Loading...
2003 06 03 RDA Minutes LA QUINTA REDEVELOPMENT AGENCY MINUTES JUNE 3, 2003 A regular meeting of the La Quinta Redevelopment Agency was called to order by Chairperson Henderson. ~ PRESENT: Board Members Adolph, Osborne, Perkins, Sniff, Chairperson Henderson ABSENT: NOne PUBLIC COMMENT - None CLOSED SESSION - None The Agency recessed to and until the hour of 3:00 pm. 3:00 P.M. PUBLIC COMMENT - None CONFIRMATION OF AGENDA - Confirmed APPROVAL OF MINUTES MOTION -It was moved by Board Members Sniff/Adolph to approve the Minutes of May 20, 2003, as submitted. Motion carried unanimously. CONSENT CALENDAR 1. APPROVAL OF DEMAND REGISTER DATED JUNE 3, 2003. MOTION - It was moved by Board Members Sniff/Adolph to approve the Consent Calendar as recommended. Motion carried unanimously. Redevelopment Agency Minutes 2 June 3, 2003 BUSINESS SESSION 1. CONSIDERATION OF A PROFESSIONAL SERVICES AGREEMENT WITH BERRYMAN AND HENIGAR FOR DEVELOPMENT COORDINATION SERVICES FOR SILVERROCK RANCH. Assistant Executive Director Weiss presented the staff report. In response to Board Member Sniff, Mr. Weiss stated this is a six months contract. In response to Board Member Adolph, Roy Stephenson, of Berryman & Henigar, stated he anticipates supporting staff on the project and providing guidance based on his experience. He stated Berryman & Henigar are supported by a large staff with varying expertise. He feels scheduling will be an important task, as well as contract compliance due to the restrictions on the funding. He noted the project has other issues besides a golf course, such as drainage, percolation, and a lot of infrastructure issues. As development coordinator, he will assist in the negotiations for the golf architect and other positions that come up, and review proposals and contracts. He suggested hiring a project manager as early in the process as possible. He confirmed he has an office in La Quinta, and would not have a problem if the contract is extended beyond six months. Board Member Osborne asked if he understands the constraints of the project, to which Mr. Stephenson responded, "Yes". In response to Board Member Perkins, Mr. Stephenson stated he has been with Berryman & Henigar for 23 years, and was one of its founders. He indicated he feels capable to do the job and understands the project needs to be run in smooth and rapid fashion with few mistakes. Board Member Sniff noted a lot of the issues in the contract are highly dependent on the golf architect, and he is not sure how it will all be coordinated. Mr. Stephenson confirmed coordination of everyone involved is important. He stated the golf architect needs support from the civil engineers because of the drainage issues. Board Member Sniff asked if he has ever seen a flood on this site, to which Mr. Stephenson responded, "No." He also asked how much impact he expects to have on the golf architect's vision. Mr. Stephenson stated he expects to have some impact as long as he is able to identify valid issues. He added he is Redevelopment Agency Minutes 3 June 3, 2003 confident the golf architect will work with them. He stated he will review the water plan for completeness, and will report to the Assistant ExecUtive Director as an advisor. He stated he has a sense where water for the project will come from but the location of the well sites is yet to be determined. He believes the golf architect's work is highly interdependent with a wide variety of other professional expertises needed to make the project a success. He feels the quality of the golf course has to be second to none but also feels the best infrastructure is needed to provide adequate water and sewer, and protection from mountain runoff and flooding. He confirmed the need to master plan up- front for both golf courses, particularly as it relates to'drainage, and to identify where debris from the mountains will go. He feels accommodating all storm water onsite is doable. In response to Chairperson Henderson, Mr. Weiss confirmed the contract with GMA was for six months, and added they are finishing some minor tasks to package the material. He stated the golf architect's contract is also for six months, which is the timeframe generally needed to design a golf course, and that contract could end about the same time as the development coordinator's contract. He added the golf architects indicated they could probably do the plans in a shorter timeframe to allow the City an opportunity to bid the project within the development coordinator's contract time period. In regard to the growing season for the golf course, he stated it's possible to plant portions of the course with sod in order to accommodate a schedule that doesn't meet the window. November or December is the best timeframe to make the growing season and open