HomeMy WebLinkAbout07/17/2007, BUS. 5 - PRADO ROAD INTERCHANGE PROJECT MANAGEMENT: DIRECTION FROM COUNCIL council n�fi�D� 7-17-07
agenda Repoat s
CITY OF SAN LUIS OBISPO
FROM: Ken Hampian, CAO
Prepared by: Shelly Stanwyck, ACAO
SUBJECT: PRADO ROAD INTERCHANGE PROJECT MANAGEMENT:
DIRECTION FROM COUNCIL
CAO RECOMMENDATION
1. Consider the County Board of Supervisors interest in transferring, from the County to
the City, project management responsibility for the Prado Road Interchange and,
potentially, future County revenue to offset interchange costs.
2. Take no further action at this time due to the financial risks associated with assuming
this role, under present circumstances.
REPORT-IN-BRIEF
The proposed development of the Dalidio Ranch property has a long, complex and
emotional history within the City and the County. This report is not about most of this
history or the various land use alternatives and opinions associated with the property.
Instead, it is narrowly focused on an immediate question that is before the City, which is:
Should the City assume project management responsibility of the Prado Road
Interchange at this time?
To address this question, this report discusses two key things:
1. The policy basis for the City retaining as a goal the eventual construction of an
interchange at Prado Road.
2. The issues and risks involved in assuming project management responsibility at this
time, in light of present circumstances.
The report concludes that the goal to eventually build an interchange at Prado Road
remains an appropriate one. Over the long haul, as historically established in the City's
General Plan and through technical traffic modeling, the City's circulation system would
greatly benefit from an interchange at this location.
Prado Road Interchange r-roject.Management: Direction from Cou►,.:11 Page 2
However, staff also concludes that the conditions are not currently right for the City to
assume interchange project management and financing responsibility. The financial risks
are too high, and taking on such risk and workload at this time could undermine City
momentum in upgrading the Los Osos Valley Road (LOVR) Interchange, which is a key
part of the City's Major City Goal for 2007-09 for Traffic Congestion Relief.
If and when circumstances change more favorably, then the City could assume project
management responsibilities, including financing strategies, for the development of the
Prado Road Interchange. These changed circumstances would include:
1. Serious interest by the property owner in annexing to the City, who to date has made
it clear has no intention to pursue annexation in the foreseeable future.
2. Receptivity by the developer for a greater role in the assumption of risk and financial
contribution to the interchange and other related traffic mitigations.
3. Resolution of the Measure J lawsuit.
DISCUSSION
Recent Background
The Dalidio Ranch is surrounded by the City of San Luis Obispo, but it is not within the
boundaries of the City (Attachment 1 - Vicinity Map). It will only become a part of the
City, and subject to City jurisdictional oversight, if the property is annexed. The property
cannot be annexed without the consent of the property owner.
The property owner is not pursuing annexation to the City at this time and has indicated
that he is not interested in doing so. This is because his past efforts to develop in the City
have failed, and a new project was approved by County voters via the initiative process
(Measure J 2006 — copy available in the Council Reading File). The approved project is
a predominantly commercial retail project and is to be built in the County. Thus, it is a
County project.
However, because the land is surrounded by the City, the project approved by voters is
expected to have significant impacts on City finances due to transferred revenues, traffic,
infrastructure (such as street maintenance), public safety services (including paramedic,
police, and fire) and open space. Many of these impacts were detailed in a June 22, 2006
letter from the CAO submitted as a part of a committee process established by Supervisor
Lenthall ("Assessing Issues and Impacts of Measure P—Council Reading File). Because
no environmental impact report (EIR) was prepared to evaluate this project, the only
mitigation measures for the project are those contained in the Measure J initiative.
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Prado Road Interchange violect Management: Direction from Council Page 3
The Dalidio Ranch Project and the Prado Road Interchange
As further detailed later in this report, the Prado Road Interchange is identified in various
City policy documents and studies as needed and beneficial to the City and our long term
circulation system. The interchange is also described in the County's Circulation
Element as beneficial to certain County interests, such as access to the airport.
Previous proposals to develop the Dalidio Ranch in the City triggered a developer
requirement to finance and build the interchange. The City established this requirement
(and others) based on detailed economic and environmental studies. In 2004, the City
Council approved an EIR for the San Luis Marketplace Project (Council Reading File).
This EIR concluded that the project — which had less development proposed than the
Dalidio Ranch Project — would generate 52% of the need for a Prado Road interchange
and this should be the developer's "fair share" responsibility. The EIR also concluded
that the interchange should be built in conjunction with the project.
A negotiated development agreement required interchange construction as a condition of
building permit issuance, with 70% of the total cost "fronted" by the developer and the
bond collateralized by the project and land. There was no financial risk or obligation to
the City in financing the developer's 70% share of project costs. However, in 2005, a
majority of City voters rejected the approvals associated with the San Luis Marketplace
project,including the development agreement.
An interchange is not a precondition for the Dalidio Ranch project approved by the voters
under Measure J. Instead, Measure J indicates that if an interchange is to be built, then
the developer's sole obligation is to contribute$4 million in cash and $4 million in land
value. Based on a current interchange cost estimate of$57 million (by County staff), this
represents about 14% of the project cost. While Dalidio Ranch representatives have
expressed support for an interchange, they have also indicated that they will pursue the
project, with or without an interchange.
Thus, the onus for advancing an interchange at Prado Road rests with government, either:
Caltrans, the County, or the City. In conversations with Caltrans (as recently as in late
June 2007), Caltrans has been very clear that they will not assume a project management
role. They do not view the interchange as a State priority at this time.
May 2007 County Action
On May 22, 2007, County staff recommended against the County serving as project
manager for the interchange (Attachment 2).. The County Board of Supervisors agreed,
and instead asked that the Council provide its position on serving as project manager and
participating in the funding of the interchange. Assuming the development will occur in
the County, the Board also indicated openness to "passing back" some level of County
revenue generated by the project to help defray interchange construction costs. They
directed the County Administrative Officer to discuss this concept with the City CAO,
and preliminary conversations have taken place.
Prado Road Interchange ProjectManagement: Direction from Council Page 4
City of SLO Considerations
At this point, the Council will need to judge if the timing and conditions are correct to
proceed in a project management role, and if so, then staff will need direction as to
further conversations with the County. In order for the Council to reach its conclusions,
what follows is a discussion of: (1) existing City policy with respect to the Prado Road
Interchange; and (2) a fiscal analysis performed to estimate the financial impacts of the
project and interchange funding to the City and County under various scenarios.
City Policy: Supports for a Prado Road Interchange
For over 30 years, an interchange at Prado Road has been identified as a critical
component of the City's circulation system. Various studies, plans, and policies have
described its physical alignment as well as its significance within the City's overall
transportation network. The City's current General Plan refers to the Interchange in a
number of places and suggests that projects generating substantial regional traffic play a
leading role in financing the construction of the Prado Road Interchange. (Circulation
Element 9.1.3)
Also, under current City's planning and policy documents, Caltrans has been identified as
the appropriate lead agency for the construction of an interchange at Prado Road upon the
City securing funding for it from the Dalidio Area development and other sources.
(Circulation Element — Figure 4. Transportation Capital Projects II.C.1.). An overview
of the evolution of these policies is summarized as follows:
1961 Identification of Prado Road as Critical to City Circulation. In 1961 the City's
first General Plan was adopted and in it Prado Road was identified as a critical
component to the City's circulation system
Studies in the Mid-to-Late 1970s. A series of studies continue to identify the critical role
for Prado Road including the 1974 San Luis Obispo County Regional Transportation
Study's recommendation to extend Prado Road across US 101 to Madonna Road .
1980's Studies. In 1984, the City's Circulation Study identified the Prado Road
Interchange as a possible improvement project. This was followed by further Citywide
studies concluding in the 1990 DKS Phase II Report, which recommended a new
interchange at Prado Road.
General Plan References. The current General Plan Circulation Element, 1994, includes
a Highway 101 interchange at Prado Road extending to Madonna Road, Circulation
Element — Figure 4. Transportation Capital Projects II.C.1. Other specific references to
the Prado Road Interchange include:
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Prado Road Interchange r eject Management: Direction from Couw..;il Page 5
a. Circulation Element, Section 9.13,Prado Road.Improvements
The City will ensure that changes to Prado Road(projects A.1, A.2, B.4; and C.1)
and other related system improvements are implemented in a sequence that
satisfies circulation demands caused by area development.
The sponsors of development projects that contribute to the need for the Prado
Road interchange (project C.1) will be required to prepare or fund the
preparation of a Project Study Report for the interchange project. The Project
Study Report shall meet the requirements of the California Department of
Transportation.
b. Circulation Element—Figure 4 Transportation Capital Projects. Notes 3
The design of the Prado Road interchange and modifications to the ramp system
for the Los Osos Valley Road interchange will be determined as pan of Project
Study Reports (PSRs) required by Caltrans. The alignment of Prado Road
northwest of Route 101 and its connection point to Madonna Road will be
coordinated with the City's consideration of plans to expand commercial
development consistent with the General Plan Land Use Element.
Obstacles to Assuming_Interchange Project Management at this Time
Although City policy says that we should eventually have a Prado Road Interchange, its
connection to a project that—if built in the County— will hurt the City fiscally is a major
factor to be considered in determining our level of involvement and willingness to accept
risk. In order to define the financial issues in an analytic way, the City and County
jointly commissioned an economic study to "size" the fiscal impacts of the interchange to
both the City and the County. Economic consultant Allan Kotin conducted the study and
used a series of scenarios to explore potential impacts (May 2007 Kotin Study,
Attachment 3). These are summarized below.
May 2007 Kotin Study: Potential Fiscal Impacts and Risks
Kotin's study shows severe negative fiscal impacts to the City unless the project is
annexed into the City and the County passes through its entire share of property tax
revenues from the project. The report states:
The construction of this interchange poses a real challenge for the County
of San Luis Obispo because the project is not annexed to the City of San
Luis Obispo and, by extension, causes substantial problems for the City of
San Luis Obispo if the project is not annexed.
In order to examine the impacts on the two agencies, the report looked at the level of
projected project revenue over time (sales tax, transient occupancy tax (TOT), and
property taxes). The report also examined how the various costs of the interchange could
be allocated and financed. The "transfer effect" — the amount of revenue that will
transfer from current retailers and hoteliers in the City to the County— was also analyzed.
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Prado Road Interchange Prioject Management:Direction.from Councd Page 6
Finally, a scenario was run to determine the various fiscal impacts should no interchange
be constructed. Outlined below are summary study assumptions and findings:
Cost Assumption. In his May 2007 Report, Allan Kotin, assumes that the gross cost of
the Prado Road Interchange is $57 million, as estimated by County Public Works staff.
The net cost is $49 million, after assuming the developer's $8 million dollar commitment
per Measure J: $4 million in land dedication and$4 million in cash.
Allocation of Cost Based on Traffic Impacts. Two cost allocations were run. The first
allocates 26% of the interchange traffic to the'Dalidio Ranch Project (per Measure J), but
based on the higher County cost assumption, while retaining the Dalidio Ranch
contribution at $8 million (per Measure J). The second allocated 52% of the traffic to the
Dalidio Ranch Project, per prior City project studies..
Traffic Impact Fee (TIF). Our transportation impact fee analysis allocates 70% of the
costs of the interchange to the Prado Road sub-area as follows:
Dalidio: 52%
Prado 40: 5%
Margarita: 13%
The balance of the project cost (30%) is funded from new development via community-
wide traffic impact fee (TIF) revenues.
Hypothetical Bond. The hypothetical bond "model" was assigned an interest rate and a
debt servicing cost to the portion of the interchange not funded by the developer or the
City TIF.
Transfer Effect. The Dalidio Ranch Project will result in the transfer of some sales from
existing City retailers and hoteliers to the new project. Kotin performed a rigorous
analysis of the estimated transfer, and concluded that approximately $1 million per year
in City sales tax and $200,000 in TOT would shift from the City to the County. This
represents $1.2 million dollars less per year to the City's General Fund.
Calculation of Project Revenue Generation. These come from three categories: (1)
retail sales tax; (2)TOT as a result of the 150-room hotel; (3) property tax collected from
the project. Sales tax and TOT allocations are dependant upon jurisdictional location.
Property tax, under existing agreements, goes to the County, with or without annexation
of the project (although an option has been developed if all of the County's share of
property tax revenues are allocated to the City).
Estimated Revenue and Cost Impacts
As presented in Table A of the Kotin report, the following summarizes the revenue and
debt service cost under seven scenarios for the City and the County.
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Prado Road Interchange Project Management: Direction from Counti_l Page 7
Summary of Table A
Mid-Point Projection for Revenues Vs Debt Service Costs,Discounted for Present Value
(In Millions of Dollars)
Scenario City County*
Without Annexation
1. No Interchange Net Loss$11.3 Net Revenue $41.2
2. County Pays Bond without City Net Loss$11.3 Net Loss$14.4
Pass Through of TIF
3. County Pays Bond with City Net Loss$11.3 Net Revenue$1.9
Pass Through of TIF
4. Bond with Dalidio at 52.4% Net Loss$26.4 Net Revenue$9.9
contribution
5. Bond with Dalidio at 26% Net Loss$50.6 Net Revenue$22.9
contribution
With Annexation
6. No County Bond Obligation Net Loss$2.1 Net Revenue$6.7
County Keeps Property Tax
7. Annexation of Project and Net Revenue$4.6 Net Revenue$0.0
County Passes Thru Property
Tax to City
Notes: Net losses presented in bold italics; chart does not reflect the impact of ongoing service
costs—which could be substantial to the City.
A more detailed version of Summary Table A is presented in the May 2007 Kotin Report.
However, the summary above illustrates the negative impacts to the City in all scenarios
except for annexation to the City and the pass-through of the County's entire share of
property tax revenues to the City. Under all "Without Annexation" scenarios, the City
loses money even if the County were to pass through all of its revenues to the City related
to the project. This is primarily due to two factors:
1. Under Measure Y, the City's effective sales tax rate is 1.5% whereas the County's
rate is 1% -- a 50% difference.
