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2003 06 17 RDA Minutes LA QUINTA REDEVELOPMENT AGENCY MINUTES JUNE 17, 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 1. Conference with Agency's real property negotiator, Jerry Herman, pursuant to Government Code Section 54956.8 concerning potential terms and conditions . of acquisition and/or disposition of real property located at 78-990 Miles Avenue (APN: 604-032-022). Property Owner/Negotiator: She/la Weldon. 2. 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 located at the northwest corner of Avenue 52 and Jefferson Street (APN: 772-220-007). Property Owner/Negotiator: Lusardi. The Agency recessed to Closed Session to and until the hour of 7:00 pm. 7:00 P.M. PUBLIC COMMENT - None CONFIRMATION OF AGENDA Executive Director Genovese requested an item be added to the business session for purchase of property at 53-200 Avenida Herrera. Agency Counsel Jenson reviewed the requirements for adding the item to the agenda. She advised the immediate need to take action is due to the sale of the property taking place July 1, which is prior to the next Agency meeting, and the need to take action was not known until today, which was after posting of the agenda. Redevelopment Agency Minutes 2 June 17, 2003 MOTION - It was moved by Board Members Sniff/Adolph to add Business Item No. 2, "Consideration of a Request to Acquire a Single Family Home Located at 53-200 Avenida Herrera," as an emergency item that requires immediate action and came up after posting of the agenda. Motion carried unanimously. APPROVAL OF MINUTES MOTION -It was moved by Board Members Sniff/Adolph to approve the Minutes of June 3, 2003, as submitted. Motion carried unanimously. CONSENT CALENDAR 1. APPROVAL OF DEMAND REGISTER DATED JUNE 17, 2003. 2. TRANSMITTAL OF TREASURER'S REPORT DATED APRIL 30, 2003. 3. TRANSMITTAL OF REVENUE & EXPENDITURES REPORT DATED APRIL 30, 2003. 4. APPROVAL OF A CONTRACT WITH RUTAN AND TUCKER, LLP, FOR 2003/2004 LEGAL SERVICES. 5. APPROVAL OF A CONTRACT AGREEMENT WITH GMA INTERNATIONAL FOR MASTER PLAN COORDINATION SERVICES FOR SlLVERROCK RANCH. 6. ADOPTION OF A RESOLUTION APPROVING THE AGENCY'S PAYMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY ("AGENCY") AND WILLIAM D. CALKINS AND LYNN R. KUNKLE, CO-CONSERVATORS OF THE ESTATE OF CHARLES BRIAN MURPHY, AS TO AN UNDIVIDED 25% INTEREST; LYNN R. KUNKLE, AN UNMARRIED MAN, AS TO AN UNDIVIDED 25% INTEREST; AND AM PARTNERSHIP, AS TO AN UNDIVIDED 50% INTEREST ("SELLERS") FOR PROPERTY LOCATED ALONG THE EAST LINE OF AVENIDA MONTEZUMA. MOTION - It was moved by Board Members Adolph/Osborne to approve the Consent Calendar as recommended and with Item No. 6 being approved by RESOLUTION NO. RA 2003-10. Board Member Sniff spoke to Item No. 5, and stated he will support it but has a level of discomfort approving contracts outside of the bid process. Motion carried unanimously. Redevelopment Agency Minutes 3 June 17, 2003 BUSINESS SESSION 1. CONSIDERATION OF A RESOLUTION ADOPTING THE INVESTMENT POLICY OF THE REDEVELOPMENT AGENCY FOR FISCAL YEAR 2003/2004. There were no changes to the staff report as submitted and on file in the City Clerk's Office. . RESOLUTION NO. RA 2003-11 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING AND ADOPTING THE AMENDED INVESTMENT POLICY FOR FISCAL YEAR 2003/2004. It was moved by Board Members Osborne/Adolph to adopt Resolution No. RA 2003-11 as submitted. Motion carried with Board Members Perkins and Sniff voting NO. 2. CONSIDERATION 'OF A REQUEST TO ACQUIRE A SINGLE FAMILY HOME ~ LOCATED AT 53-200 AVENIDA HERRERA. Community Development Director Herman presented the staff report. MOTION -It was moved by Board Members Sniff/Adolph to approve the acquisition of property located at 53-200 Avenida Herrera, authorize the Executive Director to acquire, rehabilitate, and resell the property to another Iow-income household, and authorize Rosenow Spevacek Group (RSG) to act on the Agency's behalf at the Trustee's Sale. Motion carried unanimously. STUDY SESSION 1. DISCUSSION REGARDING A BUSINESS PLAN FOR SILVERROCK RANCH. Assistant Executive Director Weiss and Consultant Frank Spevacek presented the staff report. In response to Board Member Osborne, Mr. Spevacek confirmed one option is to issue $12 to $17 million in taxable bonds. That amount is based 'on the tax ---- increment currently in place and setting aside $1 million of tax increment that is not devoted to any bond debt service in order to have cash available for operating costs. Another $5 million is anticipated once the assessment rolls Redevelopment Agency Minutes 4 June 17, 2003 equalize in August. He then explained the rational for using as much as possible of the remaining taxable bond proceeds for construction of the first golf course. and how it would free the funds currently reserved in the CIP for that purpose. He stated those funds could then be used for the second golf course or other public facilities. If a decision is made to deal instead with the land component where the monies have been expended, money would be put back into the 1999 bond proceeds, which would then make that money available. He stated staff's recommendation would be to reimburse the bond account, as opposed to calling bonds, due to the expense associated with that. In response to Board Member Perkins, Mr. Spevacek stated the KSL restrictions on the property were originally for seven years. He also noted an error on Page 7 of the staff report, and stated 7 percent should be 70 percent. In response to Board Member Adolph, Agency Counsel Jenson confirmed construction on additional hotel rooms can be started before the seven years is complete, as long as they are not operational until the seven-year period has ended. In response to Board Member Sniff, Mr. Spevacek stated out of 525 acres, 75 acres, not including the lake, would be transferred from tax-exempt to taxable bonds. He stated it would be defined by using the land area represented