HomeMy WebLinkAbout07/20/2000, 3 - PUBLIC PRESENTION OF CURRENT CONCEPT FOR MULTI-USE DEVELOPMENT ON PALM STREET/COURT STREET. council
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CITY O F SAN LUIS OBISPO
TO: City Council Members an arming Commissioners
FROM: John Dunn,CAO
Prepared By: Shelly Stanwyck,Economic Development Manager
SUBJECT: PUBLIC PRESENTION OF CURRENT CONCEPT FOR MULTI USE DEVELOPMENT
ON PALM STREET/COURT STREET.
CAO RECOMMENDATION
Receive a presentation from the Copelands on their current concept for a multi-use development on
Palm Street/Court Street and receive a report from staff on the same.
DISCUSSION
Overview and Presentation
The purpose of this joint meeting of the City Council and Planning Commission is to receive a
presentation and report on the current concept for a multi-use development on Palm Street/Court Street.
The joint meeting will proceed as follows:
1)Presentation of Current Concept—The Copeland Team
2) City Staff Report—The City Team
3) Questions and Comments—City Council and Planning Commission
Background
In September, 1999, Chinatown-Court Street Partners, LLC (referred to in this staff report as"Copelands')
presented a conceptual proposal to the City entitled "Chinatown-Court Street: A Vision for the Future of
Downtown San Luis Obispo, California, Inspired by its Past" (Attachment 1). The concept presented the
opportunity for a unique public-private partnership, taking Downtown properties, mainly surface parking
lots, owned either by the City or by the Copelands, and putting them to better and higher uses. The concept
when complete, would implement many community goals, and could not be accomplished without land
owned by both the Copelands and by the City. It was under these circumstances in October 1999 that
Council entered into exclusive negotiations with the Copelands. The exclusive negotiating period was
intended to allow the parties to come to agreement, a Memorandum of Understanding(MOU),outlining the
terms of various real property transactions.
Due to the complexity of the property transactions,the negotiations for a possible MOU between the parties
have taken longer than originally anticipated. However,the City negotiating team (John Dunn, CAO, Jeff
Jorgensen, City Attorney, Allan Kotin, PCR Kotin, Economist and Shelly Stanwyck, Economic
Development Manager) and the Copeland negotiating team (Tom Copeland, Jim Rabe, Economist, Mark
Rawson, Architect, and Marty Tangeman, Attorney) have now reached conceptual agreement on most
issues. The teams are very close to having a MOU that could be recommended to Council. The
negotiations have therefore reached a stage where it is appropriate for the Copelands to present their current
conceptual proposal to the Council and the public for input before the consideration of an MOU,possibly in
late August. 3-1
Council Agenda Report—Public Presentation Current Concept Palm Street/Court Street
Paee 2
Evolution of the Copelands' Concept
During the July 20, 2000 presentation to Council, the Copeland Team will illustrate and explain the
evolution their original concept has made to its current concept. The evolution comes primarily from the
negotiation process, response to public concerns, and further analysis of the feasibility of some of the
project's components.
The original concept was to take existing surface lots in downtown and develop than to better and higher
uses.Essentially three surface lots were involved in the vision.
■ Court Street The Court Street Parking lot,bounded by Monterey, Higuera and Osos Streets, and
owned by the City.
■ Copeland/French. The parking behind the Copelands' building on Monterey Street owned by the
Copelands, as well as the adjacent parking and building on Monro Street, owned by the French
Family.
■ Pahn Street All of the public parking, driveways, and improved structures, including the Public
Works✓Utilities office building(955 Morro Street),between Monterey,Morro and Palm Streets,and
owned by the City.
Under the current concept, the Copelands would develop two City-owned parldng lots to better and higher
uses and would sell a privately owned site to the City for future better and higher uses. There have been
several changes to the original concept's phasing. The following comparison of the concept, Then and
Now, should illustrate its evolution.
COURT STREET
•
Land Use Retail,office Same
Phasing Phase 2. Construct after Pahn/Morro Phase 1. Begin constriction before
Garage is constructed commencing Pahn Garage construction.
Ownership The Copelands buy site at fair market value. Same.
COPELAND/FRENCH
THEN NONNI
Land Use 1.Underground parking,City Offices/Civic 1.Use to be determined in the future by the
Center. city.
Phasirtg Pbase 1.Construction of underground Unknown.To be determined by the City at a
garage. future date.In the interim,the surface will likely
be used for public parking.
Phase 2.Construction of City Offices/Civic
Center.
Ownership The Copelands acquire French and sell the The Copehmdssell a portion of the Copeland
developed property to City. and French properties to the City.
