2010 07 06 RDA MinutesLA QUINTA REDEVELOPMENT AGENCY
MINUTES
JULY 6, 2010
A regular meeting of the La Quinta Redevelopment Agency was called to
order by Chairperson Evans.
PRESENT: Agency Members Adolph, Franklin, Henderson, Sniff,
Chairperson Evans
ABSENT: None
PUBLIC COMMENT -None
CLOSED SESSION
1. Conference with Agency's real property negotiator, Douglas R. Evans,
pursuant to Government Code Section 54956.8 concerning potential
terms and conditions of acquisition and/or disposition of a portion of
525 t acres located at the southwest corner of Avenue 52 and
Jefferson Street. Property Owner/Negotiator: LDD SilverRock, LLC,
Theodore R. Lennon, Jr.
The Redevelopment Agency recessed to Closed Session to and until the hour
of 4:00 p.m.
4:00 P.M.
The Redevelopment Agency meeting was reconvened with no decisions
being made in Closed Session which require reporting pursuant to
Government Code Section 54957.1 (Brown Act).
PUBLIC COMMENT -None
CONFIRMATION OF AGENDA -Confirmed
APPROVAL OF MINUTES
MOTION - It was moved. by Agency Members Sniff/Franklin to approve the
Redevelopment Agency Minutes of June 15, 2010, as submitted. Motion
carried unanimously.
Redevelopment Agency Minutes 2 July 6, 2010
CONSENT CALENDAR
1. APPROVAL OF DEMAND REGISTER DATED JULY 6, 2010.
2. ADOPTION OF RESOLUTIONS APPROVING THE fISCAI YEAR 2010-
2011 LA QUINTA REDEVELOPMENT AGENCY BUDGET. AND
DETERMINING THE PLANNING AND ADMINISTRATION EXPENSES TO
BE FUNDED IN FISCAL YEAR 2010-2011. (RESOLUTION NOS. RA
2010-007 AND 2010-008)
3. APPROVAL OF AN ASSIGNMENT AND ASSUMPTION AGREEMENT
AND. CONSENT BY AND AMONG PRECISION LANDLEVELING, INC.,
LA QUINTA FARMS, LLC, AND THE LA QUINTA REDEVELOPMENT
AGENCY FOR SILVERROCK RESORT FARMING.
4. APPROVAL OF A PROFESSIONAL SERVICES AGREEMENT WITH
INTERACTIVE DESIGN CORPORATION FOR A SITE STUDY FOR AN
AFFORDABLE HOUSING COMPLEX AT CENTRE POINTE, AND
APPROPRIATION OF FUNDS.
MOTION - It was moved by Agency- Members Sniff/Franklin to
approve the Consent Calendar as recommended and with Item No. 2
being approved by RESOLUTION NOS. RA 2010-007 through 2010-
008, respectively. Motion carried unanimously.
BUSINESS SESSION
1. CONSIDERATION OF AMENDED AND RESTATED DISPOSITION AND
DEVELOPMENT AGREEMENT BY AND BETWEEN THE LA QUINTA
REDEVELOPMENT AGENCY AND LDD SILVERROCK, LLC.
Assistant City Manager-Development Services Evans presented the
staff report.
Agency Member Henderson stated negotiations were made in good
faith and- staff has brought back a plan of attack. .She conveyed
support for the amended agreement.
MOTION - It .was moved by Agency Members Henderson/Adolph to
approve an Amended and Restated Disposition and Development
Agreement by and between the La Quinta Redevelopment Agency and
LDD SilverRock, LLC, and authorize the Executive Director to execute
Redevelopment Agency Minutes 3 July 6, 2010
the Agreement, subject to minor modifications approved by the
Executive Director and Agency Counsel.
Ted Lennon, President LDD SilverRock, LLC, thanked the Agency for
the opportunity to extend the agreement. He stated the extension
agreement is not a true option as it gives the City an opportunity to
allow another developer to propose development at the site and LDD
SilverRock will have to either match it or begin development, also LDD
SilverRock has given up rights on two of the major parcels on the
property. He feels they have ahead-start on the project and have
invested over $8.3 million to date including almost $3 million for
engineering design. Hs commented on how hard the economy has
affected resort communities; stated they opened a coast resort last
year; all 30 hotels across the county owned by this developer have
been hit hard; explained the bank is extending their loan and working
with them. He referred to the portfolio of projects distributed to
Agency Members; stated they will be announcing a new institutional
investment partner with a AAA rating. They have focused on
renegotiation of this agreement during this last year; have been
rethinking the project; have received inquiries from independent
investors; and need to predict what the new "norm" is going to be as
the economy recovers. He stated they have made a tremendous
investment in this project and have new financial partners.
Agency Member Franklin stated she does not support the motion.
MOTION FAILED by a vote of 2-3, Agency Members Franklin and Sniff
and Chairperson Evans dissenting.
Mr. Lennon inquired about the refunding of their deposit.
Agency Counsel Jenson stated staff will be looking into the issue of a
refund.
