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2017 04 18 CC MinutesCITY COUNCIL MINUTES TUESDAY, APRIL 18, 2017 A regular meeting of the La Quinta City Council was called to order at 3:00 p.m. by Mayor Evans. PRESENT: Councilmembers Fitzpatrick, Pena, Radi, Sanchez, Mayor Evans ABSENT: None PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA - None CONFIRMATION OF AGENDA City Attorney Ihrke requested that the motion for Consent Calendar Item No. 7 include authorization for the City Engineer to execute the conditional approval of final Parcel Map 37207 by signing the Map on behalf of the City. Council concurred. CLOSED SESSION 1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54956.8 FOR PROPERTY LOCATED AT: SILVERROCK RESORT (APNS 770-200-026; 776-150-021; 776-150-023; 770- 060-056; 770-060-057; 770-060-058; 770-060-059; 770-060-061; 770-060- 062; 777-490-004; 777-490-006; 777-490-007; 777-490-012; 777-490-014 CITY NEGOTIATOR: FRANK J. SPEVACEK, CITY MANAGER NEGOTIATING PARTIES: ROBERT S. GREEN, SILVERROCK DEVELOPMENT COMPANY UNDER NEGOTIATION: PRICE AND TERMS OF PAYMENT FOR THE SALE OF REAL PROPERTY 2. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54957.6; CITY DESIGNATED REPRESENTATIVE: CHRIS ESCOBEDO, DIRECTOR OF COMMUNITY RESOURCES; AND EMPLOYEE ORGANIZATION: LA QUINTA CITY EMPLOYEES ASSOCIATION COUNCILMEMBER PENA ANNOUNCED THAT HE WILL BE ABSENT FROM CLOSED SESSION DURING THE PRESENTATION AND DISCUSSION OF ITEM NO. 3 DUE TO THE PROXIMITY OF HIS PROPERTY TO THE CITY PROPERTY BEING DISCUSSED. 3. CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54956.8 FOR PROPERTY LOCATED AT AND ADJACENT TO CIVIC CENTER CAMPUS NORTH OF AVENIDA LA FONDA AND CITY COUNCIL MINUTES Page 1 of 11 APRIL 18, 2017 WEST OF WASHINGTON STREET (APN 770-130-001, 770-123-011, 770-123- 012, 770-124-010, 770-125-003) CITY NEGOTIATOR: FRANK J. SPEVACEK, CITY MANAGER NEGOTIATING PARTIES: LA QUINTA ARTS FOUNDATION UNDER NEGOTIATION: PRICE AND TERMS OF PAYMENT FOR THE LEASE OF PROPERTY IDENTIFIED COUNCIL RECESSED THE OPEN SESSION PORTION OF THE MEETING AND MOVED INTO CLOSED SESSION AT 3:02 P.M. MAYOR EVANS RECONVENED THE OPEN SESSION PORTION OF THE CITY COUNCIL MEETING AT 4:04 P.M. WITH ALL MEMBERS PRESENT REPORT ON ACTION(S) TAKEN IN CLOSED SESSION City Attorney Ihrke reported on Closed Session Item Nos.: 1. The City Council unanimously decided to address the item in open session as Business Session Item No 1. No other action was taken on this item. 2. No actions were taken on Item No. 2 that require reporting pursuant to Government Code section 54957.1 (Brown Act). 3. This item was not addressed. The Council will reconvene Closed Session at the end of the meeting to take up discussion on this item. PLEDGE OF ALLEGIANCE Mayor Pro Tem Radi led the audience in the pledge of allegiance. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA PUBLIC SPEAKER: Erica Felci, Governmental Project Manager for the Coachella Valley Association of Governments - Ms. Felci provided an update on the CV Link project, the public meeting to review the CV Link environmental impact report, the Cathedral City bike path, and the La Quinta Big Horn Sheep barrier project. PUBLIC SPEAKER: Don Adolph, La Quinta - Former Mayor Don Adolph spoke about the traffic problems that occurred last week during the first day of Coachella Fest and requested that staff work with Indio to ensure it does not happen again. Also regarding privatization of SilverRock, he reminded everyone that the purpose of the original purchase was to bring revenue into the City and provide affordable golfing to residents. Mr. Adolph asked the Council to protect both goals in all agreements. ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS Mayor Evans announced that April is DONATE LIFE month and explained how to sign up as an organ, tissue and blood donor. CITY COUNCIL MINUTES Page 2 of 11 APRIL 18, 2017 CONSENT CALENDAR 1. APPROVE MINUTES OF APRIL 4, 2017 2. AUTHORIZE OVERNIGHT TRAVEL FOR DEPUTY CITY CLERK TO ATTEND CITY CLERKS ASSOCIATION OF CALIFORNIA TECHNICAL TRAINING FOR CLERKS SERIES 400 IN RIVERSIDE, CALIFORNIA, JUNE 20 — 23, 2017 3. EXCUSE ABSENCES FOR PLANNING COMMISSIONER MARY CALDWELL FOR APRIL 25 AND MAY 9, 2017 PLANNING COMMISSION MEETINGS 4. APPROVE DECLARATION OF SURPLUS AND DISPOSAL METHOD OF CITY OWNED VEHICLES FOR CODE ENFORCEMENT 5. APPROVE AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT WITH BENGAL ENGINEERING, INC. FOR THE DUNE PALMS ROAD WIDENING IMPROVEMENT (PROJECT NO 2009-04) 6. APPROPRIATE FUNDING TO REPLACE THE SKATE PARK AND AWARD A CONTRACT TO PACIFIC TENNIS COURTS, INC. TO CONSTRUCT TENNIS AND PICKLEBALL COURT CONVERSION IMPROVEMENTS AT FRITZ BURNS PARK (PROJECT NO. 2016-04) 7. pulled by the City Attorney for a separate vote in order to clarify the motion »> ADOPT A RESOLUTION GRANTING CONDITIONAL APPROVAL OF FINAL PARCEL MAP NO. 37207 AND APPROVE AGREEMENT REGARDING REAL PROPERTY BETWEEN COACHELLA VALLEY WATER DISTRICT AND CITY ASSOCIATED WITH THE SILVERROCK RESORT DEVELOPMENT LOCATED AT THE SOUTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52 8. APPROVE DEMAND REGISTERS DATED MARCH 31 AND APRIL 7, 2017 9. AUTHORIZE SUBMISSION OF TWO GRANT APPLICATIONS FOR THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION SB 821 BICYCLE AND PEDESTRIAN FACILITIES PROGRAM 10. ADOPT RESOLUTION TO ESTABLISH REGULAR PART-TIME POSITION FOR SOFTWARE PROGRAM REPORT WRITER MOTION - A motion was made and seconded by Councilmembers Pena/Fitzpatrick to approve Consent Calendar Item Nos. 1 - 6 and 8 - 10 as recommended, with Item No. 10 adopting Resolution No. 2017-013. Motion passed unanimously. In response to Councilmember Fitzpatrick, Facilities Director Howlett clarified the necessity for the replacement of the skate park at Fritz Burns Park, the span between CITY COUNCIL MINUTES Page 3 of 11 APRIL 18, 2017 the project estimate and bids received, and the anticipated September completion of the project. CONSENT CALENDAR ITEM NO. 7: MOTION: A motion was made and seconded by Councilmembers Radi/Fitzpatrick to adopt Resolution No. 2017-012, amended as follows: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, (1) GRANTING CONDITIONAL APPROVAL OF FINAL PARCEL MAP NO. 37207 AND AUTHORIZE EXECUTION BY THE CITY ENGINEER OR AUTHORIZED PERSONNEL FOR THE SAME, AND (2) APPROVE AN AGREEMENT FOR REAL PROPERTY BETWEEN COACHELLA VALLEY WATER DISTRICT AND THE CITY OF LA QUINTA AUTHORIZING A TIME EXTENSION FOR SATISFACTORY COMPLETION OF THE CONDITIONAL REQUIREMENTS TO VALIDATE THE APPROVAL [LOCATION: SILVERROCK PROPERTY AT THE SOUTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52] BUSINESS SESSION 1. APPROVE COVENANTS AFFECTING REAL PROPERTY AND AMENDMENT NO. 2 TO PURCHASE, SALE AND DEVELOPMENT AGREEMENT WITH SILVERROCK DEVELOPMENT COMPANY LLC FOR SILVERROCK RESORT City Consulting Economist McMillen presented the staff report, which is on file in the Clerk's Office. Mr. McMillen explained that any future nine -hole course built on the property would carry resident protections and developer conditions as set for the existing course. PUBLIC SPEAKER - DEVELOPER: Robert Green, SilverRock Development Company, LLC (SDC) - Using the map of the property, Mr. Green explained how an additional nine - hole course could work, but added that the phase 2 option was very conceptual at this point. PUBLIC SPEAKER: Paul Quill, La Quinta - Mr. Quill spoke against approving Amendment No. 2 at this time in order for more residents to review the matter and be comfortable with the deal. PUBLIC SPEAKER: Mark Johnson, La Quinta - Mr. Johnson spoke in favor of the privatization of the property because it makes good economic sense, and highlighted the suggested Amendment revisions he provided in a letter to Council including: adding a resident golfer advisory committee; adding performance-based golf course management; increasing resident card fees June 1, 2017; setting tee times for residents, and; continuing the 15% discount on food and merchandise for residents. [Mr. Johnson's letter containing his