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HomeMy WebLinkAbout1994-04-14MINUTES REGULAR PALM DESERT REDEVELOPMENT AGENCY MEETING THURSDAY, APRIL 14, 1994 CIVIC CENTER COUNCIL CHAMBER * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I. CALL TO ORDER Vice Chairman Crites convened the meeting at 4:55 p.m. II. ROLL CALL Present: Member Jean M. Benson Vice Chairman Buford A. Crites Member Richard S. Kelly Member Walter H. Snyder Chairman S. Roy Wilson Also Present: Carlos L. Ortega, ACM/Director of Redevelopment Agency Bruce A. Altman, City Manager David J. Erwin, City Attorney Sheila R. Gilligan, Agency Secretary Ramon A. Diaz, ACM/Director of Community Development Richard Folkers, ACM/Director of Public Works Paul Shillcock, ACM/Director of Economic Development Paul Gibson, Director of Finance Dave Millheim, Director of Human Resources Wayne Ramsey, Acting Director of Code Compliance Pat Conlon, Director of Building and Safety Catherine Sass, Community Arts Manager Ken Weller, Emergency Services Director John Wohlmuth, Environmental Conservation Manager III. CONSENT CALENDAR A. MINUTES of the Regular Meeting of the Redevelopment Agency of March 24, 1994. Rec: Approve as presented. MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING APRIL 14, 1994 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B. CLAIMS AND DEMANDS AGAINST THE AGENCY TR$ASURY - Warrant Nos. 42 and 43. Rec: Approve as presented. C. SCHEDULE OF INVESTMENTS as of March 31, 1994. Rec: Receive and file. D. REOUEST FOR APPROVAL of the Artwork for the Civic Center Baseball Field Entry Way. Rec: By Minute Motion: 1) Approve the Civic Arts Committee's recommendation to authorize staff to proceed with a fabrication contract with artists Brian Gottlieb and Rob Pitchford for an amount not to exceed $33,000 (for the Iron Catcher Sculpture); 2) approve the Civic Arts Committee's recommendation to include the baseball field entry way columns as part of the overall entry theme for an amount not to exceed $28,000; 3) approve the sculpture placement sitework for an amount not to exceed $2,587. Mr. Ortega asked that Item D be removed for separate discussion under Section VI, Consent Items Held Over, of the Agenda. • Upon motion by Kelly, second by Wilson, and unanimous vote of the Agency Board, the remainder of the Consent Calendar was approved as presented. IV. ORAL COMMUNICATIONS None V. RESOLUTIONS None 2 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING APRIL 14, 1994 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * VI. CONSENT ITEMS HELD OVER D. REQUEST FOR APPROVAL of the Artwork for the Civic Center Baseball Field Entry Way. Rec: By Minute Motion: 1) Approve the Civic Arts Committee's recommendation to authorize staff to proceed with a fabrication contract with artists Brian Gottlieb and Rob Pitchford for an amount not to exceed $33,000 (for the Iron Catcher Sculpture); 2) approve the Civic Arts Committee's recommendation to include the baseball field entry way columns as part of the overall entry theme for an amount not to exceed $28,000; 3) approve the sculpture placement sitework for an amount not to exceed $2,587. Mr. Ortega stated that there was an error in the recommendation in that the dollar amount for the artist contract should be $33,300 instead of $33,000. Member Kelly moved to, by Minute Motion: 1) Approve the Civic Arts Committee's recommendation to authorize staff to proceed with a fabrication contract with artists Brian Gottlieb and Rob Pitchford for an amount not to exceed $33,000 (for the Iron Catcher Sculpture); 2) approve the Civic Arts Committee's recommendation to include the baseball field entry way columns as part of the overall entry theme for an amount not to exceed $28,000; 3) approve the sculpture placement sitework for an amount not to exceed $2,587. Motion was seconded by Benson and carried by unanimous vote. VII. . NEW BUSINESS None VIII. CONTINUED BUSINESS None IX. OLD BUSINESS A. REQUEST FOR APPROVAL OF A COMMITMENT Ltt ttic FROM FIRST INTERSTATE BANK AND UNDERWRITER'S MEMORANDUM OF UNDERSTANDING SETTING BOND FINANCING TERMS FOR THE STERLING "DESERT ROSE" 161- UNIT SINGLE-FAMILY HOUSING PROGRAM (CONTRACT NO. R08510). Mr. Drell reviewed the staff report and recommendation. He noted that First Interstate Bank (FICAL) was requesting signed authorization from the Executive Director agreeing to basic bond terms and also agreeing that once the commitment letter is executed and if for some reason the Agency backs out and the bonds do not close, the Agency would be liable for their legal expenses. He stated that although the staff report indicated a cap of $10,000 for the legal expenses, total legal fees could be as high as $50,000 if we went right up to the bond 3 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING APRIL 14, 1994 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * closing and then backed out. He added that he was confident the bond issue and program would proceed and all expenses would be paid out of the bond issue. Upon question by member Snyder, Mr. Drell responded that these would not be tax-free bonds. He stated that tax-free bonds were designed to finance rental projects owned by public agencies. This is a project that will start out owned by a public agency but will end up being owned by private individuals. Member Kelly asked what would happen if the developer backed out or if we cannot sell the bonds. Mr. Drell stated that these will be variable rate bonds which sell at whatever the current rate is. He said it was a very established market, and it was his understanding that there would be no problem with the bonds selling. He added that the developer would not back out because there is a signed contract with him, and he has been working hard to make sure this project