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Council Agenda Report—Public Presentation Current Concept Palm Street/Court Street
Page 3
PALM STREET
THEN NOVV
Land Use 1.Undergrotmd parking(including Morro 1.Underground parking(not including Morro
Street and Copeland/French)of Street or Copeland/French).The underground
approximately 600 spaces to replace lost structure would provide 259 spaces with the
parking and satisfy new development Yung Property and 231 without An additional
requirements. 105 spaces would be available on the Parking
Structure deck in the interim phase.
2.Multi-use above the parking including: 2.Above the parking,the uses would stay the
retail,office,entertainment and residential. same,with the caveat that the residential uses
are intended to be included by the Copelands if
le financial obstacles can be resolved
Phasing Phase 1.Construct underground parking Phase 2.Construction of underground garage
structure first Public Works temporarily would begin after Court Street is ander
relocated while new City offices are construction and after all archeological and
constructed on top of the new garage on development approvals are obtained Public
Copeland/French site. Works relocation would need to take place
before commencement of construction.
Phase 2.Construction of"Chinatown"retail,
office,entertainment and residential uses on Phase 3.Construction of retail and other uses
top of the underground garage. fronting Monterey Street
Phase 4.Construction of Palm Street retail and
other uses.
Note:the timing for phases 3 and 4 could take
place during a 5-year trm.
Ownership The Copelands purchase all City properties The Copelands purchase all City owned,
and Yung Property. Monterey street frontage at fair market value.
City owns remainder of Palm Street,including
underground parking garage,which the
Copelands will construct,and City will pay for.
The Copelands will purchase the"air rights„
from the top of the parking structure upward If
the Copelands reach an agreement with
reasonable terms,they will also purchase Yung
Property and resell to the City.
Impacts of Current Proposal
It is clear that because of phasing and physical changes to the underground parking structure, the current
concept will create a parking deficit in the Downtown. It is also clear that under the current concept, our
Public Works Department will require an interim as well as permanent relocation of their office space.
Finally, because of the parking demand created, the current concept will require significant financial
participation by the City.
Parking and Phasing Impacts
These two issues are intertwined. Both have significant impacts on the other. During various pleases of the
project, there will be parking deficits. Depending upon the phase the project is in the deficitwill vary.
There are two reasons for the deficits. First, existing surface parking lots will be removed frondh*addng
Council Agenda Report—Public Presentation Current Concept Palm Street/Court Street
Page 4
system when they are put to better and higher uses. Second, there will be new parking demand created
from the development of new retail,office,entertainment and(possibly)residential uses.
The construction of the current concept would occur in four phases. Several of the phases would run
concurrently. The construction of Court Street would begin first. While Court Street is under construction,
the construction of the Palm Street underground parking garage would begin. Once the Palm Street parldng
garage does not require the Monterey Street frontage as a staging area, construction of the frontage would
begin. Finally, the uses on top of the Palm Street parldng garage would be constructed. It is contemplated
that the Copelands will have,under the terms of the MOU, up to five years to begin this last phase,though
the Copelands could commence this phase sooner if they desire. The Copeland/French property is not
considered in the phasing. Its development will be subject to the City's determination of appropriate future
uses for the property.
Anabmis of Parking AvailabRity at the End of Each Phase
Current Phase I Phase 2 Phase 3 11hase 4
Court Street Palm Gara.-Ie NiontereN St Palm DeN.
AVAILABLE SPACES
Court Street 118 0 0 0 0
Monterey Street 52 0 0 0 0
Palm Street(surface) 117 0 105 105 0
Underground Garage 0 0 259 259 259
Total 287 0 364 364 259
SPACES NEEDED
Existing Spaces 287 287 287 287 287
New Demand
Corot Street 0 128 128 128 128
Monterey Street 0 0 0 40 40
Palm Street 0 0 0 0 146
Total 1 287 1 287 1 287 1 455 1 601
PARKING DEFICIT 1 0 (415)' (51)z (91)-3 342
As a result of the phasing for the current concept, there will be parking deficits, both large and small, at
various stages of the project. Significantly, Court Street and Palm Street will both be under construction at
the same time. In the interim period,between phases three and four, there will be surface parking available
on top of the Palm. Street underground parking structure and probably the rear portions of the
Copeland/French properties. There will be some offsets to these parking deficits. First, the Copelands will
develop a parking management plan, that the City will administer, to help minimise the impacts of the
deficits at various stages of the project Second,the Copelands will pay the existing City parking in lieu fees
of 54,000 per space (for all parking spaces required by the new development). Finally, the Marsh Street
Garage Expansion should be complete during the early phase of construction under this current concept and
will add 233 net new parking spaces to the supply.
Copeland will facilitate a parking management plan to minimize the impacts of this parking deficit.