full comments is on file in the City Clerk's Office.] CITY COUNCIL MINUTES Page 4 of 11 APRIL 18, 2017 PUBLIC SPEAKER: George Christopher, La Quinta - Mr. Christopher spoke against approving Amendment No. 2 to allow people time to understand the Amendment. Regarding resident rate, Mr. Christopher said he would like to see residents granted the resident rate whenever there is an open tee time for them, not just during the times set aside for residents. Mayor Evans explained the timing of the project and that the Council is not up against a wall to make a decision on the Amendment; that the project and Amendment No. 2 has been the subject of intense, lengthy and numerous discussions; that the reality of post -RDA and IRS tax-exempt bond regulations prompted the Amendment; that the City's investment is minimal compared to the developers - not the $185-200 million RDA investment initially planned when the property was purchased; that it became necessary to consider the entire property in calculating the 10% IRS rule, not just the initial portion to be developed by SDC; that residents' have rights and they are fully protected; that the City created the golf course to attract a hotel to provide long-term revenue to the City; that it is fiscally prudent to now transfer the course to the developer to operate, maintain and pay taxes on so that the City no longer needs to cover losses; that there are extreme federal penalties if the City does not adhere to the strict IRS 10% rule so it must do so since the City does not have the funds to pay off the bonds; that the contract for current course operator for the City expires in a year or so and the City is pleased with their service; that it is not the City's operational decision regarding who SDC selects to operate the course once the course is sold to SDC; that there was a study session to hear from resident golfers, and a study session to walk through the Amendment No. 2 to get valuable feedback; that the City is embarking upon an amazing development; that the City is gaining more than it's giving in terms of La Quinta's financial future; that this is the result of much contemplation, number crunching keeping in mind that a city's responsibility is public safety, set policy and provide infrastructure; that the Covenants allow the City to revisit resident protections and make modifications, and; that she is completely comfortable and excited about this Amendment No. 2 and the next steps. Councilmember Pena provided first-hand info on original purchase and investment sixteen years ago in 2001. He stated that the intention was always to sell the property; that the difference now is the selling price; that originally the RDA was going to invest by developing the infrastructure and recoup that investment with the sale of the property to a developer; that now, millions of dollars of improvements will be done by the developer, not the City/RDA; that the original purpose of purchasing the SilverRock property was to generate future revenue and provide golf to residents; that will be done with this Amendment; that the City not only has an obligation to resident golfers, but to all residents to be fiscally responsible and that is accomplished; that the resident golf rates projected ten years out equal current rates at other golf courses; that a noted benefit is the hotels are coming five years earlier than anticipated; that public money spent on the Cove flood prevention in the 1980s and 1990s, or affordable housing was first criticized in the past, then supported when results are seen; redevelopment has been very difficult since the requirement to unwind CITY COUNCIL MINUTES Page 5 of 11 APRIL 18, 2017 redevelopment agencies; most people have no idea of this complex transaction so when told the City is "giving" SilverRock away, they object, and; that in essence, the City is selling it to the developer for a reduced price in exchange for millions in savings to the community - making a beneficial deal for residents and getting a very