HomeMy WebLinkAbout08/23/2005, BUS 2 - AUTHORIZATION OF EXCLUSIVE PROPERTY NEGOTIATIONS FOR PARKING LOT 2 council Matfing Dft a o�
j acjenaa Report 1.Nd&S
CITY OF SAN LUIS OBISPO
FROM. Wendy George, Assistant City Administrative Officer
Prepared By: Shelly Stanwyck,Economic Development Manager
SUBJECT: AUTHORIZATION OF EXCLUSIVE PROPERTY NEGOTIATIONS FOR.
PARKING LOT 2
CAO RECOMMENDATION
L. Authorize the Mayor to execute a 120-day exclusive negotiating agreement (ENA) with
WestPac Investments, Inc. for the purpose of exploring their Garden Street Terraces Proposal and
to allow time to assess the impacts of the proposal, the feasibility and type of real property
transactions necessary, the scope of the development review process, and provide for the
involvement of the community in the process.
2. Authorize the CAO to negotiate a reimbursement agreement with Westpac Investments; Inc. to
fully cover the costs of consultant assistance for economic analysis and appraisal services.
DISCUSSION
Background
In late spring of this year, several local property owner/developers expressed an interest in
redeveloping the City's Parking Lot 2 (bounded by Broad and Marsh Streets and shown on
Attachment 1). Both parties controlled properties adjacent to Lot 2 and had identified it as
having redevelopment potential. On May 3, 2005, in closed session, Council discussed this
interest and directed staff to encourage the parties to work together to bring forward a unified
proposal. Council further directed that if a joint proposal were not feasible, then staff should
return to Council with a process for conducting a request_for proposals (RFP) for the property.
As indicated in the August 12, 2005, 2005 letter (Attachment 2), from John Rossetti and Victor
Montgomery, the Managers of Marsh Street Associates, LLC, the General Partner of Marsh
Street Associates, L.P. (the Marsh Street.Associates Letter), the parties have come to agreement
and a conceptual proposal for single negotiations has been developed by WestPac,. the now
controlling property owner/developer.
Conceptual.Proposal
In its letter of June 8, 2005 (Attachment 3) WestPac proposed a project for Garden Street
Terraces that would include: 27 hotel rooms; 46 condominium hotel rooms';40 residential lofts;
23,780 square feet of ground floor retail/commercial space; and 193 parking spaces within a
I Condominium hotel rooms are a popular trend in the industry. They allow for individual ownership of hotel rooms
with the owner sharing in a percentage of the income received when the rooms are rented by the hotel operator. TOT
is still collected on the rooms and most guests(aside from the owners using the rooms for vacation.purposes)are
unaware of the arrangement. The MGM Grand in Las Vegas is a commonly cited example.
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Lot 2—Exclusive Property Negotiations _ _ _ Page 2
subterranean garage. Notably, the proposal .addresses some of the parking issues created by
redeveloping a 62-space public surface parking lot by looking to replace the spaces presently at
Lot 2 and adding 131 spaces to meet the proposal's anticipated new demand for a total of 193
spaces within the project itself. If Council authorizes exclusive negotiations, the conceptual
proposal will be refined to address issues as they arise and to prepare for a submittal to the City
for formal review and processing.
Policy Guidance
A series of City policies provide guidance for this type of mixed-use development in Downtown.
The General Plan (our community's blueprint for its future) contains many relevant policies. In
particular, Land Use Element (LUE) Section 4.1 states that Downtown is the cultural, social and
political center of the city for its residents as well as home for those who live in its historic
neighborhoods. . . .Civic, cultural and commercial portions of downtown should be a major
tourist destination. Downtown's visitor appeal should be based on natural, historical, and
cultural features, retail services, and numerous and varied visitor accommodations. LUE
Section 4.2 also states that all new, large commercial projects should include dwellings. Lastly,
,the recently adopted Housing Element strongly encourages the creation of residential units in
downtown and provides a series of polices to incentivize new residential projects. This project
would assist in satisfying the profound community need for housing.
Additional policy guidance can be found in A Conceptual Physical Plan for the City's Center(the
Downtown Concept Plan). Particularly relevant policies to this.conceptual project contained in
the Plan include:.
1. 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.