'Copeland will facilitate a parking management plan to minimize the impacts of this parking deficit.
'This estimate,as well as the Phase 4 total,assumes the incorporation of the Ytmg Parcel into the development of the Palm Street may be
legal and/or financial obstacles to this incorporation,in which event these numbers will change. J�'7
Council Agenda Report–Public Presentation Current Concept Palm Street/Court Street
Page 5
Cost Impacts to the City for Parking Improvements and Replacement of City offices
The current concept would not be without significant costs to both the City and the Copelands. The
concept is more analogous to a redevelopment project than to a public-private partnership (Attachment
2). Cities with redevelopment agencies have funding mechanisms in place (essentially they capture tax
increments and use them to provide subsidies and/or land writedowns) to offset the financial impacts of
projects such as these. Redevelopment agencies in other communities in California offer inducements,
or subsidies, to create attractive new multi-use projects. In the long term, the current concept will
achieve many of the goals for the Downtown and will have a positive financial impact on the
community.
SiTM ARY OF COSTS AND FUNDING SOURCES
Land Acquisition and Construction Costs
Palm Underground Parking Garage(259 spaces,including Yung property) 6,223,000
Other Parldng(342 spaces) 61498,000
Replacement of 955 Morro Offices(Interim and Long-Term Solution Costs 1,902,000
Total Costs $14,623,000
The proposed parking spaces(601)would replace existing public parking on the Court Street and Palm/Monterey surface
lots(287 spaces)and meet the increased parking requirements for the new development(314 spaces).
Fundinal Sources
Parking In-Lieu Fees(314 spaces @$4,000 each per current City policy) 1;256,000
Net Proceeds from Sale of Land and Air Rights 3,949,500
Available Parking Fund Working Capital 3,300,000
Proceeds from Debt Financing 6,117 500
Total Funding Sources $14,623,000
As reflected above, City land acquisition and construction costs for parking ($12.7 million) and
replacement of City offices at 955 Morro ($1.9 million) are $14.6 million. This cost is partially offset
by $5.2 million from the sale of City property and air rights ($3.9 million) and parking in- lieu fees paid
by the Copelands ($1.3 million).
This results in a net cost to be financed by the Parking Fund of $9.4 million. Of this amount, $3.3
million can be funded from working capital already available in the Parking Fund. This leaves a
remaining balance of$6.1 million to be funded by the sale of bonds. Annual net debt service costs to
repay these bonds will be about$468,000.
Funding Availability and Current City Policy. This additional debt service cost—along with operating.
costs for the new structures and after accounting for lost revenues from the surface lots and new
revenues from the structures—can be funded within existing sources and, adopted rates, assuming that
the revenue programs already.set forth in the Draft Parking and Downtown Access Plan are
implemented.
In placing these costs in context, it is important to note that they are driven by existing City policy
(adopted in 1987) which encourages Downtown redevelopment by allowing parking requirements to be
met by paying an in-lieu fee of$4,000 per space rather than constructing on-site parking. From this
perspective, the parking costs associated with the proposed project have always been inherent in the
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Council Agenda Report—Public Presentation Current Concept Palm Street/Court Street
Page 6
City's downtown plans and parking funding strategies. In short,while this project accelerates the City's
funding obligations, it does not create new ones.
Favorable General Fund Impacts. The financing costs discussed above relate to the Parking Fund's
financial responsibilities. However, the General Fund will directly benefit from this project. At full
build-out, PCR-Kotin(the City's economic advisor for this project) estimates that the Palm Street-Court
Street project will generate about$390,000 annually in sales tax revenues. Of this amount, 60%to 70%is
net new revenue to the City after considering transfer effects, resulting in net annual sales tax revenues of
$235,000 to $275,000. While there will be incremental ongoing costs associated with providing City
services to this project, these will be more than offset by increased revenues from other sources such as
property,business and utility users taxes.
Coneland/French Properties. The appraised value of the French/Copeland properties (land and
improvements) is about $1.0 million. If acquired, this will be a General Fund cost responsibility. No
specific funding source as been identified for this purchase at this time. The Council will assess the priority
of this purchase in terms of other competing City funding needs as part of the 2001-03 Financial Plan
process.
Conclusion
Because of its potential to implement so many public policies and goals, there has been strong community
interest in the Copelands' concepts. The current concept is complex. It raises significant parking and
financial issues but it achieves many of the goals our community has developed over the years, as well as
implements many of our City policies.
Both the current and original concepts by the Copelands would implement numerous City goals. The
current proposal would implement Downtown planning and vitality goals (as set forth in the General Plan,
Conceptual Physical Plan for the City Center, and a Major City Goal established for the 1999-01 Financial
Plan). The CAO Memorandum to Council and the Planning Commission regarding the importance of
Downtown to the City sununarizes these goals(Attachment 3).The current concept would also enhance the
visual nature of our downtown. Finally, the current concept provides a practical response for the
Downtown's efforts to compete with additional regional`power-center"development.
