HomeMy WebLinkAboutC37850 - ENA - Property at SE Corner of San Pablo Ave and Fred Waring Dr - See C38310 Contract No. C37850
STAFF REPORT
CITY OF PALM DESERT
ECONOMIC DEVELOPMENT DEPARTMENT
MEETING DATE: November 15, 2018
PREPARED BY: Martin Alvarez, Director of Economic Development
REQUEST: Authorization to develop an Exclusive Negotiating Agreement for
the sale and development of the City-owned property located at the
Southeast Corner of San Pablo Avenue and Fred Waring Drive
Recommendation
By Minute Motion, authorize staff to develop an Exclusive Negotiating
Agreement (ENA) with Desert Rock Development for the sale and
development of the City-owned property located at the southeast corner of
San Pablo Avenue and Fred Waring Drive and return to the City Council for
approval.
Executive Summary
Approval of the above recommendation will allow staff to draft an ENA with Desert Rock
Development for the sale and development the City-owned property located at the
southeast corner of San Pablo Avenue and Fred Waring Drive (see attached site map).
The ENA will contain disposition terms including sales price, due diligence schedule,
project scope, and milestones to achieve entitlements. Once the ENA is drafted, staff
will return to the City Council for consideration of approval.
Strategic Plan Objective
The proposed ENA authorizing the sale and development of the subject property aligns
with the City's Envision Palm Desert Strategic Plan and the Economic Development
Strategic Plan in the following sections:
Economic Development - Priority 1: Expand job and business creation opportunities
Land Use, Housing & Open Space — Priority 2: Facilitate development of high-quality
housing for people of all income levels; and
Priority 5: Create a mixed-use city core integrating shopping, dining, lodging, and
housing.
2018 Economic Development Strategic Plan — High Priority Initiative: Revitalization of
Key Commercial Districts (San Pablo Corridor)
Staff Report
San Pablo/Fred Waring ENA
November 15, 2018
Page 2 of 5
Background
In 2014, the City purchased five vacant parcels totaling 1.62-acres located at the
southeast corner of San Pablo Avenue and Fred Waring Drive from the Successor
Agency to the Palm Desert Redevelopment Agency (SARDA). The sites' Assessor
Parcel Numbers (APNs) and acreage information are identified below:
APN Square Feet
627-101-002 15,246
627-101-017 9,147
627-101-033 10,980
627-101-061 23,958
627-101-062 11,325
Total sqft: (1.62 acres) 70,656
The City purchased the site for the 2014 appraised value of $560,000, utilizing the
Childcare Impact Mitigation Fee Fund (CMF). The CMF fund was established in 2005
and the City has collected fees from new commercial, office and industrial development
projects to assist in off-setting the demand for additional childcare space/facilities
generated from new jobs.
At the time of the City's acquisition, it was the City's intent to facilitate the development
of a childcare facility on this property. With the recent adoption of the updated General
Plan and the design of San Pablo Corridor Plan (SPCP), the subject property has
become a focal point to facilitate the implementation of the City's vision to encourage
vibrant mixed-use projects within city core and the San Pablo Corridor.
The subject property is located within the San Pablo Corridor that connects shopping,
restaurants, and other commercial services with residential neighborhoods, civic uses
including Palm Desert City Hall, College of the Desert, Civic Center Park, and the future
CVLink. The plans for the corridor call for a "road-diet" that would remove a vehicle lane
in each direction of travel on San Pablo and add enhanced walkways and buffered bike
lanes, with significant landscape and art improvements to create a sense of place.
Discussion
In June of 2018, the Economic Development Department issued a Request for
Proposals (RFP) seeking a developer to acquire and develop the City-owned 1.62-acre
property located at southeast corner of San Pablo Avenue and Fred Waring Drive. The
goal of the RFP (see attached) was to seek conceptual designs from developers for a
mixed-use project that would consistent with the General Plan, the 111 Development
Code, and the SPCP. The respondents were given access to the site's title report and
the June 2018 property appraisal that identified the fair market value at $820,000.
G\Econ Development\Martin Alvarez\Fred Waring-San Pablo Development\RFP\SEC SP-FW RFP-SR 11-15-18 doc
Staff Report
San Pablo/Fred Waring ENA
November 15, 2018
Page 3 of 5
On August 10, 2018 deadline, the City received proposals from the following
respondents:
1. Chandi Group USA
2. Coachella Valley Housing Coalition
3. Desert Rock Development
4. Knickerbocker Enterprises
The four proposals were evaluated by a team of City staff that included members from
the Economic Development, Community Development, Building and Safety, Public
Works and City Manager's Departments. The team evaluated the written proposals
based on the criteria identified in the RFP document, that included the following
information:
• Developer Experience / Qualifications
• Conceptual Site Plan / Elevations
• Compatibility with City's General Plan / One Eleven Development Code
• Compatibility with San Pablo Corridor Design
• Land Use Types
• Access and Parking
• Sustainability Design
• Cost Proposal
At the conclusion of the staff's evaluation, which included the respondent's cost
proposals, the written proposals were ranked in the following order:
Respondent Name Ave. Pts. / Ranking * Cost Proposal
(100pts. Max)
1. Chandi Group USA 70.4 $825,000
2. Desert Rock Development 69.9 $400,000
3. Coachella Valley Housing Coalition 62.7 $820,000
4. Knickerbocker Enterprises Non-Responsive N/A
• Final sales price will be negotiated at or above appraised value
On October 12, 2018, the City Council held a study session that provided the top three
respondents an opportunity to present their proposals to staff and the City Council.