succeeds. Member Kelly stated that approximately six months ago, Council decided we should go ahead with the 416 apartments on Fred Waring Drive west of Cook Street and also widen the street to four lanes. He questioned the status of the widening. Mr. Folkers responded that staff was proceeding with plans for that street. Mr. Drell added that the cost to do the widening had been budgeted into the project. Upon further question by Member Kelly, Mr. Folkers responded that it would probably be completed by late summer. • Member Wilson moved to, by Minute Motion: 1) Authorize the Executive Director to sign First Interstate Bank (FICAL) commitment letter, which includes agreement to reimburse FICAL's legal expenses up to $50,000 if bonds fail to close. Legal expenses will be capped at $50,000 and paid from Bond proceeds unless there are material changes in the terms or structure of the transaction caused by the Agency which increase those costs; 2) designate First Interstate Bank of Arizona and Miller & Schroeder Financial, Inc. to act as equal co -underwriters with respect to the proposed bond issue described in the Letter Agreement; provided, however, the Agency shall not be obligated to pay any fees to either such party until execution of a formal Bond Purchase Agreement and the issuance of bonds thereunder, on such terms as shall hereafter be approved by the Agency in its sole and absolute discretion. Motion was seconded by Benson and carried by unanimous vote of the Agency Board. 4 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING APRIL 14, 1994 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * X. REPORTS, REMARKS, AND AGENCY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR Mr. Ortega requested a Closed Session at the appropriate time for the purposes listed under Section XII-A of the Agenda. B. AGENCY COUNSEL Absent C. CHAIRMAN AND MEMBERS OF THE AGENCY None Member Snyder moved to adjourn to Closed Session at 5:10 p.m. pursuant to Government Code Section 54956.8 (Real Property Transactions). The properties in question are: 1) A portion of a 60 foot easement owned by Kathleen Fox located west of the Palm Valley Channel and south of Painters Path; 2) a 12.2 acre site owned by ACD 2 (Ahmanson Co.) west of Highway 111 between El Paseo and the Palm Valley Storm Water Channel; 3) 9.6 acres north of Country Club Drive owned by Peter Solomon; price and terms of payment will be discussed. Motion was seconded by Benson and carried by unanimous vote. • Chairman Wilson reconvened the meeting at 8:17 p.m. XI. PUBLIC HEARINGS A. CONSIDERATION OF HEARING OF PROPOSED RESOLUTION OF NECESSITY - AHMANSON DESERT CROSSING PROJECT. Chairman Wilson declared the public hearing open and asked for staffs report. Mr. Yrigoyen reviewed the staff report, noting that Mr. George Fox had requested permission to speak at the hearing. He added that the record showed the legal owner of the easement as Kathleen Fox. He said the only issues to be considered at this hearing were the following: 1) Whether the public interest and necessity require the proposed project; 2) whether the proposed project is planned or located in a manner that will be most compatible with the greatest public good and least private injury; 3) whether the real property described in the resolution is necessary for the proposed project; 4) whether the required offer to purchase the real property has been made. He said the required statutory offer to purchase the property had been made, and a letter to that effect was included in the staff report. He noted the developer was available in the event the Board wished to ask questions with regard to those issues, and staff was available to answer any other questions. 5 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING - APRIL 14, 1994 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * MR. GEORGE FOX, Fox Canyon, Palm Desert, addressed the Council and read a statement (attached hereto and made a part hereof as Exhibit "A"). Chairman Wilson asked Mrs. Gilligan to announce the objections received. She noted that only one objection had been received — from Mr. George Fox. She added that on March 25, 1994, notice of the hearing was mailed to the owner of the property. Chairman Wilson declared the public hearing closed. Member Crites moved to waive further reading and adopt Resolution No. 291, a Resolution of the Palm Desert Redevelopment Agency declaring that the acquisition of an easement interest in certain real property by eminent domain is necessary for construction of the Desert Crossing Project. Motion was seconded by Kelly and carried by unanimous vote. XII. ADJOURNMENT Upon motion by Crites, second by Snyder, and unanimous vote of the Agency Board, Chairman Wilson adjourned the meeting at 9:10 p.m. ATTEST: 14/4/4 / SHEILA R. GI :.IAGAN, S ARY TO THE PALM DESERT REDEVE1PMMENT AGENCY 6 April 14. 1994 City Council. Palm Desert California To The Members of the Palm Desert City Council: For the record my name is G. George Fox and I am here as the developer of record of Fox Canyon and its owner. Kathleen S. Fox as well as the Fox Canyon Homeowners Association. a not -for - profit corporation registered in the State of California. My remarks this evening will encompass a myriad of issues in this easement condemnation/eminent domain proceeding. On behalf of the above I request that -the City Council refuse to approve this petition by the R.D.A. for the most basic of reasons. Approval of this petition would run contrary to existing law. You cannot acquire property from another without legal right and just payment and this current exercise is simply a land grab to get something for nothing. However. before I proceed I request a ruling that the correspondence dated April 7. 1994. put before the Mayor and the City Council. along with the April 5. 