In the preparation of this staff report, the Copelands were invited to submit a written report about their
current concept It is expected they will provide that report separately to Council Members and Planning
Commission Members before the public presentation on July 20. After the Council and Planning
Commission receive the presentation and report, the most likely next step will be Council's review of a
draft Memorandum of Understanding between the City and Copelands outlining the specific terms of the
property transactions necessary for this current concept to be undertaken. That review is tentatively
scheduled for Wednesday,August 30,at 7:OOp.m.,in the Council Chambers.
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Council Agenda:Report-Public Presentation.Current Concept Palm Street/Court Street
Page-7 - — - - - - -
ATrACEEWENTS
Attachment 1
CHI. NATOWN
OU
-PT ST
A Vision for the Future
0
Downtown San Luis Obispo, California
Inspired by Its Past
Presented by.
Tom Copeland Jim Copeland
Chinatown/Court Street Partners
September 20, 1999
APS Architects, Inc. Pierre Rademaker Design
Mark Rawson Pierre Radernaker
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CI N AT O W N ATtAC6 �' g
COURT STREET
9 -
7
A Vision for Our Downtown in Keeping with Our Past
D0WNTOWN San Luis Obispo today is the cultural, social,
economic and ggoovemmental hub of San Luis Obispo County.While
there are beaches, tl�te wine country and myriad other attractions
throughout our county that make this region so desirable,the Downtown
7 of San Luis Obispo is the heart and soul of our greater community.
The Mission, the Courthouse, the movie theaters, the shops, the stores,
7 the restaurants, the coffee houses, the sidewalks, the trees, the people
and their interaction—these are the ingredients which bring life to the
9 city and reason for residents,workers and visitors to be here.Downtown
.> is where we spend our workday,where we shop for the holidays,where
we take our family and friends for an evening out. It's where we want
7 to be.
In sum, Downtown San Luis Obispo is to this county what the heart is
7 to human life. It is our core. From here life pulsates, it invigorates, it
emanates outward.
7 If the life of Downtown as we know it is to carry on—if the heart of
our community is to continue to beat with the rhythm of health and
vitality it needs nourishment and care.There must be a vision borne
7 from the wisdom, knowledge and perspective of the people here today
if the future of the Downtown is to be as rich as its past.
7
.� There always will be differing opinions as to what this vision should be.
But on this there can be no dispute: There must be a vision of the
'1 downtown.Without one,we most certainly will fall prey to the rot and
.� decay that has enveloped so many once-promising
cittyy centers. Decline
of urban cores historically is caused by unchecked
rivalry from the once-
? rural fringe, a fringe that's vanishing in our county as rapidly as tropical
rain forests along the equator.We can do something about it.
�j Our Vision of the Downtown in the 21st Century is little different from
the vision of our city's founders. They saw commerce, government and
social interaction as the basis of a thriving community.We view the
7 future of this city through the prism of its past.
7 This vision includes nurturing and enhancing the Downtown's delicate
balance of commercial and government tenants that provide human
traffic for independent retailers. This mix has been and—if done
correctl —will continue to be the recipe for making the Downtown a
.� regional and tourist destination for customers seeking special retail
opportunities, evening and weekend entertainment, and daily social
activity.
By remaining true to the founders' vision of Downtown San Luis Obispo
as the natural hub of commerce, government and social interaction, we
can strengthen our urban core's ability to compete for its rightful place
as the heart and soul of our greater community.
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CHINATOWN Amcw-EE hT
COURT STREET
y A Summa of Current Conditions
7 There is genuine fear among most Downtown businesses of competition
7 from strip malls on the city's urban fringe—and from the boom-bust
cities to the north and south—for our valued quality retail tenants.
If stri mall developers succeed in luring away our Downtown's quality
retailers , the migration of these businesses to the rural fringe will
7 devastate our Downtown and exacerbate the problem of urban sprawl
7 that's beginning to plague the entire county.
Quality retailers want to locate in Downtown San Luis Obispo, but
7 there is no space to accommodate them. Our Ian provides compact
urban form by.providing in-fill development oFareas that, up until
7 now, have not been used to their highest potential.
There will be major disruption of Downtown commerce with the repair
7 of the Higuera Street Bridge.This plan helps alleviate this disturbance
quickly and inexpensively
+� The Downtown is chronically plagued b,.parking and traffic migration
problems wrought by the perception of a lack of parking spaces and
the historical ingress and egress issues inherent to the Downtown's
circulation patterns.