After reviewing the presentations made by the respondents, staff completed its
evaluation of both the written proposals and the study session presentations and has
provided a final ranking of the proposals.
Respondent Name Ave. Pts. / Ranking
1. Desert Rock Development 81.3
2. Chandi Group USA 77.6
3. Coachella Valley Housing Coalition 67.0
G\Econ Development\Martin Alvarez\Fred Waring-San Pablo Development\RFP\SEC SP-FW RFP-SR 11-15-18 doc
Staff Report
San Pablo/Fred Waring ENA
November 15, 2018
Page 4 of 5
In addition to the above rankings, staff has provided the following summary of each of
the proposals' Pros and Cons.
Desert Rock Development-
• Pros
o Modern architecture / roof decks
o Good interiors designs
o Flexibility in retail/office
o Realistic schedule
• Cons
o Potential limited retail at the corner
o No collective team experience with mixed-use /individual experience in
residential, commercial and industrial development
Coachella Valley Housing Coalition-
• Pros
o Provides affordable housing
o Extensive multi-family residential experience, plan maximizes density
o Provides a mix of residential services
• Cons
o Potentially too great a concentration of affordable housing in the area
o No architecture renderings submitted / site plan only
o Limited commercial/retail experience
o May not be compatible with the vision of vibrant San Pablo corridor
Chandi Group USA —
• Pros
o Greater overall development experience
o Site plan provides greater retail opportunity than other proposals
o Sustainable development concepts
• Cons
o Architecture submitted has office complex feel
o Eliminated architecture from presentation
o Limited residential development experience
Staff Recommendation:
After thoroughly evaluating the respondents' written proposals and presentations made
at the October 12, 2018 study session, staff recommends Desert Rock Development as
the highest-ranking respondent. If the City Council chooses to move forward with this
developer, staff recommends that the City Council authorize staff to draft an Exclusive
Negotiating Agreement (ENA) with Desert Rock Development and return to the City
Council for consideration of approval. The ENA will contain disposition terms including
sales price, due diligence schedule, project scope, and milestones to achieve
G\Econ Development\Mart n Alvarez\Fred Wanng-San Pablo Development\RFP\SEC SP-FW RFP-SR 11-15-18 doc
Staff Report
San Pablo/Fred Waring ENA
November 15, 2018
Page 5 of 5
entitlements. Once the ENA is drafted, staff will return to the City Council for
consideration of approval. If the developer were to be successful in meeting the
milestones identified in the ENA, a Purchase and Sale Agreement would be developed
and brought back to the City Council for approval.
Fiscal Analysis
The proposed recommendation to proceed with the development of an ENA with Desert
Rock Development has no fiscal impact on the General Fund. The ENA will lead to the
development of a Purchase and Sale Agreement that will allow the City to sell the
property, ideally for a minimum of the appraised value. The sale proceeds will be used
to replenish the CMF, plus interest on the original $520,000. Any excess funds above
the original purchase price will be deposited into the City's General Fund.
LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER
g*
Robert W. Hargreaves Martin Alvarez et Moore Lauri Aylaian
City Attorney Director of Economic Director of Finance City Manager
Development
ATTACHMENTS: Site Map
RFP
RFP Evaluation Criteria
G\Econ Development\Martin Alvarez\Fred Waring-San Pablo Development\RFP\SEC SP-FW RFP-SR 11-15-18 doc
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REQUEST FOR PROPOSALS
TO PURCHASE AND DEVELOP
THE SOUTHEAST CORNER OF
SAN PABLO AVENUE AND FRED WARING DRIVE
PALM DESERT, CA (1 .62 Acres)
June 8, 2018
1
I. BACKGROUND
The City of Palm Desert ("City") is seeking proposals from qualified parties
("Respondents") to purchase and develop certain real property consisting of
approximately 1.62 acres located at the southeast corner of Fred Waring Drive and San
Pablo Avenue, in the County of Riverside, California. The property is also known as
the San Pablo Corner Property ("Property").
