HomeMy WebLinkAboutJanuary 21, 1992/~ `F' ' ~ ~ ~
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ARCADIA CITY COIINCIL MESTINf~
JANIIARY 21, 1992
6:30 P.M.
ACTION
ROLL CALL: Councilmembers Ciraulo, Fasching, Aarbicht,
Young and Gilb Harbicht excused
a sence
Discussion on proposed Arcadia Community Center Use Policy
and Fee Schedule. A~jnrnvP~l w;th ~hanges
7530 P.M.
INVOCATION
PLEDf3S OF ALLEaIANCB
ROLL CALL: Councilmembers Ciraulo, Fasching, Harbicht,Harbicht excused
Young and Gilb absence
MINUTEB of the adjourned and regular meetings of January
~' 1992 -°" Approved
MOTION: Read all ordinances and resolutions by title
only and waive reading.in full. ~ooted
PREBENTATIONB to volunteer HAM radio operators
1. POHLIC SEARINa
Consideration of assessment for property clean up
at 527 Magellan Road (Tien Chen Sun, property ~ Public.Hearing Closed;
owner).
A~,nrovari
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ACTION
2. Time reserved for those in the audience who with
to address the City Council (five-minute time Harold Ellis
limit per person). Julie McCoy
3. RECE88 CITY COIINCIL
4. MEETINf3 OF TH8 ARCADIA RSDEVELOpMENT A(iENCY
a. Roll Call: Agency Members Ciraulo, Fasching, Harbicht excused
Harbicht,.Young and Gilb absence
b. MINUTES of the meeting of January 7, 1992 p~,ornvari
c., AA70URN to 7:00 p.m., February 4, 1992
5. RECONVENE CITY COIINCIL
6. CONSENT ITEMS
a. Consideration of a one-year time extension for
Modification MM-9o-001, a proposal for two
22,340 square-foot office buildings at 201-
251 Santa Clara Street (Dan McF. Chandler, Jr., qpProved
developer).
b. Recommendation to execute a Memorandum of
Understanding for the City's participation of a
sub-regional air quality plan. Approved
c. Tentative Parcel Map 90-012 - Parcel Map No.
22410 Right-of-Way Dedication on Palm Avenue
and at the northwest corner of Holly Avenue and
Palm Avenue. Approved
d. Recommendation for award of contract for 1991-92
Tree Maintenance Program on Various Streets -
Job No. 519. Approved
e. Report and recommendation for the purchase of
one 1-ton van for the Police Department. Approved
f. Report and recommendation for the purchase of
one 3/4-ton pick-up truck for the Police
Department. Approved
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g. Report and recommendation for the purchase of
one S10 Blazer for the Fire Department. Approved
h. Report and recommendation for the purchase of
one Suburban for the Fire Department. Approved
i. Report and recommendation for the purchase of
one 4-door sedan for the Engineering Division
of Public Works. Approved
j. Recommendation to approve $500 contribution to
the Arcadia High School Bi-Centennial Consti-
tution Competition Team. Approved
7. CITY MANAf3ER
a. Request for approval of Special Legal Counsel
to review tax and bonding questions related to
a possible mall financing. Approved
b. Report regarding postcard utility billing
system. ' Approved folded bill
format
Presentation by Congressman David Dreir
8. CITY ATTORNEY .
a. ORDINANCE NO. 1962 - For Adoption - Adding a
Chapter 7 to Article IX of the Arcadia Muni-
cipal Code regarding the preservation of oak
trees. Adooted
b. ORDINANCE NO. 1963 - For Introduction -
Approving Text Amendment 91-006, amending
Section 9273.1.10 of the Arcadia Municipal
Code relating to horse racing to include a
satellite feed during daytime and evening hours
with or without pari-mutuel wagering. Introduced
c. RESOLUTION NO. 5641, denying with findings, an
appeal of the Planning Commission's decision
to uphold the Highland Home Owners Association's
(HOA) Architectural Review Hoard (ARB) approval
of a 1,689 square-foot second floor addition
at 2050 Vista Avenue. A~oRtP~
d. RESOLUTION NO. 5642, denying, with findings,
an appeal of the Planning Commission's decision
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8. CITY ATTORNSY (oontiAUed) ACTION
to deny two modification requests, and, uphold
the Santa Anita oaks Homeowner's Association's
Architectural Review Board's denial of side
property line fencing and driveway lights
for a front yard landscaping project at 284
Arbolada.Drive. Adooted
e. RESOLUTION NO. 5643, declaring its intention
to approve the petition for installation of
street lights on Pamela Road from Santa Anita.
