R~ght '~~. ~ego~~ate w1th '\h.A A~cop./Schaefer. AYES: IiOES: ABSENT; ABSTAIN: Members Gilb, ~arbicht! Young anci Challcller None ' None Member Lojeski TIl~ meetillg ~JOURNED to 7:00 p. , ' m., March 20, 1990. '." "r 3(6/90 -6- I I 4. 5. 5a. FINAL MAP 47904 ~IY (Slf-.52d' Longden Av,) 05f.O-60 If<. '-I7Qo <I, 5b. MUTUAL AID AGREEMENT - PUBLIC WORKS (L. A. & Orange Cou\lties) IO/O-do ~I-I1 (J,"1vf!L Ii I/) 5c. NIGHT STALKER REWARD (Consid'd Separately) 5c. NIGHT STALKER REWARD OlI70~&.1 !JIMtl Sitt,_I([R. 6, 6a. ORDINANCE NO. 1919 (ADOPTED) () S?O ~GS 7// J'9~oo7 32:0053 CITY COUNCIL RECONVENED CONSENT ITEMS APPROVED Final Map 47904 for an 8 lot subdivision at 516-520 Longden Avenue and 511 Walnut Avenue filed by Chris Construction Company (owner/developer of, the subject site). Approval subject to the condition that before the Final Map is recorded, all outstanding conditions of approval must be complied with. ' APPROVED Public Works Mutual Aid Agreement between Los Angeles County and Orange County and various cities within same who have become signatories to the Agreement. AUTHORIZED the Mayor to sign a duplicate copy of the Public Works Mutual Aid Agreement in a form approved by the City Attorney; DIRECTED the City Clerk to forward said signed copy to the Los Angeles County Department of Public Works for their records. Considered separately. (See below) ALL OF THE ABOVE CONSENT ITEMS, WITH THE EXCEPTION OF ITEM 5c, WERE APPROVED ON MOTION BY COUNCILMEMBER YOUNG, SECONDED BY COUNCILMEMBER HARBICHT AND CARRIED ON ROLL CALL VOTE AS FOLLOWS; AYES: Councilmembers Gilb, Harbicht, Lojeski, Young apd' Chandler None None NOES: ABSENT: With regard to the claims filed for the Night Stalker Reward, Councilmember Harbicht inquired why the eight other persons who were given portions of the reward by Los Angeles County were not included in the rewards from Arcadia. Staff replied these individuals had not made claims to Arcadia. Discussion ensued as to how the offer of the reward was publicized and how the claims were made and processed. ' Councilmember Harbicht felt that the individuals instrumental in the Night Stalker capture who had received a share ,of the reward from the County should likewise receive part of the reward offered by Arcadia. Councilmembers agreed. It was then MOVED by Concilmember Harbicht, seconded by Councilmember Gilb and CARRIED on roll call vote as follows that the Night Stalker reward be awarded based on the same ratio as the distribution applied by the County, including those that received the County reward but have not applied'to Arcadia. AYES: Councilmembers Gilb, Harbicht, Lojeski, Young and Chandler None None NOES: ABSENT: CITY ATTORNEY The City Attorney presented Ordinance No. 1919: "AN ORDINANCE OF THE CITY OF ARCADIA APPROVING TEXT AMENDMENT 89-007, AMENDING THE MAXIMUM LOT COVERAGE REQUIREMENTS IN THE" ~i~" R-_, 0 0 0, R-l ZONES", 3/6/90 -7- 6b. RESOLUTION NO. 5525 (ADOPTED) 1030--;;0 y 10-90 6c. CLAIM OF M. D. CONN (DENIED) /0</0-'+0 toN#; (>'lj) 6d. CLAIM OF J. F. ROGERS (DENIED) /OVO-,+O f(oIrER,S) :rF ;I ".. 7. 8. HARBICHT (Parking - Santa Rosa Rd.) (Disposal of Toxic Materials) Olf3o-'J. 0 DIS f'oStl /... NSf 32:UU54 It was MOVED by Councilmember Gilb, seconded by Councilmember Young and CARRIED on roll call vote as follows that Ordinance No. 1919 ,be and it is hereby ADOPTED. AYES: Councilmembers Gilb, Harbicht, Lojeski, Young and Chandler None None NOES: ABSENT: The City Attorney presented Resolution No. 5525: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, ESTABLISHING VOTING PRECINCTS AND POLLING PLACES, APPOINTING PRECINCT BOARD MEMBERS AND FIXING COMPENSATION FOR THE GENERAL MUNICIPAL ELECTION OF SAID CITY ON TUESDAY, APRIL 10, 1990, HERETOFORE CALLED BY RESOLUTION NO. 5511 OF THE CITY COUNCIL." I It was MOVED by Councilmember Young, seconded by Council- member Gilb and CARRIED on roll call vote as follows that Resolution NO. 5525 be and it is hereby ADOPTED. AYES: Counci1members Gi1b, Harbicht, Lojeski, Young and Chandler None None NOES: ABSENT: On recommendation of the City Attorney, the claim of M. D. Conn was DENIED on MOTION by Councilmember Gi1b, seconded by Councilmember Young and CARRIED on roll call vote as follows: AYES: Councilmembers Gilb, Harbicht, Lojeski, Young and Chandler None None NOES: ABSENT: On recommendation of the City Attorney, the claim of J. F. Rogers was DENIED on MOTION by Councilmember Young, seconded by Councilmember Lojeski and CARRIED on roll call vote as follows: AYES: NOES: ABSENT: Councilmembers Chandler None None Gilb, Harbicht, Lojeski, Young and MATTERS FROM STAFF None I MATTERS FROM ELECTED OFFICIALS Noted that he had received telephone calls from residents 'on Santa Rosa Road stating that since a new restaurant has opened in the area, they are having parking problems. Requested staff to look into this question and give recommenation as to some kind of parking limitation. Councilmember Harbicht noted that in the matter of toxic disposal, there are many items such as paint, motor oil, etc., which are technically illegal to be placed in the common trash. Yet there seems to be no definitive location for such toxic disposal. When he 'was representative to the Sanitation 3/6/90 -8- YOUNG I HARB1CHT (Site for Disposal of Household Hazardous Materials) HARB1CHT CHANDLER (Night Stalker Reward) 32:0055 District last year, they designated four or five days when people could come with their toxins to a central location. Staff reported they had understood from the Sanitation District that a proposed, place for disposal of household hazardous materials was to be the Rose Bowl, probably sometime in April. Staff will obtain exact information. Stated that this information should be publicized. She also noted that if paint cans were left open so the paint could dry, then they could be placed in the ordinary trash. Requested staff to find out details as to how and when people can dispose of household toxins and perhaps publicize the information in some manner. Suggested also that the Sanitation District be contacted. Noted in reply to a question from Councilmember Gilb that disposal by the trash company of such household toxic materials is extremely expensive because they have to be kept in separate containers. Mayor Chandler noted for the benefit of the reporter and others remaining in the audience that he wished to call attention to an important item. Councilmember Harbicht made a motion that the $5,000 reward offered by the City for capture of the Night Stalker be awarded to all those who were instrumental in the capture, whether or not they had applied to Arcadia for the reward. This was voted unanimously. If one can remember what the Night Stalker did to this City and this community, it is important to know that this is a City that backs law enforcement and people who help. This is significant. GILB Will be unable to attend the next Planning Commission Meeting. (Plan.Comsn.Mtg.)Councilmember Lojeski volunteered to attend in his place. LOJESKI (In Memory of Pearl Dillingham) N.s p I "I would like to take a few moments and adjourn this evening's meeting in memory of an individual who certainly had an impact on me and many, many young people in the community