2. The City's TOT rate is 10% whereas the County's is 9%.
In addition, it should be noted that a sizable portion of this revenue would be revenue
being "passed back" to the City after the "transfer effect"to the County. And the General
Fund revenue transferring to the County would be revenue funding current operations,
such as public safety, parks and recreation, and open space acquisition to name a few, but
passed back solely for dedication to the interchange.
Other Issues of Concern
In addition to the results of the Kotin Study, other issues of concern regarding the City
assuming a lead project management and interchange financing role under present
circumstances are as follows:
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Prado Road Interchange.-ioject Management: Direction from Cot,...al Page 8
Risk of Poorly Per Project. The mid-point of sales tax revenues was included in
the projection scenarios by Allan Kotin. However, if the project does not perform well,
or fails, even the scenarios involving annexation with full-County transfer of property tax
revenues to the City could have quite severe impacts on the City, since the City's General
Fund would be obligated to pay the debt service, whether or not the project revenues are
sufficient. While the likelihood of total project failure might be slim (although we have
witnessed a failed mall in the past), a project this size is subject to the uncertainties
present in the regional and national marketplace and economy. (Through a number of
mechanisms, this potential downside was fully mitigated under the prior development
agreement for San Luis Marketplace project.)
Potential Risks to City's Borrowing Capacity and Bond Rating. If the City is involved
in a bond issuance for project of this size — with all of the responsibility for payback on
the City (and most of it assigned to the General Fund), there are likely to be negative
impacts on the City's borrowing ability and bond rating. Unlike when the project was
proposed in the City, there is no security, such as the shopping center itself, to provide
sufficient collateral. Since the interchange and other public assets will be owned by the
State, the only substantive source of collateral for the project is the City's commitment to
repay the debt. Lastly, the amount of debt service would far exceed the City's policy of
limiting debt service costs to 10% of General Fund revenue. (The City's policy allows
this ratio to be as high as 15% in extraordinary circumstances, but even in this case, the
ratio is likely to be higher than even 15%.)
Litigation. At present, there is a lawsuit challenging the validity of Measure J. That
lawsuit is set for a Fall 2007 Hearing in San Luis Obispo Superior Court before Judge
Piquet. Should Measure J be overturned, the Dalidio Ranch Project approvals would be
null and void as they were the result of a voter initiative. The applicant would then have
to begin the development review process in the County or apply for annexation and
review within the City. This situation is uncertain, at best, and thus Council may choose
to wait to take a position on this matter until after the resolution of this litigation.
Workload and Impacts on LOUR Interchange. The development of the LOVR
Interchange is an integral part of the City's Major City Goal for 2007-09 for Traffic
Congestion Relief, which the staff is pursing with great focus and attention. Our work
program to implement this goal includes focusing our SLOCOG funding priorities on this
interchange. Taking on the Prado Interchange at this time (a major undertaking and the
main reason the County staff recommended against them serving as project manager)
would dilute staff time available for the LOVR interchange and, potentially, State
funding available for LOVR, if we wished to pursue any State funding for Prado.
Other Issues. Unfortunately, there are a number of very complicated issues associated
with Measure J and the plan to develop a very large urban like project in the County, but
surrounded by the City. These issues include the proposal to build a road bisecting City
owned open space and City service impacts (such as impacts of the project on our police
and fire departments, street maintenance and other City services). And there are also
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Prado Road Interchange Project Management: Direction from Council Page 9
concerns regarding the ability of the project to receive State approvals for on-site water
and wastewater facilities.
Conclusion—Conditions are Not Right to Implement Policies
The City has many policies and goals, many of which are outlined in the General Plan.
However, as we know from our annual review of the General Plan, not all of these
policies and goals can be actively implemented at the same time. A wise policy or goal is
one thing; having the right conditions for implementing a policy or goal is another. There
are many considerations associated with the timing of goal implementation, including the
City's fiscal capacity, other competing goals and priority needs. In addition, the
conditions must be such that the pursuit of a goal does not place other important City
goals and interests at risk.
As outlined in the preceding discussion, the goal to eventually build an interchange at
Prado Road remains an appropriate one. Long term, the City's circulation system would
be greatly improved were there an interchange at Prado Road. However, in the opinion
of staff, the conditions simply are not right at this time to pursue this goal by
assuming project management. Such a role, under the present circumstances, would
place the City at great fiscal risk on several levels.
In the meantime, the City should follow developments in the pursuit of this project, and if
and when circumstances change more favorably for the City, then reconsider our
position. Changed circumstances would include resolution of the lawsuit, serious interest
by the property owner for annexation to the City, and receptivity by the developer for the
assumption of risk and financial contribution to the interchange and other related traffic
mitigations.
ALTERNATIVES
Direct Staff to Take a Lead Role At This Time. The Council could direct staff to begin
discussions with the County for assumption of project management responsibilities for
the Prado Road Interchange. If this option is chosen, then the Council should provide
staff with direction in terms of our subsequent conversations with the County and with
respect to ways that we might wish to diminish the impacts and risks noted above.
ATTACHMENTS
1. Vicinity Map
2. Minutes Board of Supervisor Meeting
3. Kotin Study
COUNCIL READING FILE
1. Lenthall Committee Letter
2. 2004 San Luis Marketplace EIR
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Board of Supervisors Page 13 of 16
ATTACHMENT �
Thereafter, on motion of Supervisor Bruce S. Gibson, seconded by
Supervisor K.H. 'Katcho' Achadjian,and on the following roll call vote:
AYES: Supervisors: Bruce S. Gibson, K.H. 'Katcho' Achadjian,
Harry L. Ovitt,James R. Patterson, Chairperson Jerry
Lenthall
NOES: None
ABSENT:None
the Board modifies the request to only include the southerly side of
Bradford Circle in this proposal and continues said hearing to
November 27,2007 at 9:00 a.m..
(SUPERVISOR K.H. 'KATCHO' ACHADJIAN IS NOW ABSENT.)
13 F-1 This is the time set for presentation on the Prado Road Overpass in relation
to the San Luis Obispo Marketplace Project; All Districts.
Staff Report
Mr. Noel King: Public Works Director, (SUPERVISOR K.H. 'KATCHO'
ACHADJIAN IS NOW PRESENT.); states the correct title for this is the
Dalidio Ranch Project not the Marketplace Project; provides a brief history
on this outlining the approval by the voters on Measure J which related to
this project; discusses the various departments that will or have reviewed this
project; discusses the Prado Road interchange project; indicates that
Measure J did not address this interchange; states they have met with other
agencies on this and provides a rough timeline and cost for the proposal;
addresses concerns that include ramp spacing and cost, comments on the
possible sources of funding; outlines the three options before the Board
today.
Mr. David Edge: County Administrative Officer, states staff is not here
today taking a position of either for or against this project.
Supervisor Achadjian: speaks regarding the lawsuit on Measure J and
questions why this isn't being discussed with the City; expresses his concern
to where the priorities are for road improvements and how Willow Road is
high on his priority list.
Mr. Edge: states he feels certain no current funding would go toward this
project.
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Board of Supervisors _ Page 14 of 16
ATTACHMENT Z
Mr. King: speaks to the time frames in the Measure J Ordinance for funding
this interchange.
Mr. Gere Sibbach: Auditor-Controller, addresses funding and debt to the
County on this; speaks to the limits on what can be borrowed without having
a negative impact on the County's credit rating; speaks to the increased
revenue for the City, if this were annexed.
(SUPERVISOR JAMES R. PATTERSON IS NOW ABSENT.)
Mr. Edge: addresses the bonding process and the City's role and who would
be indebted.
(SUPERVISOR JAMES R. PATTERSON IS NOW PRESENT.)
Mr. King: speaks further to the issue of bonding for projects; outlines
discussions with City staff.
Mr. Dave Flynn: Public Works, addresses what Caltrans has reviewed and
indicates there are number of things that still need to be reviewed including
issues relating to flooding in this area.
Mr. Eric Greening: speaks to issues that need to be addressed before
deciding how this interchange should be built.
Mr. Phil Henry: South County Advisory Council Chairperson, states he is
here with unanimous support from his council on their views and in
opposition to spending any County funds on this project.
Mr. Allen Settle: speaking as a member of the public, feels this should be a
City issue and the County shouldn't be involved and explains; supports
Option A.
Ms. Mila LeBarre: states there is no place for another interchange but feels
the existing interchanges should be upgraded first; supports Option A.
Ms. Rosemary Wilvert: addresses her concerns to the project and to the
letters sent out in support of Measure J by three Supervisors.
Ms. Phyllis Davies: addresses her concerns to passing cost on to County
residents when Supervisors said all along that wouldn't occur.
Ms.Jan Howell Marx: speaks regarding the letter she faxed yesterday from
Citizens Planning Responsibly; believes there are a lot of problems with
this project which is why it's been so long in getting approval; supports
Option A.
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Board of Supervisors Page 15 of 16
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ATTACHMENT °L
Mr. Michael Sullivan: supports Option A and explains his position.
Mr. Carl Lutrin: reads a letter from the Mayor of Arroyo Grande in
support of Option A.
Mr. Andrew Christie: Chapter Chair for the Sierra Club, addresses their
concerns to this project; urges the Board to support Option A.
Mr. Richard Kranzdorf: speaks to his concern that six months ago they
were being told this wouldn't cost the County taxpayers any money and not
hearing that now; urges the Board to not go any further with this.
Mr. Victor Montgomery: representing Dalidio, states this interchange is
needed with or without the Dalidio project.
Mr. Michael Morris: representing the Dalidio family, speaks in support of
Option C to meet and talk to the City representatives on how the interchange
should proceed; suggests funds will be raised from the project (Measure
J/Dalidio), sales tax, etc.; feels this project (Measure J/Dalidio) will go
forward with or without the interchange, but feels this is an important issue.
Mr. King: responds to public comment.
Board Members: address various concerns, issues and comments
regarding: the project being done through the City; support of Option A;
annexation to the City being the right way to handle this project; suggestion
that if it were annexed there wouldn't be a project based on the voter
approved project; the belief it is important to have conversations with the
City on this and other like issues; support for Option C; new funding is what
should be used and there shouldn't be any existing monies used; questions as
to how this interchange benefits the County as awhole, with staff
responding.
Board members: discuss the various options and their concerns as to
whether to be involved in the process at all.
Thereafter,on motion of Supervisor Chairperson Jerry Lenthall,
seconded by Supervisor Harry L. Ovitt, and on the following roll call
vote:
AYES: Supervisors: Chairperson Jerry Lenthall, Harry L. Ovitt,
K.H. 'Katcho' Achadjian,
NOES: Supervisors: Bruce S. Gibson,James R. Patterson
ABSENT:None
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Board of Supervisors Page 16 of 16
ATTACHMENT �
the Board directs the County Administrator to head a "discussion
team" to meet with City representatives to discuss where the City stands
on an overpass project and what king of fmancial sharing arrangement,
if any,amongst the interested parties would work, with the
understanding that only new revenues will be used,in other words no
existing County funds will be used.
Ms. Shelly Stanwick: Assistant City Administrator, states this will have go
to the City Council before staff can meet with Mr. Edge.
On motion duly made and unanimously carried, the Board of Supervisors of
the County of San Luis Obispo, and ex-officio the governing body of all
other special assessment and taxing districts for which said Board so acts,
does now adjourn to Tuesday, May 29, 2007 at 9:00 a.m. for an overview of
the Strategic Planning roundtable on Countywide infrastructure, in the first
floor training room of the County Government Center.
I, JULIE L. RODEWALD, County Clerk-Recorder and Ex-Officio Clerk of
the Board of Supervisors of the County of San Luis Obispo, and ex-officio
clerk of the governing body of all other special assessment and taxing
districts for which said Board so acts, do hereby certify that the foregoing is
a fair statement of the proceedings of the meeting held Tuesday, May 22,
2007, by the Board of Supervisors of the County of San Luis Obispo, and ex-
officio the governing body of all other special assessment and taxing districts
for which said Board so acts.
JULIE L. RODEWALD, County Clerk-Recorder
And Ex-Officio Clerk of the Board of Supervisors
By: /s/Vicki M. Shelby,
Deputy Clerk-Recorder
DATED: 6/6/07 ; vms
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INDK&IN ATTAC H M E N A 3 310.820.0900
213.6233841
Fax 213.623.4231
Allan D. Kotin &Associates
Real Estate Consulting for Public Private Joint Ventures
949 S. Hope Street,Suite 200, Los Angeles,CA 90015 akotin@adkotin.com
Memorandum Report
TO: City and County Staff, San Luis Obispo DATE: May 15,2007
FROM: Allan D. Kotin
RE: REVENUES AND COSTS FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO ROAD
INTERCHANGE WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE
WITH MEASURE J
In March, 2007 the County Government of San Luis Obispo and the City Government of the City of
San Luis Obispo designated selected staff members to coordinate a review of the implications of the
recently passed Measure J Initiative. Measure J approved the construction of a 530,000 square foot
shopping center on a property owned by Ernest Dalidio in unincorporated area adjacent to the City
of San Luis Obispo. Among other things, the measure identified a freeway interchange to be built at
Prado Road(hereafter the interchange or the Prado interchange)to service the shopping center.
The construction of this interchange poses a real challenge for the County of San Luis Obispo if the
project is not annexed to the City of San Luis Obispo and, by extension, also causes substantial
problems for the City of San Luis Obispo if the center is not annexed. The designated County/City
staff,jointly retained Allan D. Kotin&Associates (ADK&A)to investigate the impacts of financing
the Prado interchange on the two governments in the context of the benefits that would be generated
by the construction of the new shopping associated with Measure J in the form of sales taxes,
transient occupancy taxes, and real estate taxes.
ADK&A was selected in part because, for several years ending in 2005, ADK&A had been the
primary consultant to the City of San Luis Obispo in their review and processing of the financial
arrangements associated with the proposed shopping center. These financial arrangements dealt
explicitly with the allocation of the financial benefits and tax revenues from the center to a
reimbursement of costs incurred by the developer to finance the interchange.