2. Downtown should be enhanced as : . . a major destination point-for tourists:
3. The reduction of surface parking within the core area to allow infill of commercial and
mixed use functions should be encouraged.
4. Downtown should provide and maintain a quality environment which will keep office
and retail establishments in the core area and attract smaller independent businesses.
5. Residential uses should be encouraged on upper stories of commercial buildings in the
core area.
Relationship to Major City Goals 2005-07 and Current Policies
The conceptual proposal for Garden Street Terraces is also highly relevant to two major City
Goals for 2005-07 and would play a significant role in implementing various.tasks associated
with these goals, as well as in the implementation of other City policies.
1. Sales TarITOT Goal
A major Council goal for 2005-07 is to encourage and promote programs and projects that will
increase sales tax and transient occupancy tax revenues. Garden Street Terraces presents an
opportunity to develop new retail space as well as a significant number of downtown hotel
rooms. Garden Street Terraces, as presently conceived, would satisfy multiple tasks in the goal's
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Lot 2-Exclusive.Property Negotiations_ Page 3
action plan including: continuing to facilitate and coordinate City involvement in significant
retail development projects as directed by Council; facilitating seismic retrofit objectives; and
creating an.opportunity to work with a property owner for the reuse of a large downtown property
for a hotel.
2.. Downtown Support Goal
Another major Council goal for 2005-07 is to continue the City's strong support for the
downtown in areas such as economic development and tourism promotion. The proposal would
assist in accomplishing various tasks outlined in the Downtown Support Goal such as: the
implementation of the Downtown Strategic Plan (which supports this type of mixed-use
development); the continued support of the Seismic Retrofit Program; and the support for the
completion of important downtown construction projects.
3. Continued Compliance with City's Seismic Retrofit Ordinance
An unexpected outgrowth of Council's acceleration of compliance deadlines for the City's
Unreinforced Masonry (URM) Ordinance has been the transfer of ownership for multiple
downtown properties. These transfers have allowed property owners, who for various reasons
did not want to retrofit their buildings, to sell them to other interested parties. In many instances
properties have been assembled into potentially larger parcels which present more efficient
opportunities for retrofit and redevelopment. Most of the Garden Street and Marsh Street
properties that would be involved in this conceptual project are URMs. The project offers the
opportunity to preserve and retrofit some, and redevelop others, thereby bringing seismic safety
in the Garden Street area to residents; visitors and property owners.
Exclusive Negotiations Are Appropriate in this Instance
The City may legally enter into an exclusive negotiating agreement with WestPac for the sale or
lease or property. In fact, the California Municipal Law Handbook states: "A city may sell
property essentially in any way it chooses, if the sale is for the common benefit of the city's
citizens." The Handbook goes on to say that "there is no requirement the city formally declare
the property as surplus".
To accomplish the Court Street Project, Council authorized exclusive negotiations with the
Copelands for various real property transactions. At the time Council waived the general policy
in the City's Property Management Manual, which indicates the City should geperally declare
property surplus before it is sold through a request for proposals (RFP) process, competitive bid,
or auction. The reasoning was that the Copelands brought with their project, property they
owned that was needed as an integral part of the development (the lot where the 919 Palm
Parking/Office Structure is presently being built) and that other developers could not make this
same offer.
The Property Management Manual is intended to serve as a guide for Council's decision-making
and can be waived when circumstances warrant. Staff believes Garden Street Terraces also
presents a unique opportunity for the City and it is an opportunity where exclusive negotiations
are appropriate for the following reasons:
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Lot 2—Exclusive Property.Negotiations___. Page 4
1. WestPac's control of a majority of the privately held property adjacent to Lot 2 creates a
unique opportunity for redevelopment which would not occur without their property.
2. The conceptual Garden Street Terraces would help to accomplish several major City
Goals for 2005-07 including increasing Sales Tax and TOT as well as the Downtown
Support Goal, as well as implementing other important City policies.
3. WestPac has completed many highly successful projects in San Luis Obispo and has two
hotel/housing oriented projects underway in Santa Barbara (available in the Council
Reading File is WestPac's current portfolio of projects).
For these reasons, staff recommends entering into a 120-day exclusive negotiating agreement
(ENA) with Westpac.in order to further explore their conceptual proposal, as set forth in the
attached INA.(Attachment 4). The ENA includes an outline of the general areas to be explored
during this period, as well as WestPac's commitment to work closely with the community to
refine the project,with the intent of filing a formal application for development with the City.