of Arcadia. The individual's name was Pearl Dillingham. If I could just take a couple of minutes taking some excerpts from a little article by Paul Murdy, former principal at Hugo Reid and Bonita Park Schools in the Arcadia Tribune. Pearl Dillingham was born August I, 1903. Many people in Arcadia will remember her she was a long-time teacher and principal. She passed away in Arcadia on January 20, 1990. She basically served the children of Arcadia for well over forty-six years. She was born in Chino; she graduated from Norma School in 1924 after which she applied to Mr. Westerhouse, then superintendent of Arcadia schools, for a teaching position. She started her teaching career in 1924 at First Avenue School and then went to Holly Avenue School, where she taught grades kindergarten through fifth grade over a period of many years. She was always interested in sports and took a special interest in actually teaching physical education. In those days, there were many woman teachers in the district who were not particularly interested in physical education, so she volunteered to handle many of these classes. She also organized a club within Holly School to encourage children in good dental health. Many, oldtimers and former Holly students will remember the Tooth Templer Club. One of her students at the time she was teaching at Holly Avenue was the former New York Yankee, Johnny Lindell. As a third grader, she noticed that he was having some difficulty in using the baseball bat during a noon recess period. They often talked about her special instructions after school and taught Mr. Lindell who became, again, a great Yankee pitcher and baseball player how to bat properly. Her entire life was centered on children; she was never married; her work with children was her greatest interest and joy. She later became principal of Hugo Reid School and soon after this assignment, she was selected as Principal of the newest school 3/6/90 -9- 9. ADJOURNMENT (Mar. 20, 1990 - 7:00 p.m.) ATTEST: 32:0056 in the district, Highland Oaks. At approximately the time I came to Arcadia as a fourth grader, the first person I met at Highland Oaks was Pearl Dillingham. She often expressed her concern for teachers. She formulated in 1930 the first meeting of Arcadia teachers and discussed the organization of what became the Arcadia Teachers Association. She was a tough drillmaster, but she truly loved what she was doing. She loved those with whom she worked. She once said that her life was richer for having known so many good people, particularly good children. She is survived by her sister-in-law, Emma Dillingham of Chino, her niece, Louise Osche of Henderson, Nevada and her grand nephew, Brian. I would like to adjourn tonight's meeting in memory of Pearl Dillingham." At 9:25 p. m., the meeting ADJOURNED to 7:00 p. m., March 20, 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. ~l~rd~qk 3/6/90 -10- I I I I T RAN S C RIP T (Insofar as decipherable) RELATING TO ARCADIA REDEVELOPMENT AGENCY PROCEEDINGS IN CONSIDERATION OF THE SOUTHWEST CORNER PROJECT PROPOSAL REVIEW (CONTINUED FROM 2/20/90) I REGULAR ARCADIA REDEVELOPMENT AGENCY MEETING OF MARCH 6, 1990 I ,; I CITY COUNCIL MEETING - MARCH 6, 1990 ITEM 3-e - SOUTHWEST CORNER PROJECT PROPOSAL REVIEW CHAIRMAN CHANDLER The next item is the Southwest Corner Project proposal review (continued from 2/20/90). PETE KINNAHAN Mr. Chairman, the staff has provided you the proposals and a little handout to you last night, which gives you the comments I of the developers relative to the use of the island at Second and Huntington. The issue, really, for the Agency first to discuss is how much of the island do they want to preserve for green space. Because, as you know from the transmittal, that if a great deal of the island is, in fact, devoted to green I space, it becomes a reduced site size, which means that Arcon may not be interested in the property any more. If CDC is selected as the developer, because of the reduced site size the Agency will lose $227,000 in income and there'll be a net loss of around $20,000 a year in annual revenues to the Agency. Both of the developers are here this evening, and I know at least the Arcon/Schaefer Brothers would like to address the Agency. I'd like to have Warren speak at this time if he would. CHANDLER Any questions from the Council first? AGENCY MEMBER HARBICHT I have a couple of questions here. On the amortization period, is that based on the tax increment or the total tax revenue? KINNAHAN The amortization is based upon by that particular development. sales tax and other revenues. all of the revenues produced That includes tax increment, HARBICHT But, in fact, only the tax increment goes into the Agency coffers? I KINNAHAN That's true. The tax increment goes to the Agency and the sales tax and other taxes go to the city. And what caused the downward revision in the expected Agency costs? HARBICHT KINNAHAN As to which proposal, sir? Well, the Agency costs are the same in both proposals. You were talking about the summary that was handed to you this evening? HARBICHT KINNAHAN HARBICHT Yes, you have an estimated Agency projected cost on 9-5-89 of one number. Then on 3-5-90, which was yesterday I guess, of another number. A lower number. What makes it different? I KINNAHAN When staff was doing the original estimates for these projects, we had before us appraisals and we estimated with Port and Flor the relocation costs. And we put it together into what we thought was probably going to be the most realistic cost. But we estimated kind of on the high side just to make sure we'd be covering all of our costs. We've now had about 6 months, 7 months of experience. We've acquired some of the properties. We've relocated some of the businesses. We've taken care of many of the issues that were in the original budget. We now know that the cost of the project is significantly less than it was in September. And the numbers you see there, the 9-5-89, is the estimated budget the staff provided to you then, which was our first one. The I 1 HARBICHT KINNAHAN I HARBICHT CHANDLER I WARREN LORTIE, ARCON one that was done yesterday is a more - reflects what is currently believed to be the estimated project cost. So that's our best estimate now. So we can forget these other ones. Y$S, the $2,750,000 is gone. We're looking now at $2,200,000 as the project cost. 01<. Thank you. Any other questions for Council? Ok, please state your name and address. I Y$S, Mayor Chandler, my name is Warren Lortie, I'm president of Arcon and one of the joint proposers. I'm here tonight with members of the Schaefer family, who are my joint p~oposers and a participant in our project, who has made a commitment on a portion of the site, This is a major d$velopment for us, and we would like to address that this evening. If you have any questions or specifics are needed, W$ will provide those tonight. I'd also like to make a comment on our use of the entire site. We've made a couple of comments that we didn't feel the site was appropriate as a reduced site, when the expanded site was an option. Did not mean to intend that we would not be interested in a development. We just really didn't feel that that was appropriate