In assessing the revenues and costs for alternative financing scenarios, ADK&A enlisted the support
of CB Richard Ellis Consulting and VSG Associates. These two firms, both of which have more
extensive retail market research experience than ADK&A, collaborated in the establishment of a
probable trading area and the determination of the likely transfer effects. These transfer effects
represent the extent to which the sales in the new San Luis Marketplace Center will represent a
transfer from retail outlets currently in the City of San Luis Obispo.
Subsequently, VSG Associates was retained by the county through ADK&A to investigate the
impact on center revenues of a failure to go forward and build the Prado interchange. The results of
that VSG analysis are also incorporated in one of the scenarios considered in this analysis and
memorandum report.
This report represents an attempt to present, as objectively as possible, the numeric estimates of
potential revenue and cost impacts on the two affected jurisdictions under alternative scenarios. The
inputs with respect to the cost of the interchange, the likely financing cost, and the traffic allocations
J �
RDK&R ATTACHMENTS
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
were all taken from sources provided by either the County or the City with no effort at independent
validation or review by ADK&A.
Furthermore, the estimates of retail sales, transient occupancy taxes, property taxes and the
associated transfer effects for these revenue sources are explicitly illustrative and do not represent
any independent and detailed effort to analyze the shopping center. Such a detailed effort would be
impossible since only the anchor tenants have been specified and the character and nature of the
project remains to be defined.
In many instances, information gained from the developer for the prior iteration of this project
within the City of San Luis Obispo has been used and, when used, is explicitly so identified.
There is no attempt here to characterize any alternative as in any way preferable or more desirable
than any other alternative. Instead, the intent is to provide information to allow the affected
jurisdictions to have a common basis for assessing the probable dollar impact from which to
formulate policy.
The balance of the report is organized into four sections, the first of which is an executive summary.
This is followed in the next section two which deals with the allocation of cost and the derivation of
a hypothetical bond. The third section provides a projection of revenues and the fourth section
combines the two effects to project the revenue cost balance to the City and County of San Luis
Obispo under alternative scenarios.
There are three appendices. Appendix A provides additional detailed calculations of revenue cost
balances under alternative scenarios. Since there are two different estimates of sales tax, a.high and
a low, and two different estimates of traffic allocation, a historical and one specified in Measure J,
the permutations of alternatives becomes quite large. Midpoint alternatives are considered in the
body of the report,but detailed calculations are provided in this appendix.
Appendix B is the memorandum from CB Richard Ellis Consulting and VSG Associates on trade
area definition and transfer while Appendix C is VSG Associates' memo on the impact on center
sales of a failure to build the interchange.
EXECUTIVE SUMMARY
Method of Approach
In brief, the method used to establish the probable impacts consisted of six successive steps: The
first step was to establish the gross and net cost of the nroiect.
The gross cost was assumed to be $57 million and the net cost, before the contributions by the City
of San Luis Obispo from its traffic impact fees,was estimated at$49 million.
Allan D.Kotin&Associates Page 2 5/15/2007
RDK&A
ATTacHMENT3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
The different of $8 million is attributable to the contribution committed by the developer to the
interchange in Measure J.
The second step is the allocation of cost and it is based, in turn, on two alternative traffic allocations.
One traffic allocation is the 26% of total Prado interchange traffic assigned to the shopping center in
Measure J. An alternative results from a series of City traffic studies prepared in connection with
the prior project which assigns to the center a total of 52.4% of the total traffic burden of the Prado
interchange.
Step three involves establishing a hypothetical bond by assigning an interest rate, and bond servicing
cost, to that portion of the interchange cost that is neither funded by a contribution by the developer
or, in some scenarios, by a contribution of approximately $6.6 million previously allocated from
traffic impact fees by the City of San Luis Obispo to this project. Please note that neither the
allocation of these fees to the project, nor any alternative configurations of responsibility for paying
the bond represent policy statements,but are merely intended to show the impacts of alternatives.
Step four involves the calculation of revenue benefits deriving from the operation and construction
of the center. Briefly stated, there are three classes of such benefits: (1) retail sales taxes which are
by far the largest public revenue generated; (2)transient occupancy tax associated with the proposed
150-room hotel; and(3)the property tax collected from the project.
It is significant that under current agreements between the City and County, the transient occupancy
tax and the sales tax would go to either the County or the City as a function of whether or not the
project is annexed to the City but the property tax would remain with the County with or without
annexation.
There is also consideration of the modest change in revenues associated with failure to construct an
interchange.
Seven Scenarios Considered
The analysis considered a total of seven alternatives, five of which assumed that there was no
annexation and are identified as "without annexation" and two of which are "with annexation". A
brief description of each of the seven alternatives is provided below together with the name assigned
to that alternative in the various charts.
1. Without Annexation-No Interchange Constructed
The net revenue to the County under this assumption is all the revenue from the project. This revenue is not in any way
offset by bond servicing costs for the interchange.
There is concurrently a calculation of the net unrecovered City loss which stems from the fact that a significant portion
of both the retail sales and transient occupancy sales will represent a transfer or a redirection of taxes now collected by
San Luis Obispo from outlets within its jurisdiction.
Allan D.Kotin&Associates Page 3 5/1-55/20077
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
2. Without Annexation-Full Bond Absorption with No City Pass Through of Fees
In this scenario, the County continues to receive all the revenues from the project, but bears the full expense of
construction of the interchange offset only by the$8 million contribution offered by the developer.
Of specific importance in this scenario is the fact that City traffic impact fees,both those from city wide use and also
those from two parcels known as Prado and Margarita within the City of San Luis Obispo that would benefit from the
interchange,are not passed through to the City.
3. Without Annexation-Full Bond Absorption after City Pass Through of Fees
This is an identical projection to alternative two,but in this instance, significant offset to the total cost of the project is
achieved by the contribution of city wide fees from the traffic impact fees collected by the City and from future
contributions made by the development of the Prado and Margarita parcels.
4. Without Annexation-County Bond Only with Allocation Scenario A(Prior Percentages)
This is the first of the scenarios to introduce the concept that the cost of the interchange should be shared by the two
jurisdictions (City and County) in proportion to the traffic load assigned to the center and to the City as a whole. In
scenario A, the prior percentage in which the center was assigned 52.4% of the project is used to assign that much
obligation to the County since this is a no annexation scenario. In this context,the pass-throughs referred to above are in
fact paid by the City and the City absorbs a share of the bond. In this context,the County pays only its allocated share of
the cost,but still retains all of the revenue benefits.
5. Without Annexation-County Bond Only with Allocation Scenario C(Dalidio 26%)
This scenario is identical in all respects to scenario 4 above, but reflects a different set of traffic percentages. A
significantly smaller portion of the cost burden is home by the County since the Measure J(Dalidio)specification is that
the center accounts for only 26%of the total cost.
Please note, however, that neither of the two allocations represents a current and up to date traffic study. While
consideration was given to preparing such a traffic study for this report, there was no time to complete such a study.
Whether and when such a study will be done remains to be determined.
6. With Annexation-No County Bond Obligation-County Keeps Property Tax
In this scenario,the project is annexed to the city and all responsibility for constructing the interchange is borne by the
City of San Luis Obispo. The City then enjoys, subject only to the transfer effects already identified, all of the net
revenue from sales tax and transient occupancy tax. Offsetting this,it has to bear the full cost of the bonds.
7. Without Annexation-No County Bond Obligation-County Transfers Property Tax to City
This is identical in all respects to alternative 6,but assumes that because the City is meeting the full obligation of this
project,the County sees fit to transfer back to the City the property taxes it collects from the shopping center.
Allan D.Kotin&Associates Page 4 5/15/2007
RDK&R ATTACHMENT3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
SUMMARY RESULTS
Exhibit 1 provides a highly summarized tabulation of the results of the ADK&A analysis in this
project.
The analysis is presented for each of the seven scenarios described above in two columns, one
representing the total amount of money in millions of dollars and the other representing the present
value of this flow of money discounted at 6%.
Scenario 1 —No Interchange
From the County point of view, the maximum benefit is in the first scenario in which there is no
interchange constructed and it received $86 million while the City loses$24 million. Expressed in
present value terms,that is a$41 million benefit to the County and$11.3 million loss to the City.
Scenarios 2 and 3—County Pays Full Bond With and Without City Pass-Through
The worst position for the County is scenario two in which it has to bear the full cost of the
interchange and the City does not elect to pass through those traffic impact fees which it might
otherwise allocate to the construction of the Prado interchange. In this event, the County's whole
dollar loss is $21 million and the present value is $14.4 million. The City still loses $24 million in
whole dollars and$11.3 million in present value.
Alternative three shows the mitigation of this impact for the County should the City elect to pass
through its traffic impact fees. This converts the County position from a $21 million loss to an $11
million surplus in whole dollars in present value and the County's position is essentially neutral with
a$1.9 million present value benefit.
The City remains at the same disadvantage with a $24 million whole dollar loss and $11.3 present
value loss.
Scenarios 4 and 5—City and County Share Bond According to Traffic Allocation
In scenario four and five in which the City agrees to absorb some of the actual cost of the project as
a function of the traffic allocation model, the situation is materially improved for the County and
materially worsened for the City. Without exploring the details, the County's position is either a
plus $27 million or a plus $52 million depending on the choice of traffic allocation while the City's
position is approximately a minus $40 million or a minus $65 million. In present value terms, the
County is between $10 and $23 million surplus while the City is between $26 and $51 million
deficit.
Allan D.Kotin&Associates Page 5 5/15/2007
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RDKJ1ATTAcHMENT3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
EXHIBIT 1 Summary of Revenue vs. Cost Balance over Time #
Without and With Annexation-Midpoint Retail Sales Projections(in$Millions)
Total PV 6.051
WTTHOUTANNEXATION
NO INTERCHANGE"CONSTRUCTED
NET REVENUE TO COUNTY' 86.0 41.2
NET UNRECOVERED CITY LOSS (24.1) (11.3)
FULL BOND ABSORPTION WITH NO CITYPASS THROUGH OF FEES
Total Tax Revenue to County 89.4 42.1
Less:Total Bond Service 11 (355.)
NET REVENUE TO COUNTY .(21.1) (14.4)
NET UNRECOVERED CITY LOSS" (24.1) (11.3)
FULL.BOND ABSORPTION AFTER CITY PASSTHROUGH OF FEES
Total Tax Revenue to County 89.4 42.1
Less:Total Bond Service (78.7) 40.3
NET REVENUE TO COUNTY 10.7 1.9
NET UNRECOVERED CRY LASS (24.1) (11.3)
COUNTY BOND ONLY WITH ALLOCATION SCENARIO A(PRIOR PERCENTAGES)
Total Tax Revenue to County 89.4 42.1
Less:County Bond Service (63.01" 13321
NET REVENUE TO COUNTY 26.5 9.9
City Bond Cost (15.7) (15.1)
Less:City Revenue Loss (24.11. (11.31
NET UNRECOVERED CITY LOSS (39.8) (26A)
COUNTY BOND ONLY WITH ALLOCATION SCENARIO C(DALIDIO 26°/1)
Total Tax Revenue to County 89.4 42.1
Less:County Bond Service (37.1 (19.31
NET REVENUE TO COUNTY 51.7 22.9
City Bond Cost (41.0) (39.4)
Less:City Revenue Loss 134,1 L1]31
NET UNRECOVERED CITY LOSS (65.0)
WITHANNEXATION - - --- _
NO COUNTY BOND OBLIGATION-COUNTY KEEPS PROPERTY TAX
Property Tax Revenues to County 14,0 ¢,7_
NET REVENUE TO COUNTY 14.0 6.7
Total Net City Tax Revenues 812 38.1
Less: City Bond Service (78.714( 0.3)
NET REVENUE TO CITY 2.5 (2.1)
NO COUNTY BOND OBLIGATION_ -COUNTY TRANSFERS PROPERTY TAX TO CITY
NET REVENUE TO COUNTY 0.0 0.0
Total Net City Tax Revenues 81.2 38.1
Add:Transfer of County Property Tax 14.0 6.7
Less: City Bond Service (78.71 (40.31
NET REVENUE TO CITY 16.5 4.6
#CRITICAL NOTE-In this preliminary analysls,n6 formal consideration is given to the additional service costs Incurred
by the City or county,although clearly there will be significant additional service costs,some of which would appear to
require services by the City whether or not the project Is annexed. These additional service costs would partially offset
the revenues(or Increase the deficit)if Included.
Reflects midpoint deductions over 25 yam per Victor Grgas Study on no Interchange of $3.48.million with PV of$0.96
City position assumed to be unchanged since fees not passed through would not be collected
Allan D.Kotin&Associates Page 6 5/15/2007
7 I
INDK&n ATTACHMENT3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
Scenarios 6 and 7—Annexation—Current and Altered Property Tax Arrangements
The situation changes significantly with annexation. If the County keeps its property tax, then the
"With Annexation" scenario still produces $14 million of whole dollar benefit for the County with a
$6.7 million present value. The City is in more or less a break-even situation if the County keeps its
property tax. It is $2.6 million surplus in whole dollars, but because of the timing it is actually at a
negative present value of$2.1 million.
In the final scenario, should the County agree to transfer its property tax to the City, with annexation
the City now has a surplus of approximately $16.5 million in whole dollars and $4.6 million in
present value while the County is fiscally neutral and unaffected.
FACTORS NOT CONSIDERED IN THE ANALYSIS
The most important factor not considered in the analysis is the provision of municipal service costs.
It is manifest that the construction of a shopping of this size will cause the governing jurisdiction to
incur significant, but at this point unquantified, municipal service costs. These will include fire life
safety,traffic impacts and perhaps others as well.
What is of particular relevance here is that the location of the center almost completely surrounded
by the City of San Luis Obispo suggests that these municipal service costs will accrue in part to the
City of San Luis Obispo whether or not the project is annexed. Because in cases of emergency the
nearest source of support will be the City, rather than the County, it is inevitable that even without
annexation,there will be some municipal service costs incurred by the City of San Luis Obispo.