Chinatown is a significant historical ingredient of the Downtown,yet
it has long been neglected in terms of long-range planning and urban
I � center design.
ices and employees housed in the
Keeping local government sery
Downtown is essential to the health of the city center,yet this hasn't
always been the priority of local government office space planners.
Providing and maintaining economically sustainable open space, and
pedestrian-oriented buildings and streetscapes, is vital to an
aesthetically pleasant urban experience,yet not all Downtown
developments have accommodated this design necessity.
• The city has a vested interest in capturing as much sales tax revenue
as possible in order to provide fundamental services such as police
and fire protection, parks and recreational opportunities, and senior
services. More often than not, cities have converted their rural fringes
] to strip malls as a way to secure this valuable sales tax. Our plan
] ^ captures this tax without transforming precious agricultural land and
open space into concrete.
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ECH N ATO W N ATTACNi Ei-RT STREET
A Modest Proposal for the Future
7rrHE CHINATOWN-COURT STREET PROJECT has studied this city's
7 1 history, peered into its future, and visualized solutions to many
perplexing issues that seem to carry over from decade to decade.With
a vision for Downtown shared by the community,we can:
Provide mixed uses on existing surface parking areas (Court Street,
Monterey Street and Palm Street lots), thereby enhancing the purpose
., of these prized Downtown locations to their best use. Let's un-pave
Paradise and take out several parking lots.
Rebuild a Chinatown-inspired community that celebrates our ethnic
heritage while providing a residential component on Palm Street that
�j creates livable space where asphalt now reigns.
7 Build a new, consolidated office space for city government staff-or
�j a public space for other uses—under a financial arrangement which
affords tax payers cost efficiencies and savings while providing the
city with a valuable lease/purchase option on a beautiful, centrally
r) located public place that will last for generations.
7 Provide public parking to replace the existing surface lots, which will
create more livable space and compact urban form. On top of this
invisible, underground Chinatown parking facility would go the new
�j Civic Square and Chinatown buildings, which would be accessed
7 rimarily from Palm Street with pedestrian access from Monterey
Street via a series of human-scale, public open spaces.
I ' The Chinatown parking facility would not affect the Palm Street
streetscape and would help alleviate automobile traffic now interfering
with the pedestrian ambiance of Monterey Street as motorists vie for
convenient parking. We envision a lease/sale option with the city,
allowing the city to collectpparking revenues while keeping the city's
�j parking facilities in public fiands.
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CHINATOWN AMCNAe_�T I_
COURT STREET
J
What's in it for the City and its Residents?
HISTORICALLY, joint ventures between government agencies and
private interests haven't panned out in San Luis Obispo. The
decade-old proposal to develop the Court Street parking lot by the city
and a private concern is a case in point.We propose financing and
building this visionary project with our own resources under the full
regulatory authority of city government, but without the financial
entanglements and legal complexities that often accompany public/private
partnerships.We propose to:
• Purchase at appraised market value the city property needed to fulfill
the vision.
a • Contribute to the city the private properties owned by the Copelands
that are necessary to cant'out the design.
7 • Enter into a contract with the city to "build to suit" a consolidated
office space for city government staff—or a public space for other
7 uses—and the underground Chinatown public parking facilities.
• Enter into and navigate the city's permitting and building approval
7 process at anus length from the city in order to provide the city with
' public facilities without the city having to furnish the up-front financial
resources. This would allow the city to finance its long-planned City
7 Hall capital improvement program at a very low cost. An additional
' benefit to this approach is that it requires the project's private sponsors
to follow the same permitting process as any other private project.
7 No special favors are being asked.
7 • Ailow the city, upon completion of construction, to acquire a cost-
effective, well-built City Hall annex. This project would quickly
' accomplish the long-held goal of consolidating a city staff now housed
in separate buildings. It would remedy the current city office
arrangement which inhibits communication and coordination.
a Assure the Downtown's place as the physical, spiritual and
7 Fhilosophical center of our community, as intended by the city's
ounders.
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i CHINATOWN � ='
COURT STREET
1
1 How We Can Do It
Build the underground parking along Palm Street first, thereby making
up for the loss of parking at the Court Street surface lot during the
Higuera Street Bridge repair.
Open the new Chinatown parking facility to the public.
We are committed to parking demand reduction and the protection
of our environment.As such,we would suggest an alternative pricing
program for the Chinatown parking facility that includes a modest
surcharge added to the current parking fees.
Money collected by the city from this parking surcharge would enter
an enterprise account separate from the Parking Enterprise Fund and
dedicated exclusive)y to pa for transit, bike lanes, vanpool and
carpool programs, other parking demand reduction (PDR) programs,
and a zero-emission vehicle program aimed at reducing auto exhaust
' in the urban core.
