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Home My WebLink About072407 RDA Minutes I I I MINUTES OF A REGULAR MEETING OF THE TEMECULA REDEVELOPMENT AGENCY JULY 24, 2007 A regular meeting of the City of Temecula Redevelopment Agency was called to order at 7:41 p.m., in the City Council Chambers, 43200 Business Park Drive, Temecula, California. ROLL CALL PRESENT: 5 AGENCY MEMBERS: Comerchero, Naggar, Roberts, Washington, and Edwards ABSENT: o AGENCY MEMBERS: None. Also present were Executive Director Nelson, City Attorney Thorson, and City Clerk Jones. PUBLIC COMMENTS No comments. RDA CONSENT CALENDAR 20 Minutes RECOMMENDATION: 20.1 Approve the minutes of July 10, 2007. MOTION: Agency Member Washington moved to approve the Consent Calendar. Agency Member Roberts seconded the motion and electronic vote reflected unanimous approval. JOINT CITY COUNCIUREDEVELOPMENT AGENCY BUSINESS 21 Temecula Promenade Mall East ParkinQ Facilitv Owner Participation AQreement. Ground Sublease. RinQ Road Enhancement AQreement. and ParkinQ ManaQement AQreement RECOMMENDATION: 21.1 The City Council adopt a resolution entitled: RESOLUTION NO. 07-63 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA MAKING CERTAIN FINDINGS FOR THE USE OF TAX INCREMENT FUNDS FOR THE PURCHASE OF THE EAST PUBLIC PARKING FACILITY PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445 R:\MinutesI072407 21.2 The City Council adopt a resolution entitled: I RESOLUTION NO. 07-64 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING AN OWNER PARTICIPATION AGREEMENT, A GROUND SUBLEASE, AND A PARKING MANAGEMENT AGREEMENT FOR THE EAST PARKING FACILITY, AND APPROVING THE RING ROAD ENHANCEMENT AGREEMENT FOR THE PROMENADE MALL 21.3 The Redevelopment Agency adopt a resolution entitled: RESOLUTION NO. RDA 07-05 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA MAKING CERTAIN FINDINGS FOR THE USE OF TAX INCREMENT FUNDS BY THE AGENCY FOR THE PURCHASE OF THE EAST PUBLIC PARKING FACILITY PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445 21.4 The Redevelopment Agency adopt a resolution entitled: RESOLUTION NO. RDA 07-06 I A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA APPROVING AN OWNER PARTICIPATION AGREEMENT, A GROUND SUBLEASE FOR THE EAST PARKING FACILITY, AND A PARKING MANAGEMENT AGREEMENT FOR THE EAST PARKING FACILITY 21.5 The Redevelopment Agency adopt a resolution entitled: RESOLUTION NO. RDA 07-07 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA DESIGNATING CONSULTANTS IN CONNECTION WITH THE PROPOSED ISSUANCE OF TAX ALLOCATION BONDS FOR PARKING FACILITIES AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO City Attorney Thorson provided a staff report, stating that the recommended actions before the City Council and Redevelopment Agency will provide for three significant actions, as follows: I . That the first would be the Redevelopment Agency's acquisition of 936 public parking spaces in the proposed east parking facility at the Promenade Mall · That the second would be tax allocation bonds which would finance the purchase with debt service paid from the tax increment revenues of the Agency · That the third would be substantial improvements to the ring road surrounding the mall and the approval of an agreement to accomplish that R:\MinutesI072407 2 I I I City Attorney Thorson added that the actions will proceed as follows: . That the developer of the mall, Forest City, will construct the east parking facility (adjacent to Edwards Cinema); that once the facility is constructed, Forest City will sublease the land to the Agency for a period of 30 years at a rent of $1 per year; that the Agency will then purchase the east parking facility from Forest City for a sum of $11 million; that the $11 million purchase would be half of the cost of constructing the facility which would be over $22 million . That upon the expiration of the ground lease after 30 years, the ownership of the public parking facility will revert to Forest City which is a typical condition of a ground lease agreement . That the $11 million payment will be made in two installments; that the first will be approximately $7 million -- made at the time the mall expansion opens which is estimated to be March 26, 2009; that the second installment of approximately $4 million will be made when the bond funds are released from escrow which is estimated to be approximately 18 months after the mall expansion opens . That the east parking facility will be managed by Forest City under the terms of the Parking Management Agreement being responsible for insurance, maintenance, and operations of the garage . That of the 936 parking spaces, 75 parking spaces will be dedicated to a park and ride but that no other overnight parking will be permitted . That the second action initiated would be the beginning of the process for the issuance of the Agency tax allocation bonds to provide for the purchase price of the east parking facility; that the bond documents are expected to be approved by the Agency by September 2007 and that the bonds will be issued in October 2007; that the debt service on the bonds will be paid by the increment funds of the Redevelopment Agency . That