Avenue to Naomi Avenue; setting public hearing
thereon for February 18, 1992; and directing
notice hereof to be posted and published. Adopted; public
9. MATTERS BROM STAFF
10. MATTER9 FROM BLECTSD 08BICIALB
li. ADJOIIRN to 7:00 p.m., February 4, 1992
Denied Historical Society request for tree mural on side
of Historical Museum. Woolard - notify Historical Society.
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TO: CITY COUNCIL
FROM: (,/PETER P. KINNAHAN, ASSISTANT CITY MANAGER
FOR ECONOMIC DEVELOPMENT
SUBJECT: REQUEST FOR APPROVAL OF SPECIAL LEGAL COUNSEL TO REVIEW
TAX AND BONDING QUESTIONS RELATED TO A POSSIBLE MALL
FINANCING
Santa Anita Fashion Park Mall, owned jointly by the Hahn
Company/Urban Projects, Inc. and Santa_ Anita Realty Enterprises,
Inc. , has requested financial assistance from the City on the
proposed 430, 000 sq. ft. expansion of the Mall.
Certain technical legal questions about the types of possible bond
issues, the role and risk to the City (if any) of the respective
bond issues, tax-exemption matters, and other tax related concerns
have arisen which require specialized legal review by a bond
counsel and tax firm.
A Request for Proposal was forwarded by staff to four such
qualified firms on December 19, 1991 (Attachment A) . Their replies
are summarized on Attachment B. Copies of their proposals are
available in Economic Development.
The bond counsel responses have been reviewed by the City Attorney
and Finance Director. Based upon their comments, review of! the
proposals, reference checks and cost, staff recommends that the.
City Council select the firm of Brown & Wood (B&W) .
There will be no costs to the City unless and until there is a bond
issue. The City must agree to use B&W as bond counsel on such an
issue if in fact the City issues bonds. If it does not, there will
be no cost for the service. Estimated costs for the two types of
bond issues, (only one of which would probably be used) ; are
Certificate of Participation $30, 000, Community Facilities District
(Mello Roos) $40, 000 plus out of pocket expenses (est. $3, 000.00) .
This cost could be paid out of the bond sale proceeds at the time
of the bond sale. .
By contracting for these legal services, the Council isnot
committing at this time to any course of action or financial
assistance to the Mall. This contract will merely assist staff in
analyzing the Mall's request.
LASER IMAGED., /63
A
City Council
January 21, 1992
Page 2
Recommendation
That the City Council select the firm of Brown & Wood to analyze
certain legal and tax questions related to possible financial
assistance to the Santa Anita Fashion Park Mall and to serve as
bond counsel if the City elects in the future to issue bonds,
subject to execution by Brown & Wood of an Agreement approved by
the City Attorney.
j /y
.Ap ,toved
Attachments
LASER IMAGED
ROBERT C.HARBICRT
A.4 `� MAYOR PROTEMPORE•
• 1;���� f-- 240 West Huntington Drive
IIt
P.O. Box 60 JOSEPH C. CAUIO
1411.111'' Arcadia,California 91066-0060 GEORGE FASCHING
� �o' 018)574-5400 MARY B. YOUNG
�ro�azs9" COUNCILMEMBERS
GEORGE J. WATTS CHARLES E. GILB JUNE D.ALFORD
CITY MANAGER MAYOR
CITY CLERK
December 19, 1991
Mr. Doug Brown
Brown & Wood
10900 Wilshire Boulevard
Los Angeles, CA 90024
Re: Request For Proposal For Legal Services
Dear Mr. :Z
The City of Arcadia has been working with the owners of the Santa
Anita Fashion Park Mall on their proposed 430, 000 sq. ft. expansion
which would include a new Nordstrom, May Co, 50-60 additional
shops, and parking. (See enclosed for more information. )
The Mall owners have requested City assistance in the form of a $15
million Certificate of Participation Bond issued by the City for a
two deck parking structure.
There are several policy, legal and tax questions raised by this
request. For that reason the City and the Mall owners have
prepared the attached Statement of Issues upon which we will need
an opinion from experienced qualified bond counsel.
Would you please review the attached and forward to me by January
10, 1992 a statement indicating your interest in preparing the
legal opinion, which attorney(ies) will prepare the opinion (attach
their Curriculum vitae) , your estimate of total costs, ; your
estimate of the time needed to prepare the report and any other
comments (your ability to provide the analysis quickly willlbe of
importance) .