The parking surcharge would have the added value of placing a
premium on parking in the centrally located Chinatown facility vs.
lower-cost parking options in less impacted areas of the Downtown.
Thus, people who choose to be Downtown will have a wide variety
of transportation choices and parking locations and prices.
We plan to install public electric vehicle chargers (conductive and
inductive) in a specified number of dedicatedparking stalls within
the Chinatown parking structure.We will develop a pilot project with
our tenants in the use of electric vehicles by employees of the new
commercial and civic center who use alternative transportation to
commute to their jobs.
Close the surface lots. Simultaneously start construction of:
1) the Hi era Street Bridge repair
2) Court Street pedestrian mall and shops
3) Chinatown housing and stores
4) new city office complex or other public facility.
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a CHINATOWN `c
COURT STREET
What we are asking the Council to Do
UR GOAL is to complete the majority of the project by the start of
=; ( 7 O the Holiday Season in 2000. This is realistic, as we've retained
commitments from well-regarded local and national businesses and
retailers who want to locate Downtown. These include such notable
( ' retailers as Banana Republic,Abercrombie and Fitch, and others.These
business are committed to locating in Downtown San Luis Obispo, and
have expressed to us their strong desire to enter this market in time to
' take advantage of the 2000 holiday shopping season.
AV
These are real commitments, not speculative posturing. In order for us
3 to fulfill the vision of the Downtown with the right tenant mix—which
is the formula for success—we need a unified and prompt commitment
from the City Council to:
Grant us an exclusive 120-day period to finalize the details of this
A project.This will give us time to conduct the appropriate environmental
review, finalize our design team, iron out specifics between the city
7 and our private partners, and resolve any real property issues that.
Al may arise.
7 • While this expeditious work is taking lace,we will conduct a series
of well-publicized public workshops during which we plan to share
our vision of the Downtown with the residents of the city and listen
to their collective vision. It's our intent to incorporate the community's
' vision into our overall design strategy.
7 • The Downtown is the domain of our entire community. We are
committed to shaping its future in partnership with the people.
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CHINATOWN
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COURT STREET
Why the C pelands Are the Right Partner
We have the resources and the experience necessary to successfully
7 fulfill the vision of a greater Downtown in a timely fashion.
We own much of the property necessary to allow that vision to be
fulfilled.
7 We have the support of nearly every adjacent property owner.
No one else can do this as well, as quickly, and as cost-effectively
7 as we can.
7 We have a proven track record with the Downtown Centre and other
7i projects across the nation.
7 We're San Luis Obispo County natives.This is our home.We're here
7 to stay.We have no plans to take our profits and run.We invest in
our community.We're proud to employ our community's best and
7 brightest.
`j We want to fulfill the vision of a greater Downtown because we can,
7 because we must if we are to remain true to the heritage of this
' community.
7 If we don't fight urban sprawl on our fringes—if we don't struggle
to keep our Downtown healthy in an economically sustainable,
environmentally livable, compact urban setting—who will?
If we don't do it now, then when?
7 If we don't do it together, how will we do it apart?
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Memorandum
TO: John Dunn,City of San Luis Obispo DATE: July 11,2000
FROM: Allan D.Kotin and J.Jeffrey Newton
RE: SOME OBSERVATIONS ON THE COPELAND/CHINATOWN PROPOSAL
At your request, PCR Kotm has summarized several previously offered observations on the proposed
transaction. These observations deal with four generally non-quantitative characteristics of the transaction:
(1)the special motivations of Tom Copeland in sponsoring the transaction;(2)the special value of the project
to downtown; (3)the low probability of replicating this project in the future;and(4)the manifest character of
this project as an urban redevelopment project.
All of these factors must be considered in justifying a city subsidy of more than$4.7 million,an estimate that
specifically excludes the substantial additional costs the City will incur in constructing the parking for which
in-lieu fees are paid. Recovery of this sum from net new sales taxes will take fifteen years or more. This is a
longer payback period than is typically associated with the subsidies granted by redevelopment agencies in
California to induce new and attractive retail development in infill locations.
In pursuing this transaction, Tom Copeland is taking more risks than are typical for a traditional retail
developer for projected retums that appear to be lower than normal. Based in part on his own comments,
Tom is clearly not a typical developer. In fact, he is in some ways more a retailer than a developer. His
confidence in the project, his prior experience in downtown San Luis Obispo, and a strong sense of civic
pride and personal mission all combine to create a determination that relies more on the unique monopoly
value that this project will have when completed than on traditional profit and risk analysis.
