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HomeMy WebLinkAbout090794 CC/RDA Jnt. AgendaAGENDA TEMECULA CITY COUNCIL~TEMECULA REDEVELOPMENT AGENCY MEETING JOINTLY AT A SPECIAL MEETING COMMUNITY RECREATION CENTER - 30875 RANCHO VISTA ROAD SEPTEMBER 7, 1994 - 7:00 PM In comp,liance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the office of the City Clerk (909) 694-6444. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35. 102.35. 104ADA Title II] CALL TO ORDER: Invocation: Flag Salute: ROLL CALL: Mayor Ron Roberrs presiding Pastor Sophia Sadler, Harvester Church of Temecula Agency Chairperson Parks Birdsall, Mufioz, Parks, Stone, Roberrs PUBLIC COMMENTS A total of 15 minutes is provided so members of the public can address the Council on items that are not listed on the Agenda or on the Consent Calendar. Speakers are limited to two (2) minutes each. If you desire to speak to the Council on an item not listed on the Agenda or on the Consent Calendar, a pink "Request to Speak" form should be filled out and filed with the City Clerk. When you are called to speak, please come forward and state your name for the record. For all other agenda items a "Request to Speak" form must be filed with the City Clerk before the Council gets to that item. There is a five (5) minute time limit for individual speakers. CITY COUNCIL REPORTS Reports by the members of the City Council on matters not on the agenda will be made at this time. A total, not to exceed, ten (10) minutes will be devoted to these reports. COUNCIL BUSINESS I Prooosed Old Town Entertainment Project - Price Waterhouse Rel}ort RECOMMENDATION: Accept the Price Waterhouse report and direct staff to: 1.1 Complete the remaining elements of the planning studies now underway including: ·the environmental impact report; · traffic impact analysis; · conceptual facility planning sufficient to define alternative sites. 1.2 Solicit proposals for Council review/action for a parking study, appraisal services, financial consulting assistance, visual impact EIR analysis, and water facilities study; 1.3 Prepare a financing plan for the project identifying alternative sources of revenue available to fund project costs including the sale of bonds, the use of financing districts to fund certain infrastructure improvements and the infusion of private investment capital; 1.4 Continue negotiations with T.Z.B.G., Inc. for a development agreement which will define the respective roles and responsibilities of the parties for the construction and operation of the project; 1.5 Develop a public information plan to provide continuing information about the proposed project on a community wide basis; 1.6 Appropriate $65,000to RDA Consulting from RDA Fund Balance. CITY MANAGER/EXECUTIVE DIRECTOR'S REPORT CITY ATTORNEY/GENERAL COUNSEL'$ REPORT ADJOURNMENT Next regular meeting: September 13, 1994, 7:00 PM, Community Recreation Center, 30875 Rancho Vista Road, Temecula, California. ITEM NO. 1 TO: FROM: DATE: SUBJECT: APPROVAL ' ~ CITY ATTORNEY FINANCE OFFICER CITY MANAGER TEMECULA REDEVELOPMENT AGENCY AGENDA REPORT City Council/Redevelopment Agency Ronald E. Bradley, City Manager September 7, 1994 Proposed Old Town Entertainment Project PAce Waterhouse Report RECOMMENDATION: If the City Council/Redevelopment Agency wishes to proceed with the planning phase of this project, the following actions should be taken: The City Council should accept the Price Waterhouse report and direct staff to: 1) Complete the remaining elements of the planning studies now underway including: a) the environmental impact report; b) traffic impact analysis; and c) conceptual facility planning sufficient to define alternative sites. 2) Solicit proposals for Council review/action for a parking study, appraisal services, financial consulting assistance, visual impact EIR analysis, and water facilities study. 3) Prepare a financing plan for the project identifying alternative sources of revenue available to fund project costs including the sale of bonds, the use of financing districts to fund certain infrastructure improvements and the infusion of private investment capital; 4) Continue negotiations with T.Z.B.G., Inc. for a development agreement which will define the respective roles and responsibilities of the parties for the construction and operation of the project; 5) Develop a public information plan to provide continuing information about the proposed project on a community wide basis. 6) Appropriate $65,000 to RDA Consulting from RDA Fund Balance. BACKGROUND: On October 12, 1993, the City and Redevelopment Agency of Temecula entered into a memorandum of understanding (MOU) with T.Z.B.G., Inc. (Zev Buffman) which outlined a process of negotiation between the parties to explore the development of an entertainment project in the Old Town Temecula area. The project proposal included the following components: two cabaret theaters; two "saloon" facilities; an opera house; a showboat with casino and restaurant; a wild west arena; six virtual reality theaters; a TV and radio recording studio; and a "quick-draw competition" demonstration. The proposed project is to be located within the Old Town Temecula area and developed within the guidelines established by the adopted Old Town Specific Plan. An amendment to the MOU was approved by the parties on March 25, 1994 providing for the expenditure of funds, not to exceed $250,000, for the purpose of completing various feasibility studies. The public/private partnership outlined in the amended