Respondents are encouraged to submit a proposal in accordance with the requirements
set forth herein. The City will review all submitted proposals in accordance with the
proposal process discussed below. If the City is able to reach an agreement with any
of the Respondents, the specific terms and legal considerations of the sale will be
documented in a formal purchase and sale agreement ("PSA") to be entered into by
the City and the successful Respondent.
II. THE PROPERTY
The Property consists of one site comprised of five individual parcels located at
the southeast corner of Fred Waring Drive and San Pablo Avenue owned by the City of
Palm Desert (see attached site map). The sites' Assessor Parcel Numbers (APNs) and
acreage information are identified below:
APN Square Feet
627-101-002 15,246
627-101-017 9,147
627-101-033 10,980
627-101-061 23,958
627-101-062 11,325
Total sqft: (1.62 acres) 70,656
The San Pablo Corridor:
The property is located within the San Pablo Corridor (SPC). The SPC vision is
incorporated into the City's adopted General Plan. As adopted, the General Plan
provides a progressive framework for the re-imagining of the "City Center". The General
Plan provides broad standards and guidelines for the envisioned transformation of the
Highway 111 and the SPC corridor into a mixed-use district, complete with new
landscaping, and roadway/pedestrian improvements.
SPC is a key area identified for transformational change to facilitate the creation of a
downtown/city center. The mile-long corridor connects shopping, restaurants, and other
commercial services at El Paseo and Highway 111 with residential neighborhoods and
civic uses including Palm Desert City Hall, College of the Desert, Civic Center Park, and
eventually, CVLink. The plans for the corridor call for a "road-diet" that would remove a
vehicle lane in each direction of travel on San Pablo and add enhanced walkways and
2
buffered bike lanes, with significant landscape and art improvements to create a sense
of place.
General Plan/Zoning:
The properties are undeveloped and are designated as "Neighborhood Center" on the
City's General Plan. The desire of the City is to develop a mixed-use project consistent
with the Neighborhood Center designation in the City's General Plan. The vision
includes encouraging neighborhood-serving retailers, restaurants, offices, and services
with the flexibility of adding housing on the upper floors.
The properties are zoned "Downtown Edge" (DE). The DE zoning serves as a buffer
between the downtown area and the residential neighborhoods to the south. It
introduces urban, multi-story buildings up to three stories tall. The DE zone is a flexible
zone that allows a wide range of uses, including but not limited to, residential, office,
service, retail, and hotel. Buildings with ground floor retail are located right behind the
sidewalk, while buildings with residential ground floors are set back with small front
yards.
The project shall meet the development and design guidelines identified in the One
Eleven Development Code. This includes providing for an urban streetscape along all
street frontages and pedestrian/bicycle connectivity to the SPC. The City desires to sell
the property in as-is condition with the transaction closing after entitlements are
approved.
III. QUALIFICATIONS/PROPOSAL REQUIREMENTS
The City will begin accepting proposals upon the date of issuance of this RFP and
will continue to accept proposals until 5:00 p.m. August 10, 2018.
Respondents shall submit three (3) copies of the proposal. Respondents submitting
fewer than three (3) copies may be considered non-responsive. The goal of the City is
to review proposals from qualified Respondents that provide the following information:
A. Developer Information: Provide full company name, address of
headquarters and other branch offices, if any; previous names, if any; legal
entity (i.e. corporation, partnership, etc.); the date company was established
under the current name; names and titles of officers and other key
personnel and their financial interest in the company; and the total number
of company personnel.
B. Previous Relevant Experience: Provide project names, descriptions,
locations, and completion dates of three to five similar development projects
that your company has undertaken.
C. Responsible Party for this Proiect: Identify the person responsible for this
project by providing their name, address, telephone number, job title, years
3
•
of service and financial interest, if any, in the company.
D. References: Provide names, addresses, and telephone numbers of five
individuals who can provide information about your company's performance
on recent development projects. Include the name and completion date of
each project and contact information for the City official most
knowledgeable of the development of the project.
E. Disclosures: Provide information about any litigation, including the outcome,
with which your company has been involved within the last five years
pertaining to any development projects that you have undertaken. Provide
information about any bankruptcies that you or related entities have filed in
the last 10 years. A background check on developers and principals will be
conducted by the City.
F. Provide a description of your company's experience with processing
undeveloped land through a city's entitlement process.
G. Provide a conceptual land-use plan (site plan) identifying potential property
yield, type of land-use(s), type of mixed-uses proposed, ingress/egress
points, on-site parking, internal traffic circulation, common open spaces,
interconnectivity to the SPC, the use of sustainable design principles and
any other land-use features or considerations deemed appropriate, such as
providing a mix of uses and services that support a healthy and active
lifestyle. The conceptual design shall follow and meet the development
standards and design guidelines identified in the One Eleven Development
Code, including building(s) with a maximum of three stories and 40 feet tall.