There is also one of the seven scenarios that presents a particular challenge for the City of San Luis
Obispo and that is the no interchange scenario. As described in Appendix C, the report by VSG
Associates, one impact of a failure to construct the Prado interchange will be substantial increasing
traffic congestion. While the powerful and unique draw of the two anchor tenants of the San Luis
Marketplace Center, Target and Lowe's, is so strong as to overcome traffic problems. This may not
apply to satellite stores. In fact, traffic gridlock is likely to have a deleterious effect not only on the
satellite stores in the San Luis Marketplace, but also on the adjacent stores relying on the same
traffic patterns in the Madonna Plaza Center and the Promenade Center, both of which are in the
City of San Luis Obispo.
While no attempt has been made to identify these impacts, it should be noted that without the Prado
Road interchange, there is likely to be some deterioration, particular in the smaller non-anchor
stores, in these two centers.
Allan D. Kotin&Associates Page 7 5/15/2007
01 —.21
RDK&IN ATTACHMENT 3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
ALLOCATION OF COST AND DERIVATION OF BOND
As previously described in the executive summary, the total estimated cost of the interchange is
$57.0 million.
Of this total, $8.0 million will be provided by the developer according to the provisions of Measure
J. Of the remaining $49 million, approximately $6.6 was previously committed by the City of San
Luis Obispo from its traffic impact fees. Should that prior commitment continue to apply, the net
amount of the interchange to be funded is $42.4 million.
There are three bases for the allocation of these costs among the various parties. One is the prior
City calculation in which 52.4% of the total traffic impact or load of the interchange is due to the
shopping center and the other is the one specified by Dalidio in Measure J which allocates only 26%
of the total traffic load for the interchange to the new shopping center.
Allan D. Kotin&Associates Page 8 5/15/2007
J
RDK,&,fl
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE.
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
Exhibit 2 ALLOCATION OF INTERCHANGE COST AND ASSUMED BOND PAYMENT'S
&sed on Trzo D Allaradons and Pass Through of City Fees
%ALLOCATION OF COSTS S ALLOCATION OF COSTS
SCENARIO A SCENARIO B SCENARIO C SCEN.A SCEN.B SC13L C
PER13N.m10 PRORCITY PERUPDATO ONJOIO
Estimated PRORCTIY PERUPOATED W-ASIAEJ) CALWA- TRAFFIC WA3 J)
Coat CALCULAMON TRAFFIC STIJOY ALLOCATION PON. STUDY ALLOC.
bene Trial boom Trial bane Total - Trial - -- -Trial
Frame Dedx7hg Rawus Dads✓bg Previaua Ceodng D"tang Trial DeAtchnit DeWchg
N INTERCHANGE DEVELOPMENT CAST Cara Pw,Cont Cant Rev.Cont Cam Pev.Cat Rev.Cont. Prey.Caul Prey.Can
W/THDUTAAMEXATTON
A Trial Eat,- Cast of interchange 57.000 -
B Less Dalido O M ition in Measure J 9UM
C Trial Cost of Interdraged TO BE PUBLICLY FUNDED =A-B 49.000 100.00% 100.00%
D Less PieNaaly atrrvdtted kBON try City d SLA (6.587)
E Net Cost AFTER DEVELOPER CONTRIBUTION 42.413 100.00% 100.00% 100.00°
F CITY OF SLO-OUar New Developnad Share(FLI) 29.909/. 29.90% 56.30% 56.
G Lege:Share represented by PreviorS G-TAI nerd =DIC -13,44 -13.44
H CITY OF SLA-Over New Developnart Share(NeO 16.46% 42.86% 6.980 18,177
I Magadle 13.00% 13.00% 13.00% 13. 5,514 5,514
J Prado 4.70% 4.70%, 4.70% 4.7 1,983 1,993
K Retraining ing Steed to be Funded by Carter(Cordo =EI+I-J .52.40% 65.81 26.00% 39.44 27,926 16,729
TOTALS 42.413 . .42,413
YMANrmwn0N
AA CITY OF SLO-All rot allocated to spedM COW sites 82.30% 82. 82.30% 34.906 34,906
AS Magalta 13.00% 13.00% 13.009: 5,514 5.514
AC Prado 4.70% 4.70% 4.70% 1.993 1,993
SCENARIO A_ _ SCENARIO B_ - SCENARIO C SCEN A WEN B SCEN.C
PRIOR CRY PEkI.PDATEC OALNIO
CALCULA• TRAFFIC (MEAS.J)
N�BOND AMOUNT AND BOND PAYMENTS ALLOCATION-ANNUAL BOND PAYMENTS TION STUDY ALLOC.
WTHOUTAMVEXAnoN
L Net 4rrirg 42.413
M Add to Issuance costs,resales,etc 21.0% 8,907
N Trial Bond Antoaa 51,320
O Interest Rate(Captor) 5.5%'
P Told Tenn d Bond(yeas) 25
0 Annual PWneM(Evel AnloNzdlan) 3,826
1 Less Magadta 13.00% 0.00% 13. 497 497
I Less Prado 4,70% 0. 4.7 180 180
Net Annual Payment Alter Margarita and Prado 8230% 100.00% 82. 3,149 3,149
H CITY OF SLO-Other New Oeelopnee Share(Net) 16.40% 0.00% 42.86 630 1.640
J Rarreining Shared to be Funded by Center(Camy) 65.84% 100.00% - ..39.44 .2.519 . 1,SD9
MMANNEXAnoN
AA CITY OF SLO-All not allocated to spedeo COW Sims 82.30°/ 82.30% 02. 3,149 3,149 3.149
AB Margarita 13 13.00% 13.00% 497 497 497
AS Prado 4,70Y 4.70% a.70% 180 180 180
NOTES
A Pa Caaayesammnhwatasymmnedlig I ShaeseltrffiedinprhrrshdYarld VMP Wnamma{pav ;pwmnbpeffMchmp
B PalloasueJ J gmbeJaededudmis CR11CALNPUT=liahkper tralmeWdya MeaueJ
C CAlogatin L SwlneC
D Rapdoa*0byO oISLOasPuHsled M Eaft4dby OgdSLOFianm DW M N
E CalcaalM N Cakdatim
F Fd at=Par prior aalysisbyCilydSLOW p88std 0 Asan"MbyAOK&AarA by SLO My I-Dador
G C,Nofaaal P Assupphon byADK3A w6 ad M SLO City France Director
H Thsashaeoye hlomse of to CIO ahTrypim overiaprior wmdmeN 0 Calculation booed on esanpemofoondal payment
Allan D.Kotin&Associates Page 9 5/15/2007
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ATTACHMENT 3
RDKJ1
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
As can be seen from Exhibit 2, the share of the center allocated to the County is $27.9 million in the
case of scenario A and$16.7 million in scenario C.
Also shown in Exhibit 2 is the derivation of a hypothetical bond. Please be aware, however, that no
formal financial analysis has been undertaken by either the City or the County. What is presented
here is a simulation by ADK&A of how the cost of the interchange could be paid for over time. An
underlying premise for the entire analysis is that neither party has the resources or the inclination to
pay for the interchange with a single check. Based on some prior analysis done by ADK&A for an
earlier version of the same project, a hypothetical coupon interest rate of 5.5%was assigned together
with a bond load factor for capitalized interest, issuance costs and reserves of 21%. What this does
is to convert the $42.4 million in cost into a $51.3 million bond. The total annual debt service for
this bond is $3.826 million.
Because the parcels within the City of San Luis Obispo identified as Margarita and Prado will
benefit from this project, 13% of the cost of the project (net of general contributions) was assigned
to Margarita and 4.7% to Prado. Subtracting these two items from the $3.826 million leaves a net
bonding cost of $3.149 million which is divided as shown at the bottom of Exhibit 2 under the
designation`without annexation" as $2.519 million(Scenario A) or $1.509 million (Scenario C) for
the County and the corresponding complement amount for the City. With annexation, there is no
County cost and a similar allocation is shown as between the City of San Luis Obispo as a whole
and the specific parcel portion borne Margarita and Prado.
Please be aware, however, that there is no automatic requirement that the City pass through to the
County the benefits associated with either $6.6 million and accumulated traffic impact fees or the
allocation of cost to the Prado and Margarita properties. In the event that these are not provided,
then the cost of the project is a full $49 million. This is the $57 million minus only the $8 million
contributed by the developer. Associated with the $49 million cost is a total bond service of
$4,000,420 per year. This is specifically relevant to scenario two, alternative two, as shown in the
executive summary.
Projection of Revenues
The projection of revenues involves a multi-step calculation in which fust the total revenues from
the center are established. These are the bases for the various tax revenues and include the total
taxable retail sales and the total rooms' revenue subject to transient occupancy tax. Because there
are slight differences in the tax rates for both sales tax and transient occupancy between the County
and the City, then separate estimates are generated for the sales tax and property tax with and
without annexation. These and other effects are shown in the following Exhibit 3
One consequence of this analysis is also that the City's loss due to a transfer effect of retails sales
has to be calculated at 1.5% of the sales loss whereas the County's benefit is only 1% of the sales
gain.
Allan D.Kotin&Associates Page 10 5/15/2007
02:7 .Zy
J
RDK&R ATTACHMENT
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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Allan D.Kotin&Associates Page 11 5/15/2007
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
A similar situation exists with respect to the transient and occupancy tax which is 10% in the City
and 9% in the County. Exhibit 3 provides a calculation for both the high and low retail sales as well
as a supplemental calculation of the midpoint sales which are used in the summary in Exhibit 1.
The assumptions underlying the calculation of sales tax benefits are shown in the assumptions block
while this is a followed by a 30 year projection of the available revenues based generally on a 2.5%
annual increase except for property taxes which are assumed to increase at 2%. After computing the
available revenues,the combined totals without annexation are computed. This shows the amount of
revenue to the County and the amount of revenue loss to the City given the assumed transfer effects.
The third sections repeats the analysis but this time assuming that there is annexation in which the
City receives not all of the benefits, but all of the benefits except for the transfer effects because
whether or not the project is in San Luis Obispo, part of its sales and part of its hotel revenue will
represent a reduction in other revenues that the City would otherwise receive.
The bottom portion of the table is a simple arithmetic calculation of the midpoint sales intended to
facilitate simple comparison.
PROJECTION OF REVENUE/COST BALANCE
A series of exhibits are presented in Appendix A for the different allocation scenarios associated
with the different traffic analyses and for the different sales tax forecasts, high and low. For ease of
reference, a single example exhibit is presented here. This follows as Exhibit 4.
Allan D.Kotin&Associates Page 12 5/15/2007
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
In this exhibit there is a calculation of four of the six scenarios presented in the summary. These
four scenarios are full bond absorption and County bond only without annexation. With annexation
there is no County bond obligation and without annexation no pass-throughs.
The other three scenarios presented in the summary table are in fact simple numeric transpositions or
recombinations of data already available in the others. In Exhibit 5, the left hand two columns show
the total and present value, which are the same numbers that were presented in the summary. There
is a projection by year of each of the impacts.
Allan D.Kotin&Associates Page 14 5/15/2007
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
APPENDIX A
Additional Detailed Calculations
Exhibit A-1: High Retail Sales; Prior Allocation Method
Exhibit A-2: Low Retail Sales, Prior Allocation Method
Exhibit A-3: Midpoint Retail Sales, Prior Allocation Method
Exhibit A-4: High Retail Sales, Dalidio Allocation Method
Exhibit A-5: Low Retail Sales, Dalidio Allocation Method
Exhibit A-6: Midpoint Retail Sales, Dalidio Allocation Method
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE.PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RDK&R ATTAcHMENT3
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENTOFSAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
APPENDIX B
Memorandum by VSG Associates and CB Richard Ellis
Consulting on Trade Area and Transfer Effects
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
April 16, 2007
TO: Shelly Stanwyck, City of San Luis Obispo
Will Clemens, County of San Luis Obispo
CC: Andrea McGarvey, Kami Griffin and Dave Flynn, County of San Luis Obispo
Ken Hampian, Jay Walter and Tim Bochum, City of San Luis Obispo
Allan Kotin, Allan D. Kotin &Associates
FROM: Victor Grgas, VSG &Associates
RE: San Luis Obispo Marketplace—Retail Sales Tax Transfer
This memorandum summarizes the estimated retail sales tax transfer effects that are
anticipated to occur from the development of the proposed San Luis Obispo Marketplace
shopping center project as approved under the auspices of the recent County wide ballot
measure known as "Measure J." This analysis represents the best judgment, input and
consensus of me, Thomas Jirovsky of CB Richard Ellis Consulting, and Victor Grgas of
VSG & Associates, each of whom possess extensive first-hand knowledge and substantial
experience in the retail-related real estate development industry. In addition, the findings
contained herein are based upon review of existing relevant documents related to the
proposed project, recent personal examination of all of the competing centers located
between Paso Robles and Santa Maria, as well as prior knowledge of the greater San Luis
Obispo market place and previous formal analysis that I have conducted regarding the
downtown area on behalf of the City of San Luis Obispo. This memo and the
accompanying exhibits cover the following:
1. Assumptions about the San Luis Obispo Marketplace project and anchor stores
2. Estimated trade area for the proposed project
3. Anticipated sales tax transfer effects for Target, Lowe's and small shop space (GLA)
SLO Marketplace—Assumed Project Description/Anchors
While no formal site plans have yet been submitted by the developer for the proposed
project, the text of Measure J indicates that the project will be an open-air shopping center
comprising a total of approximately 530,000 square feet of building area. It is assumed that
the anchor tenants (and approximate sizes) for the proposed project include a Target
(143,000 sf) and a Lowe's (142,000 sf). In addition, the project will contain approximately
245,000 of GLA space potentially including mini-anchors (not .yet identified) as well as a
variety of small shops and fast food restaurant pads. The precise categories of
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merchandise that will be sold from the small stores contained in the project is still uncertain,
however, it is likely to include stores typically found in similar centers including so-called
"soft goods" (i.e., apparel, accessories, beauty, etc.), personal services, and specialty
stores. No supermarket (nor full line grocery sales) is believed to be a part of the
development program.