MOU requires that the cost of the feasibility studies be split between the parties; T.Z.B.G., Inc. paying $125,000 and the City paying $125,000. The studies, which received Council authorization and are now underway, include an environmental impact report, conceptual architectural planning, traffic impact analysis and a professional evaluation of the reasonableness of T.Z.B.G., Inc.'s business plan. The evaluation of the business plan, prepared by Price Waterhouse, is the subject of this report. Price Waterhouse Reoort The attached Price Waterhouse study was completed in three phases. The Phase One report concludes that Temecula's existing level of tourist and local event visitation would not in itself support the proposed project. However, the project, if constructed, can be expected to generate a significant increase in visitation to the City. The report emphasizes Temecula's location within the populous Southern California market area, which includes a large and diverse base of residents and visitors. This market area, which now supports a number of existing leisure attractions of various themes and magnitudes throughout the Southern California region, would provide the support for the entertainment project proposed by T.Z.B.G., Inc. Phase Two of the Price Waterhouse study evaluates T.Z.B.G .'s estimates of future attendance and financial operations for the proposed entertainment facilities and concludes that it is reasonable to expect that the project would enjoy a strong level of market support. T.Z.B.G.'s estimated expenditures and revenues were measured against comparable existing attractions and found to be within a reasonable range. Price Waterhouse concludes that the proposed entertainment facilities would attract in the range of one million to 1.5 million visitors annually and could generate operating revenues sufficient to fund operating costs and to provide a surplus which could be applied to non-operating expenses such as debt service to fund construction costs. Phase Three of the report concludes that the economic impact of the project to the Temecula regional area would be the creation of 2,500 full time equivalent jobs with annual earnings estimated at $19,600 per year, new sales volume of $145 million annually, and new construction contracts in the estimated amount of $51.7 million. Status of Project Other studies of the proposed entertainment project are still in progress. The Environmental Impact Report and traffic studies, which will determine the degree to which improvements to the traffic circulation system will be required to support the project will be completed in November. Also in progress are discussions relative to the alternatives available to finance the project. The financing concept under consideration calls for the sale of bonds backed by the revenue generated from the project. The City and/or Redevelopment Agency would serve as the conduit for the issuance of the bonds which would be amortized from a number of revenue sources including redevelopment tax increments, ticket sales, parking revenue and lease payments from the project operator. Another potential source of funding is the formation of an assessment district for the design and construction of certain infrastructure improvements necessary to support the project and the Old Town area in general. Revenue sources that would require an increase in property tax rates or a risk to the City's general fund have been, and will continue to be, specifically excluded from consideration. Site planning is now underway to determine the possible location of the facilities. A number of alternative locations will be defined in order to provide the flexibility necessary to adjust the project based on the opportunities and constraints that may result from the need to purchase privately held property. The initial phase of the project has been reduced in size with the removal of four of the six virtual reality theaters and the showboat, casino and restaurant component. These changes were made by T.Z.B.G., Inc. in response to concerns regarding the environmentally sensitive Murrieta Creek area and to allow for future expansion as the market dictates. The two remaining virtual reality theaters are proposed to be incorporated into one building to further reduce the cost and scale of the project. If the Council wishes to proceed with exploration of the project, additional consultant assistance will be required to complete project planning. These additional consultant services include appraisals to determine the fair market value of land required; a parking study to evaluate the level of parking necessary to support the proposed project and the existing Old Town commercial uses; a financial analysis of the operator's projected revenue in order to assist in structuring a public/private financing plan; preparation of a visual impact analysis for incorporation into the EIR, and a water facilities study. The budget for these services is estimated to range between $45,000 and $65,000. In addition, significant staff resources will continue to be required for the project throughout the remainder of the planning process. FISCAL IMPACT: The Council has previously authorized planning studies not to exceed $250,000; one-half to be paid by T.Z.B.G., Inc. and one-half to be paid by the City. The completion of studies now under contract will require the total $125,000 City commitment. An additional $45,000 to ~65,000 is estimated to be required to complete the planning of the project.