LASER IMAGED 00
1
Brown
December 19, 1991
Page 2
If you have any questions, please contact our City Attorney Mike
Miller (818-574-5407) or me (818-574-5408) . You are also welcome
to contact Bill Doyle, Sr. Vice President-Development at the Hahn
Company (San Diego) at 619-546-3343 in preparing your response to
this RFP.
Sincerely yours,
eter P. Kinnahan
Assistant City Manager
for Economic Development
Enclosure
cc: William Doyle, The Hahn Company
Glenn Carpenter, Santa Anita Realty Enterprises
Bob Spelman, Spelman & Company
LASER IMAGED
12/18/91
LEGAL AND TAX ISSUES REGARDING THE
PROPOSED EXPANSION OF
SANTA ANITA FASHION PARK MALL, ARCADIA, CALIFORNIA
Owner/Developer
Anita Associates, a California Limited Partnership; Hahn-UPI, a
California Limited Partnership (General) and Santa Anita ;Realty •
Enterprises, Inc. (Limited) (the "Mall") The individual department
stores (except Buffums) are owned by others.
Description
The existing 983 000 sq. ft.
g q. (GLA) north/south oriented Mall liat the
Northeast corner of Baldwin/Huntington in Arcadia, consisting of
Broadway (South) , Penny's (North) , Robinson's (East) , a !vacant
Buffum's (West) and approximately 150 Mall shops would be expanded
by:
- Demolishing Buffum's and constructing in its place 2 department
stores: a 138, 000 sq. ft. (GLA) Nordstrom and a 120, 000 sq. ft.
(GLA) Robinson's, both integrated into the existing Mall
- These 2 new department stores would be constructed around a $15
million two-deck parking structure, integrated into the existing
Mall
The May Co would take over the former Robinson's store and
expand it by 45, 000 sq. ft. (GLA)
90, 000 sq. ft. (GLA) of additional shop space would be
constructed between the new department stores and the exlisting
Mall
Additional surface parking (1, 000 spaces) would be provided to
the East
(Total Net New sq. ft. - approximately 430, 000 - GBA)
The Mall has tentatively committed to complete the western
improvements (i.e. , Nordstrom, Robinson's, parking structure by
August, 1994; the eastern improvements are to be done, if possible ,
on the same time schedule, or be completed shortly thereafter.
The Mall is not in a Redevelopment Project area, but is in the 1973
Survey Area.
1 LASER IMAGED
General Issue
The Mall states it requires $15 million in additional outside
financing in order to complete the $75 million expansion. The Mall
suggests that the City contribute the $15 million in the formiof the
Parking Structure to be paid by a City-issued 25 year Certificate of
Participation Bond Issue. (The City has retained Keyser Marston
Associates to analyze the Mall's proforma and assumptions and advise
the City on the overall economic issues of this proposal. )
The City Manager has advised the Mall that: 1) City Staff will not
recommend that the City General Fund be the guarantor of any bond
financing for a Mall Expansion Project; 2) Staff may be willing to
recommend to the City Council that a significant portion of the new
annual sales taxes from the expansion (estimated by the Mall at
$1, 680, 000 in 1993-94) be contributed to the financing of the Mall
Expansion Project; and 3) Creation of a new Redevelopment Project
Area or amendment of the existing area to include the Mall is not
possible (i.e. , difficulty in meeting blight test; possible loss of
existing tax increment) . Further, since the Agency is $5 million in
debt to the City and $3 .7 million in debt to bondholders, and has 12
approved projects to do, not including low-moderate income housing,
use of Agency money for this project is not acceptable.
Obiective
The Mall owners and City Staff are very desirous of accomplishing the
Mall Expansion Project. For this reason, both parties are seeking
advice from legal and tax authorities (i.e. , bond counsel) on the
best way to resolve the issues below:
a) Eliminate the risk to the City beyond a committment of a portion
of new sales tax.
b) For economic reasons, provide tax exempt (vs. taxable) financing
for the needed $15 million outside contribution to the Mall
Expansion project.
c) Provide a mechanism to ensure a long term committment of sales
tax towards the financing.
Specific Issues
1) Certificates of Participation Bond Issue
a) Given the $15 million parking structure component of the Mall
expansion project as set forth above, under what conditions
could such an issue be tax exempt?
b) Is there a way to permit the City to issue the C.O.P. bonds,
but have the owner/developer fully back up the City so as to
eliminate the City's risk that sales tax is insufficient to meet
debt service for the multi-year term of the bond issue?