It is important to note that the two proposed anchor tenants (Target and Lowe's) represent
somewhat new or novel entries into the existing market dynamics of San Luis Obispo and
the overall region. While there are currently two existing Target stores (see Exhibit 1)
located in San Luis Obispo County, from the perspective of the city of San Luis Obispo,
each are located at the "far reaches" of the trade area (the Target in Paso Robles is
approximately 21 miles away and the Target in Santa Maria is approximately 28 miles
away). The proposed Lowe's would represent its first entry in San Luis Obispo County.
Target can be categorized as a discount, yet chic, general merchandise chain store offering
a wide variety of goods including apparel, jewelry and accessories, home decor, home
electronics, videos and music, certain dry-packaged food goods, cosmetics, gardening,
sporting and camping equipment, and other items. Target and its larger grocery-carrying
incarnation, SuperTarget, have carved out a niche by offering more upscale, fashion-
forward merchandise than rivals Wal-Mart and Kmart.Target is now the nation's # 2
discount store (behind Walmart), operating over 1,500 stores nation wide.
Lowe's is the second-largest home improvement retailer in the world (behind Home Depot)
operating over 1,300 stores nation wide. While Lowe's and Home Depot sell similar
hardware, building and gardening supplies, Home Depot is perceived as catering more to
the needs of contractors, tradesmen and do-it-yourselfers whereas Lowe's is perceived as
being somewhat more "home decor" oriented and features product lines (including top-of-
the-line home appliances) notably aimed at female customers. Similar in size and format,
Home Depot and Lowe's are also somewhat distinguished from each other in presentation
"feel" (i.e., Home Depot's concrete floors, warehouse type illumination and shelving as
compared to that of Lowe's).
SLO Marketplace—Trade Area
Both Target and Lowe's represent somewhat unique destination retail opportunities for
shoppers located in the San Luis Obispo and the surrounding area. While it is certain that
the existing Target stores in Paso Robles and Santa Maria are currently drawing customers
from San Luis Obispo, having a Target store conveniently located will clearly change the
current shopping patterns for San Luis Obispo's residents who shop at Target. Essentially,
a new Target at the San Luis Obispo Marketplace will be the main driver for the definition of
the new center's trade area and will serve both as an attractive and desirable merchandiser
for prospective patrons in San Luis Obispo and the surrounding area, and fills the "hole in
the donut" that currently exists in the greater market region.
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR.FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
Similarly, because this will represent its first entry into the market, Lowe's will likely provide
some initial added drawing power to the proposed center because of the "novelty effect." In
the long-haul, however, Lowe's will essentially be competing for a substantial share of the
market that is currently being enjoyed by The Home Depot Center located on Los Osos in
San Luis Obispo. The trade area for the existing Home Depot is more "localized" than that
of the proposed new Target.
In an effort to determine the physical extent of the likely trade area for the proposed new
San Luis Obispo Marketplace, distance estimates (see Exhibit 2) and drive-time
comparisons where made to existing competitive shopping centers as far north as Paso
Robles and south as Santa Maria. While each competitive center provides a somewhat
different (and therefore uniquely attractive) line-up of retail tenants, each is sufficiently
comparable to the proposed new center (along with the existing adjacent San Luis Obispo
Promenade and Madonna Plaza shopping centers) so as t0 provide prospective shoppers
with viable alternative destination choices that are likely to be governed both by the
convenience of freeway drive time (approximately 17 minutes maximum) and natural
barriers.
Exhibit 3 & 4 show the estimated trade area map and corresponding demographic
characteristics for the proposed new San Luis Obispo Marketplace. Roughly speaking, the
projected trade area encompasses the region extending from Morro Bay to the west, to
mid-way towards Atascadero to the north, to Arroyo Grande to the south and contains an
estimated population approaching 99,000 people.
Anticipated Sales Tax Transfer Effects
Typically, a Target store does in the range of $25-$50 million in total sales. For the San
Luis Obispo Target store, it is estimated that total sales will be in the $40-$50 million dollar
range. Although Target will provide an array of merchandise offerings that may have a
competitive effect on some of the city's current retail offerings, it is likely that Target will
help to expand the market somewhat by attracting patrons from within San Luis Obispo
itself as well as Morro Bay, Los Osos, Pismo Beach, Arroyo Grande, Grover Beach and
perhaps even further south who are currently "shopping" Target at their existing stores
located either in Paso Robles or Santa Maria. In addition, there is good chance that
additional cross shopping will occur at the adjacent centers (SLO Promenade and
Madonna Plaza) by patrons who will find the new Target and nearby stores more
convenient to them. Accordingly, retail sales transfers from San Luis Obispo resulting from
the new Target are likely to be at the low end of the spectrum (10% or less).
In the category of home improvement and building supplies, the introduction of a new
Lowe's in the market place will likely result in a more significant sales transfer effect,
perhaps on the order of 30% or more, for existing merchandisers in San Luis Obispo and
the region, including Home Depot and other merchants competing for these types of
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
expenditures. Typically, a Lowe's store does between $40-50 million in total sales volume.
As stated before, the novelty effect for a new Lowe's will initially serve to expand the
market somewhat by drawing customers from farther reaches who are either interested in
comparison shopping, are curious or who may find it somewhat more convenient to shop
there. However, in the overall, Lowe's will be competing with Home Depot and the other
hardware and appliance (and to a lesser extent furniture) retailers for a larger slice of the
existing market "pie."
From the standpoint of the transfer effects resulting from the GLA space and sub-anchors
located in the proposed project, historic evidence suggest that a range of between 20-30%
is likely to occur for projects of this type.
For the purpose of calculating potential transfer effects on sales for San Luis Obispo, this
analysis assumes both "high" and "low" transfer rates for Target, Lowe's and the remaining
GLA in the center. The impacts are summarized in the table below:
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
ALTERNATIVE ESTIMATES OF DOLLAR SALES TRANSFER
GLA including Sub-
Target Lowe's anchors TOTAL
Sales Area 143,000 142,000 245,000 530,000
High Estimates (a)
Sales/sf 300
Total Sales 50,000,000 50,000,000 73,500,000 173,500,000
Highest Transfer
(b) 10% 35% 30% 26%
Lost Sales 5,000,000 17,500,000 22,050,000 44,550,000
Low Estimates (c)
Sales/sf 300
Total Sales 40,000,000 40,000,000 73,500,000 153,500,000
Lowest Transfer
(d) 10% 35% 20% 21%
Lost Sales 4,000,000 14,000,000 14,700,000 32,700,000
a Highest sales and highest GIA transfer
b Assumes significant poaching and apparel stores
c. Lowest sales and lowest GLA transfer
As is evident in the foregoing, the potential impacts from the standpoint of transfer effects
range from a low of $32.7 million to high of $44.5 million in sales. It is further worth noting
that largest proportions will be nearly equally split between Lowe's and the remaining GLA
type stores.
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RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
APPENDIX C
VSG Associates Memorandum on the Impact of Not
Constructing the Prado Interchange
April 16, 2007
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Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE NTH MEASURE J
TO: Shelly Stanwyck, City of San Luis Obispo
Will Clemens, County of San Luis Obispo
CC: Andrea McGarvey, Kami Griffin and Dave Flynn, County of San Luis Obispo
Ken Hampian, Jay Walter and Tim Bochum, City of San Luis Obispo
Allan Kotin, Allan D. Kotin &Associates
FROM: Victor Grgas, VSG &Associates
RE: San Luis Obispo Marketplace—Retail Sales Tax Transfer
San Luis Obispo County (the "County") seeks an assessment and professional opinion of
probable impacts that a new freeway interchange at Prado Road would have on the
development of the. proposed San Luis Obispo Marketplace regional shopping center
project (the "Project") as recently approved under the auspices of so-called ballot Measure
°J." The County wishes to better understand the likely impacts that may result to the
proposed Project, including its ability to attract tenants of the type typically found in similar
regional shopping centers, as well as the potential impacts to adjacent and nearby retail
uses, if the interchange is built or not. This memorandum summarizes the anticipated
effects that are likely to occur under both scenarios.
The analysis and findings contained herein represents my best judgment and opinion
based upon the following: 1.) review of existing relevant documents, site plans, etc., related
to the proposed Project, 2.) discussions and input of knowledgeable County and City of
San Luis Obispo staff, 3.) discussions, input and feedback from knowledgeable retail
development professionals who are actively developing projects of similar scope and size
elsewhere in California, 4.) discussions and input from retail leasing specialists who are
active in the San Luis Obispo county market area, 5.) feedback from selected national retail
tenants that are typically found in similar centers, 6.) personal first-hand observation of
existing traffic patterns relating to the Project site, 7.) extensive first-hand knowledge and
substantial experience in the retail-related real estate development industry and personal
prior knowledge of the greater San Luis Obispo market place from a retail shopping center
perspective.
This memorandum is not intended to be a technical analysis of existing or prospective
traffic conditions related to the Project. Such analysis, while potentially useful to the
County (and City) in terms of understanding actual traffic related impacts that are likely to
result from the Project, is beyond the scope of this assignment. Rather, this analysis is
limited to an admittedly judgmental and partially anecdotal assessment of how the
development and operation of the proposed San Luis Marketplace Shopping Center might
Allan D. Kotin&Associates Page 29 5/15/2007
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ADK&IN
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
change if the Prado Road interchange at Highway 101 was not constructed. Accordingly,
this memorandum covers the following:
4. Assumptions about the proposed Project and anchor stores
5. Anticipated tenant mix for the proposed Project
6. Site location advantages and existing access issues
7. Anticipated impacts to the proposed Project with and without the interchange
8. Possible traffic related outcomes
9. Anticipated impacts to retail sales
SLO Marketplace—Assumed Project Description/Anchors
While no formal site plans have yet been submitted by the developer for the proposed
Project, the text of Measure J and related site plan as depicted on the Dalidio Ranch
Project proponent's web site (http://www.dalidioranch.com) indicates that it will be an open-
air shopping center comprising a total of approximately 530,000 square feet of building
area. In addition, the proposed Project contains a 150-room hotel as well as a 6 acre
business park comprising approximately 198,000 sf of office space. The site plan also
depicts adjacent active recreation and open space uses including soccer fields,
playgrounds, etc.
It is assumed that the major anchor tenants (and approximate sizes) a for the proposed
retail component of the Project include a Target Department Store (143,000 sf) and a
Lowe's home Improvement Center (142,000 sf). In addition, there is approximately 245,000
square feetb of GLA space potentially including mini-anchors and a variety of small shops
and fastfood restaurant pads. The Project would likely be built on phased basis.
There are currently two existing Target stores that serve San Luis Obispo county
consumers. From the perspective of the city of San Luis Obispo, each are located at the
"far reaches" of the trade area (the Target in Paso Robles is approximately 21 miles away
and the Target in Santa Maria is approximately 28 miles away). The proposed Lowe's is its
first entry in San Luis Obispo County and will likely provide added drawing power to the
proposed center because of its "novelty effect." Both Target and Lowe's represent powerful
and attractive destination retail opportunities that will clearly change the current shopping
patterns for many San Luis Obispo area shoppers.
Anticipated Tenant Mix
No store sizes were specified in Measure J. While the sizes assumed are those previously specified by the developer of
the center,it is possible that they may differ somewhat when precise plans are revealed in the future.
b Calculated by subtraction of the two anchors from the 530,000 sf specified in Measure J.
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The precise categories of merchandise that will be sold from the non-anchor stores
contained in the project are still uncertain. However, the project proponent's web site
currently suggests that there will be "less retail space for smaller retail stores" and,
therefore, more space dedicated to so-called mini-anchor or larger format specialty tenants.
Examples cited include TJ Maxx & More, SportMart, as well as Old Navy, Lane Bryant and
Pier 1 Imports.
Beyond the major anchor stores, retail tenants typically found in similar type centers
provide a wide array of goods and services. These include "soft goods" (i.e., men and
women's apparel, shoes, accessories, etc.), as well as personal services such as health
and beauty, banking and financial, specialty stores including children's apparel and toys,
electronics and appliances, furniture and home accessories, office supplies, books, records
and videos, specialty grocery and supermarkets, drug stores, auto supplies, restaurants
including sit-down and fast food, and movie theaters.
In addition, it is becoming increasingly common for regional shopping centers to
incorporate certain "civic and public" elements including libraries, cultural and community
centers, parks, plazas and other uses in an effort to potentially increase shopper
patronage.
It is important to note two critical aspects in the development of these types of shopping
centers; first, major anchors (predominately national chains) act as "bell cows" with respect
to the ability of the developer to lease or sell the remaining space in the center. Without
doubt, a commitment by the likes of a Target or a Lowe's to a potential shopping center site
"cements that location." Simply stated, where Target and Lowe's go, so go the rest
(especially national brand tenants, many of whom have anchor co-tenancy requirements).
The second critical aspect is that the tenant mix the Project is likely to achieve is also
influenced by the existing mix of tenants that are located in adjacent and nearby shopping
centers. While there are certainly retail tenants who are willing to locate in close proximity
(if not side by side) to their direct competitors, it is more likely that the Project's tenants (at
least initially) will be somewhat complementary to the existing mix of tenants located in the
adjacent San Luis Obispo Promenade and Madonna Plaza shopping centers. If the
proposed site plan as currently depicted is truly representative of the developer's intent,
there are only a limited number (perhaps 8 or less) of likely national tenants remaining who
are not currently in the marketplace and that "fit the building footprint" for the remaining
larger sized stores. With respect to the few remaining small stores, the prospective pool is
somewhat larger and would likely include both national and certain key local tenants. Most
importantly, the combined effect of the Project's tenants combined with those in the existing
adjacent centers creates a powerful retail venue that will clearly attract large numbers of
shoppers.
Site Location Advantages and Existing Access Issues
Allan D.Kotin&Associates Page 31 5/15/2007
r _?
RDK&A ATTACHMENT
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
If the most important axiom for successful real estate development is "location, location,
location," then it is followed closely by another axiom "access, access, access." The
proposed Project site enjoys several key location advantages. First, the site has excellent
visibility from the freeway. Anchor tenants especially highly prize this kind of "freeway
exposure." Second, the site is located next to other existing successful regional retail
destinations. Third, the site is relatively large and can accommodate a significant amount
(i.e., critical mass) of new development including abundant and proximate parking. Fourth,
there are no practicable alternative sites of similar size or visibility that are known to be
available in the area today. These factors collectively help to create a "monopoly" value for
the site.