Issues to be Addressed during the Exclusive Negotiating Period
There are a host of issues to be addressed during the ENA period. The parties will.address some
of these issues independently and others through the negotiation process itself. The issues are
complex and diverse. Just a few of-the issues already identified include:
1. The determination of what types of agreements will be necessary to facilitate the
development of Lot 2. The negotiating period.will allow the parties to explore: (a) the
most appropriate type of real estate transaction, e.g. sale or lease of property; (b)the types
of agreements necessary to facilitate the transactions and the necessary conditions to the
agreements to safeguard both parties' interests; (c) the determination of whether or not a
memorandum of understanding, development agreement, or other type of agreement is
necessary to outline the parties' intended outcomes.
2. The compatibility of proposed uses with current uses in the Downtown.
3. The fiscal and economic analyses that need to be performed.
4. Operational issues related to parking that must be analyzed.
5. Several potential historic issues related to the seismic retrofit and redevelopment of the
site.
Resources Needed
A series of studies will need to be undertaken as various issues are identified during the
negotiation process. Resources will need to be assembled and studies undertaken in the
following areas:
1. Appraisal of Lot 2 (The appraisal will be performed under a contract with the City, with
costs reimbursed by Westpac).
2. Survey and engineering by Westpac.
3. Preliminary archeology investigation by Westpac:
Lot 2-Exclusive Property Negotiations_ Page 5
4. Economic analysis of parking and other issues by Allan Kotin (Allan Kotin's services will
be performed under a contract with the City.with his costs reimbursed by Westpac).
5. City staff review of various parking issues.
6. Phase 1 and.2 environmental work by Westpac.
7.Preliminary soils, hydrology, traffic, and other studies by WestPac.
Next Steps
Upon entering into exclusive negotiations, the parties will begin regular meetings to discuss the
various issues described above, as well as new issues not yet identified, and undertake the
various studies necessary for refinement of the proposal.
FISCAL IMPACT
The precise fiscal impacts of a transaction involving Lot 2 are unknown at this time. The
exclusive negotiation period will allow the City to specifically identify those impacts.
Additionally, it is the intent of the parties that WestPac, as the developer and future applicant,
will reimburse the City for various third party services that are necessary to (a) facilitate the
negotiations and (b) complete WestPac's "due diligence".. The Economic Development Manager
will be the lead staff person responsible for coordinating these negotiations and studies and she
will be assisted by staff members from Administration, the City Attomey's Office, Community
Development,Finance and IT and Public Works.
ALTERNATIVES
Council could decide not enter into exclusive negotiations with WestPac. Staff believes
exclusive negotiations are appropriate given the unique opportunity that WestPAc'S property
ownership creates for the redevelopment of Lot 2 and satisfaction of various City policies.
ATTACHMENTS
1. Vicinity Map
I August 12;2005 Marsh Street Associates Letter
3: June 8, 2005 WestPac Letter
4. Exclusive Negotiating Agreement
Council Reading File: WestPac Brochure and Local Projects Listing
G:Admin\Smfi\Stanwyck\Lut2\CAR—Exclusive Negotiation Request
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ATTACHMENT 1
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08-15-`05 .08;42 FROM-office 5414494 T-839 P003/004 F-167
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ATTACHMENT 2
MARSH STlt&tT Assocuns,L.P.
a Catifomis lunited parorml*
r/o Marsh Street A9sooiates,LLC
A7rN: Mr.Mill RnGOW
1301 Chorro Streei
Son Luis Obispo,California 93401
August 12, 2005
VIA F CS 1M1LE
Ms.Shelly Stanwyck
Economic Development Manager
City of San.Luis Obispo
990 Palm Street
San Luis Obispo;CA 93401
Re- 712=728 Marsh Street,San Ltus Obispo,CA(the." o art ll
Withdrawal from Negotiations and Consent to Single Nerrotiations
Dear Shelly:
1 am writing to confirm that Marsh Street Associates,L.P.(" ALi'"),hereby withdraws
from negotiations regarding plans .for development of the Property and the adjacent
parking lot owned by the City of San Luis Obispo (thc "ftle '), and consents to the
City of San Luis Obispo engaging in single negotiations with Garden Street SLO
Partners. L.P., a California limited paftnership, (''13u ':), which is an affiliate of
WestPac llevetopinent,Inc,,regarding the Project.