1994 letter from Dr. Harold Davidson. be made a record at this hearing and if the City requests that I read them aloud. I shall. I also request that all correspondence pertaining to an alternative entry for Fox Canyon and the documents sent to the City Staff over the last 2 years be included as exhibits at this hearing as well as all correspondence sent by the City and its attorney to the owner or developer of Fox Canyon. We are here to discuss a development named Fox Canyon and the property rights therein as well legal precedent .to maintain those rights and remedies available if those rights are infringed upon to such an extent that substantial damages may be awarded by the courts to the owner. A damage claim based on that scenario is not in the best interest of the City nor its client. Extended litigation would be the end result if this petition would be accepted. Precepts of law will govern our mutual conduct and as you shall hear. the end result will not be in the best interests of the City or Desert Crossings. In fact. Desert Crossings may cease to exist if immediacy of action is necessary. To quote the City Attorney. Mr. Douglas S. Phillips. who wrote on April 5. 1994. "Agency counsel has recommended denial of your request for a continuence if the continuence would adversely impact the development schedule." 1 Believe me on this. The litigation that the City will ignite if this petition passes will scorch the earth. The Agency denial of two weeks while the City contemplates Mrs. Fox's counter-offer world not even equal the depoaition time needed for the smallest assemblage of the City officials who would be called for testimony. We are speaking of years of litigation and in the end legal precedent - precepts of law - wili govern and the City will assuredly lose. .50+641.. t_ N o t•J Re p. - -.rife n'i rf F' TL�2 ?0 0. 1 I now address the City Council Members individually for each of you has been a building block in the finalisation of Fox Canyon's destiny as a major luxury homesite locale for the City of Palm Desert. Each of you at one time or another has worked assiduously and honestly to see that the City and the developer have come to terms in law and spirit to make Fox Canyon happen. Walt Snyder. it was you in the early days who gave advice as what the City would like to see in the area known as Fox Canyon. Your dreams are also being fullfilled in this matter. You have stated "Fox Canyon will create a higher level of ambiance and exclusivity that will enhance the region." Mr. Mayor, without you the Desert Crossings plan would have been approved in its original form which actually had structures on Fox Canyon easement rights. It was you who made that very important point in the Conditions of Approval. You have stated public► many times the value of this development to the City, one such remark being, "Fox Canyon is located in one of the choicest areas of Palm Desert. Because its location is environmentally sensitive to the community. this project underwent years of review in our city planning process before receiving the necessary land use approvals." Dick Kelly. it was your input in the study group over 10 years ago which evolved the Hillside Ordinance that permitted Fox Canyon to realize its approved map in the form that your intellectual expertise had devised. Fox Canyon is the result of your study and your personal approvals. Jean Benson, it was under your term as Mayor that the final map for Fox Canyon was approved and you graciously appeared on KESQ- TV and stated at the time "Fox Canyon is certainly going to be one of the better developments in the valley." Buford Crites. it was you while still a member of the Planning Commission who appeared gratuitously before this very City Council and presented the Fox Canyon map -as approved by 100% of your colleagues -for its approval. In all instances and at all levels, there has been 100% approval of Fox Canyon Final maps by all elected and appointed officials. 2 Therefore, is is beyond belief that this City Council which has nurtured Fox Canyon over the past years and spent nu hundreds but thousands of man hours creating this development, with the accompanying emotional heartaches and regulatory pain involved, will act in concert with Dayton—Hudson/Target/Ahmanson/Lowe to commit this travesty of eminent domain. It is beyond belief that the City Council Members will devour their offspring for the financial benefit of major corporate entities. This City Council has always put integrity, honesty and conscience ahead of money and corporate greed. I cannot perceive it changing its colors now. However. at this bearing I am forced to bring forth issues for if they are not stated now such subject matter may be denied in later court proceedings. AND D/ sre► rn ut— RepugnantAas they may seem. there are issues of fact and in theory supported by case law. Issues to be raised will relate to existing case law on possible fraud. deceit. conspiracy. conspiracy to commit fraud. misrepresention. violation of civil rights. denial of property rights. wrongful taking. misuse of power. just compensation. acting in bad faith. unjust enrichment. abuse of process. violation of public trust and interference in interstate commerce, restraint of trade and RICO (racketeering in interstate commerce). Clearly. all of he above issues are being raised because of the City's and the Redevlopment Agency's OWN acts. which appear to be in DIRECT conflict with basic consitutional and case law as well as the City's own previous actions in map approval of both Fox Canyon and Desert Crossings. As an example of the City and the Redevelopment Agency's egregious conduct. consider this. The easement in question is by the R.D.A.'s own calculations. 