Existing access to the site is a more problematic issue however. The site is accessible from
the 101 Freeway via Madonna Road interchange to the north and the Los Osos Valley
Road interchange to the south.
Generally speaking, traffic conditions along the extension of Madonna Road, especially at
key intersections including Dalidio Drive and Los Osos Valley Road, are currently believed
to be operating (or anticipated to operate) at unacceptable levels of service especially
during peak traffic hours. In addition, both interchanges are likely to operate at lower levels
of efficiency due to the probable traffic impacts generated by the proposed Project as well
as increased traffic resulting from other activities occurring in the general vicinity. Minor
vehicular capacity improvements .(e.g., lane re-striping, etc.) can or have already been
made for the existing freeway interchanges. However, without significant improvements
(i.e., additional turning lanes, overpass and road widening, etc.), and/or the construction of
a new Prado interchange, it is assumed that traffic conditions will continue to worsen at the
interchanges and at current chokepoints along the extension of Madonna Road.
Anticipated Impacts to the Project with the Interchange
Without addressing the issue of its cost or who pays, the proposed Project would most
certainly "benefit" from the construction of a new interchange at Prado Road in several
ways, but most importantly by providing "direct"freeway access to the site. While a "Target"
and "Lowe's" based shopping trip can be characterized as a "destination" event,
convenience is nevertheless a powerful determinant for consumers selecting between
shopping venues and/or merchants. Since Target's and Lowe's anticipated trade area
reaches substantially beyond the San Luis Obispo city limits (especially to the south), easy
access to the site from a prospective tenant's standpoint is a highly desirable attribute.
However, this notion is tempered by the irrefutable fact that the Project site has significant
"monopoly" value by virtue of the reasons cited above and the fact that the anticipated
major anchor tenants are willing to commit to it (notwithstanding access "difficulties"). As
stated earlier, where Target and Lowe's go, so go the rest.
Allan D.Kotin&Associates Page 32 5/15/2007
�-y6
� e4TTACFIMIENT ?J
RDKJ1
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
Anticipated Impacts to the Project without the Interchange
The practical implications of the proposed project without the construction of the new Prado
interchange are twofold; first, the proposed Project is likely to be built-out in stages with the
majority Of the space (i.e., Target, Lowe's and a few of the other min-anchor and smaller
merchandisers) occurring in the initial phase (and as a consequence, significant traffic
increases result early), and second, barring any meaningful and, no doubt, costly
improvements to the existing interchanges and other critical points along the extension of
Madonna Road, increased traffic congestion and vehicular movement restrictions over time
(several years perhaps) will begin to "constrain the viability" Of certain tenants both in the
proposed Project and in the immediate area as well; the most susceptible tenants being
those that rely heavily on "convenience factor" or those who may have more than one store
in reasonable proximity from which consumers may chose.
It would nonetheless be difficult to conceive the idea the a major anchor tenant like Target
would experience significant enough negative impacts on sales volumes as a result of
"traffic congestion" to warrant shuttering except under the most severe of circumstances.
Because there are few alternatives in San Luis Obispo county, except to drive longer
distances or chose another "comparable" retailer, a San Luis Obispo Target store is still
likely to be successful (in terms of sales volumes) even with it being somewhat challenging
to get to during peak hours. This can also be said, perhaps to a somewhat lesser degree,
for Lowe's and likely most of the other national brand tenants that might occupy the site. It
is far more likely that such anchors and retailers would consider closing because of "lack of
traffic." However, it should also be noted that where retailers struggle to successfully
operate (for whatever reason), they become susceptible to being "poached" to other
competing centers or locations if they can be convinced of the advantage of doing so.
Possible traffic related outcomes
A pending dilemma will likely manifest itself if the proposed Project is built without the
benefit of the Prado interchange, or some variation thereof. Traffic mitigation measures (to
the extent feasible from a design and a cost standpoint) will need to be instituted in order to
meet the inevitable political and other pressures that potential traffic gridlock brings.
Likewise, the articulation of a policy that ignores other potential (but perhaps less politically
desirable) alternative traffic solutions can result in unintended consequences as described
above.
Therefore, careful thought should also be given to the following:
Allan D. Kotin&Associates Page 33 5/15/2007
al--V*7
RDK&R \_ ATTacHnnEw-r3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE CENTER IN CONFORMANCE WITH MEASURE J
• Consider providing additional access to the proposed project from Los Osos Valley
Road potentially along the extension of Froom Ranch Road and/or the soon to be
realigned intersection of Calle Joaquin near the freeway interchange.
• Consider building a freeway overpass (presumably less expensive than a full
interchange) at Prado Road. Reserve additional right of way for full completion of
the interchange at a future time if warranted.
• Enhance existing interchange capacity to the extent feasible at the earliest
possible opportunity.
Impacts to Retail Sales
Over time, it is anticipated that levels of retail sales for the Project (and possibly even the
adjacent retail uses) are likely to be impacted if no major traffic improvements are made to
better serve the area. While initial retail sales volumes for the Project are expected to be
strong, the rate of growth in overall sales is anticipated to be less than would otherwise be
achieved if customers are constrained in their ability to easily and conveniently get to the
stores where they want to shop.
This is because the most heavily "traffic impacted" tenants are less likely to experience
sales growth patterns that are "uniform" and "consistent" with growth that might otherwise
be achieved by the remaining Project's tenants (especially the anchors). If the customer
has the choice of either shopping the same retail merchant or purchasing similar goods and
services more "conveniently" elsewhere, they will usually choose to do so.
The net result is that whereas "non-traffic constrained" shopping centers of this type are
likely to see overall growth in retail sales, the same center, given significant traffic
(customer) impediments would realize somewhat lower growth. Given the probable tenant
mix of the SLO Marketplace project, it is anticipated the center at build-out would realize an
average sales growth of 2.5 % or more per year if"non-traffic constrained." However, if the
center operates under a "traffic constrained" basis, it is anticipated that overall sales growth
at build out would only be on the order of 2.0% per year and could worsen somewhat over
time if store vacancies were to occur.
The magnitude of these probable impacts are demonstrated in the text tables which
follows:
Allan D.Kotin&Associates Page 34 5/15//22007
RDK&R A-rTACHMENT 3
Memorandum Report
RE: REVENUE AND COST FOR ALTERNATIVE SCENARIOS FOR FINANCING THE PRADO INTERCHANGE
WITH DEVELOPMENT OF SAN LUIS MARKETPLACE.CENTER IN CONFORMANCE WITH MEASURE J
IMPACT OF FAILURE TO BUILD INTERCHANGE
ON SALES AND SALES TAXES AT PROPOSED SAN LUIS MARKETPLACE
(ALL ESTIMATES IN$ MILLIONS)
HIGH SALES FORECAST I FL'OWSALES FORECAST
First 5 Yearsl First 5 Years Full 25 Years
TOTAL RETAIL SALES
Prior Growth Forecast 833.247 5,848.000 737.196 5,174.000
Lowered Growth Forecast 824.305 5,479.000 729.285 4,847.000
Net Change (8.942) (369.000) (7.911) (327.000)
MAXIMUM SALES TAX TO COUNTY AT 1%
Prior Growth Forecast 8.332 58.480 7.372 51.740
Lowered Growth Forecast 8.243 54.790 7.293 48.470
Net Change (0.089) (3.690) (0.079) (3.270)
Present Value at 6% (0.071) (1.015) (0.063) (0.898)
MAXIMUM SALES TAX TO CITY AT 1.5%
Prior Growth Forecast 12.499 87.720 11.058 77.610
Lowered Growth Forecast 12.365 82.185 10.939 72.705
Net Change (0.134) (5.535) (0.119) (4.905)
Present Value at 6% (0.106) (1.523) (0.094) (1.347)
Note that the impacts, even over 25 years, are quite small when measure in terms of sales
tax. If the project were in the city then the city might lose sales tax revenues (exclusive of
any transfer effects) of, at most, approximately $1.5 million.
Note, however, that this estimate is only for the new center and does not consider
likely sales losses in the existing adjacent Promenade and Madonna Centers that are
likely to occur if no interchange is built.
For the County, this maximum effect would be just over $1 million for the full 25 years.
In this instance, even more than in the case with the interchange, it is critical to
remember that this simplistic analysis does not include offsetting municipal service
costs. Without an interchange the increased traffic loads would inevitably
significantly increase the city's service costs.
Interchange Memo ReportRevp I 051507.doc
Allan D.Kotin&Associates Page 35 5/15/2007
-x-19
CITIZENS FOR PLANNING RESPONSIBLY (CPR)
P.O. BOX 712
SAN LUIS OBISPO, CA 93406
To: The San Luis Obispo City Council
From: Citizens for Planning Responsibly
Re: Item#5 Prado Road Interchange
Date: July 17, 2007
Dear Mayor Romero and Council Members,
Citizens for Planning Responsibly, (CPR),urges you to follow your staffs well
researched and well thought out recommendations and do not accept lead responsibility
for building the Prado Road Interchange, for all of the reasons stated in the Staff Report.
It is not fair to make city taxpayers subsidize this project, which is located in the
county and which they have rejected at the ballot box. The Dalidio shopping mall will
cause the loss of approximately $11.3 million dollars for the city according to the Kotin
Report. The Interchange will hugely profit the developers; they should pay for it. There
is no reason for the city to give special favors to one developer, especially one who has
never followed through on his promise to devote half of his land to open space.
Subsidizing this development is not only unfair in itself, but will also encourage
other developers to use "ballot box planning" to siphon off taxpayer money and line their
own pockets at the same time. This precedent would put City General Plan and Budget
in a world of hurt. We urge you not to shift this financial burden from the developers to
the city taxpayers.
Here are a few reasons the city should not subsidize this Interchange:
-The Prado Interchange was NOT included in the Measure J initiative, and city
voters have not authorized expenditure of city funds for this purpose. The one and only
time that the Prado Interchange has been voted on by city residents, in April of 2005, they
rejected it by approximately 54%.
-The costs of the interchange have skyrocketed from an estimated $39 million last
year to $57 million and will continue to go up. For the city to take financial
responsibility for it would be like signing a blank check. This interchange would be an
extremely risky investment for city general funds.
-The City's first priority is LOVR interchange. The City should not abandon its
well considered priorities, decided after hours of public hearings, in order to do a special
favor for one developer.
-Measure J is currently subject to legal challenge. If Measure J is defeated in
court, these developers will have to go through the normal process, and will be required
a -
to submit an actual project design, do an EIR and pay their fair share of any
infrastructure,just like any other applicant. They may even decide to annex into the city.
It is premature to even consider taking on this project at this time.
-The Dalidio developers have a record of disrespect for the city of San Luis
Obispo. They refuse to annex into the city, yet want the city to pay for the Interchange so
they can build the biggest possible shopping center. They spent over a million dollars on
an initiative,to evade an EIR. They never submitted the design,traffic and flood studies
required by Caltrans when the project was in the city. This conduct should not be
rewarded with taxpayer dollars.
-The Prado Interchange is development-driven according to Caltrans. Placing
another interchange between Los Osos Valley Road and Madonna Road violates Caltrans
interchange spacing standards by creating dangerous weaving patterns. Caltrans declined
being lead agency for this project in 1998 for the following reasons: "1) The need for this
interchange is being driven by (the Dalidio) development...and 2) Caltrans would not
study constructing an interchange at the Prado Road location, because this crossing at
best can only meet one of the two interchange spacing requirements between Los Osos
Valley Road and Madonna Road," according to a letter from Caltrans to William Bird,
agent for the Dalidio developers, dated August 24, 1998.
-There have never been adequate flood hazard studies on the effect of building the
shopping mall and/or the Interchange in this FEMA flood plain. In fact,right now,
neither the mall nor the interchange have actually been designed or engineered.
Construction on that scale in that location could well result in increased flooding of
homes and businesses in the city. This is one reason the developers' EIR was rejected by
the San Luis City Council in 2002. Caltrans has expressed concerns that the interchange
would create an unacceptable risk of flooding over Highway 101. The city should not
devote taxpayer money to this endeavor without having any idea of harm it could cause
or the liability it would incur to property owners, the city and/or Caltrans.
We urge you to follow your staffs recommendation. Thank you for considering
our stance on this issue.
cerely,
an Howell Marx
Vice-President of CPR
Page 1 of 1
council, Sloity
From: Mary Lou Johnson [maryloujohnson@charter.net] Sent: Tue 7/17/2007 6:39 PM
To: Council,SloCity
Cc:
Subject: Approve the Prado Road Overpass with city oversight
Attachments:
Prado Road should have as high a priority as LOUR. Cross-town traffic in San Luis Obispo is
already a disaster. The only viable alternative to relieve this is the extension of Prado
Road and the fully integrated north/south interchange at Prado/101. The LOUR interchange can
relieve traffic traveling east to 101 but because it dead ends into South Higuera, it will
have no effect on relieving traffic on Tank Farm Road. Combine current traffic with new
impacts from the Margarita expansion, and it is a disaster waiting to happen. It's time for
the city to step up and move this overpass forward.
Why was the regiional post office placed at Madonna Road and Prado if this overpass was not in
the long range planning?
Mary Lou Johnson
1610 Huckleberry Lane �� '• RECEIVED
D
San Luis Obispo, CA 93401 ��0 JUL 1 F, 2007
�o EG L SLO CTY CLERK
544-5278 �f0 D��—
https:Hmail.slocity.org/exchange/slocitycounci l/Inbox/Approve%20the%2OPrado%20Road%200verpass... 7/18/2007
Page 1 of 1
Council,Slotity
From: Russ Tice[rtice@calpoly.edu] Sent: Wed 7/18/2007 12:34 AM
To: Council,SloCity
Cc:
Subject: Meeting of Jury 17
Attachments: RECEIVED
Council members, JUL 18- 2007
I just want to let you know that I am proud of the action you took SLO CIN CLERK
tonight during council meeting when you did not take a seemingly easy
way out and adopt the CAO recommendation. I think doing that and
nothing else would have been very irresponsible. Instead of hiding
your heads in the sand and pretending the problem would go away, you
took a leadership position and voted to deal with problem in an
attempt to find the best solution available. Waiting until after the C C4 uN 6-[-1C
Dalidio project is completed to begin dealing with the problems
created would have been shameful. C�
Although I often agree with Councilwoman Mulholland in her protection pC�
of our residents, in this matter I am convinced that Councilmen �at�1EGG
Carter and Brown, along with Mayor Romero, had the courage to make
the correct decision. I wish the subcommittee well in their
negotiations with the county and the Dalidio team to obtain the best
and fairest deal for the residents of San Luis Obispo.