that it be reduced if you have the availability of the full site. We said that we would take any portion of the street or the island that was allocated to us and we SUbmitted a proposal of a revised site plan showing how we could save a portion of the island and as many of the existing t~ees as we felt were appropriate without any adjustment at all in our proposal. Did not mean to imply that we would not negotiate a reduction in the price if we could deal with some site in between or even the original site. We've just always been of the opinion that that was not the logical thing. And it certainly would affect the valuation of our project and all of the tax impact numbers. So, we didn't see where that was a possibility. Didn't mean to imply that we would not do that p~oject because we certainly would revise our proposals to come back if that was the decision of Council that the island was absolutely not an option we did not want to do it. Also, we are negotiating with a retail or a user in the office building that would generate retail sales. The commitment that we have on the restaurant corner is also a restaurant which can be validated in terms of income and so we would like to be sure that those numbers are used in the sales tax computation. I believe you have a range before you now on what the sales tax revenues would be and we would be at the high end of that range. And with the potential pharmacy being added to the office building, then that number would be increased even higher than that. A~e there any taxes on pharmaceuticals - prescriptions? I CHANDLER LORTIE CHANDLER I LORTIE CHANDLER Yes, to the extent they make retail sales. But not on prescriptions? I'm not sure how drugs are treated. I think they actually - certainly all patent-type medicines are taxed normally. OK. Yes, I was led to believe that if the included, then you were out of the deal. restated that fact. island wasn't And you just LORTIE Yes, really, that was not what we had intended when we made that statement. It was that we really didn't feel that was logical and we've always - from the time that the Agency had 2 offered it as an option, we said, well, that's the option we would take. If the option's not there, then we'd go back. It would require a reanalysis of the tax impact, because the office building would be significantly reduced. The restaurant is dictated as a certain size; but, we could make that smaller. There's still a possibility to put an office building on the site. It would be reduced quite a bit from what it is now. But I don't have those numbers. AGENCY MEMBER GILB OK, Discussion? Question? Mr. Gilb? NO, I don't really know where we are then. We've gotl Champions here tonight and these proposals are with a portion of the island or all of the island included, or what? , CHANDLER KINNAHAN Well, if I can, the original proposals, of course, were fori the entire island. For the entire island. Yeah. And there was also a request that they submit for reduced site It Was my understanding that Mr. Lortie did not have an interest in the reduced site. He corrects me now and says he is. If he is, then I guess if the Agency would like to proceed with the reduced site, then I guess we'll need to go back to this developer and have him provide us with some further information to clarify his proposal. KINNAHAN GILB LORTIE If I can inject, please. We have a time constraint. We have a specific user that does need to move forward quickly. I think what I need to make very clear is that we're willing to work with whatever site you determine you would like to provide. If it is not significantly different, then the full site that you proposed to us is our first option. We don't propose to change our contract with you, our proposed contract. If it is significantly different, I propose we workl this out in an ERN and come to a mutually satisfactory conclusion. But we do need to move forward quickly in order to preserve the commitment that we do have and which affects not only this site, but another site in the area. Is that clear? GILB I think what we have to do then is decide among the Council - the majority of the Council - if we want to retain the park out there. And if we reduce the size of the property to be developed, then we're still going to have to take in the street - part of the street - in the development. But, in other words, if we move out from the development toward the park - the little park - and we take up the street, then we really have not accomplished very much. In other words, if there's no place for cars to pass in on that side, you know, it's going to be kind of a screw ball deal over there as far as the park is concerned, the way I see it. Unless I I m wrong. I mean, the people are still going to have to drive around thel park, aren't they? The outside of it. Well, if YOU'd look in the package that was provided last evening, there was a concept map drawn by the Public Works Department that showed that they can take the traffic through part of the island and there will be a second small pork chop island to the north of that. And if I can, I can route - givel you a larger version. Yes. But, that will give somebody something to run into. Huh? That's going to be a traffic hazard, isn't it? Well, not necessarily. We have that same kind of thing at Colorado Place and Colorado. GILB KINNAHAN HARBICHT GILB Oh yeah, that's right, Yeah, This is the property. 3 KINNAHAN Mr, Gilb, the traffic consultant, Barton Aschmann, is the one that prepared it in a concept plan and it's been reviewed by Public Works and what you see there is actually a drawing by Public Works ,that could be incorporated into the overall plan for the southwest corner, ' HARBICHT What page are you looking at, Pete? Well, what I've given Councilman Gilb KINNAHAN IGILB Then we're going to cut a piece off of the front and like you have on Colorado Place as Mr, pointing out. OK, I understand that, I didn't night, of the island Harbicht was see this last IAGENCY MEMBER YOUNG Mr, Kinnahan? Seeing this blueprint I assume that some of those trees that are there on the east end are the trees that are there on the east end are the trees that are existing. KINNAHAN Yes, Some of those trees would, of course, have to go, could be saved, Some GILB This conceptual map that I have here is not a heck of a different in land overall total that the full deal, is How much less is it? It couldn't, be that much less, lot it? KINNAHAN Well, the - if you can see, the island is shown kind of in the underlying - you see where the island is today and you can see what would be left if they put basically a new turn lane, which would take off the northern tip of the island. The little pork chop would be left. Now the pork chop would be the traffic signal, the main Edison pole, there'd be probably a fire hydrant located there and it would be concrete. Maybe there might be a place for some small landscaping. Well, then we'd have to cut a piece of the corner off to make the turn. Is that what you're talking about? IGILB KINNAHAN Yes, Essentially what would happen is that the new driveway would go right kind of through the middle of the island, A little bit to the north end of the island. But you would