24.188 square feet. For this amount of land the Redevelopment Agency has — with a straight face — offered a grand total of $3.000.00. That equates to twelve cents a square foot. I challenge anyone in this chamber to find a parcel of land of any _size in Palm Desert that can be purchased for .12 cents a square foot. This exact same parcel of land is valued in the commercial market at a minimum of S8.00 a square foot for a total of $193.504.00. Target is alleged to have paid OVER that amount for the larger parcel abutting this easement parcel. 3 Who will realize this windfall? The City will not be the developer. For this $3.000.00 the parcel will then be deeded by the City to Dayton -Hudson, Target. Ahmanson Commercial Development or Lowe Enterprises. Truly a gift in every sense of the word for the R.D.A. is offering Mrs. Fox less than 2 percent of fair market value. We are all familiar with the term money-laundering. In this case. we appear to have s situation where the land is being laundered. I am reminded of a story. A man is waving his arms in a crowded bus, yelling."Hooray. It's a free country. Hooray for America." However, in the process he keeps hitting another's nose. After a few such strikes the injured party complains to the robust fellow who exclaims, "But it's a free country." "Yes. it is my friend," replies the owner of the nose. "However, your freedom ends where my nose begins." Here we have an Eminent Domain request supposedly to serve the public good, except that it hits Pox Canyon's nose and becomes an act NOT for public good but for PRIVATE GREED. Fortunately the courts of our land have had experience with the 'Ahmanson/Lowes of this world and their ilk. I refer to Capital Electric Power Assn. v McGuffee 56 ALR 2 403 226 Miss 227 83 So. 2d 837. 84 So 2d 793. "'The State does not have the power to authorize the taking of private property of an individual without his consent for the private use of another. even on the payment of compensation." "The right to exercise the power of Eminent Domain by constitutional provision is limited to cases where the property is to be taken for public use." V "447u.�C The R.D.A. in support of this petition is following Health and Safety Code Sections 33000 wherein the Agency is authorized to enter into an agreement but case law prevails when an offer or proposal is refused by the owner of the easement. "Once the location of an easement has been established, regardless of h•ov it was created, neither the owner of the easement nor the court can make any material change in its location without the consent of the owner of the servient tenement." tag" r Dominant tenement ights are no less under law. !' • 4 See Leverone v Wjkley (1909) 155 C 395. 398. 399. 101 P 304; Edgar _v Pensinger (1946) 73 CA 2d 405. 414. 415. 166 P 2d 354; Tounstovn Steel Product Co. v Los Anjlts (1952) 38 C 2d 407. 410. 411, 240 P 2d 977 dicta.); Winslow v yil.lejo (1906) 148 C 723. 726, 727. 84 P 191; Joseph v A er(1895) 108 C 517. 520, 41 P 422; Haley v Los Angeles ountp . (1959) 172 CA 2d 285. 2b9, 347e4 2D 47b (dictum); Brown v Ratliff (1913) 21 CA 282. 290._ 291. 131 P 769. I seriously doubt that the courts will interpret the fact that the public will buy at a Target store on this site as property being taken by necessity for the public use. Instead. this would be referred to as Wrongful Taking and Misuse of Power and is adequately covered in 27 Am Jua2 under Eminent Domain 485. 489, 493 and Under Injunctive Relief Against Exercise of Power of Eminent Domain in 27 Am Jur 2d Eminent Domain 485. 488 and 9034 ALR 2 465. There is more. In US v 10 acres (1976 CA 9 CAL) 533 F 2d 1092. 36 ALR Fed 502 "Where the Federal government condemned the road and opened it to the public for an access road" (such as the Fox Canyon easement)" it was held that the l andowner's exclusive easement was a property right which was taken from him by the government. On appeal from a directed verdict denying compensation. the court agreed with the defendant. The court declared exclusive easement was an unusual interest in land. that it had been taken and destroyed his exclusivity. his right to exclude all others from the property. This vas a compensable lose." U 0, 1; o'!G In January of 1993. The City of Palm Desert staff offered to present to the City Council a recommendation that it pay $300.000.00 towards an alternative location. 100 times MORE. 100 times MORE. than this offer by the R.D.A. This present offer even fails to provide an alternative location for entry. That $300.000.00 request to the City Council was NEVER made. Instead an alledged series of events and meetings took place. whose details will be revealed in depositions. which sale the R.D.A. take over the field to use its legal power to force an action at the expense of Kathleen S. Fox. owner of Fox Canyon. which would result in the removal of Painters Path to the South and its character being substantially changed into a service road different from that of an El Paseo type commercial road. People v Ricciardi. (1943) 23 Cal 2d 390. 144 P 2d 799. 