in January 2005, and the City is very close to missing that window. He confirmed drainage and infrastructure issues are not exclusive to the 18-hole golf course but rather include the entire site, and the golf architect and his specialists will have to coordinate with project engineers for the entire project to make sure it is developed in a sensible and efficient manner. Board Member Adolph asked if he is comfortable Berryman & Henigar can handle the responsibilities of the contract, to which Mr. Stephenson responded, "Yes," and noted he is backed by experts in a wide variety of areas. Board Member Adolph indicated he is a lot more comfortable than he was a few weeks ago. MOTION - It was moved by Board Members Perkins/Osborne to approve a Professional Services Agreement with Berryman & Henigar, Inc. to provide development coordination services for the SilverRock Ranch project, and authorize the Executive Director to execute the agreement. Redevelopment Agency Minutes 4 June 3, 2003 Board Member Sniff stated he has minor reluctance based on the responses to his questions because he is not convinced it will work as smoothly as it sounds but he will support the motion. Motion carried unanimously. Mr. Vossler asked for clarification regarding the six-month time period for the golf architect's contract, and stated it's his experience that it takes closer to 18 months. He voiced concern about the golf architect's responsibility for the golf course if he leaves before the growing is established. Mr. Weiss advised the golf architect will be on site to ensure the golf course is being built according to the design. He explained the six-month period is for preparing the plan so construction of the plan can be bid. He noted the contract is yet to be negotiated but he expects the contract to include construction of the actual course. STUDY SESSION - None DEPARTMENT REPORTS - None CHAIR AND BOARD MEMBERS' ITEMS - None PUBLIC HEARINGS · JOINT PUBLIC HEARING WITH THE LA QUINTA CITY COUNCIL 1. JOINT PUBLIC HEARING BETWEEN THE LA QUINTA CITY COUNCIL AND THE REDEVELOPMENT AGENCY TO CONSIDER A PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE AGENCY AND CENTER POINT DEVELOPMENT, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, TO FACILITATE CENTER POINT'S CONSTRUCTION OF: 1) MEDICAL OFFICE/ CLINIC; 2) BOUTIQUE HOTEL; 3) TWO RESTAURANTS; 4) MID-PRICE SUITES HOTEL; 5) CONDOMINIUM/CASITAS DEVELOPMENT; 6) CLUSTER COURTYARD DEVELOPMENT; AND 7) SINGLE FAMILY HOME DEVELOPMENT CONTAINING NOT LESS THAN FORTY (40) HOMES RESTRICTED FOR SALE TO LIMITED-INCOME BUYERS FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF MILES AVENUE AND WASHINGTON STREET. APPLICANT: CENTER POINT DEVELOPMENT, LLC. Redevelopment Agency Minutes 5 June 3, 2003 Community Development DirectOr Herman presented the staff report. Consultant Frank Spevacek gave a brief overview of the Disposition and Development Agreement (DDA). In response to Board Member Osborne, Mr. Spevacek stated the $2.5 million loan will be made after the foundations are approved for the first phase of the casitas and the hotel. The loan will be drawn over a six-month period and accrue interest only if the developer defaults. He confirmed the loan will take place prior to construction of the homes to reduce the interest cost that the developer would incur to borrow the funds, which will also reduce the Agency's per-unit-assistance. In response to Board Member Sniff, Mr. Spevacek advised monitoring of the agreement will take place through' 1) approvals of various documents and financing packages for the project; 2) construction activities as they relate'to the DDA; on-site construction and engineering activities; and the Finance Department will oversee the cash flow. He stated the Executive Director will have the ultimate responsibility of making sure everything is done legally and in a proper fashion. Board Member Sniff noted the plan to accomplish this project is creative and somewhat tenuous, and that percentages of progress are attached to various components of the project. He questioned the hotel being done in stages, instead of completing it, if 100% financing is in place. Executive Director Genovese advised the City has an implementation plan for each of its projects, and the milestones in this DDA are put into a business plan and matched up with a graph or matrix, which will be used to monitor the project. Board Member Sniff stated he feels it would be more logical to complete the components as the project moves forward instead of having a series of incomplete components. Mr. Spevacek commented on the difficulty of getting hotel financing in today's market, and stated the medical facility will create room demand for a hotel. Additionally, the sale of the casitas will generate cash