preserve a significant part of it for use as parking and landscaping. KINNAHAN OK, Well, then with the figures that I've got - all these pieces of paper - how many less square feet would the property be with this new proposal? ROUghly about - the new island would give you about 6,000 more square feet to add to the development site, Roughly, without the island you get about 50,000, with the island you get about 6,000 of usable square feet which would be used by the new developer. GILB I G'LB . ...., KINNAHAN 56,000, IGILB KINNAHAN 56,000 roughly. So you lose about 4,000 square feet by making (inaUdible). Because of the island. Right, GILB OK, That's what I want to know, YOUNG I think that's very attractive - the shape of that. I like it, GILB 4 KINNAHAN As I say, it's been designed by Barton Aschmann, the traffic consultant. And Public Works has actually done that concept plan. What's very lucky about it is that it happens to avoid almost all the major utilities. Not all of them, but most of the major utilities in the island. Mr. Kinnahan, that's a big part of this, isn't it? That those utilities are there and that's a very expensive item, right? CHANDLER KINNAHAN Yes, There's a main Edison vault there. There are some - underneath the street there is a sewer line and a water linel There's a main Edison overhead that goes above the island So there are some very significant... There's a sewer lin in there. Some very significant stuff. What would have to be changed? Well, fortunately, because this seems to work, the only thinl that has to change is the fact that you would probably hav to relocate a fire hydrant. You may have to relocate th water and irrigation system for the remnant of the island. But that would probably have to change, anyway. KINNAHAN YOUNG YOUNG That's easy. KINNAHAN Yes. And beyond that, you have to design and build the new driveway lane. CHANDLER And the Police Department did their study and recommended this as a way to make traffic move. KINNAHAN Yes. They saw the original concept and they've also seen the specific proposals. And they say this is OK. CHANDLER Can we get off dead center on this one? Well, I don't know what action you have to take, except thai I would MOVE that we accept the new'proposal as outlined i the map to include the portion of the island as outlined here for the new configuration of this lot. GILB MOTION YOUNG I'll SECOND that. GILB That way, at least, if we can get that passed, then the developers at least know what we're working with. KINNAHAN That's right. If that's the Agency's pleasure, and I may take some consensus, but if that's it, then we know that the Agency prefers the expanded site. And after that it's merely selecting the developer. CHANDLER Mr. Harbicht? GILB Well, I think that's the key thing this evening is selecting I the developer. And frankly, I'm not sure that either one 0 these is what we ought to be going with. I had hoped, and think we had all expected, that we would get more proposal than we got. And, like on the north side we've gone out fo re-proposals and thrown it open to anybody who wants to propose. And I'm not so sure that that isn't what we should be doing here. The prices that they're offering - the pel square foot prices - I think are real cheap. Well, the only thing is, Mr. Harbicht, I wasn't saying that we take the two developers or pick out one tonight. I'm just saying that this is what we're going to develop and how we're going to develop. HARBICHT 5 HARBICHT GILB HARBICHT GILB I CHANDLER GILB ,YOUNG CHANDLER HARBICHT CHANDLER ROLL CALL CHANDLER HARBICHT I YOUNG HARBICHT YOUNG HARBICHT YOUNG HARBICHT YOUNG HARBICHT GILB I I HARBICHT Well, I think that's set. But now we have to decide if we're going to use Champion, are we going to use Arcon, are we going to go for something else? Well, we haven't set that yet. We've got a motion and a second. We haven't even voted on it yet. Oh, he just took that as a consensus. Oh. Well, I'd like to firm it down a little bit (inaudible) Me, too. Why don't we take a vote? First of all, I want to be sure everybody understands what we're talking about. We all understand. We all understand? OK. We do have a motion and second. Let's have a roll call on that one, please. AYES: Gilb, Harbicht, Young, Chandler ABSTAIN: Lojeski OK. That clarifies that issue. OK. But the main issue that's before us is where do we go from here? Now we've got the site. I guess I would be willing to take some extra time to go out and see what other expressions of interest we might have if we went out again. What are you looking for? I'm looking for more money. OK. This is - I think this price is real cheap. It is cheap. I think the property's worth more than that. I'll agree with that. And so, if it takes us another 3 or 4 months, it will take us that long. Well, I have to agree. I understand that the developer, you know, that time 1S of constraint because of the money situation. But, in redevelopment anybody that does business with a redevelopment agency is used to these delays. Especially bidding on or going to work on a piece of property that we're really not sure how we want to plan the whole thing. And I'm like you. I was very disappointed with how many answers we got back for all of the proposal requests that we put out. It just - I think the property's - for what it cost it's worth more than that. If that has anything to do with it. I think so, too. And it's always going to cost us more than we get for it. Because we have to destroy - take down the buildings that are there. We've got to prepare the land. We have to do all these things. But - and that's the price we pay, though, to eliminate a blighted area. But this seems like the differential's greater than it out to be. And just 6 GILB KINNAHAN LORTIE KINNAHAN HARBICH'l' LORTIE KINNAHAN HARBICH'l' YOUNG HARBICH'l' YOUNG HARBICH'l' YOUNG CHANDLER YOUNG MOTION CHANDLER YOUNG GILB CHANDLER GILB CHANDLER GILB CHRIS WILSON CHAMPION DEVELOPMENT looking at the absolute value of the land - forget about how we acquired it or what it cost - I think the offer is too low. Well, actually, we really don't know what Mr. Lortie's offer is because we were informed that he might not be interested in this thing. And now he says he'll work with any site. So we don't really know what those numbers are right now. They're less than obviously what it was for the entire site, but how much less I don't know. Mr. Gilb, he does. He has proposed for the expanded site his numbers are shown in that summary sheet. ani The site you just voted on is the site that I bid on. Yes, that's the one he prefers. It's shown as - under second column "Arcon" - it's shown as $1,200,000. th) This is public information, isn't it? Yes, it is. Yes, it is. OK. We're talking $21.27 a square foot. That's very low. I don't think it's enough. And I don't think $25,88 a square foot's enough, either. And I know that we have to look at it in light of what's going to go on there and what the returns are. But the fact is, I think the property's worth more than that. I think we can get more than that for it. Especially on a Huntington Drive site, too. Yes, we're going to beautify that railroad bridge. to look good. And so, I think that