attractive, developed property in exchange. Mayor Evans noted that the Agreement was executed in November 2014 and by December 2019, there will be two hotels with 320 rooms in operation - the City has not let "grass grow" on this deal. She also noted that once owned by a private party, the City will begin receiving property tax on the course and all the other acreage in addition to transient occupancy tax and sales tax, whereas under City ownership, no tax is paid or received. Councilmember Radi explained that the City has endured economic blows over the last several years but continues to fulfill its duties to be transparent and fiscally responsible; that all public questions and concerns raised were also raised by Council and satisfied; that he and the Council could not support waiving developer impact fees (DIF); that the Council works with the situation it has, not with that it wishes it had; that he wishes the IRS did not have the 10% cap rule; that one has to project fifteen years out when the bonds are paid off and decide if they want to see vibrant hotels, and village creating economic activity or want to see just the existing golf course; that the City could wait it out until 2033 when the bonds are paid and continue to cover the annual $500,000 deficit on the course or partner with an experienced developer for a projected revenue source; that decisions must be made with the facts at hand, and when voters elect someone, voters expect them to make decisions; that this can be debated forever but in order not to lose another season, have a start date of May 15t; that if residents read through the Covenants, the work of protecting residents is apparent - it took a long time and lots of work by many diligent people, and; that he sees a vibrant site when he looks to the future. Councilmember Fitzpatrick said that back when she was a candidate for Council, she had 98% of this information and the restrictions, although perhaps not the exact tally of the $9.7 million limit imposed by the 10% IRS rule, but this information is not new; that this is an economic decision that supplying residents with a Montage -quality golf course and preserving the recreational aspect of the property is a tremendous benefit to all; that the Covenants on the Ahmanson Ranch House preserves an historic part of La Quinta culture; that the developer is open to a resident advisory committee; that there has been a great change in public policy - cities don't own golf courses any more if it can be helped because it's difficult to make them economically viable and meet the high standards that residents want, and; the deal may be perceived negatively but the information has been available for a long time, and as complex as it is, the result is that the developer is paying about $340 million for the property by investing that amount instead of the City/RDA doing so. CITY COUNCIL MINUTES Page 6 of 11 APRIL 18, 2017 Councilmember Sanchez echoed what other councilmembers have said and noted that this deal was in progress when he came onto the Council, and that he has been fortunate to be able to pick up where former Council left off; that the fiscal responsibility of decisions is always examined by him and the Council - are residents getting their fair share, are residents being protected; that having a real estate background affords him some understanding of the complexities of developments; that he has had to learn about federal requirements, IRS laws, state and county requirements, lender requirements, timelines, environmental impacts and agencies, tax revenues, covenants; that the Council, staff, developer and the community have had to work hard together to design a deal that puts the community first; that this is a long term vision that will begin to see benefits in the next year or so but is for the benefit of future residents and Councils, and; that the Council was elected to make decisions and that is what they must do. PUBLIC SPEAKER: Paul Quill, La Quinta - Mr. Quill was invited to address the