As you know; MSALP has been in negotiations with the City with respect to the Project_
At the City's encourageluent, we and our afSliate,.Mqrsli Street Associates, LLC, have
entered into agreements to transfer the Property to Buyer. While the acquisition of tltc
Property will.not close until August 31, 2005, Buyer lies provided us sufficient
assurances of its intentions to close that we hereby withdraw from negotiations with the
City with,respect to the Project,and authorize Buyer to procced_with single negotiations
with the City.
F:4�eiWVdanIMtSVinal�Urn�ctiJd�Daca�l.rdpW'idwr�wul-oa-��.os•FiNnt.:i�e
08-15-'05 08:42 ROM-office _ 5414494 T-839 P004/004_ F-167
ATTACHMENT 2
Ms. Shelly Stanwyck 2' August 12„2005
If yoti have tuty comments or questions rogarding this niattesr tccl free to contact us to
discuss thein.
VOL-/truly yes,
Marsh Street associates,L.P.
By Marsh Sttect Associates,LLG, its
g eral partner
Y
Jot Rossetti,Its Manager
Bytoi)VU-2
Wr
nc; Mr.HamisliNUrshali,
Westpac Development;Ino:
wesftc ATTACHMENT 3
08 June 2005
Mr. Ken Hampian
City Administrative Officer
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93408
RE: Garden Street Terrace—Mixed Use Development
1119 and 1123 — 1137 Garden Street& 748 Marsh Street
Dear Ken,
Thank you for your positive response to our correspondence dated April 22, 2005 and
subsequent authorization to the Economic Development Manager to coordinate with us to
formalize the project description and prepare a request to process the project. Of note is
our recently concluded discussion with the adjacent property owner, Mr. John Rossetti.
Based upon a mutual agreement, we will be acting as sole developer for both our
respective property holdings.We look forward to including the City of San Luis Obispo's
property within this development proposal.
Subsequent to your initial acceptance of our proposal to pursue a comprehensive
development, we respectfully request establishment of a 120-day period in which to
exclusively negotiate the purchase and/or exclusive use of the City's property holding(s).
In addition, we will require authorization to assemble the design team to develop the
mixed-use concept and coordinate with the Community Development Department(CDD)
staff to initiate the planning and entitlement process. Knowing that the work load at the
CDD is quite heavy, we would be more than willing to retain a City-approved outside
consultant to act on the CDD's behalf in order to expedite the process.
Concurrently, we will use this 120-day period to conduct additional "due diligence" that
would include, but not necessarily be limited to, environmental assessments (e.g., site
survey, hazards/hazardous materials, traffic, cultural/historical, soils, etc.), preliminary
community outreach, and fiscal analysis. We would include any additional analysis,
reports or information that the City may require in support of the project concept and Westpac ShelterCm7
provide these at our sole expense. am aBWtW%c4
We are very excited about the proposed mixed-use project and look forward to sharing
the"street scene",building elevations and floor plans with you once they have been more
fully developed and refined. For your information, the project includes the following
components.
• 27 hotel rooms;
Westpac Imestments,Inc.
806 AeiwisYa Place,suite 202
San iAIiS Obispo,CA 93401
805N4-7343•FAX:806 549-1177
�- 9
Westpac Development, Inc.
08 June 2005
Garden Street Terrace
Page 2 of 2
0 46 condominium hotel rooms;
0 40 residential lofts;
0 23,780 square feet of ground floor retail/commercial; and
0 193 parking spaces within a subterranean garage.
Although you are familiar with Westpac and the variety of projects that we have
developed within the City — The Villages, DeTolosa Ranch, Aerovista Business Park,
Acacia Business Park, Broad Street Mixed-Use, etc., we have included the company
brochure for your review. It is noteworthy that we are also involved with two (2) hotel
projects in Santa Barbara—South Coast and The Sandman. We have included a site plan
and floor plan of The Sandman project, as we are currently redeveloping the property
from a 120 room hotel into a 113 room hotel including 72 townhomes. The Sandman
project also includes a subterranean parking garage.
