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2002 05 15 RDA Minutes LA QUINTA REDEVELOPMENT AGENCY SPECIAL MEETING MINUTES MAY 15, 2002 A special meeting of the La Quinta Redevelopment Agency was called to order by Chairperson Henderson. PRESENT: Board Members Adolph, Pe~a, Perkins, Sniff, Chairperson Henderson ABSENT: None PUBLIC COMMENT - None CLOSED SESSION 1. Conference with Agency's real property negotiator, Mark Weiss, pursuant to Government Code Section 54956.8 concerning potential terms and conditions of acquisition and/or disposition of real property generally located on the west side of Jefferson Street, south of Avenue 52 (APNs 770-200-009 through -010; 770-260-017; 772-150-001 through -005; 772-290-001 through -007, and -009 through -013; 772-310-002 through -007, and -009 through -013). Property Owner/Negotiator: KSL Land Holdings, Inc./Chevis Hosea. The Agency recessed to Closed Session. The Agency meeting reconvened with no decisions being made in Closed Session which require reporting pursuant to Section 54957.1 of the Government Code (Brown Act). PUBLIC HEARINGS 1. PUBLIC HEARING TO REVIEW AND TAKE TESTIMONY ON THE MID-YEAR SECOND FIVE-YEAR IMPLEMENTATION PLAN FOR THE LA QUINTA REDEVELOPMENT AGENCY PROJECT AREA NOS. I AND 2 AND TO COMMIT ADDITIONAL PROGRAMS TO THE SECOND FIVE-YEAR PLAN. The Chairperson declared the PUBLIC HEARING OPEN. Consultant Spevacek presented the staff report. Redevelopment Agency Minutes 2 May 15, 2002 There being no requests to speak, the Chairperson declared the PUBLIC HEARING CLOSED, Board Member Pe~a commented on the success of the projects in the plan. In response to Board Member Adolph, Mr. Spevacek reviewed the status of the City's affordable housing program mandated by the State. MOTION - It was moved by Board Members Sniff/Adolph to approve the Mid- Year Second Five-Year Implementation Plan and approve the inclusion of the projects and programs listed therein in the Mid-Year Second Five-Year Implementation Plan. Motion carried unanimously. The Agency convened in Joint Session with the City Council. 2. 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 MOUNTAINS; AND 3) CONSIDERATION BY THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY BOARD TO ADOPT RESOLUTIONS MAKING FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445, AND CONSENT/APPROPRIATION OF FUNDING. The Chairperson declared the PUBLIC HEARING OPEN. Assistant City Manager Weiss and Community Development Director Herman presented the staff report. Redevelopment Agency Minutes 3 May 15, 2002 Consultant Spevacek gave a brief summary on how the proposed land purchase developed, beginning in 1996, an;d commented on the importance of sales tax and Transient 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 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 Jacoy, 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. Redevelopn, ent Agency Minutes 4 May 15, 2002 There being no further requests to speak, the Chairperson 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 currently. 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 $105 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 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. Redevelopment Agency Minutes 5 May 15, 2002 Regarding the question about the acreage, Mr. Spevacek explained the Agency 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 Board Member Pe~a, Mr. Herman confirmed development within the hillside is prohibited by the City's hillside ordinance. Agency Counsel 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. Board 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 higher. He felt a public golf course would benefit the City and supported moving forward with it. Board 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. Board 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- Redevelopment Agency Minutes 6 May 15, 2002 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. Board Member Pe~a voiced agreement with the Board Members' 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. Chairperson 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 Agency Members for an explanation. RESOLUTION NO. RA 2002-09 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF LA QUINTA, CALIFORNIA, CERTIFYING A MITIGATED NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT FOR THE ACQUISITION AND DEVELOPMENT RANCH PROPERTY, ENVIRONMENTAL ASSESSMENT 2002-435, SCH #1999081020. It was moved by Board Members Sniff/Adolph to adopt Resolution No. RA 2002-09 as submitted. Ms. Jenson noted the Mitigation Monitoring Plan that is referenced has been distributed. Motion carried unanimously. Redevelopment Agency Minutes 7 May 15, 2002 RESOLUTION NO. RA 2002-10 A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY OF THE CITY OF LA QUINTA, CALIFORNIA, MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445(a) EXERCISING THE OPTION CONTAINED IN THE OPTION AGREEMENT AND AUTHORIZING ENTERING INTO THE AGREEMENT OF PURCHASE AND SALE OF JOINT ESCROW INSTRUCTIONS, AS AMENDED. It was moved by. Board Members Pe~a/Sniff to adopt Resolution No. RA 2002-10 as submitted. Motion carried unanimously. MOTION - It was moved by Board Members Pe~a/Sniff to appropriate $43.5 million from the Project Area No. 1 Bond Fund to underwrite the obligations the Agency will incur pursuant to the Option Agreement and the Agreement of Purchase and Sale and Joint Escrow Instructions. Motion carried unanimously. ADJOURNMENT There being no further business, it was moved by Board Members Sniff/Adolph to adjourn. Motion carried unanimously. Respectfully submitted, JUNE S. GREEK, Agency Secretary La Quinta Redevelopment Agency