Russell Tice
1224 Madonna Road
https:Hmail.slocity.org/exchange/slocitycounciL/Inbox/Meeting%20of%20July%2017.EML?Cmd=open 7/18/2007
J
Hoo er,,Audrey
From: Hampian, Ken
Sent Tuesday, Jury 17, 2007 4:23 PM JUL 17 2007
To: Hooper,Audrey
Subject: FW: Dalidio Acres RED FILE SLO CITY CLERK
MEETING AGENDA
�
Sent by Good Messaging (www.good.com) DATE4* ITEM #
-----Original Message-----
From: Michael Clark [mailto:michael.clark-slo@excite.com]
Sent: Tuesday, July 17, 2007 04:19 PM Pacific Standard Time
To: Brown, Paul; Carter, Alice; Mulholland, Christine; Romero, Dave; Settle, Allen
Cc: Hampian, Ken
Subject: Dalidio Acres
Dear Mayor and Members of the City Council --
I have just gotten around to reading today's Tribune and could not help seeing the
article on yet another attempt by Mr. Dalidio to get the taxpayers of the City of San Luis
Obispo to pay for a freeway access road to his proposed retail development.
Several days ago, the Tribune carried an article on Mr. Hampian's well-reasoned
recommendation that the City not fund the Prado Road overpass and freeway on- and off-
ramps.
I urge you to follow Mr. Hampian's recommendation. City voters rejected the original
plan. Admitedly the margin was a slim one, but it was a defeat. The fact that County
voters would like to add to our City's stock of low-paying jobs is not a good enough to
reason to approve this additional attempt by Mr. Dalidio to add additional unnecessary
retail stores to our City.
Sincerely --
Michael Clark A0 L
CCUNCIL TCDD DIR
CAO FIN DIR
ACAO FIRE CHIEF
ATTORNEY PW DIR
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_ Page 1 of 2
Council,SloCity
From: Michael Sullivan [mcsgday@yahoo.com] Sent: Tue 7/17/2007 4:53 PM
To: Council,SloCity
Cc:
Subject mcsgday@yahoo.com
Attachments:
17 July 2007
To:
City Council of San Luis Obispo, CA
From:
Michael C. Sullivan
1127 Seaward St.
San Luis Obispo, CA 93405
RE: Council hearing of 17 July 2007— Prado Road
interchange funding
I support the CAO recommendation to take no
action at this time related to potential funding of a
future Prado,Road interchange. With a project price
tag of at least$50 million, this matter is too
important to decide at this point in time, for several
reasons.
- It remains uncertain if the project can be built in
County jurisdiction, because of a pending lawsuit
which may invalidate the County approval, and because
of potential failure to gain approval for on-site
waste water disposal.
-The developers (Mr. Dalidio et al.) have not come
forth with a.satisfactory financing plan which offers
a fair share. The City would be stuck with a very
large debt burden which it cannot afford.
-Any such plan should only be based on a certain
outcome that the project would be approved and built
under City jurisdiction. A Prado Road project
supporting a development in County jurisdiction should
be funded by the County, not the City.
Please vote NO on any present action to fund a
potential Prado Road interchange.
Michael C. Sullivan
https://mail.slocity.org/exchange/slocitycouncil/Inbox/mcsgday @ yahoo.com.EML?Cmd=open 7/17/2007
From: Pete Evans [riki77@gmail.com] RECEIVED
Sent: Tuesday,July 17,20072:09 PM
To: Hampian, Ken JUL 17 2001
Subject: Prado Road overpass
SLO CITY CLERK
Hello Ken,
I hope this a to you will be shared with the council. I oppose city funding of this project. I feel, though there are some
benefits to city residents, the main focus is to support the Dalidio project.
Since city residents voted against the project they should not have to be burdened with the cost. I would suggest the city
recommend to the county residents a new vote county wide, including these costs to county residents. I am sure when all
the facts are clear an informed decision could be achieved.
Best,
Pete Evans
A
COUNCIL F CDD DIR
CAO te- FIN DIR RED FILE
ACAO E?FIRE CHIEF
ATTORNEY TPW DIR MEETING AGENDA
[$CLERK/ORIG -e POLICE CHF
❑ DEPT HEADS r REC DIR DATE.Z/L�ITEM #�
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y _ Page 1 of 1
From: John B.Ashbaugh Obashbaugh@charter.net]
Sent: Tuesday,July 17,2007 3:07 PM
To: Allen Settle;Andrew Carter, Christine Mulholland; Romero, Dave; Brown, Paul
Cc: Hampian, Ken
Subject: Prado Road overpass
I cannot attend the Council meeting this evening due to my teaching obligations at Hancock College, but I
would like to use this opportunity to urge you to support the City Administrator's recommendation regarding the
Prado Road overpass. It is clearly not the time for this city to take the role of lead agency in planning or
managing this project.
In Mr. Dalidio's letter to his supporters, he has asked(rhetorically)a key question that deserves a responsible
answer. He states in his letter: u... In 2004 the City Council endorsed the construction of the overpass and voted
for the same construction financing mechanism using sales tax revenues. What's changed since then?"
Much has changed since 2004: For one thing, the City Council recently adopted its priorities which place the
Los Osos Valley Road interchange at the top of the list for transportation and public works resources—well
above the Prado Road overpass. Another major change is that, of course, the Marketplace project which was
"on the table"at the time was rejected by the City's voters. Although Measure J did receive approval by a
majority of the County's voters in 2006, this flawed measure is currently under a legal challenge. Until a court
has ruled on its validity,the City should assume that it does NOT conform with State planning law and will be
overturned; there is nothing in Measure J that compels you to act on behalf of this project,and indeed there is
much in that poorly-designed initiative to discourage the City from any further participation with this particular
incarnation of the project.
The most important change since 2004, however, is that the cost of the project has ballooned far beyond all
earlier estimates, and now totals close to$60 million. The Dalidio Ranch Project is only obligated to contribute
$4 million in cash,and$4 million in right-of-way. The earlier"endorsement" of the Prado Road overpass
project was based upon a negotiated agreement with Mr. Dalidio that obligated his project to support 52% of the
estimated cost of the overpass. Moreover, the City would have benefited from a long-term revenue stream of
sales tax receipts from the retail uses in the Marketplace project because it was to be annexed to the city. Under
Measure J, Mr. Dalidio is only offering 14%of the estimated project cost with NO long-term revenue stream for
the City.
I trust that your council will turn this"gift horse"down with a swift kick. The City needs to put all of its horses
into the Los Osos Valley interchange project at this stage. Mr. Dalidio has placed his bets with the County's
thoroughbreds; let's see whether his Measure J turns out to have any real "legs." I wouldn't bet on it, even
(especially!) if I were betting with the City's over-stressed tax revenues
Thank you for considering my views.
Sincerely,
John B. Ashbaugh
805-550-7713
No virus found in this outgoing message.
Checked by AVG Free Edition.
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7/17/2007
Page 1 of 1
From: Cydney Holcomb[cholcomb@charter.net] Sent: Tue 7/17/2007 3:36 PM
To: Settle,Allen; Carter,Alice; Christine Mulholland; Romero,Dave; Brown,Paul
Cc:
Subject: Bus.5-Prado Road Interchange Project Management: Direction from Council
Attachments:
July 17, 2007
Honorable Mayor and Members of the City Council,
For the reasons outlined in staffs excellent report on the above-mentioned item, the City should not consider assuming project
management and/or financial responsibility for a freeway interchange at Prado Road and Hwy. 101 at this time.
Sincerely,
Cydney Holcomb
San Luis Obispo
https://mail.slocity.org/exchange/asettle/InboxBus.%205%20-%20Prado%20Road%20Interchange%20Pr... 7/17/2007
Page 1 of 1
i
®This message was sent with high importance.
Council,SloCity
From: ebal12@ponyinet.com [eba[12@ponyinet.com] Sent Tue 7/17/2007 3:10 PM
To: Council,SloCity
Cc: Hampian, Ken
Subject: Prado Road Interchange Project Management-Direction from Council
Attachments:
Dear Mayor Romero and City Council Members Brown,Carter, Mulholland&Setde:
As concerned citizens of the City of San Luis Obispo,we would like to ask your support of Ken Hampian's recommendation that the City of San Luis
Obispo not oversee the direction, management and especially the cost of the proposed construction of the Prado Road interchange. We feel the cost
of this project will become a very serious financial risk to the City. At this time,the discussions between the County of San Luis Obispo and the City of
San Luis Obispo should address all costs associated with this project with the property owner,Ernie Dalidio,before any role is assumed by the City of
San Luis Obispo. We strongly urge you to consider the suggestions of Mr. Hampian at the meeting this evening. Thank you.
Dr. Randy Ball and Mrs. Elizabeth Ball, 1579 Frambuesa Drive,San Luis Obispo,CA 93405
https:Hmaii.slocity.org/exchange/slocitycounci t/Inbox/Prado%2ORoad%2OInterchange%2OProj ect%2OMa... 7/17/2007
Page 1 of 1
From: Beverly Davis[beverly@themortgagehouse.com] Sent: Tue 7/17/2007 12:40 PM
To: Settle,Allen
Cc:
Subject: Prado Road Overpass
Attachments:
FRECEIV,ED
RED FILE C07
M ING AGENDA LERK
DATE .7 o ITEM #5S
Dear Councilmember's,
It is essential that you take the leadership role in the Prado road overpass. The city was willing to take the lead 2
years ago and now you have changed your minds????The overpass benefits everyone in this county but mostly the
city. Two years ago you were satisfied with the Mello Roos Tax district now you are acting like you have never
heard of this solution . Two years ago you had a plan in place and a few self serving property owners and no growth
advocates sabotaged the project. Tell the county to put up the money and you'll handle overseeing the project. The
longer this is prolonged the higher the cost. If it had been done 2 years ago it would have cost aprox. $11,000,000
now I heard it was up to $57,000,000 where is your conscience?????The people voted for the Dalidio project to be
built and with that they were told that the Prado Rd overpass would be built by a Mello Roos district, the Dalidios
would put up the land for a bond, and the bond would be paid back with the sales tax from the shopping center. Is
Madonna doing anything like this to help pay for improvements to the overpasses?NO but they keep building and
building and building over by Home Depot and no one is saying anything?????????? Can't the city and the county
work together and stop postponing the inevitable with out increasing the cost anymore. By delaying all you will do
is slow down the already ridiculous process and cause a serious increase to the already escalating cost of construction
of the overpass...Please have a conscience with regard to the cost.
Thank you for your time rd Co �yvtpt t 1
COUNCIL *9CDD DIR
Beverly Davis CAO rIN DII
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https://mail.slocity.org/exchange/asettle/Inbox/Prado%2ORoad%200verpass-4.ENIL?Cmd=open 7/17/2007
Page 1 of 1
Council,SloCity
From: ]enni Duval Dzduval@hotmail.com] Sent: Tue 7/17/2007 10:07 AM
To: Council,SloCity
Cc:
Subject: Prado Overpass and the Dalidio Project
Attachments:
PLEASE, PLEASE, PLEASE,support Emie Dalidio and get this project going. As I recall,development in this area was part of the general plan that was
established BY THE CITY COUNCIL 16 years ago. Why are you putting him through the ringer? You all need to realize that you blew It when you didn't
stand up to"Save San Luis Obispo." The project was already approved and you backed down to the very small but loud minority. Your constituents
voted for this project;they want it. You now have the chance to do the-right thing for SLO, Mr. Dalidio and his family. He has jumped through every
firey hoop you have put in front of him. He will do the right thing for the city because that is the kind of man he Is.
Thanks you,
]enni Duval
See what you're getting into...before you go there
https://mail.slocity.org/exchange/slocitycounciL/Inbox/Prado%200verpass%20and%20the%2ODali dio%2... 7/17/2007
Page 1 of 1
Council,SloCity
From: Don Thompson [ride4ever4@sbcglobal.net] Sent: Tue 7/17/2007 10:08 AM
To: Council,SloCity
Cc: Tribune
Subject: Prado overpass
Attachments:
As a resident and voter in SLO I am concerned about the attempted delays in moving ahead with the agreement on the overpass. My concern is that
Mr. Dalidio at his age will be forced to discount his land and sell to a corporation that can "wait out"the anit-Dalidio group until gridlock forces
something be done. With the increased cost of the overpass the owners of the property at that time will want total 100% density. And we will agree.
We will have dawdled away the amenities now being offered.
I can't believe that no one can see the similarities to the Los Osos sewer. Only this affects the quality of life of more people than the sewer.
I propose a monument on Tank Farm Road and South Street bearing the names(carved in stone)of the primary persons that had a hand in delaying
the overpass. That way as commuters sit in gridlock at 1 mph,they can be reminded of how we got there.
Sincerely
Don Thompson
San Luis Obispo
Don
805-801-8331
https:HmaiI.slocity.org/exchange/slocitycouncil/Inbox/Prado%20overpass.ENM?Cmd=open 7/17/2007
Page 1 of 1
Coun�l,SloCity
From: E Thyne[ethyne@sbcglobal.net] Sent: Tue 7/17/2007 12:39 PM
To: Council,SloCity
Cc:
Subject: Prado Interchange Financial Responsibility
Attachments:
To the City Council:
Since I am not able to attend this evening's meeting, please accept this email as informing you of my strenuous objection to the
City of San Luis Obispo taking on any financial responsibility for the projected Prado Interchange. It would be economic folly of
the highest degree to get involved with this project.