5 "Under California law real property is defined as including that which is incidental or appurtenant to land and that appurtenances are further defined by statute as something 'By right used with the land for its benefit, as in the case of a way.'" e Courts of California from time immemorial have declared and enforced the abutting property owner's rights to a free and convenient use of and access to the highway on which his property abuts. said the court. and this right of easement and use for access purposes cannot be damaged or taken away from him without due compensation. The court rejected the arguments of the State that no actionable •interference with the right of access results from the so-called circuity of travel to which an abutting owner may be subjected as a result of a public construction improvement, that such an interference is but an inconvenience auffered only in common with the general public." I want to put this decison in proper perspective. The City as this petition now stands would require the East terminus as it is now in place for Fox Canyon at Painters Path to be re-routed by having the travel go West to the Fred Waring/Painters Path intersection then turn right and halt at the stoplight at Hwy. 111 and Fred Waring and then turn East. halting at the proposed Desert Crossings stoplight at Hwy. 111 after which you would then have to travel to the nextdtop light at Hwy. 111 and El Paseo. and then turn turn South to the present terminus of Painters Path and E1 Paseo. With the entry road planned by Desert Crossings at Ewy. 111. that adds up to 5 intersections, while the present road pattern consists of only 1 intersection to reach the same location on El Faseo. In addition you add approximately 1 mile of travel. This is not rural travelling but heavily congested city travel and the inconvenience suffered by the homeowners of Fox Canyon. as well as by the fact that emergency vehicles will be also encumbered by this greater distance and road congestion. is quite significant. Yet, the City Traffic Engineer has not commented on this fact. The Fire Marshall has not commented on this fact. The Police Department has not commented on this fact. Why? Why have• these city officials not commented on this terribly important matter which would obviously have a severe negative effect on saving of life and property if this easement is extinguished? To continue with People v Ricciardi. "The court stated that although it recognized that the defendants' had no property rights in any particular flow of traffic over the highway adjacent to their property. they did possess right of ►direct 6 access to the through traffic highway' and an easement of reasonable view of their property rights from such highway." In People by Dept. of Public Works v Becker (1968) 262 Cal App 2d 634 69 Cal RPTR 110. "The court said that the easement of access possessed by an abutting landowner includes the right to get into the street upon which the landowner's property abuts, and to get from there in a reasonable manner. to the general system of streets. The court said that the right of access has been defined as that of reasonable use of the street fronting on the property in either direction to the next intersection." Additional cases would include among others Balog v State. Dept. of Roads (1964) 177 Neb 826 131 NW 2d 402. The City Council and the R.D.A. (with only 14 days left before their act would become illegal) pushed through the amount of $2.5 million to the benefit of Dayton-Rudson, Target, Ahmanson Commercial Development and Lowe Enterprises. When he voted against this, City Council Member Crites said, "It's Christmas and a good time for Santa Claus. We're being asked to subsidize a very wealthy land-owning company and then also companies that move in. In .my opinion. we ended up giving away $2.5 million that wasn't necessary." City Council Member Benson stated, in voting against this largesse. "I just don't believe we should put taxpayers' money in a private project. Target has as much money as we have. so they can put in their own improvements." Yet. 14 days before such action would become illegal by California Law. the City of Palm Desert passed this resolution. The R.D.A. claims that the Ahmanson parcel is allowed to be selected for this largess because it is in the R.D.A. area, whose inclusion date and method of inclusion may be challenged in later court action. Now let us return to the question of access to Fox Canyon. At the time Fox Canyon's map was processed. the City knew full well that a Condition of Approval was access and the maps of record clearly stated that Painters Path was temporarily closed in 1969 due to a washout at the channel connection and to quote from the County of Riverside's letter of January 6. 1970, to the CVWD. "It is anticipated by the county that this road will need to be re- opened at a future date when the construction of a bridge will be warranted." Obviously a re -connection was not necessary at the early stages of development prior to construction of infrastructure but as time wore on the City was kept fully informed of its responsibility in this matter. 7 i 4 1 Demand was made to the City to re -open Painters Path. There is co responsibility for Fox Canyon to pay for this connection. Citing State ex rel. Dept. of Highways v Blanks (1978) LA App 2d Cir. 355 So 2nd 283. "As a result of this condemnation there was a change in the character of the property including impairment of access." Obviously Fox Canyon's path to the east- f, blocked by this attempt_ ed move of the R.D.A.jas well as causing a monuments 1 ichange in itschara_ct_ei. _ ` - — - -- At the time that Ahmanson's proposal was shown to the City Council the Conditions of Approval clearly stated that the access an interests of Fox Canyon were a condition. At the time that the Ahmanson proposal was approved Mr. Fox did state that the plan called for Ahmanson/Love to build structures on Fox Canyon's easement but this objection was supposedly taken into consideration under the above Condition of Approval. To this date there has been nothing but silence by the City on this matter of exchanging the easement for another entry. Yet Fox Canyon has delivered a sheaf of correspondence to the City and the City attorney requesting the City to accept its responsibility in this matter. There has been a Crash of Silence. Well, not quite. r �G We do have testimony to the effect that Ahmanso interests have told third parties in discussing the easement factor, "We're going