Copeland's faith in the unique and special value of his project when completed may be justified even if it
defies traditional development logic,given the problems of rigorous regulation and very limited opportunities
for land assemblage in downtown San Luis Obispo. The need for new larger scale retail in downtown is
manifest if downtown retailing is to survive and thrive in the face of increased future competition both from
within and outside the City.Notwithstanding this manifest need, the opportunities for such development are
very limited and arguably non-existent without city property and quite possibly city financial assistance as
well. It is hard to see where else this project could be built.
Even with city property and a city subsidy, most large-scale retail developers would not even consider the
project, given the combination of its relatively small size and the cost, delay, and uncertainty associated with
the City's development approval process. For this reason, it is highly unlikely that any integrated project of
similar scale will be undertaken in downtown San Luis Obispo in the foreseeable future if this project fails to
go forward.
Even though the City lacks a formal redevelopment agency, this clearly is a redevelopment project. The
project is characterized by the transfer of publicly owned property,an exclusive negotiating agreement,and a
substantial subsidy - all granted in the interest of creating a presumably unique and valuable addition to
downtown. This is precisely what redevelopment agencies do throughout California.
H:\Projects\SL0992\WP\observadm&doc
3-23
61
���n ���►���ui�� n�,i► council mcm01Zan6um
July 11,2000
TO: City Council and Planning Commission
FROM: John
SUBJECT: The Downtown—It's Importance to Our City; Our Plan for Its Future
The Downtown Physical Concept Plan starts off with this declaration:
Downtown San Luis Obispo is Special!
Downtown is a vital commercial district; it is the focus of local and regional
government; it is the center of our cultural activities and festivals; it is a place where
people go to enjoy entertainment, dining and music; it is the community's favorite
meeting place. When residents were asked in a 1988 survey to name their favorite part
of the City, the most common response by far was the downtown and Mission Plaza.
The success of the downtown is a fragile thing; if not nurtured, it will likely be lost
Constant vigilance, ongoing experimentation and visionary leadership are necessary to
keep the downtown vital.
It is important for all of us that we place the Copeland's current concept, which involves a
myriad of complex details, into a larger framework. We should presently take a snapshot of the
reality of this portion of the Downtown against our "vision" of what it should become. For
without this larger framework, the never-ending permutation of the details, as important as they
are, will obscure the big picture. The central, commercial core is the heart and soul of our
community, a major contribution to community life, and the"statement"we choose to make as to
what we are as community.
BACKGROUND:
In late 1989, I was asked by the City Council to design a planning process to produce a"physical
concept plan" for the Downtown.. Out of that exercise came the "two-tiered" process of an
intense interplay between a small"design team"and a larger review committee.
One of the background documents developed as a starting point for this effort was a summary of
discussions held by the Downtown Ad Hoc Committee, authored by the then-Community
Development Director Mike Multari. While the full draft is available for review, I have
abstracted out certain "downtown principles" which, a dozen years later, seem equally valid
today.
3-24
The Downtown Should Remain a Place Where People Want to Go
• The Downtown should continue to provide a variety of commercial goods and
professional and governmental services for the local community as well as the region.
• Variety in commercial goods and services should be accommodated.
• A continuous retail figade should be maintained along downtown commercial blocks.
• The Downtown should be viewed as a coordinated, connected place which is suited in
size and character to the pedestrian.
• Parking structures should be encouraged around the perimeter of the Downtown so that
visitors/customers/employees are encouraged to park their cars there and access the
Downtown primarily on foot.
• Transportation other than the automobile should be encouraged including the possibility
of a downtown jitney....
The Downtown Should Continue to be an Attractive and Interesting Place
• The creek should continue to be protected and enhanced in the downtown. Mission Plaza
should be expanded.
The Downtown Must be a Social Center
• The Downtown should be fun and festive.
• The Downtown must continue to be recognized as the"heart"of the City.
• The Downtown must be perceived as a friendly place.
• Residential uses should be accommodated in the Downtown.
• Downtown must be perceived as a place where it is safe.
The Downtown Must be an Entrepreneurial Place, Both for the Private and Public
Sectors
• Downtown should be a place that invites private investment.
• Downtown must have the infrastructure and additional support to make investment
worthwhile.
• A variety of uses and services should be accommodated to provide multiple use
opportunities and diverse economic strength.
• Downtown should be the focus of public investment and risk-taking. 3-25
• Downtown should be seen as a place for community innovation.
• Investment should continue to be made in the Downtown in infrastructure, parking
facilities, civic and cultural facilities...
• The Downtown must remain flexible and adaptive.
Subsequently, after the Plan was reviewed by several City advisory bodies and approved by the
City Council (May 4, 1993), it contained the following concepts, which are extracted from the
Downtown Plan and are relevant to Copeland's current concept:
The Plan Vision is to:
• Preserve and enhance the Downtown.
