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HomeMy WebLinkAboutPrelim - RDA 01/13/2011DRAFT PRELIMINARY MINUTES 'A REGULAR PALM DESERT REDEVELOPMENT AGENCY MEETING THURSDAY, JANUARY 13, 2011 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Chairman Benson convened the meeting at 3:00 p.m. II. ROLL CALL Present: Member Cindy Finerty Member Jan C. Harnik Member William R. Kroonen Vice Chairman Robert A. Spiegel Chairman Jean M. Benson Also Present: John M. Wohlmuth, City Manager/RDA Executive Director David J. Erwin, City Attorney Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Bo Chen, City Engineer Russell Grance, Director of Building & Safety Lauri Aylaian, Director of Community Development Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing Mark Greenwood, Director of Public Works Frankie Riddle, Director of Special Programs Bill Hunley, Battalion Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Andrew Shouse, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Mendoza, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Reauest for Closed Session: PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) Property: Northwest Corner of Highway 111 and Monterey Avenue (APN 640-140-019) Negotiating Parties: Agency: John M. Wohlmuth/Justin McCarthy/City of Palm Desert/ Palm Desert Redevelopment Agency Property Owner: City of Palm Desert/ Palm Desert Redevelopment Agency Under Negotiation: x Price x Terms of Payment Mr. Erwin requested that the Agency Board consider adding an item to the Closed Session agenda having to do with existing litigation pursuant to Government Code Section 54956.9(a) a) Edith Slater v. City of Palm Desert, Palm Desert Redevelopment Agency, and Palm Desert Housing Authority, Riverside County Superior Court Case No. INC 10004792 Upon a motion by Spiegel, second by Kroonen, and 5-0 vote of the Agency Board, the aforementioned item of existing litigation was added to the agenda for Closed Session consideration. With Agency Board concurrence, Mayor Benson adjourned the meeting to Closed Session at 3:02 p.m. She reconvened the meeting at 4:01 p.m. IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None V. AWARDS, PRESENTATIONS, AND APPOINTMENTS None V1. CONSENT CALENDAR A. MINUTES of the Regular Redevelopment Agency Meetings of December 9 and December 23, 2010. Rec: Approve as presented. K PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 B. CLAIMS AND DEMANDS AGAINST THE AGENCY TREASURY - Warrant Nos. 127RDA, 129RDA, 132RDA, 137RDA, 142RDA, 147RDA, 127-Housing, 130-Housing,133-Housing, 138-Housing, 143-Housing, 148-Housing, 134HA, 139HA, and 144HA. Rec: Approve as presented. C. REQUEST FOR RATIFICATION of Amendment No. 2 to Contract No. R27280C for Professional Engineering Services and Community Outreach forthe Palm Desert Country Club (PDCC) Undergrounding Project. Rec: By Minute Motion, ratify Amendment No. 2 in an amount to exceed $6,400 to the subject contract with Willdan Financial Services, Temecula, California, for Professional Engineering Services and Community Outreach - funds are available in PDCC Undergrounding, Account No. 854-4256-464-4001. D. REQUEST FOR APPROVAL of Amendment No.1 to Contract No. R29450B for Construction Management Services for the Desert Willow Lakeview Terrace and Kitchen/Building Expansion Projects. Rec: By Minute Motion: 1) Approve Amendment No. 1 in an amount not to exceed $17,840 and an additional amount not to exceed $2,500 for reimbursable expenses to the subject contract with Barnhart Balfour Beatty, Palm Desert, California, for Construction Management Services forthe Desert Willow Lakeview Terrace and Kitchen/Building Expansion projects; 2) transfer $17,040 from the budgeted contingency to contract base; 3) appropriate $3,300 from the Unobligated Project Area No. 2 Fund to Redevelopment Agency (RDA) Post Construction Costs, Account No. 851-4663-454-4001; 4) authorize Executive Director to execute the contract amendment. Upon a motion by Finerty, second by Spiegel, and 5-0 vote of the Agency Board, the Consent Calendar was approved as presented. VII. CONSENT ITEMS HELD OVER None VIII. RESOLUTIONS None 3 PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 IX. NEW BUSINESS A. REQUEST FORAWARD OF CONTRACT FOR PERIMETER LANDSCAPE IMPROVEMENTS AT THE NORTHEAST CORNER OF LARKSPUR LANE AND SHADOW MOUNTAIN DRIVE FOR PROJECT NO. P87110 (CONTRACT NO. R30380). Project Administrator Bryce L. White noted the staff report and offered to answer questions. Member Finerty stated she would move to approve because funding was coming out of Project Area #1 Funds. Member Finerty moved to, by Minute Motion: 1) Award the subject contract in the combined total price of $42,044 to Earth Sculptures, Inc., Indio, California, for Perimeter Landscape Improvements at the Northeast Corner of Larkspur Lane and Shadow Mountain Drive; 2) authorize the Director of Finance to set aside the amount of $4,204.40 as 10% contingency (use of contingency requires additional action); 3) authorize the Chairman to execute said Agreement for the subject contract; 4) appropriate the amount of $50,000 from Unobligated Project Area 1 funds to Account No. 850-4388-433-4001. Motion was seconded by Spiegel and carried by a 5-0 vote. X. CONTINUED BUSINESS A. REQUEST FOR APPROVAL OF THE 2011 MASTER LIST OF QUALIFIED PROFESSIONAL SERVICES CONSULTANTS FOR SERVICES VALUED AT LESS THAN $25,000 PER PROJECT (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL AND THE PALM DESERT