we maybe out to advertise for proposals. It's goinl go out am Mr. Mayor? Yes. I MOVE that with our new vote on the exact site that we go out for new proposals. Before we get a second, would it be courteous at least to let the other developer who showed up tonight say his piece and we can decide after that developer gets done? That's fine with me, I'll SECOND her motion. J OK. We have a motion and a second. To put it on the floor. Put it on the floor, OK? Would - yes - anybody. They want to pay $260,000 more than the other guy. my kind of people. They'rl I'm Chris Wilson with Champion Development. And first thing, I'd just like to say that I'm in support of the motion you just passed for the expanded site because it does work better for our project that way. And I would like to just tell you that from a retail standpoint I think we've used the site most effectively and it's really a function of the income that we 7 I ,GILB WILSON GILB HARBICHT WILSON HARBICHT WILSON CHANDLER I WILSON GILB WILSON GILB I CHANDLER WILSON CHANDLER I HOWARD SCHAEFER, SCHAEFER BROTHERS can generate on that site afterwards, And if you go out again I think you have to identify with the types of uses that maybe you think you might get there to generate more land value for you, You've got an office guy here who has obviously used the site most efficiently based on Arcadia's parking codes. And us, being a retailer, you know, we're the same way. Your City is, because of this parking issue, one of the most restrictive that I work in. 5 per 1000 for retail with no compacts and, you know, expanded larger parking stalls so folks have, you know, an easier way to get around~ And, I mean, you're really creating a better environment, but what you're also doing is impacting the amount of building that you can put on there. So, I just would like to leave you with that and see if you guys have any questions regarding my project. In other words, $25.88's you and that's it, as of right now. Yes, sir. OK. You still don't have a commitment. No, we don't. We don't have a commitment and, you know, until we had a site plan settled down and an economic deal with the city, you now, we really have not taken it out beyond the initial people that we had contacted at first. And has there been a change in their attitude? There has not been. Would an expanded site? At least we've put it in concrete what you have to deal with. To tell you the truth, Roger, we presented the expanded site to them, And when I went out to visit with the pier I people at the site, he told me that without the expanded site that he was going to drive away at that time. Because, see, the site from a commercial standpoint for retail without that identity, it's just too soft a site. It just doesn't - it doesn't attract the type of tenants that you folks are going to demand that I produce. So, you know, I'm pleased that you voted the way you did. The site's just too difficult to get to being on that side of the street, with the divider in the middle of the street. And there's no identity. I mean, Second's just a sleepy little street without, you know, doing something to it. OK? Yeah. I follow. OK. All right. Thank you. No more questions? Thank you. I'm Howard Schaefer, Schaefer Brothers, and a joint venture with Arcon on the proposed project. If I may just comment on the issue of value, because I think it's a good question that you've raised. As you know, we're familiar with and have dealt with the real estate opportunities in Arcadia. We've dealt with the projects for a number of years. When we've taken a look before the condemnation of that particular site, we took a look at the values that were being asked along that area by owners for properties. And the judgment we made at that time that the value, even though that may have the highest value that people were asking, it wasn't justified 8 HARBICHT with respect to the types of commercial properties that would be conducive to the City and that the City would want in that particular area. So, consequently, when prices were being offered at $30 or $35 a square foot, we backed away from those particular prices. When you're talking about a condemnation of property, as the Council was aware, the price is for the highest and best use of that particular property. But in the RFP that has been presented and the desire of what is best for the city of Arcadia, excludes certain types of commercial activities that might be willing to pay the highest price. For instance, a fast food operation in some of those areasl So I think those are items that you have to take int consideration and it's indicated in the reaction that you go to the RFP. The fact that you only got a few people that were particularly interested. As you're aware, that site is a very difficult site. The individual from Champion indicated soml of the problems with that particular site from a developmen point of view. Our feeling was that the best use of that sit would be combination of an office building, since that wa acceptable to the City of Arcadia, plus an established well- known restaurant. And we've been able to obtain one of the restaurants in Arcadia that is very much interested in that particular site and that way we will be abl~ to retain their business acti vi ty here in Arcadia. And I think that's another important factor to be taken into consideration as to how the development of that site, while it may not be the highest price that the Council's being requested for, nevertheless in the long run it brings in sales tax revenue and other tax - and property tax revenue. So in time I believe the City will get back a significant benefit to the City of Arcadia and a good looking, quality building, which I think is also just as important. If you're talking about eliminating blight in the city of Arcadia, it's not important just to have another facility there, but a building that we can all be proud of, that will establish a quality and a direction for the future for the entire development in that particular area. And thai is what we plan to do. Thank you. I think, Mr. Schaefer, what we were talking about the last time we had this meeting that if we wanted to put a hamburger stand in there we could get $40 a square foot for that property without any trouble. I think, you know, there's 2 or 3 that have shown an indication for it. So, maybe that's something we have to deal with. What we want, you know, if you're going to go to heaven, you got to die. And if you're going to want $40-$50 a square foot, then you're going to get something that you may not want too bad, you know. So there you've got the problem. Anyway... Pete, what do you think about - what's your prognosis of what would happen if we went out with a wider advertising proposal? GILB KINNAHAN Well, the Agency has done a relatively wide first RFP and we got - if you recall, we narrowed it down to 10 qualifiers. We went to those 10 and we got 2 that seriously proposed. Thl RFP that we wrote basically said that we want the develope to do everything. And I think that, coupled with the wea office market, had a little bit to do with the limited numbe of proposals that we got. Not just for this corner, but for the northwest corner. The proposal