to let the City take care of Fox." In addition, it has been alleged by others that a senior officer of a major corporate entity and a major party to Desert Crossings has been actively soliciting financial support by use of United States mail for the election campaign of a sitting City Council member involved in this proceeding. Then we have to ask the question concerning the alleged tender of 2 acres of Hidden Valley land to the City by Lowe Development and the timing of Lowe Development's entry into the Ahmanaon Development for it was onALowe Development Corporation letterhead/ that correspondence was addressed to Fox Canyon BEFORE this request by the R.D.A. At any rate, in discovery the depositions taken will reveal the circumstances of Ahmanson land being brought into the R.D.A. 8 sphere of influence as well as other heretofore unknown matters. Back to legal precedent. Let us look at Dept. of Public Rorke g Bldgs. v Maddoz (1961) .I1 2d 489.173 NB 2d 448. L3"/ "In this case entrances to the property were curtailed. Damages awarded for difference between value of the remainder of the land before and after the taking." v N 0. A In this case only a simple median strip caused the loss which resulted in over 24Z of appraised value of the whole, being awarded as damages. Yes. there is law at work here. Iota of it. Our research is not complete but initial research as stated here begins at 22 Am. Jur. 743 (condemnation of easement) 15 American Law Reports 5th 82 (access a uttiug Downers right to compensation for limitations of access causes by traffic_ ree.ul_ations) 2 ALR 3d 13 l�mitatioa of access caused -by converii_gp of read into limited accesm hi away - right a); 59 ALR 3 488(diminutioa in va3�re o rema3.nuer propert _resulting from taking or_.se_ of adloini g an o others or the sams—unslartak_ ag. compensation); 36 ALI( reb. 3i3 (compensation for derail taking of private, road 'a or right-of-way for use a •u• c road) In addition Redevelopment Agency of the City of Concord v Tobriner 153 Cal. App. 3d 367 (1984). There are other theories at work on our behalf. As an example. you go to the bank and make application for a loan claiming a particular purpose of need and the loan is then granted on that basis. In this instance we have the R.D.A./Ahmanson/Love axis funding for $2.5 million. A major portion was thought to be allocated towards this easement. the request stating it being for purchase of real property held by others. - Row much of the $2.5 million awarded would be allocated for purchase of real property held by others? The equivilant of tourist class round trip tickets from Palm Springs to New York City. Are we now being asked to accept the fact that a redevelopment agency would petition a City Council for a sum equal to two round trip tourist class tickets between New York City and Palm Springs in good faith? It is unfortunate that 1 am forced to stand here and list Order of Battle. The City has Mrs. Fox's counter-offer on the easement and has failed to acknowledge it. Last Friday Mr. Ortega steadfastly refused to halt this proceeding pending acceptance or denial of Mrs. Fox's offer. 9 Mr. Ortega was told in detail that his refusal to request a delay would cause a reply for Mrs. Fox in defense of Fox Canyon which could possibly destroy years of a harmonious working relationship between the City and the Fox Family. His answer to that request for a reasonable delay was a simple "No." The City and the R.D.A. will act as they may. but the Fox Family, tiny as it may be. will stand its ground in this matter as we are speaking of millions of dollars that are at stake. Mrs. Fox and the Fox Canyon Homeowners Association did NOT choose this battle but in the litigation that lies in the years ahead to preserve its property rights. the rights of the Fox Canyon Homeowners Association and the economic value of their respective entitites. we are placing our faith in the courts of our land and their legal precedents and precepts of law. Along with that and the Lord's help. we shall prevail. for this battle is simply a question of fairness. It is not a battle against the public good. It is a battle against corporate greed. Thank you. Reply to the Staff Report: The Staff Report was never received by Mrs. Fox but was picked up by Mr. Fox last night. -,��, ,y, -' ,i s AL), l LP /t t 5 �''� S �^ra,s A24.4. ra , We have no record of it being se � to Mrs. Fox or to Mr. oz. However, there are some glaring ommisions of fact which are notate in the Best, Best & Krieger report. 4( s4-.sa For instance, what particular need does Ahmanson/Lowe have of this easement? Has there been a demonstration of traffic need? Hardly, as the parcel fronts by itself on Highway 111, Fred Waring Drive and Painters Path and is the 1la occupant of that huge expanse of land. All we hear from Ahmanson/Lowe is "I want it." Is there a terrain need, such as reason of drainage? No. All we hear is "I want it." Has there been documented evidence of financial loss or need for this small piece of land to the corporate giants Ahmanson/Lowe? No. All we hear is, "I want it." Has there been any legal documentation and case law to sustain the Ahmanson/Lowe request to have the R.D.A. act on behalf of a private entity to advance that private entities financial benefit and enhancement especially at the expense of another. No. All we hear is, "I want it." As to the Staff Report, Section 1:60..±Tit,014?`° 0iLcI/eIv There is no documentation of this so-called need except blather. r"->/ 5 / L) / -J kvaAj. r�( aT 7 d./6 s4 e't> t.✓) , (/ G k //4 eve As a matter of -fact, it was the Ahmanson interest who originally l subdivided this property and sold the Fox Canyon property prior J' to Mrs. Fox gaining title. This corporate giant was well aware of what was to be needed in the future as it knew it was commercial property. 