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HomeMy WebLinkAboutJanuary 21, 1992/~ `F' ' ~ ~ ~ ~, 1~ A(iB NDA 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 ACiBNDA 1/21/92 t~ y ~ ~ ` 4, , :, 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 -2' A(iBNDA 1/21/92 ~ ~ ~ ` ,_ - > ; CT O 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 '3- A(3ENDA 1/21/92 ~ ~ ~ ; ~:, ` , ,~ 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. -4- A(iENDA 1/21/92 • • o.ci -6 xfixpan sior) ▪ ea ." emotanc unt Ohl t' escenre �$ °e+oussv 1/21/92 Date _ --- - - - i 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 if a�a L) CM LU CD 1/15/92 SUMMARY - BOND COUNSEL FIRMS - POSSIBLE MALL FINANCIAL ASSISTANCE ec GO 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