H. Provide an estimated schedule for due diligence, entitlements, acquisition,
and development phasing.
Provide a purchase offer in separate sealed envelope labeled purchase
offer. Respondent proposal will be ranked based on A-H criteria and minor
consideration will be given to purchase offer.
PROPOSAL SUBMISSION:
THE CITY OF PALM DESERT
Fred Waring/San Pablo Proposal
Attn: Martin Alvarez, Director of Economic Development
73510 Fred Waring Drive, Palm Desert, CA 92260
Phone: (760) 346-0611, Ext. 467
Submit questions to: malvarez a( ,cityofpalmdesert.orq by July 20, 2018.
RFP Submittal Deadline: 5:00 p.m., August 10, 2018
4
IV. PROPOSAL PROCESS
Proposals may be mailed or delivered in person. All proposals shall be sealed and
clearly marked: "Fred Waring/San Pablo Proposal." Respondent shall be solely
responsible for ensuring its proposal is received by the City by the deadline set
forth above. The City shall not be responsible for any issues with delivery or circulation.
Telephone or electronic submittals will not be accepted.
Any costs incurred by the Respondent in the preparation of any information or material
submitted in response to this RFP shall be the sole responsibility of the Respondent. The
City reserves the right to reject any and/or all responses or to decline to enter into a PSA
for any reason. The City may also waive irregularities in any response.
After the closing date, the proposals will be reviewed by City staff and/or consultant(s).
At the discretion of the review team, one or more Respondents may be interviewed in
person. Once the review team has chosen qualified respondents, the City Manager
and/or her designee shall notify the selected respondent. All RFP's submitted will remain
confidential until an ENA has been executed with the top-ranked respondent.
Upon selection of the top-ranked Respondent, the City shall prepare an Exclusive
Negotiating Agreement (ENA) for the Parties' execution, setting forth the terms of the
purchase. At the conclusion of the ENA due diligence period, the Parties will negotiate
and execute a Purchase and Sale Agreement (PSA). In the event that the top-ranked
Respondent and the City fail to successfully negotiate and execute a mutually
acceptable ENA or PSA, the City will terminate negotiations with the top-ranked
Respondent.
V. BASIS OF AWARD
It is the intent of the City to review the proposals submitted based on the list of requested
items in Section III (A - I), with particular consideration given to the proposed land use
concept and compatibility with the General Plan, Zoning, and the One Eleven
Development Code. Once a Respondent has been selected, it is the intent of the City to
enter into an ENA, giving the Respondent the opportunity to conduct due diligence
investigations, perform an appraisal, negotiate a PSA with the City, and seek
entitlements and final approvals from the Architectural Review Commission, Planning
Commission, and City Council.
A property appraisal has been prepared and is attached to the RFP. The City has also
attached a preliminary title report. Once the top-ranked Respondent has been selected,
the City will negotiate the sale price. As with any RFP of this nature, an evaluation
process has both objective and subjective elements. The decision of the City Council
shall be deemed final and is not subject to any appeal.
5
Attachments:
• Site Map
• Preliminary Title Report
Links:
• General Plan:
http://www.cityofpalmdesert.orq/departments/planninq/qeneral-plan
• One Eleven Development Code / Design Guidelines:
http://www.cityofpalmdesert.orq/our-city/departments/one-eleven-dvelopment-
code
6
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CITY OF PALM DESERT
CALIFORNIA
ADDENDUM NO. 1
REQUEST FOR PROPOSALS
TO PURCHASE AND DEVELOP
THE SOUTHEAST CORNER OF
SAN PABLO AVENUE AND FRED WARING DRIVE
PALM DESERT, CA (1.62 Ares 1.44 Acres)
ISSUED July 19, 2018
IMPORTANT NOTE: RECEIPT OF THIS ADDENDUM MUST BE ACKNOWLEDGED
IN RESPONDENT'S PROPOSAL
This addendum changes/clarifies the following item(s) of the required proposal
submittal documents for the above referenced project:
1. Question:
Is there an appraisal available for the properties?
Answer: Yes, please see the following link on the city's webpage.
2. Question:
What is the engineer's estimate/project cost of this job?
Answer: No engineer's estimate available/project cost.
3. Question:
Is there an addendum issued?
Answer: Yes, after July 20, 2018.
4. Question:
Can I request a copy of the short list of those interested parties?
Answer: It will be provided as part of the addendum.
5. Question:
Do you have an engineer or design team for this?
Answer: No. We are seeking a developer to acquire, entitle and develop
the site.
Clarification:
Project site is 1.44 acres total (see appraisal). City will deed the portion of San
Pablo frontage (0.177 ac.) back to the successful buyer as part of the Purchase
and Sale Agreement.
Acknowledgement Addendum No. 1 Received:
Name:
Company:
By:
Signature:
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Possible Design Modifications
Thank you for your consideration!