4"i."/, r..,,, ti-,„..., 4A744.4..d.5,,,„/ 40., e CT), i ., < <liC., 1jab CityK //. ()L4 ./7 ?��y / �' , 1j� -1 /lscr de,.. 4-( Ihi4 A 2 Q2y� ci''�CI'll '� ✓w U6 d e�'IC k of- ;z b. 01--. • Are we to baby-sit Ahmanson/ Lowe, whose business acumen and aggressive tactics and alleged utter ruthlessness are.well known? Does the baby steal candy from the bully? The balance of Section 1 is pure folderall, window dressing in trying to plead a case that has no basis in law, else the proper legal citations would have been made. There have been no legal citations made because there are none. There have been no legal citations made nor case law stated because there are none that permit or advance corporate greed. ✓h�j /b Section II 5eLu (so -,i ,4,Q12,r-( v �, Again, there has been no actual documentation on the continuing and emphactic demand by Ahmanson/Lowe to sustain their wish/list position on getting something for nothing. 14,, ! Section III "�i,P �� � )‹. 6/, da— This is a lie pure and simple. Where are the financial documents to support to such a position? Where are the proforma operating statements, leases, costtand fees? This action is simply a reason for an additional profit center, satisfaction of greed _a/t someone else's expense. tree Section Iv 64,-3rj flt7e Ai/e c Gvkkci %x or a /1 )/'ca•w c «c'-'e „ 71,,coc.•53.-i- z QS There were not only NO "protracted negotiations' between Ahmanson/Lowe and Mrs. Fox, Mr. Fox or their representatives, ©dad there were absolutetly NO negotiations of any substance whatever. I read you this letter: Ve eat) The so called fair market value is ridiculous and self serving by an appraiser who may not be impartial. Depositions will of course settle this issue for Best, Best i Krieger, attorney for 4,t the R.D.A. and the City, stated on Page 8, Section III of the Staff Report, 'The proposed configuration of the improvements nu places a garden center for Target Store upon the easement sought "Iv to be acquired." This will be covered in my later remarks. 2,40�1, To continue, the arrogance of corporate giants performing in this matter is truly amazing. Neither the City nor Ahmanson/Lowe has indicated any regard for the economic viability of Fox Canyon. 2 Neither the City nor Ahmanson/Lowe has addressed the needs and legal rights of the Fox Canyon Homeowners Association. Neither the City nor Ahmanson/Lowe has remarked on the economic contribution that Fox Canyon and its 58 families will provide the City. All we hear is "I want it." However, it is astounding and incredible to learn that only a simple quote "I want it" uttered by major corporate giants Ahmanson/Lowe is what it takes to have the mighty engine of the City of Palm Desert, City Staff, the R.D.A. and the huge corporate/ representation legal machine of Best, Best & Krieger to crank up and roar to the attack against the lone figure of Kathleen S. Fox. Fox Canyon and its developer WERE NEVER EVER accorded this c onsideration. We had to struggle over many many years to satisfy the City Staff, City Planning Commission and the City Council simply to assert legal rights due us, as you will hear from the quotes I shall repeat later, to receive the smallest consideration and attention to address these legal rights. Not once did we plead "I want it." Not once did we receive even a modicum of the type of legal and City Staff aid the corporate giants Ahmanson/Lowe appear to have been receiving. NOT ONCE. 3 Palm Desert. California 92260 Mayor S. Roy Wilson City of Palm Desert 73-510 Fred Waring Dr. Palm Desert. CA 92260 Dear Mayor: April 7. 1994 As you may know every manufactured product h.as internal bookkeeping terms known as "material costs" and "cost of goods". The former is self-explanatory while the latter generally reflects labor costs added to raw material costs at the finished product level. After this level. upon sale of product, there is another term commonly called "cost of sales" to reflect resultant costs to that level. Creating homesites is a manufacturing exercise in the purest sense as you are dealing with the most basic raw material, barren land. In manufacturing a chair or.a table you are able to determine your costs as the material is widely quoted as to price. labor is quite fixed as to wages and man hours to create the product and overhead is equally fixed. with small variances. These variable factors are called variable costa. Fixed costs would be rent which would not vary over product manufacture such as materials and labor. In manufacturing homesites one never has the luxury of pre- determining costs. Every time planning and the city council ask for further studies. drawings, presentations and the like the costs rise. There is no fixed cost except the land. Every time an adjoining developer requests a hearing on his plat our attendance is required. Engineers must be consulted. landscape architects must be in attendance and our attorney must be present. -- Development Office: — 7366 North L>1eenview Avenue Chicago Illinois 6062<. (312J 465-3634 Page Two April 7. 