Council again. He said that he understands the Covenants and that the Council has done a miraculous job with the project. Mr. Quill said his one concern and question: is it a requirement of the IRS rule that the developer be given the option of the remainder of the Silverrock property for $1? City Attorney Ihrke replied that yes it is a legal requirement because all of the property that was purchased with the tax-exempt bond proceeds is subject to that 10% threshold that has been discussed for several years. Regarding the $1 price, there is language in the option that is part of Amendment No. 2 [Phase 2 Option Agreement] that provides that any amount determined with certainty, up to that 10% maximum, that hasn't already been accounted for elsewhere, will be added to the purchase price. If the land is still vacant in 2033 when the bond are paid off, the IRS 10% rule does not apply. Mayor Evans extended the explanation by saying that it was the City's choice in evaluating their vision for the property to extend those options to SDC with strict protections and thresholds that must be met. She said it was a way to ensure the entire property is thought through so it's a cohesive package, and that should SDC desire to bring in other entities, that would still be subject to City approval. City Consulting Economist McMillen provided details on the Phase 1 Option Agreement including its timeline and restrictions. City Manager Spevacek provided an extensive and thorough history of the purpose and circumstances leading to the Phase 2 Option Agreement . MOTION - A motion was made and seconded by Councilmembers Radi/Sanchez to approve covenants affecting real property and Amendment No. 2 to the Purchase, Sale, and Development Agreement with Silverrock Development Company LLC for SilverRock Resort and authorize the City Manager and City Attorney to (i) make minor CITY COUNCIL MINUTES Page 7 of 11 APRIL 18, 2017 revisions and additions as necessary that do not substantively change the business terms, and (ii) execute and implement said agreements and other documents necessary. Motion passed unanimously. Councilmember Pena noted for the record that the agreements allow for amendments to the Covenants over time if necessary. COUNCIL RECESSED FOR A TEN MINUTE BREAK MAYOR EVANS RECONVENED THE CITY COUNCIL MEETING AT 6:08 P.M. WITH ALL MEMBERS PRESENT 2. INTRODUCE FOR FIRST READING AN ORDINANCE AMENDING TITLE 3 OF THE LA QUINTA MUNICIPAL CODE BY ADDING CHAPTER 3.35 RELATED TO REVENUE COLLECTION POLICY; CALIFORNIA ENVIRONMENTAL QUALITY ACT: FIND THE PROJECT EXEMPT PURSUANT TO SECTION 15061 (B)(3) Management Specialist Villalpando presented the staff report, which is on file in the Clerk's Office. MOTION — A motion was made and seconded by Councilmembers Pena/Sanchez to take up Ordinance No. 557 by title and number only and waive further reading. Motion passed unanimously. City Clerk Maysels read the following title of Ordinance No. 557 into the record: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, ADDING CHAPTER 3.35 TO THE LA QUINTA MUNICIPAL CODE, RELATING TO THE POLICY TO REVENUE COLLECTION, AND CLARIFYING THE COLLECTION OF REVENUES UNDER EXISTING MUNICIPAL CODE PROVISIONS RELATING TO THE TRANSIENT OCCUPANCY TAX MOTION - A motion was made and seconded by Councilmembers Pena/Sanchez to introduce at first reading Ordinance No. 557 as recommended. Motion passed unanimously. STUDY SESSION 1. DEVELOPMENT SERVICES — 2017 UPDATE The staff report and presentation, which is on file in the City Clerk's Office, was given by Customer Service Center Manager Zarco, Building Official Hanada, Associate Engineer Yu, and Planning Manager Perez. Councilmembers discussed the volume of permits; paperless planning case files, and; producing a handbook for business license holders. CITY COUNCIL MINUTES Page 8 of 11 APRIL 18, 2017 PUBLIC HEARINGS - None DEPARTMENTAL REPORTS All reports are on file in the City Clerk's Office. City Manager Spevacek explained the traffic problems that occurred last Thursday caused by Coachella concert -goers and the solutions that will be in place for the upcoming weekend. Councilmembers relayed their experience with concert effects on La Quinta, and Councilmember Fitzpatrick requested that staff relay to the City of Indio and GoldenVoice that the concerts are substantially louder this year as noted by her many neighbors who can even hear the lyrics from their home, and these are folks who have never complained before. 