• Provide a major commercial and business center offering a wide variety of goods and
services.
• Provide the primary cultural and entertainment center of the County.
• Create a major destination point for tourists.
• . Provide the major congregation center— an enjoyable place to meet others, to celebrate, and
to participate in festivities.
The Primary Plan Goals are to:
• Provide a physical framework to retain and strengthen economic health and provide for future
Srowth-
• Grive pedestrians priority;open up new pedestrian routes in the middle of the blocks.
• Produce parking structures at strategic points on the periphery and within easy walling
distance of major activity areas.
• Reduce surface parking and infill with commercial and mixed-use functions.
• Retain traditional character while augmenting visual mixture, diversity and interest (within
the) existing building height pattern of two and three stories.
• Create opportunities for additional anchor retail stores consisting of a single store or a
complex of small stores.
• Provide and maintain a quality environment to retain and attract office and retail uses to the
core area.
• Expand cultural,recreational and entertainment facilities. 3-26
• Encourage residential uses, dining, galleries and open spaces above commercial uses and
parking structures.
Area Special Recommendations
• Redevelop the Court Street parking lot site with mixed-use and public spaces.
• Redevelop the Pahn Street property with multi-use parking, retail, office and residential
structures; existing grade level parking lots (should be) filled in; pedestrian access should be
provided throughout interior of block.
• Develop a financial program including incentives for private development.
Subsequent Downtown Economic Analysis
In February 1999, PCR/Kotin presented an economic analysis of the Downtown, which
suggested a"Downtown strategy",which included these three points:
• The mix of retailing in Downtown San Luis Obispo, although generally rich and
attractive, could benefit from additional expansion.
• ...Downtown can meaningfully expand its retailing presence with the addition of selected
chain store tenants requiring floor areas in the range of 5,000 to 10,000 square feet or
more, which in tum would require land reuse or assemblage to create parcels not
currently available.
• A more focused and larger commitment to retailing events and integration of retailing
would also enhance opportunities in Downtown San Luis Obispo without having adverse
effects elsewhere in the City.
SUMMARY:
The basic problem with our Downtown is that it is essentially "built out". The Downtown area
has been combed by experts looking for new locations for their businesses. There is no
"expansion area"on the periphery of the Downtown; if Downtown is to do more than assume the
status quo, it will be necessary to"redevelop"presently underutilized areas,because new land for
development is simply not available. The area included within the Copeland's current concept
proposal is one such opportunity for redevelopment to higher and better uses. The downtown,
almost by definition, should have a greater density/intensity then would be appropriate for other
areas within the City.
In summary, the above hopefully sets forth the "bigger picture"background for the examination
of the Copeland's current concept, which should be reviewed within the context of our plan and
"vision" for the Downtown's future.
3-27
CITY SELECTION COMMITTEE AGENDA
Friday, July 21, 2000
11:30 o'clock A.M.
SAN LUIS OBISPO CITY COUNCIL CHAMBERS
990 Palm St.
San Luis Obispo, California
1. Meeting is called to order.
2. Public Comment Period -Members of the public wishing to address the Committee
on any items not listed on the agenda.
3. Approval of the minutes for July 23, 1999.
4. Nomination of Chairperson, term expires 1/2001 (currently filled by Mayor Settle).
5. Nomination of Vice Chairperson, term expires 1/2001 (currently filled by Mayor
Brown).
6. Appointment/Reappointment to LAFCO for:
a) Regular member seat currently held by Duane Picanco, new term will expire
5/31/2004.
b) Alternate member seat currently held by Allen Settle, new term will expire
5/31/2004.
7. Appointment to the Airport Land Use Commission replacing Chris Iversen, term
expires 5/31/2002.
8. Ratification of phone appointment of Rich Neufeld, Grover Beach, to the Air
Pollution Control District Board.
Adjourn - approximately 12:00 o'clock p.m
POSTED 7/17/2000
Cray Co�c�
a City o San Luts.
0A00" Legis-lative
7,.17,2000
9:30AM to 10;1 OAM,
g:= Legislative Briefing with Council Hearing Room:.
Type:of mee- tin g g th State Senator Jack O'Connell
Attendees; State Senator Jack O'Connell, City Council Members, Appropriate City Staff
Minutes A ends ;topics
:115The:2000 legislative'session and budget process State Senator Jack O'Connell
401 IL"°How could the:City have doae.better in the A11
Center; open spacers (1 e' Coinmurnty
recent bud et roces
requests)
1.5 III. Other Issues
All
A.. ,Long4erm local:goyenunent finance
B. Erosion of Home Rule
C. FB e09 Clean Water Enforcement and City
D. AB2838 (Hertberg)LAFCO:legislation