flow to invest back into the hotel and remove the hotel investor at an earlier date. He explained by doing this, the Agency does not have to put money into the hotel transaction because it is based on a land sale where the developer secures financing for the hotel. He stated the residential developer is anxious to move forward and start Redevelopment Agency Minutes 6 June 3, 2003 generating cash flow to pay for the design and drawings needed to pull permits. If the project is delayed in sequential steps, it would impact the developer's financing and add costs to the project, which would result in a request for reduced land value or additional assistance. He stated the intent is to move forward in a manner that gets the hotel built first but also protects the Agency. He stated the total cost of the hotel, including land, is projected at $15 million. He noted having spent $9.8 million for the hotel at 75 % completion, the lender will be motivated to get the project completed. Board Member Sniff continued to question why the hotel wouldn't be completed and begin producing revenue instead of moving on to other components that will be partially completed. Mr. Spevacek stated the delay was engineered in starting the rest of the project until certain milestones are accomplished. He stated it is a business decision as to what level of risk the Agency wishes to take. Chairperson Henderson stated she was uncomfortable referring to the $2.5 million as a loan, and stated she viewed it as participation in the project to secure 40 affordable housing units. Mr. Spevacek stated the loan agreement in the DDA is for security for the Agency to use for foreclosure should the developer default on producing the 40 units. It will remain a loan for the 40 units as long as the units remain in the affordable housing program for a period of 45 years. Chairperson Henderson asked if any component of the project will be put on hold while other components move forward. Mr. Spevacek stated the benchmarks placed on the project do not mean construction will stop. He added the plan is for the project to rise in concert, and to achieve certain cost savings by mass grading the site and installing utilities on the entire site. The plan is also to provide some degree of incentives to get the hotel going before the developer gets to finish and start the other land uses on the site. Chairperson Henderson complimented the development plan, and stated she is prepared to support it. Board Member Adolph asked if the developer is in agreement with the conditions of the DDA. He noted it's important for the other components to be near completion before the hotel is occupied because the hotel guests will not want construction going on around them. Redevelopment Agency Minutes 7 June 3, 2003 In response to Board Member Sniff, Mr. Spevacek stated as in all real estate transactions, this agreement relies on the private market for financing, on Hilton for concluding the hotel franchise agreement, and on stability in the world. He stated there is no absolute certainty that the project will take place without a problem but one difference in this agreement is that the Agency is getting paid a fair-market value for the land and not having to put money back into the project to subsidize any of the non-affordable units in the development. Richard Oliphant, 44-139 Monterey Avenue, Palm Desert, stated the deal points represented in the development agreement and the DDA are acceptable, and they are prepared to sign it. Chairperson Henderson asked if the project will be built in phases. Mr. Oliphant stated the project will be phased but the phases are indexed to the hotel, and that prevents some of the phases starting that they would like to start. He stated the hotel will be moving faster than the balance of the project, and the greatest impact will be in the residential section because it will sell much faster than it can be constructed. The Chairperson declared the PUBLIC HEARING OPEN at 10:12 p.m. Emily H®mphill, attorney for the applicant, noted the terms of the agreement require the developer to diligently pursue construction to completion once it is started. She then commented on the substantial security provided to the Agency within the agreement. There being no other requests to speak, the Chairperson declared the PUBLIC HEARING CLOSED at 10:16 p.m. RESOLUTION NO. RA 2003-09 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE AGENCY AND CENTER POINT DEVELOPMENT, LLC, FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF WASHINGTON STREET AND MILES AVENUE. It was moved by Board Members Sniff/Adolph to adopt Resolution No. RA 2003-09 as submitted. Motion carried unanimously. Redevelopment Agency Minutes 8 June 3, 2003 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