we've rewritten for the northwest corner has put the Agency a little more up fronJ that says we're willing to ,help out a little more to get th type of development we want. I suspect we're going to ge more proposals. But there's a trade-off there, because if we give them more incentives by, say, paying for off-site improvements and they give us a higher land price, the net is really going to be about the same. That could be true here in this one as well if the Agency - my question to the Agency is in light of this. If $25.88 is not enough, then as we've done with another RFP, maybe the Agency wants to fix a bottom 9 IHARBICHT "NO.... HARBICHT KINNAHAN HARBICHT I' KINNAHAN HARBICHT KINNAHAN HARBICHT IKINNAHAN HARBICHT ,KINNAHAN I HARBICHT KINNAHAN HARBICHT price that says we don't want - don't propose unless you're going to at least meet this price. My concern with that' is we're going to be running up against a difficult time. I think we've got a couple of bona fide proposers out here who have looked at their pro formas and these are valid. These are not pasted together. They've taken some - there's some work to these. And if we go out again we run the risk that we may not get - they may not come back in again. If they do we may get the same - possibly better, possibly worse. So we're running a bit of a risk if we go out again with the same RFP. If we were to enter an Exclusive Right to Negotiate, is price one of the negotiable? It is. We would get a re-use appraisal by our consultant and we would see - the re-use appraisal basically backs you into the residual price of the land, which is what they offer on, using their particular development and their particular expenditures. And if the re-use appraiser said that he felt they could pay more money for the land, we would certainly seek to have them pay more money for the land. You mean somebody has to tell them that they can? Well, we need to have some professional get in and analyze all of their numbers in a very detailed way. The numbers we have seen today appear to be relatively - I'm comfortable with them in terms of what I believe the market to be out there. But we would hire a professional appraiser to look at those, which is what we typically do. Well, I guess I'm saying if you're negotiating with somebody, that person might say, OK, I've made you an offer, but I'm willing to up that offer. Just like we might be willing to say we're willing to do this. I mean, I assume that they came up with these prices by themselves. Yes. Why would we have to have an appraiser? Well, as part of the normal exclusive process, we typically do that. We have an outside expert come in and take a look at their numbers and make sure those numbers are, in fact, as accurate as they say they are. Well, what if the re-use appraiser - let's say we're talking to Arcon here, just for purposes of discussion. What if the re-use appraiser comes in and says, yeah, $1,200,000 is the right price. And Arcon says, we want to close this deal. We'll make it $1,300,000, That's fine. I mean, they're not bound by the re-use appraiser. No, no. Of course not. No, no. We need to do the re-use appraisal for basically two reasons. One is to verify the numbers that are given to us by the developer. The second is ~ we have to make a finding when we adopt the DDA as to what the actual value of the land is. Whether there's a write-down or not. And we haven't done a re-use appraisal yet? Not on this property. No, sir. We do that usually during the Exclusive Right to Negotiate period. OK. So that wouldn't be a repeat of something. 10 KINNAHAN No, no. GILB Mr, Kinnahan? I want to ask a question. This piece of paper I got here - Champion - is $1,460,000. Then it says reduced site $1,222,000. Is this the reduced site? KINNAHAN No, sir. That's the expanded site with the island. includes the expanded site. So that's $1,460,000 with Champion? It GILB KINNAHAN Yes, sir. I GILB And $1,200,000 with Arcon? KINNAHAN Yes, sir. I HARBICHT You can throwaway the second sheet (inaudible). GILB Yes. KINNAHAN The Agency tonight just decided it's going to be use of full island. GILB OK. So Champion's offering $260,000 more for the site than Arcon, KINNAHAN Yes, sir. GILB So if you're going to go ahead, there isn't even a contest as far as I'm concerned. For that kind of money. Unless I'm reading this thing all wrong. Of course, the increment you get from Arcon for this thing is twice as much. CHANDLER What is that difference? Why is the increment? Is it becausl there's three different users? It's that the tax increment comes from the buildings that are proposed. And the buildings are, of course, different. See, one of them's proposing a retail building. The other one's proposing a restaurant and an office building. KINNAHAN HARBICHT KINNAHAN Yes, but it's $6,000 difference in the deal. Well, those figures are - I wouldn't consider those to be immediate. Those are orders of magnitude. Basically, what it shows you that overall they're relatively close in terms of their overall estimated revenues. There is a difference. We feel that Arcon's going to be a little higher, probably, than would be Champion. GILB GILB But it would take 40 years for them to catch up. I KINNAHAN Well, we know that... At least, my mathematics it does. GILB KINNAHAN We've now looked at the different - the project cost, we believe, now is around $2,200,000. Which means that thl payoff for both of them ranges from 13 to, say, 16 years t payoff that debt. Which is the difference between the lan sale proceeds and the project cost. There is a little - there is some money to pay back and that's amortized over time. And that takes about anywhere from 13 to 16 years to pay that bac!c, HARBICHT That's not based on present value. line. That's just a straight 11 KINNAHAN HARBICHT IGILB r'CHT I CHANDLER SCHAEFER CHANDLER SCHAEFER CHANDLER CHARLES STURNIOLO, I DERBY OWNER CHANDLER STURNIOLO IYOUNG STURNIOLO YOUNG STURNIOLO straight line. straight line. See, the difference between the two proposals in terms of the net net isn't that much difference in terms of the payoff. But there are some significant differences on what's going to be there. You know, the question is would you want something like a pier I there? Or do you want something like a restaurant and an office building there? You're getting an office building with a restaurant. The restaurant won't be the major part of that deal, I don't think. The medical building is the big thing. In any case, you're - the actual physical plant for the Arcon proposal is going to be a much more substantial, much more expensive development than the other. The other makes it up because it returns twice as much sales tax because it's retail. And I guess my feeling is that given these two, I would rather go with the restaurant and office because I think it provides an anchor down there and is going to sort of set the tone for the rest of that area. And I don't think we're going to have a thriving retail area there. I think that - I'm not saying that a pier I or something like that couldn't succeed there. I think it could because it's a destination- type shop. But, it's not going to generate a whole lot of other retail on both sides