in the master plan. He added bond counsel has indicated a legal description of the portion of land would not be required. Executive Director Genovese explained the mathematical calculations would be based on reasonableness, and have to meet the test of bond counsels. Mr. Spevacek advised a parcel map would be created to define the legal parcel when the parcels are sold or leased to a resort developer. Once that is done, the test would be run again to make sure the acreage allocation falls within the parameters of the taxable and tax-exempt test. He noted the test will be done throughout the process until the hotels and golf courses are operational. Board Member Sniff stated he feels some of this will have to be deferred since the size of the lake will depend on water availability, which is uncertain at this time. Mr. Spevacek stated an alternative would be to go on the knowledge currently available and, as that knowledge changes, rerun the calculations to ensure the tax codes are not being violated. Redevelopment Agency Minutes 5 June 17, 2003~ Mr. Genovese advised a conservative approach would be taken by allocating the highest amount to the taxable side. Board Member Sniff stated he likes things that are defined and not subjective. Mr. Weiss noted the concept is a "living" document and will respond to market pressures and developer interest. The suggestion is to try to sell the taxable bonds so the City can respond in a flexible manner to those pressures and interest. Board Member Adolph referenced a letter from CVWD, and commented on the difficulty of knowing how big to design the lake without knowing where the water will come from. In response to Board Member Adolph, Mr. Spevacek stated more than $17 million in taxable bonds will be needed. Due to Iow interest rates, staff is recommending the sale of taxable bonds to get the proceeds, in order not to pay a higher interest cost, and use the proceeds to reimburse the tax-exempt account. The remaining proceeds would then be pledged toward development ~-- of the first golf course. In response to Board Member Adolph, Mr. Weiss stated the final documents prepared by GMA will be distributed to those who have expressed an interest in participating in the project. He noted without selling the taxable bonds, staff is somewhat restricted on how to respond. Board Member Adolph stated he feels the first four steps should be finalized before dealing with anything else. He stated staff may understand the bond issue but he feels the Agency needs more time to absorb it. In response to Andy Vossler, 49-910 Lago Drive, Mr. Spevacek explained both Phase I and II are in Redevelopment Project Area No. 1, from which the Agency derives tax-increment revenue that is used to pay the debt service on the bonds. He confirmed both phases are in the bonded indebtedness. Mr. Vossler stated he feels the Agency should consider all options when deciding how to build the project, and to determine if a design/build concept will save the City money. He asked about the water study, and if CVWD had been contacted as to what it should contain. Mr. Weiss advised GMA will be preparing a master water plan as part of the contract approved earlier this evening. He confirmed the water plan has been Redevelopment Agency Minutes 6 June 17, 2003 discussed with CVWD, and stated staff has provided GMA and Pace Engineering with a copy of CVWD's recently-adopted water ordinance. He added communication between the agencies will continue to make sure we look at wells necessary to do the project, including back-up wells should canal water not be available. Mr. Vossler noted the discussions have included one to eight well sites. He asked if the intent is to market the entire 75 acres of hotel area, and stated his personal design/build concept focuses mainly on the golf course and related facilities. He went on to say one of the top three or four golf contractors is willing to discuss a design/build contract with the City. Chairperson Henderson stated she understands staff is looking to begin the process to provide as much flexibility as possible to be prepared for opportunities that might come up. She feels it's important to be able to satisfy the responses that are received, and to determine which is best for this City's project. She stated she supports moving forward with the four steps. Board Member Sniff stated he supports dealing with individual developers, as opposed to a master developer or joint ventures, because it would provide flexibility to accommodate various proposals. He also feels staff should be encouraged to move forward with the taxable bonds to the maximum amount available and to free up as much land as possible. As for step //3, he feels a basic overall structural plan and broad parameters of a business plan are needed before anything is distributed. Board Member Adolph agreed with using individual developers since the project will be done piecemeal. Board Member Osborne stated he supports steps 1-4. Board Member Sniff voiced opposition to the term "story books" as it relates to the distribution materials. Chairperson Henderson stated she understands it's a term used in the industry but prefers using a more professional-sounding term. Mr. Genovese advised it can be changed to marketing brochures. Board Member Perkins stated he is not ready to decide on whether or not to use individual developers, master developer, or joint ventures. He stated he prefers working on major subjects, and letting staff work it out. Redevelopment Agency Minutes 7 June 17, 2003 Chairperson Henderson noted there is consensus to move forward with the four steps. CHAIR AND BOARD MEMBERS' ITEMS - None PUBLIC HEARINGS - None The Agency recessed to Closed Session as delineated on Page 1. 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). ADJOURNMENT There being no further business the meeting was adjourned. Respectfully submitted, JUNE S. GREEK, Agency Secretary La Quinta Redevelopment Agency