HOUSING AUTHORITY) (Continued from the Meeting of December 9, 2010). Redevelopment Accountant Veronica Tapia stated staff went through the list that was provided in December and reorganized it. She pointed out that the local vendors were prioritized to the front of the list, which represented 40% of the vendors, and then by region and out-of-state. Mayor Pro Tem/Vice Chairman Spiegel asked if any vendors were removed that weren't local. Ms. Tapia responded the list was just reorganized. Mayor Pro Tem/Vice Chairman Spiegel stated the Chamber of Commerce is having a program on Saturday, March 19, 2011, on encouraging people to purchase locally, which he was in favor. He said hopefully the people that CI PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 will be making purchases will primarily search for local vendors and not go outside the Valley. Councilmember/Member Harnik stated the staff report indicated the companies on the list were considered qualified for three years. She asked if other people were eligible to be placed on the list or was the list comprised every three years. Ms. Tapia said the list was comprised every year, but once accepted, they are allowed to remain on the list for three years. Mayor Pro Tem/Vice Chairman Spiegel invited Barbara deBoom to comment on the matter. MS. BARBARA deBOOM, President/CEO of the Palm Desert Chamber of Commerce, stated she liked the order in which the vendors were listed and appreciated staff working with the Chamber. Mayor/Chairman Benson noted the Housing Authority approved the list as well Mayor Pro Tem/Vice Chairman Spiegel moved to, by Minute Motion:1) Approve the 2011 Consultant Master List as outlined in the accompanying staff report; 2) authorize staff to negotiate agreements and contract amendments with the Qualified Consultants for up to $25,000 per project, and authorize the City Manager/Executive Director to execute same; 3) approve the proceedings for selection and award of contracts as set forth in the accompanying staff report and as authorized by Palm Desert Municipal Code Section 3.32.090. Motion was seconded by Kroonen and carried by a 5-0 vote. XI. OLD BUSINESS A. REQUEST FOR APPROVAL. OF CHANGE ORDER NO.2 TO CONTRACT NO. R29450C (THE PENTA GROUP) FOR THE KITCHEN/BUILDING EXPANSION PROJECT AT DESERT WILLOW GOLF RESORT. Redevelopment Manager Martin Alvarez stated this item was a change order to the Penta Group contract, the contractor for the Desert Willow Kitchen and Building Expansion. He said in 2008 the Agency Board authorized a contract in the amount of $2.8 million out of Redevelopment Funds and also set aside a $288,000 contingency. He was proud to announce the kitchen expansion was complete and invited the City Council to attend the grand opening scheduled for the following day at 4:00 p.m. He said the change order was in the amount of $195,984, which included some unforeseen site conditions and electrical and structural upgrades that were not included in the scope of work. To date this amount encompassed the 10% contingency and an additional $55,000 increase or appropriation, which was a 12% overage to 5 PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 the contract. Responding to question, he said the money had not been issued to the contractor, but the work was completed. Member Spiegel moved to, by Minute Motion: 1) Approve Change Order 2 to the subject contract in the cumulative amount of $195,984 for items not included in the original contract with The Penta Building Group, Palm Desert, California, for the Kitchen Building expansion at Desert Willow Golf Resort; 2) authorize the Chairman to execute said documents; 3) authorize the Director of Finance to transfer $140,061.35 from contingency to base for Change Order No. 2, Account No. 851-4663-454-4001; 4) appropriate $55,922.65 from Account No. 851-4663-454-4001. Motion was seconded by Kroonen and carried by a 5-0 vote. XII. PUBLIC HEARINGS A. REQUEST FOR APPROVAL OF FOURTH AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN PALM DESERT REDEVELOPMENT AGENCY AND WVC RANCHO MIRAGE, INC. REGARDING MODIFICATION OF MINIMUM PROJECT AMENITY FEES FOR THE WESTIN DESERT WILLOW VILLAS TIMESHARE PROJECT (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL). Mr. McCarthy stated this item was a joint hearing with the Palm Desert Redevelopment Agency and as members of the Agency Board it currently had a Disposition and Development Agreement (DDA) which was amended when Starwood took over a portion of the Intrawest property and therefore inherited a schedule of project amenity fee payments that were subsequently modified in the Third Amendment, but that schedule is predicated on an assumed build -out that was determined in 2006. The market for timeshares has suffered along with a lot of other activities with the current extraordinary economic distress. He said there was great deal of distressed timeshare products in different markets that are competing with the City's project. Representatives of Starwood asked if the City was willing to consider a permanent modification to the agreement with respect to the project amenity fee payments. Staff responded suggesting a five-year moratorium whereby Starwood would just pay on timeshares that were actually built. They will continue to pay on the ones that have been built with the schedule intact and reassert it after the end of the five-year period. Staff believes it is in the City's best interest to be accommodative with the developer as