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HomeMy WebLinkAboutPrelim. MINS - RDA Sept 8, 2005X A PRELIMINARY MINUTES REGULAR PALM DESERT REDEVELOPMENT AGENCY MEETING THURSDAY, SEPTEMBER 8, 2005 CIVIC CENTER COUNCIL CHAMBER I. CALL TO ORDER - 3:00 P.M. Chairman Crites convened the meeting at 3:05 p.m. II. ROLL CALL Present: Member Jean M. Benson Vice Chairman Jim Ferguson Member Richard S. Kelly Member Robert A. Spiegel Chairman Buford A. Crites Also Present: Homer Croy, Acting City Manager RobertW. Hargreaves, Assistant City Attorney (present from 3:05 p.m. to 3:30 p.m.) David J. Erwin, City Attorney (arrived at 3:30 p.m.) Sheila R. Gilligan, ACM for Community Services Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Mark D. Greenwood, City Engineer Amir Hamidzadeh, Director of Building & Safety Paul S. Gibson, Director of Finance/City Treasurer Michael J. Errante, Director of Public Works David Yrigoyen, Director of Redevelopment & Housing Steve Smith, Planning Manager Walt Holloway, Battalion Chief, Palm Desert/Riverside County Fire Dept./CDF Steve Thetford, Asst. Chief, Palm Desert Police/Riverside Co. Sheriffs Dept. III. ORAL COMMUNICATIONS - A (CLOSED SESSION ITEMS) None IV. ADJOURN TO CLOSED SESSION Reauest for Closed Session: Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 1) Property: APNs 620-400-025, 620-400-003, 620-420-010 Negotiating Parties: Agency: Justin McCarthy/Lauri Aylaian/ Palm Desert Redevelopment Agency Property Owner: Palm Desert Redevelopment Agency Other Parties: Les Melcher/Woodbine Development Under Negotiation: x Price x Terms of Payment With Agency Board concurrence, Chairman Crites adjourned the meeting to Closed Session at 3:06 p.m. He reconvened the meeting at 4:03 p.m. V. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None VI. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA - Member Robert A. Spiegel VII. INVOCATION - Member Richard S. Kelly VIII. ORAL COMMUNICATIONS - B MR. JOHN L. DAW, General Manager, Marriott Vacation Club Shadow Ridge, 9003 Shadow Ridge Road, Palm Desert, addressed the Agency Board/City Council to seek its expertise and assistance in helping Marriott Corporation relocate 60 of its employees and their families, totaling about 240 people, from the New Orleans area devastated by Hurricane Katrina. Marriott Corporation lost five hotels there, with some 2,800 Marriott employees affected by the disaster. Palm Desert's Marriott operation was currently looking for 110 employees, and Shadow Ridge had 60 two -bedroom villas that would be available to these families until January 1, 2006. These employees could live and work in Palm Desert for a couple of months until they were able to return to their jobs in New Orleans. Each villa needed to be furnished with two beds, two dressers, and a sofa, which they were hoping to be able to rent, and each villa would need some purchased kitchen items. Additionally, they were seeking assistance with the cost of bus transportation for these families, who would also need canned food, clothing, and personal items upon their arrival in Palm Desert next Thursday or Friday. He said they had not made their plan known publicly yet, which they were hoping to do next Monday, but they already had some church organizations that were helping with the effort. He further noted that in order to advance the occupancy of these villas for this purpose, City Building Department and Fire Department inspectors had quickly responded to their site to provide necessary inspections for the required certificates of occupancy three 2 PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 months ahead of schedule, and he expressed sincere thanks for this outreach. Responding to question, he said The Desert Sun, American Red Cross, and The River, were allowing them to participate with their fundraiser next Thursday. Upon further inquiry, he said College of the Desert had offered to help, and the School Districts offered to enroll some of the children to help them keep up with school while they are here. He added that the Palm Desert High School Football Team had offered to help move in furniture and items to be placed in the villas. He appreciated all of the consideration and again expressed thanks to Palm Desert and the City Council for its help. Member/Councilman Kelly offered that the Palm Desert Rotary Club had been collecting all types of items to deliver to New Orleans next week, which Mr. Daw just said he was also seeking for families coming to Palm Desert. He would contact the club's president to see about donating them to the families coming to Shadow Ridge. With Agency Board/City Council concurrence, Vice Chairman/Mayor Pro Tern Ferguson and Member/Councilman Spiegel were appointed to serve as a subcommittee along with appropriate City staff, starting tomorrow, to work with Mr. Daw and coordinate any financial or in -kind contribution assistance that can be provided. It was noted that if any City funds were necessary, the City Manager had authorization to make such expenditures within the established limit. MR. ALIBABA FARZANEH, 11 Via Santo Tomas, Rancho Mirage, CA, said he admired what Mr. Daw was doing in the community and commented that his own family had received outside assistance after a large earthquake last year in Barn, Iran. He was aware of three hotels that had furniture they were trying to dispose of, and he also had collected a truckload of clothing from the Persian community that could be offered to this cause. Additionally, he would host dinner for these 240 people for their first night in Palm Desert in an amount up to $5,000. MR. DAW and MR. FARZANEH were going to collaborate on their efforts. Human Resources Manager Lori Carney reported to the Agency Board/City Council that in a pizza lunch employee fundraiser held today at City Hall, $2,200 was raised for donation to the American Red Cross for Hurricane Katrina relief. IX. AWARDS, PRESENTATIONS, AND APPOINTMENTS A. PRESENTATION OF PROCLAMATION DECLARING SEPTEMBER 14, 2005, AS "POLLY USHER DAY" IN THE CITY OF PALM DESERT. Presentation of this proclamation will be made at the next meeting on September 22, 2005. 