1996 02 20 RDAd_2 S-
Pe?uet)pmen1
e'da
CITY COUNCIL CHA?ER
78?495 Calle Tampico
La Qilinta, California 92253
Regular Meeting
February 20, 1996 3:00 P.M.
CAll TO ORDER
a. R?1 Call Beginning Res. No.9601
CONFIRMATION OF AGENDA
APPROVAL OF M[NU'II:S
a. Approval of Mmutes of February 6, 1996.
FUBUC COMMENT
Thia Li the time id a:lde for hc co--ad on no' iche?d for a p*bhc he??ig. Neme complete
a rtqeed to speaknfoflu and limit your comiu? to three mmtiu.
BUSINESS SESSION None
CONSENT CAIDIDAR
1. APPROVAL OF DEMAND REGISTER DATED FEBRUARY 20, 1996.
2. TRANSMITTAL OF TREASURY REPORT DATED DECEMBER 31, 1995.
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d_23. APPROVAL OF AN OWNER PARTICIPATION AGREEMENT BETWEEN THE REDEVELOPMENT
AGENCY AND MR. & MRS. HAROLD HARRIS FOR FINANCIAL ASSISTANCE TO DEVELOP AN
11-ROOM, 9,000 SQUARE FOOT BED AND BREAKFAST INN ON APPROXIMATELY ONE ACRE
OF PROPERTY LOCATED ADJACENT TO LAKE LA QUINTA. RES)
DEPARMENT REPoR?
1. TRANSMITTAL OF REVENUE AND EXPENDITURES REPORT DATED DECEMBER 31, 1995.
CHAIR AND BOARD MEN!BERS' ii?"'9
PUBUC IIEARINGS None
CIOSED SESSION
Note: Persons ilentifi?ed as negotiating parties where the City is considering acquisition of their properly are not
invited into the Closed Session meeting.
1. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO GOVERNMENT CODE
SECTION 54956.8 CONCERNING POTENTIAL ACQUISITION AND DISPOSITION OF REAL
PROPERTY LOCATED AT THE SOUTHEAST CORNER OF SIMON DRIVE AND HIGHWAY 111
PROPERTY OWNER NEGOTIATOR: RICHARD GATTIS.
ADJOURNMENT
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d_2 DECLARA'TION OF POgTlNG
I, Saundra L. Juhola, Secretary of the La Quinta Redevelopment Agency, do hereby declare that the foregoing
agenda for the Redevelopment Agency Meeting of February 20, 1996 was posted on the outside entry to the Council
Charnber, 78-495 Calle Tampico and on the bulletin board at the La Quinta Chamber of Corntnerce on Friday,
February 16 1996
DAtdFebruAaryl?l??
DRALJU?O1L??ary
La Quinta Redevelopment Agency
I?IJBUC NOTICE
The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the
hearing impaired, please call the City Clerk's Office at 777-7025, 24-hours in advance of the meeting and
accommodations will be made.
Page
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d_2 1
OF
AGENDA CATEGORY:
BUSINESS SESSION
COUNCIL!RDA MEETING DATE: FEBRUARY 20, 1996
CONSENT CALENDAR
ITEM TITLE:
STUDY SESSION
Demand Register Dated February 20, 1996 PUBLIC IIEAR[NG
RECOMMENDATION: Approve Demand Register Dated February 20, 1996
BAQKGROUND
Prepaid Warrailts:
24102-24113) 34,779.50
24114-24]16) 2,453.63
24117-24155) 111,439.93
24156-24159) 763.19
24160 24172) 34,442.27
24173) 250,014.50
PIR 13149-13216) 65,989.50
PIR 13225-13301) 66,683.11
PIR Tax Transfers) 41,606.45 CITY DEMANDS $611,923.56
Payable Warrants:
234174 24325 447,726.84 RDA DEMANDS 443,975.36
$1,055,898.92 $1,055,898.92
FlSCAL IMPLICATIONS:
Demand of Cash RDA $443 975 36
Jo n M Fa1conerF?anceD irector
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d_2@ AGENDA CATEGORY:
BUSINESS SESSION:
COUNCILIRDA MEETING DATE:
February 20, 1996 CONSENT CALENDAR:
ITEM TIThE: STUDY SESSION:
PUBLIC HEARING:
Transmittal of Treasurer's Report
as of December 31, 1995
RECOMMENDATION:
Receive and file.
BACKGROUND AND OVERVIEW:
Transmittal of Treasurer's Report dated December 31, 1995 for the La Quinta Redevelopment
Agency.
FINDINGS AND ALTERNATIVES:
I certify that this report accurately reflects all pooled investments and is in compliance with
California Government Code Section 53645 as amended 1/1/86; and is in conformity with City
Code 3.08.010 to 3.08.070 Tnvestment of Money and Funds.