they are building a fine product. He said Starwood expressed their concern in that if they were forced to make payments well in advance on the construction of the timeshare units, they would be at a disadvantage in terms of competing for internal capital necessary to actually build these projects, because they have to present the project to their parent company and compete internally in terms of returns and things of this nature. He said their rationale seemed to make sense and the recommendation was a collective recommendation N PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 from the management team. He said a representative from Starwood was present to speak on the matter if Council had any questions. Mayor Pro Tem/Vice Chairman Spiegel stated it meant the City would lose $2.5 million to the General Fund. Mr. McCarthy responded these funds actually went into the 241 Capital Reserve Fund for Desert Willow and not typically operating General Funds; however, the 241 Fund was accessible to the General Fund should it be needed. He agreed there would be a reduction in revenue of about $2.7 million over the five-year period. Mayor Pro Tem/Vice Chairman Spiegel asked if the City's relationship with anyone else be affected if this request was approved. Mr. McCarthy answered no, stating the City had a similar agreement with the existing Intrawest, but they have not been building and have been operating under this agreement for sometime. He said this particular agreement with the Amendment was still favorable to the City relative to other types out there. He said other agreements are tied to "as built," as opposed to a pre-existing schedule like with the Marriott on Monterey. Councilman/Member Kroonen questioned what would be the scenario if this wasn't approved. Mr. McCarthy stated he didn't wish to speculate, because he never felt it was appropriate to put a business in distress and it's never in the City's interest. He said this has been a very good project for the City and it seems there is a fair argument to be made that if the actual build -out has changed, it may be appropriate to conform to the actual build -out as opposed to everybody's best intentions four years ago. Mayor/Chairman Benson asked if the City would return to the same agreement at the end of this period. Mr. McCarthy answered yes. Mayor Pro Tem/Vice Chairman Spiegel asked if Starwood was continuing to build on their last pad. Mr. McCarthy stated it was his understanding they were, but deferred to the representative of Starwood to speak to the issue of absorption and build -out. Mayor/Chairman Benson declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. 7 PRELIMINARY MINUTES DRAFT PALM DESERT REDEVELOPMENT AGENCY MEETING JANUARY 13, 2011 MS. EMILY HEMPHILL stated she was Counsel and Local Representative for Starwood. She said Starwood had 74 units that were already built and entitled for 280 in total. She said 74 units started selling in 2007, and with 74 units you get about 3,700 timeshare units. In 2007 and 2008 Starwood was selling at a rate of almost 2,000 timeshare units per year. In 2009 that number dropped to less than half, but the numbers are starting to crawl up again. Starwood's projections are that with the units already constructed, if they don't begin building again, they will run out of inventory at this particular location; they have run out of inventory in Rancho Mirage. She said Starwood had a real investment in the sales machine here in the Desert, so they would like to avoid dismantling the machine and keep it fed with inventory as they go. Although the depressed economy hit tourism and timeshare sales hard, they are starting to see it climb back up, so they went ahead and purchased a building permit for Building 4, which has 22 additional units. They plan to meet with their Board of Directors on February 23 to ask for permission to begin construction on that building. However, because it's a public company, until they act, she couldn't tell for sure what will happen, but this request is an important piece. She said Starwood was asking to not pay the project amenity fee for units that didn't exist for a period of five years, but will continue to pay on the ones that did exist whether they are sold or not. Further responding, she said if the additional 22 units are approved for construction, Starwood will pay the fee on those as well. The estimate provided to Council by staff, in terms of reduction, was a worse case scenario. She said they were hopeful the market will continue to pick up, and as they build the deficit number will be smaller. She thanked the Council for its consideration. With no further testimony offered, Mayor/Chairman Benson declared the public hearing closed. Mayor Pro Tem/Vice Chairman Spiegel moved to, by Minute Motion: 1) Approve the Fourth Amendment with WVC Rancho Mirage, Inc.; 2) authorize the Mayor/Executive Director to execute the Fourth Amendment. Motion was seconded by Harnik and carried by a 5-0 vote. XIII. REPORTS, REMARKS, AND AGENCY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None 0 PRELIMINARY MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING B. AGENCY COUNSEL None C. CHAIRMAN AND MEMBERS OF THE AGENCY None XIV. ADJOURNMENT DRAFT JANUARY 13, 2011 Upon a motion by Finerty, second by Kroonen, and 5-0 vote of the Agency Board, Chairman Benson adjourned the meeting at 5:25 p.m. ATTEST: JEAN M. BENSON, CHAIRMAN RACHELLE D. KLASSEN, SECRETARY PALM DESERT REDEVELOPMENT AGENCY 0