9. TOBACCO FREE COMMUNITIES REPORT PUBLIC SPEAKER: V.J. Sleight, La Quinta - Ms. Slight spoke in favor of the City adopting a tobacco retail licensing ordinance. Ms. Slight provided a hand out to Council which details the reasoning, purpose and parameters for such an ordinance. [The hand out is on file in the City Clerk Office.] Police Captain Grace and Assistant Chief Walton provided details on sting operations conducted in La Quinta and youth interviews regarding the source of tobacco in their possession. Councilmembers discussed the lack of stats on incidents of retailers selling to youths; grant funds used by police for tobacco and alcohol sting operations; control of electronic tobacco delivery products, and; unwillingness to impose another fee on retailers - equivalent to pre -penalizing businesses $428. MAYOR'S AND COUNCIL MEMBER'S ITEMS Councilmember Radi reported on the City's Easter egg hunt event, the Sheriff's ceremony, and the Find Food Bank's telethon. Councilmember Sanchez said the City Manager's history of the SilverRock property was spot on and he suggested using it to create a timeline to post on the website for all residents to follow. Councilmember Fitzpatrick reported on the Salton Sea tour, and the Big Horn Sheep temporary barrier fence. CITY COUNCIL MINUTES Page 9 of 11 APRIL 18, 2017 REPORTS AND INFORMATIONAL ITEMS La Quinta's representative for 2017, Mayor Evans reported on her participation in the following organizations meeting: CVAG COACHELLA VALLEY CONSERVATION COMMISSION CVAG ENERGY AND ENVIRONMENTAL RESOURCES COMMITTEE La Quinta's representative for 2017, Councilmember Fitzpatrick reported on her participation in the following organization meeting: CHAMBER OF COMMERCE INFO EXCHANGE COMMITTEE La Quinta's representative for 2017, Councilmember Radi reported on his participation in the following organization meeting: RIVERSIDE COUNTY TRANSPORTATION COMMISSION COUNCIL RECESSED TO THE HOUSING AUTHORITY MEETING AT 7:16 P.M. MAYOR EVANS RECONVENED THE CITY COUNCIL MEETING AT 7:19 P.M. WITH ALL MEMBERS PRESENT CLOSED SESSION continued 3. CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54956.8 FOR PROPERTY LOCATED AT AND ADJACENT TO CIVIC CENTER CAMPUS NORTH OF AVENIDA LA FONDA AND WEST OF WASHINGTON STREET (APN 770-130-001, 770-123-011, 770-123- 012, 770-124-010, 770-125-003) CITY NEGOTIATOR: FRANK J. SPEVACEK, CITY MANAGER NEGOTIATING PARTIES: LA QUINTA ARTS FOUNDATION UNDER NEGOTIATION: PRICE AND TERMS OF PAYMENT FOR THE LEASE OF PROPERTY IDENTIFIED COUNCILMEMBER PENA ANNOUNCED THAT HE WILL BE ABSENT FROM CLOSED SESSION DURING THE PRESENTATION AND DISCUSSION ON ITEM NO. 3 DUE TO THE PROXIMITY OF HIS PROPERTY TO THE CITY PROPERTY BEING DISCUSSED. COUNCIL RECESSED TO CLOSED SESSION AT 7:19 P.M. MAYOR EVANS RECONVENED THE CITY COUNCIL MEETING AT 7:49 P.M. WITH COUNCILMEMBER PENA ABSENT REPORT ON ACTION(S) TAKEN IN CLOSED SESSION City Attorney Ihrke reported that no actions were taken on Item No. 3 that require reporting pursuant to Government Code section 54957.1 (Brown Act). CITY COUNCIL MINUTES Page 10 of 11 APRIL 18, 2017 ADJOURNMENT There being no further business, a motion was made and seconded by Councilmembers Fitzpatrick/Sanchez to adjourn at 7:50 p.m. Motion passed: ayes 4, noes 0, absent 1 (Pena). Respectfully submitted, SUSAN MAYSELS, City Clerk City of La Quinta, California CITY COUNCIL MINUTES Digitally signed by Susan Maysels DN: cn=Susan Maysels, o=City of La Quinta, ou=Clerk's Office, email=smaysels@la-quinta.org, c=US Date: 2017.05.03 08:10:42 -0700' Page 11 of 11 APRIL 18, 2017