In closing, we cannot overstate our enthusiasm about the opportunity to develop these
downtown properties. The City's participation is critical to our success. Thank you in
advance for consideration. Should you have any questions and/or require any additional
information to assist you with your deliberation, please do no hesitate to contact me
directly. We look forward to your positive response to our request to initiate the 120-day
negotiation period.
Very truly yours,
Westpac Development, Inc.
_HKOissident
Attachments
c: Shelly Stanwyck,Economic Development Manager
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ATTACHMENT 4
EXCLUSIVE NEGOTIATING AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day of July,
2005, by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City,
and WESTPAC INVESTMENTS,INC,hereinafter referred to as WestPac.
WITNESSETH:
WHEREAS,on June 8,2005,WestPac presented a proposal for redeveloping a significant portion of the
City's downtown in the Garden Street area, hereinafter referred to as the Project;and
WHEREAS, the Project has generated enthusiasm from a broad range of community members; and will
help implement a number of City goals, including those set forth in the City's General Plan,.Conceptual Physical
Plan for the City's Center and 2005-07 Financial Plan Major City Goals: Increase Sales Tax and.TOT and
Downtown Support and will assist in compliance with the City's Seismic Retrofit Ordinance,and
WHEREAS, Westpac has successfully developed major projects in the City, Santa Barbara, Hawaii, and
Australia and has the ability to successfully undertake a project that will be well-received by the community;and
WHEREAS, WestPac proposes to hold a number of community and stakeholder "workshops," before
finalizing its development application in order to provide meaningful community input on the Project and to
incorporate the community's ideas and suggestions into its overall design strategy;and
WHEREAS, Westpac has represented that it owns or controls much of the privately-held property that will
be needed to successfully implement the Project and the City's goals for the downtown;and
WHEREAS, Westpac has requested a 120-day exclusive negotiating period with the City to finalize the
details of its proposed Project, conduct initial environmental review and resolve real property issues that may arise;
and
WHEREAS, the unique nature of this Project calls for a unique approach in exploring its feasibility due to
itsprivate-public partnership approach, under which the City has dual roles in exercising its regulatory
responsibilities as a government agency in the development review process, and its proprietary responsibilities as a
landowner;and
WHEREAS, for these reasons the City is willing to consider direct negotiations with Westpac in the
potential disposition of City properties rather than pursuing a request for proposals, competitive bid or auction
process as set forth in the City's Property Management Manual.
Exclusive Negotlating Agreement Page 2
NOW THEREFORE; in consideration of their mutual promises, obligations and covenants hereinafter
contained;the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be for 120 days from the date this Agreement is made and
entered,as first written above.
2. PURPOSE. The purpose of this Agreement is to,further explore the Project concept by: assessing the
feasibility of the real property transactions that will be required between the City. and Westpac in implementing the
concept;and evaluating the planning and other regulatory approvals that will be required from the City. If the parties
mutually determine that the Project,appears feasible;.after the initial term of this Agreement,the parties may extend
the-term for a reasonable period of time in order to develop a Memorandum of Understanding (MOU), or other
similar _agreement, that will set forth the general business principles, framework and key procedures for the
disposition of any City properties to Westpac under the Project, including but not limited to, sale, lease, trade or
development. If executed, the MOU(or other similar agreement) would be a prelude to a subsequent Development
Agreement(DA),or other similar agreement, which would finalize the terms and conditions of any sale, lease,trade
or development of the City's property to or by WestPac. The City and WestPac shall not execute this DA(or other
similar agreement) until all discretionary approvals for the Project, including environmental review, have been
received. Other than exploring the feasibility of this Project from the City's perspective as set forth above, both
parties agree that no other obligations are established under this Agreement.
3. CITY'S OBLIGATIONS. The City agrees to complete the following general tasks:
a. Analysis. Research and analyze the likely economic, fiscal, administrative and other issues
facing the City in its "proprietary" role as a landowner and potential Project participant in considering the Project
concept,and set policy parameters in negotiating other agreements accordingly.
b. Development Review Process. Prepare a development review-process and schedule that will
subsequently provide timely and expeditious review of the Project while at the same time ensuring meaningful public
input, and appropriate planning and environmental review. The City expressly reserves its discretion under the
California Environmental Quality Act (CEQA), California Public Responsibility Code Section 21000 et seq. to
approve the final scope of the Project.
c. Resource Needs. Identify the City's resource needs and funding sources in negotiating
Agreements and in processing the Project's developittent application.