I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet
next month's estimated expenditures.
ohn M. Falconer, Finance Director
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d_2E 0%
Sifi op4?ai(ia?
1
AGENDA CATEGORY:
4OF BUSINESS SESSION:
COUNCILIRDA MEETING DATE: February 6,1996 CONSENT CALENDAR:
ITEM TIThE: STUDY SESSION:
Approval of an Owner Participation Agreement between the
Redevelopment Agency and Mr. & Mrs. Harold Harris for PUBLIC HEARING:
financial assistance to develop an 11 room, 9,000 square
foot Bed and Breakfast Inn on approximately one acre of
property located adjacent to Lake La Quinta
RECOMMENDATION:
Adopt Agency Resolution approving the Owner Participation Agreement, authorize the Chairman
to sign and execute the document, and appropriate the necessary funds.
FISCAL IMPLICATIONS:
An expenditure of up to $100,000 would be funded from monies in the Project No.2 Capital
Projects Fund.
BACKGROUND AND OVERVIEW:
In the fall of 995, Agency staff received a request from Harold and Harriet Harris for up to
$100,000 in tinancial assistance to assist with the development of a Bed and Breakfast Inn. The
Harrises are proposing to develop an 11-room, 9,000 square foot bed and breakfast inn on
approximately one acre property adjacent to Lake La Quinta. The inn would feature nine deluxe
guest rooms with private baths, a separate cottage accommodating two super deluxe guest rooms,
a reception area, living room/salon, meditation room/library, dining room, and support facilities.
The architecture would be French Country or French Chateau and the structure would be
surrounded by gardens. The total projecL development cost is estimated to be $1.8 million.
The Harrises are in the process of closing escrow on a one-acre site and are processing plans for
approval. They anticipate initiating construction activities during the first quarter of 1996 and
desire to open the inn by August of 1996.
PROJECT ECONOMICS
RSG has reviewed the project's development and operating pro formas and have discussed various
aspects of the pro forma with Mr. Harris. Employing conservative revenue and cost factors, the
project proposal will potentially generate a positive cash flow for the Harrises during the first lull
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d_2F year of operation, and generate an internal rate of return for the first ten years of operation of
approximately 26%. This projected return favorably compares to typical market returns of 16%
to 18%. Thus, the project proposal should be a successful venture.
Agency staff has reviewed both the development and operating econornics, as well as the project's
financing commitments, and believe the request is justified. Project financing requires that the
Harrises provide $1O0,00 in cash equity to augment their construction and permanent financing.
These were to come from the sale of their personal residence in San Bernardino; however, the
slow real estate market has inhibited the sale as of this date. Thus, the requested assistance would
fulfill this requirement and allow the release of construction funds. Staff has reviewed the
project's financing with representatives from Valley Independent Bank. The project has an
approved $1.7 million construction loan, funding for which is contingent upon the Harris's
funding the remaining $100,000. Permanent financing has also been approved. It will be a
combination of a $824,015 first trust deed from Valley Independent Bank, and a $650,000 second
trust deed from the Small Business Administration SBA).
The OPA provided that the Agency would fund up to $100,000 in financial assistance to be used
to pay City and other public agency fee and permit expenses. If these expenses are less than
$100,000, the Agency would fund only actual costs. The monies would be secured by a trust deed
recorded against the project site property, and must be repaid when the Harris' San Bernardino
home sells or within two years, whatever comes first. If the Inn does not achieve a 30%
occupancy rate during this period, the repayment obligation would be reduced.
Staff has also calculated the financial returns that will accrue to the City and Redevelopment
Agency as a result of this development. It is projected that at the City's current 11% transient
occupancy tax TOT) rate, the inn would generate approximately $53,000 in TOT tax by Year 2
and once stabilized, approximately $82,000 to $92,000 per year thereafter. Gross annual tax
increment revenue would be approximately $4,800 per year.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency are as follows:
1. Adopt Agency Resolution approving the Owner Participation Agreement, authorize the
Chairman to sign and execute the Agreement, and authorize the appropriation of the
necessary lunds
2. Deny the request.
3. Provide direction to staff
mmunity Development Director
Attachment:
1. Owner Participation Agreement 000070
CCRDA002
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2:
AGENDA CATEGORY:
BUSINESS SESSION:
COUNCIL?DA ME?NG DATE:
February 20, 1996 CONSENT CALENDAR:
ITEM TIThE: STUDY SESSTON:
PUBLIC HEARING:
Transmittal of Revenue and I
Expenditures Report dated December 31, 995
RECOMMENDATION:
Receive and File
BACKGROUND AND OVERVIEW:
Transmittal of the December 31, 995 Statement of Revenue and Expenditures for the La Quinta
Redevelopment Agency.
OOOI2?
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