the debt service is estimated to be $875,000 per year; that it is estimated that the new sales tax revenues to the City as a result of the mall expansion will be approximately $1.1 million per year; that the tax increment to the Agency from the mall expansion will be approximately $200,000 per year; that there would be a net increase in the accumulated tax revenue to the Agency and the City . That at the present time, the Agency's tax increment would not be enough to support the full issuance of the bonds, but that under very conservative estimates, such would occur approximately 18 months after the mall opens · That the bonds will be issued in its full amount and will be placed in escrow; and that when the tax increment rises to a certain level, they will be set forth in the bond documents at which time the trustee will release the funds · That the third action would be the ring road improvements; that this agreement will provide for various types of improvements to the ring road such as traffic lanes being reconfigured, traffic signals being added, upgraded traffic signage and street markings, enhancement of pedestrian crossings, coordination ring road traffic signals, and upgrades to access points for the Power Center and Bel Villagio . That Director of Public Works Hughes will be working with Forest City to develop a ring road enhancement plan; that both entities will work with major department stores which would have a contractual right to approve any changes on the ring road; that once all parties are in agreement of the enhancement plan, it will be forwarded to the Planning Commission and then to the City Council · That once approved by the City Council, Forest City will begin the ring road improvements; and that it would be anticipated to be completed prior to the opening of the mall expansion R:\MinutesI072407 3 I I I . That staff would be confident that the ring road improvements will make a significant improvement . That the construction costs for the ring road improvements will not exceed $2 million and that Forest City would be of the opinion that it would be less than $2 million . That staff would expect the improvements to be completed by March 26, 2009, which would be the opening of the mall expansion . That there would be two aspects of security: that the Agency will be buying the east parking structure for $11 million; that of the $11 million purchase price, $4 million will be withheld until such time as the plan is approved by the major department stores and the ring road is completed; that the $4 million withheld will be lowered to $2 million once the plan is approved by the City Council and major department stores and will be dissolved once the ring road improvements have been completed; that the second aspect of the security is that once the ring road plan has been approved and if it were not constructed or not completed by the opening of the mall expansion, the City will be entitled to take over the construction of the ring road and not limited by the $2 million construction figure; and that Forest City's parent company will guarantee either the completion of the ring road or the payment to the City of all associated costs. In response to the Mayor/Director Washington's query, City Manager/Executive Director Nelson stated that the intent would be to eliminate blight and promote economic development within the project area; that there would be several findings made that identify the appropriateness of the utilization of the redevelopment funds for this particular project, advising that the parameters of this project would meet those specific requirements. City Attorney Thorson concurred with comments made by City Manager/Executive Director Nelson, adding that seven different findings have been made and that this would be viewed as a part of the City's tourism industry. MOTION: Agency Member Comerchero moved to approve Item No. 21.1 and 21.2. Agency Member Robert seconded the motion and electronic vote reflected unanimous approval. MOTION: Agency Member Comerchero moved to approve Item No. 21.3, 21.4, and 21.5. Agency Member Roberts seconded the motion and electronic vote reflected unanimous approval. City Attorney Thorson advised that the issuance of bonds will be addressed in September, 2007, and that the approval of the ring road enhancement plan will be forwarded to the City Council no later than April, 2008, after review by the Planning Commission. RDA DEPARTMENTAL REPORT 22 Redevelopment Department Monthly Report RDA EXECUTIVE DIRECTORS REPORT Commending Mr. Kenneth Lee of Forest City, City Manager Nelson stated that after many months of involved negotiations, Mr. Lee has been a professional leader and would be looking forward to seeing the mall expansion project move forward R:\Minutes\072407 4 RDA AGENCY MEMBERS REPORTS I No additional comments. RDA ADJOURNMENT I I At 7:58 p.m., the Temecula Redevelopment Agency meeting was formally adjourned to Tuesday, August 14, 2007, at 5:30 p.m., for a Closed Session, with regular session commencing at 7:00 p.m., City Council Chambers, 43200 Business Park Drive, Temecula, California. ATTEST: [SEAL] R:\Minutes\072407 5 n Edwards, Chairman