2002 05 15 CC Minutes LA QUINTA CITY COUNCIL
- SPECIAL MEETING
MINUTES
MAY 15, 2002
A special meeting of the La Quinta City Council was called to order at the hour of
7:00 p.m. by Mayor Pe~a.
PRESENT: Council Members Adolph, Henderson, Perkins, Sniff, Mayor Pe~a
ABSENT: None
Mayor Pefia led the audience in the Pledge of Allegiance.
PUBLIC COMMENT - None
CLOSED SESSION - None
CONFIRMATION OF AGENDA - Confirmed
Council recessed to the Redevelopment Agency meeting.
Council reconvened into Joint Session with the Redevelopment Agency.
PUBLIC HEARINGS
1. JOINT PUBLIC HEARING BETWEEN THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY REGARDING PURCHASE OF PROPERTY
COMMONLY KNOWN AS "THE RANCH" TO CONSIDER THE FOLLOWING
ACTIONS: 1) CERTIFICATION BY THE REDEVELOPMENT AGENCY OF A
MITIGATED NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT FOR
ENVIRONMENTAL ASSESSMENT 2002-435 (STATE CLEARINGHOUSE NO.
1999081020) REGARDING AN AGREEMENT OF PURCHASE AND SALE AND
JOINT ESCROW INSTRUCTIONS; 2) CONSIDERATION BY THE
REDEVELOPMENT AGENCY TO EXERCISE THE OPTION CONTAINED IN THE
OPTION AGREEMENT, REVISION TO EXHIBIT "B" TO THE OPTION
AGREEMENT, AND TO ENTER INTO THE AGREEMENT OF PURCHASE AND
SALE AND JOINT ESCROW INSTRUCTIONS BY AND BETWEEN THE
LA QUINTA REDEVELOPMENT AGENCY AND KSL LAND HOLDINGS, INC.,
REGARDING PURCHASE OF THE 525-ACRE PROPERTY KNOWN AS THE
RANCH, LOCATED GENERALLY NORTH OF AVENUE 54, WEST OF JEFFERSON
STREET, SOUTH OF AVENUE 52, AND EAST OF THE CORAL REEF
City Counc;i Minutes 2 May 15, 2002
MOUNTAINS; AND 3) CONSIDERATION BY THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY BOARD 1'O ADOPT RESOLUTIONS MAKING
FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445, AND
CONSENT/APPROPRIATION OF FUNDING.
The Mayor declared the PUBLIC HEARING OPEN.
Assistant City Manager Weiss and Community Development Director Herman
presented the staff report.
Consultant Spevacek gave a brief summary on how the proposed land purchase
developed, beginning in 1996, and commented on the importance of sales tax
and 'Fransient Occupancy Tax to the City.
Kay Wolff, 77-227 Calle Ensenada, voiced concern about the process and
product of this proposal. As a member of the Community Services Commission
in 1996, she didn't recall any discussions on golf courses being a high priority
nor that a needs assessment was done for a golf course. She noted there's no
guarantee the project will yield the projected hotel rooms and tax revenues and
stated she felt further negative declarations will be necessary as land
development occurs on the property. She questioned the project serving the
greater good of the community. She felt the findings for the affordable housing
aspect were questionable and that the economic development aspect was a
"maybe." As for relieving blight, she felt it looks nice as it is. She voiced
concern about the number of closed session discussions that took place prior
to public input on this matter and stated she has reservations about the project
and its future to the community.
Tom Mulcahey, 79-350 Desert Rock Court, asked for clarification on the $2.5
billion for private improvements, and asked who is going to pay for golf course
maintenance and build and own the hotel. He questioned the City having the
finances and population to support a public golf course and suggested getting
another appraisal on the property. He felt KSL would have built the golf course
and hotel themselves if it was feasible.
Steve Inwood, 57-461 Spanish Hills Lane, spoke in support of the project and
commented on the need for affordable public golf courses.
Robert Filiatreaux, 77-545 Calle Chillon, commented on the importance of
preserving this property for public use and not private development.
Dempsey Mork, 54-671 Shoal Creek, complimented the City for creating the
redevelopment area and for having the foresight to make the proposed project
City Council Minutes 3 May 15, 2002
possible. He felt affordable golf is important and that the project will be a great
revenue source for the City with La Quinta citizens being the beneficiaries.
Alex Jaco¥, 78-196 Calle Norte, commented on the need for public golf courses
and lower-cost hotels and stated he felt the City should be competitive in that
market.
Donald Palm, 53-340 Avenida Madero, questioned using redevelopment tax
increment dollars for this project when tax money is needed for fire services.
There being no further requests to speak, the Mayor declared the PUBLIC
HEARING CLOSED.
Mr. Weiss advised the City has hired Economic Research Associates to prepare
a comprehensive needs assessment, and noted the $1 million estimated revenue
figure includes the cost of operating the golf course. As for whether or not the
project serves the greater good, he noted redevelopment monies cannot be used
for police, fire, and recreation services. The goal is to use the monies that can
be used for capital improvements and economic development purposes and to
invest it.