3 PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 X. CONSENT CALENDAR A. MINUTES of the Regular Redevelopment Agency Meeting of August 25, 2005. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE AGENCY TREASURY - Warrant Nos. 43RDA, 46RDA, 48RDA, 50RDA, 44-Housing, 47-Housing, 48-Housing, and 51-Housing. Rec: Approve as presented. C. REQUEST FOR RATIFICATION of Contract for Interim Redevelopment & Housing Finance Manager (Contract No. R24270). Rec: By Minute Motion, ratify the City Manager's authorization of the subject contract with Moreland & Associates, Inc., Newport Beach, California, in an amount not to exceed $40,000 to be paid from Account No. 850-4195-466-3035. D. REQUEST FOR RATIFICATION of Change Order No. 5 to Contract No. R19540-A — Construction of the New Visitor Information Center at Entrada del Paseo. Rec: By Minute Motion, ratify Change Order No. 5 in the amount of $15,723.29 to the subject contract with WDL Construction, Palm Desert, California, for seven miscellaneous field -directed changes necessary for construction of the new Visitor Information Center at Entrada del Paseo — funding is available in Account No. 850-4358-433-4001. E. RETAIL REPORT. Rec: Receive and file. Upon a motion by Kelly, second by Spiegel, and 5-0 vote of the Agency Board, the Consent Calendar was approved as presented. XI. CONSENT ITEMS HELD OVER None Xll. RESOLUTIONS None 4 PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 XIII. NEW BUSINESS A. REQUEST FOR APPROVAL OF SECOND AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT WITH AMERICAN INVESTMENT PALMS TO PINES EAST LLC (CONTRACT NO. R19820A). Responding to Vice Chairman Ferguson's questions, Senior Management Analyst Catherine Walker said that the first agreement with American Investment was signed October 25, 2001, with a financial commitment of $1,425,000. She went onto say that the First Amendment to the Agreement was approved in February 2003, which provided for a seasonal time extension only, no additional funds. The subject Second Amendment was requesting some $700,000. In further response, she stated that the increase in project cost following the time extension granted in 2003 was the reason for the additional funds being requested in order to complete the original scope of work. She reported that the construction had been outlined in phases, and the Agency's monetary contribution would be triggered by the completion of each phase, further noting that the Agency was provided a copy of the signed copy between the developer and his contractor, which stated the contractor would perform and complete the work for the stated amount. She said the Agency did not have any such assurance previously. Member Benson said she also wanted to be sure that there was a mechanism in place that would require the work to be completed, since she felt this project had gone on for too long. Chairman Crites recalled that the time extension was provided so that the 99-Cent Store could open. The owner didn't want to do the parking lot improvements at that time so as not to hinder the opening of that store and would, instead, have them done over the coming summer. He pointed out that was over a year and a half ago, and the parking lot still hadn't been improved. He went on to note the trash bins at the rear of the building, facing El Paseo, were frequently overflowing and sat for long periods of time before being emptied. He felt it wasn't a matter of money, but rather, that the owner and tenants weren't abiding by good maintenance guidelines. Ms. Walker responded that staff had held off pursuing any sort of corrective action on the trash enclosures facing El Paseo or on the additional parking lot improvements, as they were both specified to be addressed in Mr. Glasser's first phase of construction. Chairman Crites was disturbed by the disparity in the amount of funds being put up by the owner, around $125,000, as compared to that being requested from the Agency, an additional $739,000. He wondered why the Agency was spending 80% of the money on the project when it was the owner who was 5 PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 now in this position because he didn't do what he said he would. Ms. Walker answered that the owner had conveyed that the additional $125,000 is all he has to put up at this time. Upon question by Member Kelly, Ms. Walker said if the Second Amendment was not approved, the developer would be unable to complete the improvements that were described in the Owner Participation Agreement. Agency Board Members were skeptical that the owner would actually perform as he had promised to in the past. Mr. Yrigoyen added that if the Second Amendment was not approved at this meeting, staff would pursue Code issues -- parking lot improvements have been substantially below Code, and the reason behind