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HomeMy WebLinkAbout2018-06-14MINUTES REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY THURSDAY, JUNE 14, 2018 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Chair Jonathan convened the meeting at 3:03 p.m. II. ROLL CALL Present: Director Jan C. Harnik Director Kathleen Kelly Director Gina Nestande Vice Chair Susan Marie Weber Chair Sabby Jonathan Also Present: Lauri Aylaian, Executive Director Robert W. Hargreaves, City Attorney Rachelle D. Klassen, Secretary Lori Carney, Director of Administrative Services Ryan Stendell, Director of Community Development Martin Alvarez, Director of Economic Development Janet M. Moore, Director of Finance/City Treasurer Tim Jonasson, Interim Director of Public Works Bo Chen, City Engineer Stephen Y. Aryan, Risk Manager Lt. Matt Martello, Asst. Chief, Palm Desert Police/Riverside Co. Sheriffs Dept. Grace L. Rocha, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Reauest for Closed Session: A. Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 1) Property: Desert Willow Lot Pad B (APN 620-420-023) Negotiating Parties: Agency: Lauri Aylaian/Martin Alvarez/Successor Agency to the Palm Desert Redevelopment Agency Property Owner: Successor Agency to the Palm Desert Redevelopment Agency Under Negotiation: x Price x Terms of Payment 2) Property: Desert Willow Lot Pads C, D, and E (APNs 620-450-012, - 013; 620-450-016, -018, -020; 620-370-002, -004, -017, - 018, -020, -033, -043) Negotiating Parties: Agency: Lauri Aylaian/Martin Alvarez/Successor Agency to the Palm Desert Redevelopment Agency Property Owner: Successor Agency to the Palm Desert Redevelopment Agency Under Negotiation: x Price x Terms of Payment With Successor Agency Board concurrence, Chair Jonathan adjourned the meeting to Closed Session of the City Council, Successor Agency, and Housing Authority at 3:10 p.m. He reconvened the meeting at 4:17 p.m. IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. Mr. Hargreaves reported that direction was given, but no reportable actions taken. V. AWARDS, PRESENTATIONS, AND APPOINTMENTS None VI. CONSENT CALENDAR A. MINUTES of the May 24, 2018, Regular Meeting of the Board of Directors of the Successor Agency to the Palm Desert Redevelopment Agency. Rec: Continue to the next meeting. B. CLAIMS AND DEMANDS AGAINST SUCCESSOR AGENCY TREASURY - Warrants Dated 5/4/2018, 5/11/2018, 5/18/2018, 5/25/2018, and 6/1/2018. Rec: Approve as presented. 2 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 C. COMPLIANCE ANALYSIS AND INVESTMENT REPORTS for the Months of March 2018 and April 2018 (Joint Consideration with the Palm Desert City Council). Rec: Receive and file. Upon motion by Harnik, second by Nestande, and 5-0 vote of the Board of Director of the Successor Agency (AYES: Harnik, Kelly, Nestande, Weber, and Jonathan; NOES: None), the Consent Calendar was approved as presented. VII. CONSENT ITEMS HELD OVER None VIII. RESOLUTIONS A. RESOLUTION NO. SA -RDA 073 - A RESOLUTION OF THE BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, REJECTING A BID FOR THE 128-ACRE PARCEL OF VACANT LAND, SOUTH OF GERALD FORD DRIVE, NORTH OF FRANK SINATRA DRIVE, AND WEST OF PORTOLA AVENUE (APNs 694-300-001, 694-300-002, 694-300-005, 694-300-014, 694-300-015, 694-310-002, 694-310-003, AND 694-310-006) PURSUANT TO THE LONG-RANGE PROPERTY MANAGEMENT PLAN, AND TAKING RELATED ACTIONS. Capital Improvement Projects Technician Cora Gaugush noted the staff report, requesting the rejection of the sole bid for the 128-acre parcel. Director Kelly said Council received a letter from the sole bidder in which it was suggested that a clause for windfall profits could be added to address the prospect that the property is being skewed too cheaply. Ms. Aylaian recommended not curing this discrepancy between the appraised value and the bid value by adding or amending the current purchase bid. She believed that because only one bid was received and staff knew there were other parties interested in the property, and because the bid received was less than half of the appraised value, the cleanest thing to do is reject it and start over. There is no guarantee the City will receive more bids, but because this is a sale that will have to be approved by the Oversight Board, which will be under the County's control by that time, and the fact that fellow taxing entities deserve the benefit of fair value for the property that is sold, and because of the magnitude of the sales price, she believed the only responsible thing to do is reject the bid. 3 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 Director Nestande noticed that the one bid received was from Lewis Homes, questioning if it was because of the market environment, economic development, or the affordable housing clause. She wondered if this one offer from Lewis Homes was a good offer. Ms. Aylaian replied staff contacted other parties who had expressed interest in the past, and under different conditions, they may still be interested in the property. What she means by under different conditions, is for example breaking the property into