2 LASER IMAGED 53
J ,
c) Is there another variation of a C.O.P. issue which could meet
our objectives?
d) Is there a variation of a reimbursement agreement from the
owner/developer which would not cause the bonds toj become
taxable if the guarantee exceeded a pre-established IRS maximum
(i.e. , 5% or 10%) , if such excess were used exclusively to
redeem bonds. (The theory here is that upon such reduction, the
outstanding bond issue is reduced and the developer guarantee is
maintained at the permitted level. )
2) Mello-Roos Bond Issue
a) Under what conditions could a Mello-Roos Financing be tax
exempt?
b) Is there a way the City can legally commit a significant
portion of its new sales tax receipts from the Mall Expansion
over an extended term of years to finance or reimburse the
Mall's annual debt service on a Mello-Roos issue?
c) Is there a variation of a Mello-Roos issue which could meet
our objectives?
3) Other Tax Exempt Financing Mechanisms
Are there any other tax exempt financing mechanisms other than
C.O.P. 's or Mello-Roos which could meet our objectives? (e.g. ,
escrowed/phased bonds, etc. )
4). Taxable Financing Mechanisms
Are there any taxable financing mechanisms which can best meet
objective a) above and minimize the increased costs of taxable
financings?
5) Do any possible financial mechanisms raise an issue concerning
the legal propriety of an expenditure of public funds, e.g. gift
of public funds? 1
3 LASER IMAGED 54
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1/15/92
SUMMARY - BOND COUNSEL FIRMS - POSSIBLE MALL FINANCIAL ASSISTANCE
ec
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Name/Address Est. Cost Comments
Best, Best & Krieger Est. Total $6, 000. 00 -BBK is the Agency's Special Redevelopment Counsel.
3750 University Avenue - (Fees Est. $5, 000. 00 The bond/tax division is a separate "group" within
Suite 400 [$180/hr. ] , plus out BBK and has extensive California experience.
Riverside, CA 92502 of pocket expenses, -BBK handled similar expansion project involving parking
(r- - ) 686-1450 est. $1, 000. 00) structure (Riverside's Tyler Mall) .
-Willing to work on -BBK assumes they would act as Bond Counsel if City elects
Principals Assigned contingent basis if to proceed; willing to defer compensation until such bond
appointed as Bond issue.
Francis J. Baum Counsel, i.e. , paid -Comprehensive and detailed response to City RFP.
John R. Rottschaefer only upon sale of
bonds. Est. cost if
Est. Time $15 million COP
issue - $52,500 plus
30 days out of pocket
Mello Roos - $62 ,500
plus out of pocket
Brown & Wood Est. Total $4, 000.00 -B&W is. a national firm. B&W (L.A. ) has extensive
10900 Wilshire Blvd. (Fees capped at $3, 000 experience in similar financings.
Los Angeles, CA 90024 [$175-$235/hr. ] plus -B&W (Doug Brown) was the Agency's Bond Counsel in their
(: ' 443-0200 out of pocket expenses 1989 $3 .9 million refinancing.
est. - max. $1, 000. 00 -The estimates of cost\time assume the Mall has tentatively
Principals Assigned -Willing to work on a resolved most of the proposed financial relationships with
contingent fee basis if the majors and the City.
Doug Brown appointed Bond Counsel,
Cliff Gerber (tax) i.e. paid only upon
sale of bonds. Est.
Est. Time cost if $15 million
COP issue - $30, 000
21 days plus out of pocket -
Mello Roos - $40, 000
plus out of pocket
• Attachment B
el
Name/Address Est. Cost Comments
- Jones, Hall-, Hill Will provide opinion JHHW is a national firm and--has-extensive experiencgain--
& White only if appointed Bond similar financings. Ms. White is a nationally LU
4 Embarcadero Center Counsel . Cost only recognized bond and tax expert. W
19th Floor if City issues bonds -JHHW is working on a similar issue in Rocklin, Cali .
San Francisco, CA 94111 (will not provide -Comprehensive and detailed reply to City RFP.
(415) 391-5780 separate opinion) .
-Est. cost if $15 Lill
Principals Assigned COP issue - $43,750 C!)
plus out of pocket - ct
Timmig Mello Roos - $80,000
Sh )n White (tax) plus out of pocket
Est. Time
Verbal - few days
Written - one week
Richards, Watson Est. Total $13 ,750 -RWG is an experienced California firm.
& Gershon min. ($275/hr. , min. -Est. cost assumes at least 50 hours of work at $275/hour.
333 S. Hope, 38th 50 hours)
Floor
Los Angeles, CA 90021
z9213) 626-8484
Principals Assigned
W Lam Strausz
William Kramer
Est. Time i
Est. 50 hours