1994 Mayor Wilson Our costs escalate but without any creation of enhanced value to our actual homesites relative to the purchaser. Thus, over the years the costs to reach the sales stage at Fox Canyon our costs to manufacture a lot have far exceeded the wildest calculations imaginable. As you can see by the enclosed, the hard costs as of March, 1993 to manufacture a lot in Phase I are over $90,0000.00 per lot. This does NOT include full landscaping, entry and guardhouse or soft costa. Soft costs are in general administration, telephone, typing, secretarial, general manager. taxes, City of Palm Desert and CVWD fees, homeowner fees. accounting and legal, advertising and marketing. These costs are budgeted to be $30,000.00 per lot, the guardhouse alone being budgeted at $15.000.00 per lot. We must now enter the original costs to date. As of August, 1987 these were $900,000.00. To date they are $1.5 million. (As you know Mr. Wilmont stated at the time of his request that his presentation costs alone were $500,000.00.) It is quite obvious that we have kept our costs quite low in comparison because we are a small family with limited resources. Thus you must add $51,724.00 ($1.5 million divided by 29 lots) to the $90.000.00 and $30.000.00 figures for a cost of goods of $171.724.00. The real estate people need 10Z so you have an average price per lot of $188.894.00 to break even without allowance for interest on the loan to develop the lots. Therefore. to borrow from a lender this parcel must be able to reflect to an appraiser the fact that the average lot will have double the retail value of any loan. the 2-1 minimum ratio demanded by a lender, referred to as loan -to -value. At $120,000.00 (total loan with interest totals $4 million and the owner's costa are not reflected as the lender is only interested in loan repayment. not the equity repayment) the average lot must show a fair market appraisal of $240.000.00. Page Three April 7. 1994 Mayor Wilson Homeeites in Fox Canyon vary in size and locale. so some may sell for more than others but the essence in the transaction is that 29 lots must generate nearly $6 million in sales to break even on loans and costs. A lessening of value by only 10Z due to the closure of the Painters Path without an equally appealing alternative entry would be devastating to this development. The figures given to me informally by lender approved appraisers are actually in excess of the 10Z and would doom the development beyond a shadow of doubt. However. if this is the intent of the City of Palm Desert. so be it. In closing may I state that this entire eminent domain development is also quite disturbing as it appears to be in direct conflict with the Conditions of Approval for Desert Crossings. As a matter of record I do believe it was you who had insisted that the Conditions bear a phrase stating that the welfare or needs of Fox Canyon must not be compromised. Pardon my lack of quoting the exact verbiage you used but the intent was quite clear and this entire action seems to be a violation of that Condition of Approval. If this action is said to be for the benefit of the City and not for the benefit of Desert Crossings. I would hasten to add that on more than one occasion I have been told that Ahmanson interests have stated to third parties relative to their desires to obtain this easement. "We'll let the City take care of Fox." I remarked to City personnel that I was terribly disappointed to hear this phrase bandied about as it smacks of something conspiratorial in nature. Sincerely yours. G. George Fox. Developer Fox Canyon GGF/sz pc: City Council Enclosures c1900 Avenue of the Stars, Suite 2400 4 Los Angeles, California 90067 — (213) 553-5551 • FAX (213) 553-3901 DAVIDSON & ASSOCIATES, INC. REAL ESTATE RESEARCH April 5, 1994 G. George Fox, Developer Fox Canyon 7366 N. Greenview Avenue Chicago, IL 60610 Dear Mr. Fox: Dr. Harold A. Davidson President Since May 30, 1984, our firm has been intimately involved in appraising and updating its file on Fox Canyon. At the time of our initial appraisal, if was with the understanding that all existing items of record would be part of the Conditions of Approval, including the re -opening of Painters Path to the East. It was also our understanding that Painters Path to the West would remain a commercial street in the sense that it would house establishments demanding a pedestrian presence, as exists on El Paseo. If Fox Canyon is denied access to El Paseo to the East by a closing of Painters Path and is to have as its main entry a service road based on the relocation of Painters Path to the North, it would have a severe negative impact on the value of the Fox Canyon, said loss of value to be determined by an appraisal. It is quite possible that this negative value impact could cause denial of a development loan as your infrastructure costs are quite high and you would not be able to realize enough on lot sales to satisfy a lender's ratio requirements in a loan. In fact, this action proposed by the Redevelopment Agency could potentially have the effect of forever denying development of Fox Canyon. Certainly based on this information, $3,000.00 as just compensation seems to be unrealistic. Diminution in property value can be ascertained by completing an appraisal of the property. G. George Fox, Developer April 5, 1994 Page Two If necessary, our firm would be available for expert witness testimony in this matter, for we have a long history of appraisal work in Palm Desert for major institutional lenders. Sincerely, HAROLD DAVIDSON & ASSOCIATES, INC. 4/,,\NNA\44;404- Harold A. Davidson, DBA, CRA President HAD/kf/1970 H HAROLD DAVIDSON & ASSOCIATES, INC. istr COMMERCIAL IROKERAOt April 11, 1994 MR. G. GEORGE Foa FOX CANYON 1530 N. State Parkway Chicago, IL 60610 Rs: Fox CAnynn RARPmnnt. 9s1m Distort, CA Dear George, As a commercial real estate broker in the Coachella Valley for the last five years, I have reviewed the offer you have received from the City on the above referenced easement. I have come to the conclusion that the offer is far below the estimated market value of the asset. A realistic value of your 24,441 square feet easement is $8 per square foot or $195,528. My understanding is Target paid between $8 and $9 per square foot for their parcel, which is contiguous to your easement. If you have any other questions, call anytime. Sincerely, JIM SHUTE Senior Partner JS/dc 68.860 PEREZ ROAD, SUITE P • CATHEDRAL CITY, CA 92234 • (619) 324-4554 • FAX (619) 328-6289