Mr. Spevacek stated the City receives approximately seven cents of every
property tax dollar (approximately $1 million annually), which goes into the
General Fund and can be used for things such as fire and police services. Under
redevelopment law, property tax revenue generated above the base-year value
of a redevelopment project is allocated back to the Redevelopment Agency and
in Project Area No. 1, the City retains approximately 55 cents out of every
property tax dollar. However, expenditure of those dollars is limited to
infrastructure improvements, public facilities, economic development projects,
and affordable housing. He stated tax increment revenue is generated by
development and growth that occurs within the project areas and in Project
Area No. 1 the assessed value of property has increased from $200 million in
1983 to $2.5 billion current~ly. The remaining 45 cents of every property tax
dollar is distributed to other agencies, i.e. County of Riverside, school districts,
water district, and recreation district. He noted Project Area No. 1 has the
capacity to generate approximately $337 million of revenue over the next 33
years that is not allocated to affordable housing, payments to existing
obligations, nor payments to taxing entities. The Agency has the capacity to
invest 8105 million in today's dollars over the next 33 years and since 1996 the
City has looked at ways to capture the $105 million revenue and invest it in
projects and programs that stimulate development and generate sales tax and
Transient Occupancy Tax income. He noted when Project Area No. 1 expires
in 2033, the City will no longer receive the tax increment dollars and will have
City Council Minutes 4 May 15, 2002
to rely on sales tax and Transient Occupancy Tax revenues to fund City
services. He further noted the 1999 marketing study identified the City's
"niche" as resort, recreation, and tourist-oriented uses. Additionally, through
input at public forums the City developed policies and objectives for the City's
Economic Development Plan, which included public golf facilities.
Mr. Weiss confirmed the City has looked at alternative locations, such as the
114-acre City property site at the top of the Cove. However, that site will not
accommodate a championship golf course and it would be difficult to
accommodate hotel uses that would generate revenue.
Regarding the question about the acreage, Mr. Spevacek explained the City is
proposing to purchase 525 acres of flat desert land and negotiating with KSL
on the adjacent 182 acres within the mountain range. KSL is considering their
options for the 182 acres, including dedicating the property to the City or to
another entity that will maintain the land as open space. Staff's goal is to have
the 182 acres donated to the City for better control.
In response to Mayor Pe~a, Mr. Herman confirmed development within the
hillside is prohibited by the City's hillside ordinance.
City Attorney Jenson noted the essential habitat line for the Big Horn Sheep is
at the toe of the slope and includes everything above that area. As for the
Mitigated Negative Declaration, she stated oral comments were received from
the Department of Fish & Game and U.S. Fish and Wildlife and both were very
satisfied with the mitigation measures. As to the scope of the Mitigated
Negative Declaration, she stated CEQA defines acquisition of the property as a
project and encourages analyzing the use along with the acquisition, instead of
handling it "piecemeal" style. The City has provided the best forecast possible
as to the use of the property, and the project description is appropriate under
CEQA. She stated further analysis should not be necessary unless a significant
change is made at a later date, and pointed out the property has been the
subject of repeated environmental analysis over the years.
Regarding ownership of the hotel, Mr. Spevacek stated the goal is to have a
private interest purchase property from the Agency and build, own, and operate
a hotel on the site. The Agency would design and build the golf course.
Council Member Perkins encouraged citizens who are confused about the
differences between the use of redevelopment and general fund monies to meet
with staff for additional explanation. He commented on the increasing cost of
property and the need to purchase this property before the cost goes any
City Council Minutes 5 May 15, 2002
higher. He felt a public golf course would benefit the City and supported
moving forward with it.
Council Member Adolph agreed and stated he would not support anything that
may cause a financial burden on the City or its citizens. As for development of
the site, he noted public hearings will be held as development plans are
determined and stated he will not support building heights that will destroy the
ambience of the mountains. He is totally supportive of moving forward with the
project.
Council Member Sniff commented on the need to plan for and secure the future.
He felt this is a realistic and logical opportunity to provide for the City's long-
term fiscal health. The income can pay for the City's major public interest
requirements without having to go out and get additional tax money from its
citizens. He felt very strongly that there will never be a deviation from the
City's hillside ordinance to allow building in the hillside. He noted the proposed
purchase also provides an opportunity to secure additional perimeter trails to
replace those lost due to the Big Horn Sheep habitat. He felt there are many
pluses and very little risk and that it's a business decision that must be made.
He totally supports moving forward and feels it would be a mistake to do
otherwise.
Mayor Pe~a voiced agreement with Council's comments and referred to an
opportunity the City had some years ago to purchase the Rancho La Quinta
property for substantially less money but chose not to. He noted all cities try
to attract industry and that La Quinta is trying to attract the golf industry, which
is basically paid for by tourists and provides revenue to the City. He
commented on the importance of securing long-term revenue to avoid the
devastation that took place some years ago when the State raided the city and
county funds to balance their budget. He noted what the City is proposing at
this prime location is somewhat less than the number of homes that a developer
could build on the site. He fully supports the proposal and feels the property
will be developed into a first-class recreational opportunity and revenue
generator for the City.
Council Member Henderson stated she is excited about the project and fully
supports moving forward with it. She encouraged those in attendance who
might hear other residents confused about this project and the funding to be
used, to contact the Council Members for an explanation.
City Council Minutes 6 May 15, 2002
RESOLUTION NO. 2002-69
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA,
CALIFORNIA, MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND
SAFETY CODE SECTION 33445(a) AND CONSENTING TO THE EXPENDITURE
OF FUNDS TO FACILITATE THE PURCHASE OF "THE RANCH" PROPERTY.
It was moved by Council Members Adolph/Sniff to adopt Resolution No.
2002-69 as submitted. Motion carried unanimously.
Council Member Adolph expressed appreciation to the Public Works Department for
the installation of speed limit signs on Jefferson Street.
ADJOURNMENT
There being no further business, it was moved by Council Members Henderson/Sniff
to adjourn, Motion carried unanimously.
Respectfully submitted,
JUNE S. GREEK, City Clerk
City of La Quinta, California