requesting this amendment and additional funds was to make the project very nice and one that exceeded Code requirements. Instead, staff would then make sure that minimum requirements were met, which would mean some improvements in the parking area; the building facades would not be updated and would stay the same. However, he said if approved, it would provide enhanced facades and substantial improvement for the parking and landscaping. In answer to question, he stated there were three separate owners in this project. Further responding, he said the Agency didn't have any legal options for forcing completion of the improvements agreed to earlier; the agreement would simply die since the owner had already defaulted on all the improvements and the specified time line. Although, he noted that the Agency hadn't yet contributed any of the $1,425,000 either. Mr. McCarthy commented that when the Agency committed to that funding, it was upon completion of the project, and the Agency then levered another $2,000,000 to $2,500,000 worth of improvements out of the developer and the other third parties at the project. Mr. Yrigoyen stated that everything done so far, the facades, the Staples Building and its repainting, had been paid for by the developer. He said RiteAid was included in the subject request for additional funding. Responding to question, Ms. Walker said approximately $400,000 worth of improvements were specified for the El Paseo side. She said the parking lot improvements were actually included in the larger sum for the first phase. Further responding, she said the area was already designated for public parking; therefore, the Historical Society would still be able to utilize it. Vice Chairman Ferguson asked if staff was aware of any other private development, for -profit projects where the City picked up approximately 50% of the cost. Mr. McCarthy said to date, they have been substantially smaller facade enhancement projects. However, he went on to say there were some pending projects to come before the Agency Board where the ratio of City to n PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 private participation would be in the 40%-50% range, but they had not yet been presented or approved. Member Spiegel felt it was a true conundrum. He noted that he and the City Manager had personally met with the owner on a couple of occasions; there were problems getting signatures from the other owners, and he was going to go ahead with it anyway, which is the point the Agency Board approved $1,425,000 to rejuvenate an area that leads into the City's renowned El Paseo. He observed that the owner had done some of the improvements but certainly not everything that was promised. He wanted to know how the agreement would be affected if the rear facades were excluded from the required improvements. However, Member Kelly and Chairman Crites felt these were needed most. Vice Chairman Ferguson agreed that the area was a problem and in a vital part of the City, but he was unconvinced that the proposed solution or Mr. Glasser were the right combination for making it happen. Further, he felt that it would have been helpful if Mr. Glasser had been present to directly answer questions about why the Agency should provide him with over $2,000,000 for this purpose. Therefore, he wanted to go back and tighten up the agreement, make sure there were remedies in the event of default, and answer a couple of very hard questions: whether or not this would be good money spent on a project, and if it would result in the desired outcome on both Highway 111 and El Paseo. Ms. Walker offered that staff would look into the matter and work with Agency Counsel to see what other options may be available. Chairman Crites cautioned that the developer had already defaulted on the agreement, didn't show any inclination of ever living up to it, resulting in the project becoming more expensive, and now he expected the Agency to pick up 85% of his lack of due diligence. He was totally opposed —it was not good public funding policy and unfair to the citizens of Palm Desert. He quickly added that he knew staff had worked as hard as it could to try and resolve the matter. Member Benson suggested also investigating whether or not the Agency could be the lead on the parking lot improvements to ensure they were completed, using some of the requested funds rather than waiting for the developer. Responding to comment and question, Mr. McCarthy said staff shared the Agency Board's sentiments. He felt it would be prudent to take them back to the developer and also to let staff investigate ways the agreement could be tightened up or restructured in a manner that would be more satisfactory. He suggested a six -week continuance. 7 PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING SEPTEMBER 8, 2005 Vice Chairman Ferguson moved to continue consideration of the Second Amendment to the Owner Participation Agrement with American Investment Palms to Pines East LLC to the meeting of October 27, 2005. Motion was seconded by Spiegel and carried by 5-0 vote. XIV. CONTINUED BUSINESS None XV. OLD BUSINESS None XVI. PUBLIC HEARINGS None XVII. REPORTS, REMARKS, AND AGENCY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. AGENCY COUNSEL None C. CHAIRMAN AND MEMBERS OF THE AGENCY None XVIII. ADJOURNMENT With Agency Board concurrence, Chairman Crites adjourned the meeting at 5:36 p.m. ATTEST: BUFORD A. CRITES, CHAIRMAN RACHELLE D. KLASSEN, SECRETARY PALM DESERT REDEVELOPMENT AGENCY 0