of the street around it, because the area itself just can't succeed for that. It just doesn't work. And, so, given these two I'd rather go with the office and restaurant because I think that's what the character of Huntington Drive between First and Second is going to be. That's what the hope is. You know, we have the proposal across the street for the remodel of that one building which, if they ever get going on it, is going to be very nice office- type development. And there's other office-type developments in there. I have a question. Mr. Schaefer, we keep talking about a quality in-town restaurant and, unless it's some big secret, this may have a big - I'd like to know what it is. Yes. I don't think - I'm pleased to announce that the Derby is very much interested in relocating to that particular site. Relocating its entire building, or just expanding, or what? with your permission, Mr. Mayor, I have here the owner of the Derby restaurant. Name and address. Charles Sturniolo, 102 Mill Run, Monrovia, We would relocate the whole building over to the new site. Where would the office building be then? I guess on the back side. And the restaurant would be as big as the present one? No, it would be a lot larger. A lot larger. 7,000 - 8,000 square feet. We're on a time schedule here. We have 9 months, I guess 8 as of tomorrow - months to do something. The restaurant is not valuable enough to earth- quake it, so we have a choice of finding a new home for the Derby. Our first choice, naturally, is to try to stay in 12 CHANDLER STURNIOLO CHANDLER GILB Arcadia. This is what we're trying to do. This is why, when they were talking about "time is' the essence", we're on a clock there. We have maybe 9 months. So, in a nut shell, because of the earthquake needs to repair, you would just build and close shop and then sell what you have. We have to now. Yes. OK. Thank you very much. I think that should have coml out sooner. OK? We have a motion on the floor. Well. YOUNG Maybe I should withdraw it. MOTION WITHDRAWN CHANDLER ' GILB SECOND WITHDRAWN YOUNG GILB YOUNG LORTIE CHANDLER GEORGE WATTS, CITY MANAGER LORTIE Withdraw the motion? I And I'll withdraw the second. I understood from the discussion with Mr. Schaefer last time that we were going to have an office building with a restaurant upstairs. I mean, that's what I heard. At least, I think that's what I heard. A banquet room upstairs. A banquet room. Yeah. That would be fine. That's what I plan. If I may explain a little bit more about the layout. If you picture the land as being a rectangle area going from Second moving west, it would be divided into, you might say, two parts. The eastern part would be the restau- rant. Roughly, about one-half. And the west side would bl the medical building. That was similar to what our original presentation was, except that we were anticipating a littl€ larger medical building and a smaller restaurant facility. But to accommodate the Derby, we can give them a larger restaurant facility, including banquet facilities and bring down and make smaller the medical building. That seems to accommodate all the parties that we have of an interest in the property. Plus,_having the restaurant at the side also allows us to better utilize the trees and some of the shrubbery that you already have there. And, so, that accommodates some of the concerns that the Redevelopment Agency has presented to make sure that it maintains some of that park ambience that you have there. Mr. Watts, do you have a comment? Yes, Mr. Mayor and Members of the Council, if you will turn to the memorandum on this subject that was given to you las1t night, dated March 5. It's the same one where you wer looking at the island configuration. If you'd turn to th fifth - to the sixth page in that, you will see a propose layout for the Lortie-Schaefer plan. It shows the medical office building on the left and a proposed restaurant site on the right. Although that may not be to scale, given the size of the proposed Derby restaurant, I think that's the basil configuration. Am I correct? George, that was a 6,000' foot restaurant - 4,000 foot on the first floor and 2,000,upstairs in a banquet Kiwanis/Rotary Club type facility. That will now be expanded to 5,000 to 6,000 feet on the ground floor and retaining the same 2,000 feet upstairs. It reduces the office building approximately the same amount - 1,000 to 2,000 square feet. The configura- 13 CHANDLER LORTIE CHANDLER I LORTIE J CHANDLER STURNIOLO CHANDLER STURNIOLO I GILB CHANDLER GILB CHANDLER YOUNG I GILB HARBICHT GILB I HARBICHT GILB HARBICHT YOUNG HARBICHT tion on the site plan stays essentially exactly as it was shown on the original proposal. Parking's no problem? Parking's no problem. The original His current situation, he's got all kinds of parking. Yes, we actually counted the spaces that they have at the existing Derby in order to determine that we could provide the same amount of parking that he has now, which is a larger site than necessary. On our first proposal what really changed most significantly was the downstairs. We had parking just under the office building. We would now need to expand it and have it under the entire site, except for the area where the utilities are running under the island. That area we couldn't use, but we will expand that underground facility, which is one of the reasons the assessment of the project for property tax revenue went up. We had to increase the construction costs. Just one other question. Mr. Sturniolo, other than the fact that you're forced to do something because of the earthquake thing, does this all add up to you real nice in terms of your business? Well, we need to go to 7,000 - 8,000 square feet to make the payments. Yes, it does. Thank you. Thank you. Of course, he's got to make that deal with those folks, not with us. The initial motion was withdrawn and the second was withdrawn. We're back to square one. We have any kind of a discussion? I'll start the discussion. For some reason, I didn't know what local restaurant we were talking about and we're talking about a local legend, not just a local restaurant. Shoemaker is a legend. Well, his picture's on the wall, too. Somebody has to win; somebody has to lose. In my mind this proposal with the Derby restaurant included in it is my choice. It certainly creates a different story knowing. certainly don't want to lose the Derby. And we I kind of like - I'm looking at the $240,000. mercenary. I'm kind of I think the $240,000, though, is you have to give something up to get it. It's just like... We're gonna get it up front. We can run. It could be even more if we let McDonald's go in there. I said that. Yeah. So, I mean, it's what do we want there and, you know, the net net is pretty much the same for either one. I truthfully don't want a fast food restaurant. No, well, I don't think any of us do. 14 LORTIE How fast is the food at the Derby? Slow. OK. Mr. Harbicht, I could answer your question. You haven't asked me yet. But we would be willing to discuss the price very seriously with your re-use appraisal. We're not trying to steal the property from the city. We did a very careful analysis and, obviously, just in the things that have transpired