4. WESTPAC'S OBLIGATIONS. WestPac agrees to complete the following general tasks:
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Exclusive Negotiating Agreement Page 3
a. Finalized Project Concept. Prepare and submit a finalized Project proposal to the City within
one hundred twenty (120) calendar days after execution of this Agreement in as much detail as possiblej including
but not limited to: building program; properties ifivolved and their ownership; parking needs assessment and
proposal for how these will be met;Project phasing and methodology for ensuring that the Project will be completed;
proposed form of the City's contributing properties, such as sale, trade, lease or air rights likely environmental,
traffic and archaeological issues that will be encountered by the Project and how these will be addressed; and
financial pro forma for the Project.
b. Community Workshops. Hold a series of community and stakeholder workshops before
finalizing its development application in order to provide "meaningful community input on the Project and
incorporate the community's ideas and suggestions,as feasible,into its overall design strategy.
c. Formal Development Application. Finalize and submit a formal development application for
the Project to the City.,
d. Compensation for City Review Costs. Discuss and finalize how City processing and review
costs will be funded,such as: those costs that will be directly paid by Westpac;those that will be paid by the City but
reimbursed by WestPac(including the level and method of reimbursement);and
e. Fiscal Analysis. Provide sufficient,descriptive material for the City to initiate a fiscal analysis
of the Project.
5. AMENDMENTS. this Agreement may be extended or modified with the mutual consent of the parties
hereto; Any such extension, amendment, Modification or variation from the terms of this Agreement shall be in
writing and shall be effective only upon approval by the Council.
6. COMPLETE AGREEMENT. This written Agreement,including all writings specifically incorporated
herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement,
understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or
effect,nor shall any such oral agreement,.understanding or representation be binding upon the parties hereto.
1. NOTICE. All written notices to the parties hereto shall be sent by United States mail.,postage prepaid
by registered or certified mail addressed as follows:
City City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo,CA 93401
Westpac WestPac. Investments,Inc.
F
Exc_l_uslve Negotiating Agreement Page 4
Attn: Hamish Marshall
805 Aerovista Place,Suite 202
San Luis Obispo,CA 93401
8. AUTHORITY TO EXECUTE AGREEMENT.. Both City and WestPac do covenant that each
individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute
Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year
fust above written.
ATTEST: CITY OF SAN,LUIS OBISPO,A Municipal Corporation
By:
Audrey Hooper,City Clerk Mayor David F.Romero
APPROVED AS TO FORM: WESTPAC INVESTMENTS,INC
By:
_CJ towe�11,�City Attorney Hamish Marshall,President
Page 1 of 1
Julie O'Connor- Rational for Exclusive Negotiating Agreement
From: "Brett Cross"<brettcross@chaiter.net>
To: "Christine Mulholland" <CMulholl@slodty.org>, "Ken Hampian" <KHAMPIAN@slocity.org>
Date: 8/23/2005 3:24 PM
Subject Rational for Exclusive Negotiating Agreement
The staff report indicates that the City Council authorized exclusive
negotiations with the Copeland's because of the property owned by Copeland RECEIVED
where the new parking structure/office space is being built.That is not
accurate given the.sequence of events that occurred.The Copeland's were AUG 2 3 ZQQS
suppose to build underground parking as part of the China Town design which s:
the.City was then going to purchase."the Copeland's were going to buy the $L0.CITY CLERK
airspace above the finished parking area at a discount because after allit
was only the airspace they were buying (that was an absolutely ridiculous
notion).The Copeland's in a letter to the.Council indicated they couldn't
build the parking as planned at the China Town site because subterranean
water was a problem and it wouldn't be feasible to build.(note: they are now
including their own underground parking in their latest proposal). It was
only then did the Council embark upon the current 919 parking and office
project RED FILE
Sincerely, ME ING AGENDA
Brett Cross
DATE4SREM # .