smaller parcels. Director Kelly asked if staff will look into whether it should be presented differently before it request bids again, if the bid is rejected. Ms. Aylaian answered yes, stating that at the minimum staff will include the current appraisal with the bid documents. When it went out previously, the appraisal was not complete, because there was an unfortunate circumstance where the appraiser passed away after the Agency started marketing the property. By the time there was a new appraiser on board, the bids had already been received so bidders did not have the benefit of that information. That alone could make a material difference. At a minimum, staff will be discussing and considering how to rebid it and how to solicit greater interest. It's just too tough to tell when you only get one bid to determine if it's a fair bid. The bidder provided an email to the City Council, where they claim the appraisal itself was faulty and it's very possible there were shortcomings in it. However, it was done by a very qualified appraiser, and staff has no reason to believe that it was off by 100%. Therefore, there are two sides to every story, in that for every bidder who is successful, there is someone who is not, and each party will have a different perspective. As a public agency, it has the responsibility to pursue the matter further. Chair Jonathan said he understood Lewis Homes purchased the property back in August 2016 for $13 million, so he assumes there was an appraisal done at that time that justified that purchase price. Ms. Gaugush explained there were cumulative appraisals that were used that added up to the $13 million, but Lewis Homes didn't purchase the property, they entered into an Exclusive Purchase and Sale Agreement. Chair Jonathan added that in August 2016, there is an appraisal for $13 million, and in May 2018, less than two years later, the appraisal is $7 million. Ms. Gaugush reiterated that the $13 million was based on accumulative of appraisals that were done on separate parcels of land, it was not an appraisal of the property as 128-acres. 4 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 Chair Jonathan stated it illustrates the point he's trying to make, which is that appraisals are not always reliable -indicators of true market value. He heard staff say it was going to use the same appraisal as part of the bid package, and he's not sure there is a level of confidence that it's accurate and/or damaging to the process of getting a qualified builder to do what the City wants with those acres. Has staff considered alternatives, such as getting a second appraisal, and if the difference is greater than 20%, then consider getting a third one. He said there are procedures for this and wondered if staff had thought about doing something along those lines. Ms. Aytaian replied staff discussed getting a pure review of the more recent appraisal of $7.1 million, and depending on the results, staff will decide how to move forward prior to going out for Request for Proposals. Director Kelly said she heard that the higher number was the result on appraisals on segments of this 128-acres, which does suggest that segments might draw more market interest than the whole piece together. As she understands, if the Board approves this, it's not directing staff to take specific steps, were giving them authority to explore alternative ways to package this in order to assure the property gets its best use. Chair Jonathan disagreed, stating the recommendation is to authorize staff to reject the bid, stating the Board can provide some direction, because he has concerns about valuation in general, stating he has seen valuations of the same property where there were disparities; it's an art more than it is a science. He's speaking specifically for undeveloped land, because residential appraisals are quite straightforward, but undeveloped land has so many variables that often times appraisals of the same property will vary as it's seeing here. He didn't want to dissuade qualified bidders from being part of this process, so if there is any way it can develop a more reliable appraisal. Ms. Gaugush replied that's why staff is requesting a pure review. Once it's received, if the appraisal is close, fine, but if there is a great disparity staff will need to rethink it. Chair Jonathan said he wanted to give staff the latitude to go out for a second appraisal if needed, using their knowledge, expertise, and judgement to ensure it ends up with something it's comfortable. Director Nestande asked if Lewis Homes was prepared to bid on this again if they are rejected this evening. Ms. Gaugush said she didn't know, stating she didn't feel it was appropriate to have any conversations with anyone until the Agency Board made a decision on what to do with this bid. 5 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 Director Harnik commented that people don't care how you feel, they care how you act, and this didn't feel good to her. It appears staff has gone through the whole RFP process and only one came back, and because we don't like it, were attempting to