The Redevelopment Agency recessed to and until 7:00 p.m.
The Redevelopment Agency reconvened.
Redevelopment Agency Minutes 4 July 6, 2010
7:00 P.M.
BUSINESS SESSION .........continued
2. CONSIDERATION OF A RESOLUTION APPROVING THE OWNER
PARTICIPATION AGREEMENT BETWEEN THE LA QUINTA
REDEVELOPMENT AGENCY AND GARFF PROPERTIES-LA QUINTA,
LLC, FOR PROPERTY LOCATED AT THE SOUTHWEST. CORNER OF
HIGHWAY 111 AND LA QUINTA DRIVE, AND THE APPROPRIATION
AND TRANSFER OF FUNDS.
Assistant City Manager-Development Services Evans presented the
staff report..
In response to Agency Member Franklin, Assistant City Manager-
Development Services Evans .referenced a .typographical error in the
staff report and explained the Agency is not participating to purchase
additional acreage; and further explained all of the funds will be
allocated to rehabilitation.
In response to Agency Member Sniff, Agency Counsel Jenson
explained the document is a loan but upon performance will transform
to a grant if all conditions are met. She further explained that under
the agreement, the loan amount will be reduced by payments received
by the Agency through tax increment increases and sales tax received
by the City; and there is a credit for the amounts received even if
there is nonconformance in the future.
In response to Agency .Member Sniff, Assistant City Manager-
Development Services Evans explained the Finance Director will track
the loan and receive reports on the established property values and
business reports relative to sales tax; once the amount of the
increased tax revenues equals the amount of the loan, the loan will be
forgiven, or if they perform for the term of the agreement, the loan
will be forgiven. He stated this process is fairly common for
affordable housing units; and explained in this case, the increased tax
revenue is used to credit against the amount. of the loan.
In response to Agency Member Sniff, Finance Director Falconer
explained a credit will be given instead of cash payment to the loan;
staff will determine the amounts of the property tax increment and
sales tax on an annual basis at the end of the fiscal year, and reduce
the loan by that amount; and stated the Agency has never established
this type of an agreement.
Redevelopment Agency Minutes 5 July 6, 2010
Agency Member Adolph asked how long will it take for the Agency to
receive the loan amount. Assistant City Manager-Development
Services Evans stated the return of the loan could take five to eight
years, depending on the economy.
In response to Agency Member Henderson, Assistant City Manager-
Development Services Evans confirmed this project is within the
Economic Development Plan and the strategy of receiving up to 10%
to 15 % return.
Assistant City Manager-Development Services Evans confirmed with
Chairperson Evans that the operative plan is for 10 years and is
forgiven at the end of 10 years whether or not the tax increment
amount is achieved to credit the entire loan.
Agency Member Sniff asked if the terms of the agreement will be
monitored. Agency Counsel Jenson explained staff would be made
aware if the business is no longer operating; if the business loses their
franchise by no fault of their own, the agreement will terminate.
Agency Member Sniff asked if the Agency has any provision for
recovering the amount of the loan if the business closes. Agency
Counsel Jenson stated the City utilizes an Operating Covenant, similar
to that used with Costco, Kohl's, and Embassy Suites. Agency
Member Sniff asked who would monitor operation of the business.
Agency Counsel Jenson stated Assistant City Manager-Development
Services Evans will monitor the terms of the agreement. Assistant
City Manager-Development Services Evans explained he and the
Finance Director would monitor the business and the terms of the
agreement. He stated Mr. Garff took a big risk in purchasing the
property.
Agency Member Sniff asked how this agreement benefits the Agency.
Assistant City Manager-Development Services Evans explained the
benefit is occupation of an empty building and the City will receive
sales tax revenue from the business.
In response to Agency Member Adolph, Assistant City Manager-
Development Services Evans confirmed there are transfer capabilities
of the agreement. Agency Member Adolph stated the Agency cannot
lose with this agreement and it will be protected. Agency Counsel
Jenson further explained the operating covenant would remain on
transfer of the agreement.
Redevelopment Agency Minutes 6
RESOLUTION NO. RA 2010-009
July 6, 2010
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY OF
THE CITY OF LA QUINTA, CALIFORNIA, APPROVING AN 'OWNER
PARTICIPATION AGREEMENT BETWEEN THE AGENCY AND GARFF
PROPERTIES-LA QUINTA, LLC, FOR PROPERTY LOCATED AT THE
SOUTHWEST CORNER OF HIGHWAY 111 AND LA QUINTA DRIVE.
It was moved by Agency. Members Franklin/Henderson to adopt
Resolution No. RA 2010-009 as submitted. Motion carried
unanimously.
STUDY SESSION -None
CHAIR AND AGENCY MEMBERS' ITEMS -None
PUBLIC HEARINGS -None
ADJOURNMENT
There being no further business, it was moved by Agency Members
Sniff/Franklin to adjourn. Motion carried unanimously.
Respect ly submitted,
VERONICA J. NTECINO, Secretary
City of La Quetta, California