[To accomplish the Court Street Project; Council authorized exclusive
negotiations with the
Copelands for various real property transactions . At the time Council
waived the general policy !�9
/ouNCILcOD DIR
in the City's Property Management Manual, which indicates the.City should �� JAo SIN DIR
generally declare 1ACAOFIRE CHIEF
ATTORNEY Ipw DIR
property surplus before it is sold through a request for proposals (RFP) /CLEFK ORIG 2'pOueE CHF
0 DEPT HEADS �EC DIR
process, competitive bid,. �� TIL DIR
HR DIR
or auction .The reasoning was that the Copelands brought with their
project, property the y
owned that was needed as an integral part of the development(the lot where
the 919Pal m
Parking/Office Structure is presently being built) and that other developers
could not make thi s
same offer.]
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Page I of 1.
SLO Citycoundil =Exclusive Property Negotiations fdr Pairlding Lot 2
F RECEIVED
AUG 2 4 20rTi
From: "Brett Cross" <bretb-oss@charter.net>
To: "City Council" <s1odtyoounci1@s1ocitV.org>. SLO CITY CLERK
Date: 8/23/2005 7:40 AM
Subject fxclusive Property Negotiations for Parking Lott
Cie, Qbtu\AAJ
.I aim perplexed as to Why the city Would enter into an exclusive property
negotiation with'a potential acquirer of city property. One of your
responsibilities as an elected representative is to ensure that the
community receives the highest valuation for property that the city is
considering selling. Certainly limiting the number of potential purchasers
is counter productive to that goal. Appraisals give only an estimated,
-Valuation of a property, not what a buyer may be willing to pay.
It appears from the staff report that.there Were two parties interested in
the property but for some unknown reason the Cit
,y Coun il directed staff to
encourage the parties to work together, at first blush this makes no sense
from the-standpoint of the community's interest. It is apparent there is,
was, more than one interested party. The City's Property Management Manual
is clear in the disposition of city owned property. I cannot see a
compelling reason to set aside adopted City policy which would require that
the City use a Request for Proposal's process to sell the property. A
request for proposal's process would not only allow the community to provide
direction on what is desired at the location but would ensure the community
receives the highest value for the property.
Sincerely,
Brett Cross
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Page 1 of 1
SLO Citycouncill Downtown Concept Plan EIR
From: "Brett Cross" <brettaoss@charter.net> RECEIVED
To: "City Council" <slocitycoundl@slqdtyqrg>
Date: 8/23/2065 9:03 PM AUG 2 4 200.1
Subject: Downtown Concept Plan EIR SLOCITY CLERK
According to a staff report written by Whitney McIlvaine and Glenn Matteson
on Staffs Evaluation of A Conceptual Physical Plan for the City's Center,
October 28, 1991
From the Above mentioned staff report.
Environmental Review
If the Planning Commission, the ARC,and the City Council agree with the
approach recommended by staff, environmental review will focus on the new
consistent concepts. Staff has begun to define the downtown design plan as a
"project'for purposes of environmental- - review. It Was mentioned at the
beginning of the review process fro the downtown plan, that environmental
—
review may not be necessary.This would be the case if the City Council ONLY
acknowledged the.design concept as a commendable vision WITHOUT adopting any
means of enforceable implementation or allocAting any funds for capital
,improvements. If the City Council intends to adopt a "Downtown Plan"to be
used in reviewing specific design proposals,with or Without associated
ordinances and capital improvement programs, the action becomes a 11projectf,
under the California Environmental Quality Act(CEQA).
Sincerely,
Brett Cross
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Page I of 3
RECEIVED
SLO Citycouncil Fw: a little perspeooVe ,: IMIN
From: "Brett Cross" <brettcross@charter.net> SLO_CIIY CLERK
To: "City Council" <slocitycoundl@slodty.org>
Date: 8/23/2005 12:45 PM
Subject: Fw: a little perspective
I thought I'd send this along to get.sorne perspective on how much developers r
are willing to pay for land in other communities. Obviously the valuation is
based on the rent that the project would expect to generate:but the selling
price of the Court St. Parking lot and the other city lots to a single
developer looks like a gift compared to Walnut Creek.
Brett Cross
y
----- Original Message -----
From: "Brett Cross" <brettcross@charter.net>
To:
Sent: Tuesday, April 19, 20052:31 PM
Subject: a little perspective
> Price hits prime for plum parcel
> By Theresa Harrington
> CONTRA COSTA TIMES
>The already skyrocketing cost of commercial real estate in downtown Walnut
> Creek has blasted to new heights with a record-setting sale in the city's
• retail core.