go out for a RFP again. This doesn't feel like the Palm Desert standard, and it's not a good reflection on the City. Director Kelly appreciated the comments, but she believed staff is trying to get it right. The request from staff is to take more time to ensure the property is put to its best use. Chair Jonathan understood, but some of it is just unlucky or misfortune, because the City has gone through this same process with great success, like with Black Rock and the 176-acre parcel being an example. Ms. Aylaian clarified that was a private sector transaction, stating the City was not involved via buying it or selling it. Mr. Stendell recalled the City initiating a Specific Plan on 400-acres, and Black Rock took down 170-acres of that 400 acres, which was privately held. Further responding, he said the City Council took action on a City initiated Specific Plan for that University Area. The presentation by Black Rock was within the framework of the University Neighborhood Specific Plan (UNSP). Chair Jonathan recalled it was a successful process and wondered if that was an option here or was he talking apples to oranges. Mr. Stendell confirmed he was comparing apples to oranges. Chair Jonathan commented he didn't know if there was a better process, which was probably a question for staff. At this point staff is just trying to sell it, because it's not a RFQ or asking for designs. An appraisal and RFP took place and only one bid came in for less than half the appraisal, and staff didn't want to accept it, so it's trying it again. Director Harnik disagreed, stating they weren't trying it again, staff was now changing it, because the first time it went out guidelines were provided, and now were saying were going to try different guidelines. Director Kelly offered she didn't think it was unreasonable, so she will move to approve staff's recommendation. Director Kelly moved to waive further reading and adopt Resolution No. SA -RDA 073. Motion was seconded by Weber. 6 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 Vice Chair Weber asked for clarification from the City Manager, stating that since the bid is being rejected she questioned what would happen on July 1. Ms. Aylaian replied that the Riverside County Oversight Board will take over the Successor Agency Oversight Board it currently has at a local level. Staff will go through the same precesses, but when were at the point where we have a buyer and an acceptable price, rather than just going to our own Successor Agency Oversight Board, it will go to the Riverside County Oversight Board. Further responding, as luck would have it that Board will have two Palm Desert representatives, unlike other cities. Nonetheless, it meant that board will be taking a broader perspective and more likely to be guided by expedience and the underlying price received for the property rather than the plan for its use. It is why staff originally wanted to go through a RFP, so it could control the product that would end up at that property. However, between that time and now, the City was able to get its updated General Plan in place, so the zoning and General Plan designations are consistent with what is the best use for the property. Therefore, as a City, it no longer needs to have that type of control. Developers going through the City's process of approval at Architectural Review Commission and Planning Commission will turn out a product that is acceptable to the City. At this point, the City is more comfortable with letting the decision be based upon price. Therefore, going to a Riverside Oversight Board would not adversely impact the City. Director Harnik inquired about the number of members on the Board. Ms. Aylaian replied there are seven, so two of the seven are from Palm Desert. Further responding, she said State law identifies what positions each of the seven must represent. One of the representatives needs to be from the employees' organization of the largest former Redevelopment Agency in the County, in which that was the City of Palm Desert. Another of the position is to go to a city in the County to represent all cities, in this case, staff did some campaigning of one of its Councilmembers who was available and agreed to serve on it, who is Councilmember Kathleen Kelly. Ms. Moore added the other positions are representatives from the largest taxing entity, appointment by the County Board of Supervisors, etc., stating it's defined in the law. Chair Jonathan called for the vote and the motion carried by a 5-0 vote (AYES: Harnik, Kelly, Nestande, Weber, and Jonathan; NOES: None). IX. NEW BUSINESS None 7 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2018 X. CONTINUED BUSINESS None XI. OLD BUSINESS None XII. PUBLIC HEARINGS None XIII. REPORTS, REMARKS, SUCCESSOR AGENCY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. SUCCESSOR AGENCY COUNSEL None C. CHAIR AND MEMBERS OF THE SUCCESSOR AGENCY None XIV. ADJOURNMENT With Successor Agency Board concurrence, Chair Jonathan adjourned the meeting at 8:48 p.m. ATTEST: RA LL' D. KOZ-SEt ECRETARY) SUCCESSOR AGENCY TO THE �/ PALM DESERT REDEVELOPMENT AGENCY 8