already with the island and trying to save the trees, more things could change. We're not trying to steal the property. We've come up with a price that we feel we can make work. We need to guarantee it to you. We're not gOingl to enter this project unless we can produce a quality project and be successful at it. . It's a project that we want to continue to own and we don't want it to go into bankruptcy or have words over the windows in two years. So, we will 1001 very seriously at the re-use appraisal from both - from ou point of view as seriously as from yours. And if there is some justification in the appraisal process that we've either been able to increase the usage of the property or increase our utilization of the property and it significantly changes our pro forma, we would certainly consider renegotiating the price. GILB CHANDLER Do you have a motion, Mr. Harbicht? WATTS Excuse me, Mr. Mayor. The appropriate motion, if the Council wants to select one of the firms, would be to designate the firm and then direct staff to commence negotiations on an Exclusive Right to Negotiate. Yeah. I would MOVE that we commence negotiations on an Exclusive Right to Negotiate with ArconjSchaefer. HARBICHT MOTION YOUNG I'll SECOND that. CHANDLER Motion and second. May we have a roll call, please? I GILB May we have a discussion? CHANDLER Oh, we certainly can. I thought we had it. GILB We're going to have another one. CHANDLER All right. GILB Listen. I'd like to know what Mr. Lortie was saying there about - I think we've been a little misled on this thing. I mean, I had that vision they want to pay $1,200,000. They're going to put an office building in, a dental building in. There'll be a little restaurant upstairs. And that's all it's worth. But if you're going to put two buildings over there and the Derby'S one of them, I mean, that's a hell of a different ball game than I understood we. were going to get. In fact, as I was sitting here trying to figure out how at guy's going to keep a restaurant going on the second floor of a medical building, unless I didn't know, you know. I don't want to charge a lot more money just because the Derby's coming in over there. But, I don't think we got the facts to start. I'm going to support the motion, but I want to tell you something. I don't think we got the facts in this wholel thing to start with. And that gives me a little disturbance, you know. I don't know how long ago everybody on the staff knew this, but I got to tell you something. Tonight's the first time I ever heard about it and that's moving a major restaurant over there and putting up two buildings is a lot more on that corner than I thought we were going to get, you know. And it just seems like if we're going to make these decisions, we got to weigh everything and not just get the surprise 10 minutes before the vote, you know. I don't think 15 that's fair to me sitting home studying all this junk every night and then I don't even know what we're talking about. That's all I got to say. HARBICHT Well, my impression all along was that the restaurant was a separate building. GILB It wasn't mine. IHARBICHT YOUNG They were talking about a banquet facility on the second floor of the restaurant building. ~BICHT 'GILB HARBICHT I knew it was going to be a separate building for the restau- rant, but I did not know it was the Derby until tonight. I didn't either, but... Pardon me? I said I didn't either, but... YOUNG Yeah. CHANDLER Well, needless to say, I think that's a significant part of the program. GILB What does that mean? CHANDLER Well, I said it earlier that it's not just a successful restaurant, it's a legend. And I think its hope for future success is good. And I'm willing to go with a winner. GILB Well, I got nothing against the Derby. I'm just saying that I think that we didn't get the whole ball game that we were entitled to. I LORTIE Mr. Mayor, if I may shed a little bit of light, because I think it's no one's fault. These are what's happened when you're trying to negotiate things when you've got a lot of different parties involved. We, ourselves, did not know that we would have the Derby committed until this past weekend. Because the Derby had to consider a certain number of alterna- tives that were available to them and what they were going to do. Our original proposal when we presented was for a res- taurant site. And we were hoping that there was a possibility of the Derby. But in all fairness to the City Council, in all fairness to the Derby, there was nothing definite that was being discussed. It wasn't appropriate for us, since there was nothing definite to disclose, who it was that we were talking to. And we had a back-up plan that if it wasn't going to be the Derby we would try to get some other type of good style restaurant, because that would provide sales tax revenue to the city. And, in fact - and we didn't disclose a lot of our negotiations with the Redevelopment Agency. So it's not - this is last minute information that we definitely had a restaurant committed to our particular proposal. And, also, another one of the issues was how to use that particular island and certain other issues that we had to come up with as far as our financing. Could we do it with the extended size of the Derby? Would that accommodate with reducing the medical building? So there was a lot of things that had to be negotiated. Thank you. I I CHANDLER Thank you. Yes, Mr. Harbicht. I want to make it clear. I mean, I hear what you're saying. Speaking for myself, I don't care that it's the Derby. HARBICHT GILB Fine. 16 HARBICHT GILB HARBICHT GILB HARBICHT CHANDLER YOUNG CHANDLER WATTS CHANDLER ROLL CALL If it was Tony Roma's - fine. We're talking a restaurant. We're talking an office building. so, I mean, the fact that the Derby's a legend - I don't care. Well, it seems to be important to the Mayor. Well, maybe it is. I'm just saying, to me it's not. I mean, I like the Derby. I eat there. But, I'm looking at the proposal for a restaurant and an office building. And that's what I'm looking at. In other words, you would have passed this tonight if theyl said we're going to try to get a restaurant. You wouldn't have no idea what it was. Is that what you're saying? Yes. We did that on the northside development. We did thai on the souths ide development. Part of the ERN was that w negotiated with them that the restaurant would be from a lis that we prepared. So we - I mean, we're not passing th project tonight. What we're doing is saying, these are the' people we're going to talk to and work out the deal with and if the deal doesn't work out, we'll go talk to somebody else. But, the fact that it's the Derby - fine. I think that's great. But if it was - like I say, if it was Tony Roma's or Benihana or something like that, I'd say great too~ Everybody had their say? .We have a motion. Yeah, we have a motion. Would you repeat the motion, please. city Clerk, can you repeat the motion. The motion would be to direct staff to commence negotiations on an Exclusive Right to Negotiate with WLA Arcon. The motion from Mr. Harbicht and the second from Mrs. youngl OK. May we have a roll call. AYES: ABSTAIN: Gilb, Harbicht, Young, Chandler Lojeski I I 17