>The $8.5 million sale of a 9,600-square-foot parcel occupied by Traditions
• furniture store is the most money paid for,properly that size in the
> thriving district
•'That's huge," said Jim.McMasters, director of retail for Colliers
• International,a commercial brokerage. "The international council of
> retailers says Walnut Creek is probably one of the top 10 Main Streets in
• the United States now. It's that elegant"
> Retail rental rates in Walnut Creek are higher than those in any Northern
> California city except San Francisco, he said.
> Based on the land alone, the price of nearly $887 per square foot for the
• property at 1530 Olympic Blvd. surpasses other recent sales by hundreds of
> dollars per square foot, McMasters said. Because the land includes an
> 18,420-square-foot building, the purchase price is about$460 per square
> foot of the building, bringing it closer to other$400-to
• $500-per-square-foot building purchases in town.
• Retailers have been vying to snatch up scarce space in Walnut Creek since
• Nordstrom came to Broadway Plaza and started pulling in $100 million in
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Page 2 of 3
J '
> annual sales, he said.The demise of Oakland's retail district and the
surge
> of affluence in the East Bay have also been a boon to the city, he added_..
> "Walnut Creek.really had no choice but to be successful," he said.
> Counting on continued success, the purchaser of the Traditions property,
>-Danville-based Blake Hunt Ventures, wants to raze the store and create a
> large retail, housing and parking project.
>The company is negotiating with the city to become the master developer of
> the project, which would be combined with three adjacent parcels in the
> city's redevelopment area.
> Blake Hunt, which developed Plaza Escuela and Olympia Place, purchased the
> nearby Traditions property in January. It was a strategic move that puts
the
> company in a better bargaining position than competitor Lamorinda
> Development and Investment in its bid to redevelop the four-parcel site.
> Although Blake Hunt paid nearly 10 times the.property's assessed.value of
> $933,000, City Manager Mike_ Pamess pointed out that under Proposition 13
> assessed value can rise only 2 percent per year, no matter how high the
actual value is.
>A bank appraisal of the Traditions property recently valued it at
> substantially more than $8.5 million, said Brad Blake, chief executive
> officer of Blake Hunt Ventures.
>
•
"We wouldn't have paid it if we didn't think it was worth that amount," he
> said. "It works for us on both a standalone basis, if the property's never
> developed, and also as part of a major development. We thought it was a
key
> property for the block's redevelopment."
>The Traditions owners said last year they didn't want to sell. But Roland
• Wentzel said he and his wife later reconsidered; realizing a high-density
> project on the land makes sense: County records show the Wentzels paid
> $765,000 for their property in 1993.
> "My wife and I looked around and said, 'We're sort of a dinosaur here.
We're
> a bit obsolete. Not our business, but as landowners,"' he said. "We
weren't
> getting as much for the property as the value of the property commanded."
>The Wentzels negotiated a lease-back agreement with Blake Hunt and will
stay
• open for as long as two years while they look for another site. Meanwhile,
> Blake Hunt has persuaded the owners of the former Hospice Thrift Shoppe to
>join the redevelopment project The company also is negotiating to
purchase
> the Union Bank site on Mt._Diablo_ Boulevard, Blake said.
> If selected as the master develoPer, Blake.Hunt would also purchase the
> Veterans Memorial Building site from the city.
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Page 3 of-3
> Councilman Charlie Abrams said the,city will not make a final decision
about
> a master developer until it sees more specific project plans. But he
> acknowledged that Blake Hunts progress in cutting deals with property
> owners seems to give the company a "leg up" in the negotiations.
> Brian Hirahara, of Lamorinda Development, declined to comment on Blake
> Hunts latest jockeying.
>
> Escalating land prices prove that Walnut Creek is a place where retailers
> want.to be, Pamess said..In the last quarter of 2004, Walnut Creek took
in
> $4.2 million in sales tax revenues.
• But high land costs also make it difficult for the city to provide
• affordable housing.
> "Its a positive sign," he said of rising prices, "but it also raises some
>.challenges."
— -____----------------------------------------------
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