Sincerely,
Elizabeth C. Thyne
1420 Woodside Drive
San Luis Obispo
https:Hmail.sl6city.org/exchange/slocitycounci l/Inbox/Prado%20Interc hange%20Financial%20Responsib... 7/17/2007
' Page.1 of 1
From: Sandra [macsar99@yahoo.coml Sent: Tue 7/17/2007 12:26 PM
To: Romero, Dave; Mulholland,Christine; Settle,Allen; Brown, Paul; Carter,Alice
Cc:
Subject: Prado Road Overpass
Attachments:
Honorable Mayor and Members of the City Council,
I support the CAD's recommendation regarding the Prado Road overpass.
Having read the staff report and accompanying attachment, I agree that the project as currently planned poses far too great a risk for the city to
take on. Since the Dalldio Ranch project is in the county and all income ultimately derived from it accrues to the county, it is the county which should
take the lead in constructing the overpass. The Board of Supervisors was, in my opinion,wrong to try to pass off management of overpass
construction to the city.
Thank you for your time and attention.
Sandra Rowley
Resident,SLO
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Page 1 of 1
From: Morris,Greg [GMorris@MonisGarritano.coml Sent Tue 7/17/2007 11:48 AM
To: Romero, Dave; Brown, Paul; Carter,Alice; Mulholland,Christine; Settle,Allen
Cc:
Subject: Prado Road Overpass
Attachments:
Good Moming Dave, Paul, Andrew, Christine, Allan.. I urge you all to support providing the management of the construction
of the Prado Road interchange as it will greatly alleviate current traffic problems in the City and make good planning sense for
the future. Thanks; Greg
Greg Morris
Morris &Garritano Insurance
GMorris@MorrisGarritano.com
805-543-6887
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Page 1 of 1
From: Kathie Haley[kbhaley@charter.net] Sent:* Tue 7/17/2007 10:05 AM
To: Romero,Dave; pbrown@solcity.org;Carter,Alice;Settle,Allen
Cc:
Subject: Prado Road Overpass Issue
Attachments:
Dear Mayor and City Council Members,
It is unconscionable not to support the construction of the Prado
Road Overpass. The Council has let all the development on LOVR take
place and is currently working on residential expansion in the
Margarita area. Cross-town traffic problems will continue without
the overpass. Step up and take the lead in the project. It's good
for our City.
Kathie Haley
1881 Corralitos Ave
San Luis Obispo, CA 93401
https://mail.slocity.org/exchange/asettle/Inbox/Prado%2ORoad%200verpass%20Issue.EML?Cmd=open 7/17/2007
Page 1 of 1
Settle Allen
From: kd2[kd2@sbcglobal.net] Sent: Mon 7/16/2007 12:36 PM
To: Settle,Allen
Cc:
Subject: Prado Road
Attachments:
I am supporting the plans for the construction of the Prado Road interchange. ERECEIVED
The People voted for it -now do your job and implement it! 2001
Karin Dunklin LERK
Pismo Beach, CA
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https://mail.slocity.org/exchange/asettle/Inbox/Prado%2ORoad.EML?Cmd=open 7/17/2007
Page 1 of 1
Council,SloCity
From: Robert McLaughlin [bmc@thegrid.net] Sent: Mon 7/16/2007 5:51 PM
To: Council,SloCity
Cc:
Subject: Dalido Ranch
Attachments:
How many times are these people going to try and thwart the will of the people? Enough already, Mr. Dalido has jumped
through all the hoops,the voters have supported him (2 times!)
This is an outrage, please, let justice prevail.
Bob & Marina McLaughlin
San Simeon Ca
https://mail.slocity.org/exchange/slcicitycouncil/Inbox/Dalido%2ORanch.EMi,?Cmd=open 7/17/2007
Page 1 of 1
Council,SloCity
From: John Samuel Hughes(samhughes@charter.net) Sent: Mon 7/16/2007 4:54 PM
To: Council,SloCity
Cc: Dalidio Emie
Subject: Dalido Ranch
Attachments:
Dear Council members,
I, like the many others in this county, voted our wishes that the
Dalidio project be brought to a reality. It now is my opinion that
the overwhelming number of people that made that decision is being
ignored in great part because of the lack of movement on the overpass
by the city of San Luis Opisbo.There will always be groups, normally
small in number, that seem to have a larger voice with elected
officials. Please don't disregard the wishes of the greater numbers
that voted on this important issue.
Thank you,
Sam Hughes
https://mail.slocity.org/exchange/slocitycouncil/Inbox/Dalido%20Ranch-2.EML?Cmd=open 7/17/2007
Page 1 of 1
Settle Allen
From: crowe [crowe2@charter.net] Sent: Mon 7/16/2007 8:42 PM
To: Romero, Dave; Brown, Paul; Carter,Alice; Mulholland,Christine; Settle,Allen; Council,SloCity
Cc:
Subjecb Ernie Dalidio project....
Attachments:
To each of you we would like to express our total support for Mr. Dalidio's project. The
obstacles that have been thrown in his path for so many years are utterly absurd. San Luis
Obispo continues to sustain development -- commercial, residential projects, income
producing units, etc. Yet, Mr. Dalidio's project appears for some reason to have become the
target of a small group of folks who have spent years trying to stall whatever he attempts to
do.
We believe it is time that all obstacles be removed -- once and for all -- and he be allowed to
continue with his development. That is what the majority of voters want and it is high time
that the wishes of the people be respected.
Sincerely,
Bill & Pat Crowe
https://mail.slocity.org/exchange/asettle/Inbox/Ernie%20Dalidio%20project%20.....EML?Cmd=open 7/17/2007
_ Page 1 of 1
Settle Allen
From: Phil Farber[farbslo@charter.net] Sent: Mon 7/16/2007 7:47 PM
To: Settle,Allen
Cc:
Subject: Prado Road Overpass
Attachments:
Dear Councilman Settle,
Please honor the will of the people of San Luis Obispo County
and support the Prado Road and the Dalidio Ranch projects.
Sincerely,
Phil Farber
https://mail.slocity.org/exchange/asettle/Inbox/Prado%2ORoad%200verpass.ENE?Cmd=open 7/17/2007
Page 1 of 1
Settle Allen
From: Phil Opperman [popperman@charter.net] Sent: Mon 7/16/2007 6:14 PM
To: Romero, Dave
Cc: Brown, Paul; Carter,Alice; Mulholland,Christine; Settle,Allen; Council,SloCity
Subject Direct the Prado overpass, please
Attachments:
Please take over the direction for the Prado overpass. This needs to get done, and you are the ones to do it.
I live in Cambria, not SLO -but I shop in, and visit your fine city all the time. We approved the Prado overpass and the Dalidio
project-please proceed posthaste!
thanks,
Dr. Phil Opperman
1592 Cardiff Drive
Cambria, CA 93428
POpperman@charter.net
https://mail.slocity.org/exchange/asettle/Inbox/Direct%20the%2OPrado%20overpass,%20please.E M?C... 7/17/2007
Page 1 of 1
Settle Allen
From: HMi5917745@aol.wm [HMi5917745@aol.com] Sent: Mon 7/16/2007 7:45 PM
To: Romero, Dave; Brown,Paul; Carter,Alice; Mulholland,Christine; Settle,Allen; Council,SloCity
Cc: contact@daladioranch.com
Subject: Daladio Ranch Project
Attachments:
Dear Council:
This is to let you know that we support the Daladio Ranch development and the related Prado Road extension and Highway
101 overpass.
We are sick to death of bureaucratic obstruction and delay, delay, delay. Seems everyone thinks they have right to tell Mr.
Daladio how to use his own property. About time to move off the obstructionist dime and move on. The voters of San Luis
Obispo County, through Measure J, spoke loudly and clearly. How about seeing how you can get the job done, instead of
interminable delays?
Harold R. & Betty J. Miller
1740 Lee Ann Court
San Luis Obispo, CA 93401-6024
(805) 544-7815
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Settle Allen
From: Nancy Hutchison [nancyhutchison@charter.net] Sent: Mon 7/16/2007 3:02 PM
To: Settle,Allen; Council,SloCity; Brown,Paul; Romero, Dave
Cc: Carter,Alice; Mulholland,Christine
Subject overpass prado road
Attachments:
--The Prado Road Lnterchan.ge has been on the boolzs since 1961,regardless of LovP-pLa"vLg,housLng expansLon of the MargarLta area and the extension of
Prado Road to$road street Ls essential.
--cross-town tra f Lo probkrws wLLL continue unless do"10u0.d the Prado rznad overpass. expanding LovR does not solve problems on Tante Form Road or for the
new housing being built at Margarita. Anyone who travels from the Tonle Farm area to Hwy lot tznows this.
--Has the cLty council forgotten a decision by county votersjust eight months ago? Two-thirds of us made a strong statement-we're for Dalidio and for the
overpass. it's Ln our eeneraL Plan. rhe city Ls the Logical agency to take the Lead.
--The cLty councLL was willing to talo the Lead on this project two years ago-now you thinie you can't? Two ears ago you were satisfLed with a McLLo Roos tax
district, now you act LLtae you've never heard of Lt. The eLty needs to step up. TeLI the count to give you the money and get this project goLn.g.
--rhe overpass benef,,ts everyone,but mostly the cit. The city Ls the logical agency to head the project. The at had a plan Ln place two dears ago-but was
unfortunately sabotaged by a few self serving property owners and no-growth advocates. Tell the county to put up the money,and that you'll put up the muscle.
we can't Ltt this opportunity pass us by again.
--Anyone can sue anybody,anytime with very Little to boole Lt up. This Lawsuit is bring brought by a small group of discontents who want to stop lxlUolio
despite an overwhelming vote Ln support. By delaying aLL you will do Ls slow down and already ridiculous process and cause a serious increase Ln the cost of
construction of an overpass. Please have a conscience with regard to the cost.
--Are the city and county really going to engage Ln a catch-22 on this project? can you not woriz together to move thLs process along. The city Ls the Logical
choice to head the.overpass project. Pointing fingers and claiming ignorance Ln problem solving Ls antL-progressive,and anti-voter. The voters have directed you
don't Lnadvertently thumb youv nose at them Lw your inability to get this project moving.
--Prado Road should have as high a priority as LOVR.. cross-town tra f fi.c in son Luis Obispo Ls already a disaster. The only viable alternative to relieve this Ls
the extension of Prado Road and the fully Lntegrated north/south LAterchange at Prado/101. rhe LovR Lnterchange can relieve tra f f�c traveLLAg east to loi but
because Lt dead ends into south Higuera,Lt will have no effect on relieving traffic fi.c on TanlZ Farm Road. combi..n.e current traffic fi,c with new impacts from the
Margarita expansion,and it Ls.a disaster waiting to happen. It's time for the city to step up aAd move this overpass forward
I askz you to move forward with the Prado Rd.overpass-
Nancb Hutchison
https:Hmail.slocity.org/exchange/asettle/Inbox/overpass%20prado%20road.EN'L?Cmd=open 7/17/2007
Page 1 of 1
(�You forwarded this message on 7/17/2007 8:53 AM.
Settle Allen
From: Barcul@aol.com [Barcul@aol.com] Sent: Mon 7/16/2007 12:48 PM
To: Settle,Allen
Cc:
Subject: From Barbara Cully(a former student) re: Dalidio Project
Attachments:
Dear Dr. Settle,
I was once a student of yours (1968, 1969, 1970?) - I think that it was your first
year at Cal Poly. It was long before any of us can remember. There was no political
science major at that time, but I did earn a political science teaching credential and
taught in Atascadero for 32 years. I am now retired.
I am prompted to write to you about the Dalidio Project's delay. I thought
that everthing had been settled by the voters months ago. Please help me
understand how a 2/3 majority of voters can approve a ballot measure and NOT
have their decision supported by our government (City Council of San Luis Obispo).
It seems to me that delaying a voter approved project isn't in the best interests of
our democratic (?) system. Delay costs money, and finalizing a project means
added money for the City, as well as, jobs and services for people (voters).
I lived in the city San Luis Obispo for 34 years, raised three children, and enjoyed
the ambiance of San Luis Obispo. I moved to Santa Margarita onto acreage when I
began accumulating horses and needed a lot more space. There are projects here
in Santa Margarita that are being delayed by so called "no growth" proponents,
also. I understand their fear of "urban sprawl" since most of them fled from cities
not that long ago. However, the cost of trying to stop growth simply escalates
costs which are transferred to "the people" who have enough money to live here.
I, too, love the small town flavor that San Luis Obispo once had and has lost, and
that Santa Margarita still has, but will soon lose. However, nothing is going to
STOP the growth. It's going to happen regardless of what any adamant group does
to try to stop it. Why not support responsible growth (by that I mean that growth
that creates an environment where famillies with children can live, work, and
prosper) by promoting and expediting well planned projects, regardless of the
opposition of small, vocal, unrelenting "no growth" groups.
I hope that you and the other council members will respect the decision of the
voters and allow democracy to actually work without more delay.
Sincerely,
Barbara F. Cully 805-438-4934
Get a sneak peak of the all-new AOL.com.
https:Hmail.slodity.orglexchange/asettle/Inbox/From%2OBarbara%2OCully%20(a%20forfner%20student)... 7/17/2007
COUNCIL MEMORANDUM
City of San Luis Obispo, Administration Department i
DATE: July 17, 2007 RECEIVED
RED FILE JUL 17 2001
TO: Council STING AGENDA
VbATE4&_9Z ITEM # SLO CITY CLERK
FROM: Ken Hampian, CAO 1//1
- —
Prepared By: Shelly Stanwyck, ACAO
SUBJECT: July 17, 2007, Business Item 5 - Direction from Council on the Project
Management of the Prado Road Interchange
Question: What Does Project Management of the Prado Road Interchange Mean?
Staff has been asked to better define what "project management" of the Prado Road Interchange
means in practical terms.
Brief Answer: Project management involves far more than construction management
(referenced in the e-mail sent out to Measure J supporters), and includes all major project steps
involved in completing a complex, State approved interchange project. Because Caltrans is the
approving body, all of the work undertaken would need to be consistent with their standards,
procedures and other requirements. A great deal'of coordination will be involved in working
with Caltrans, the County and the developer. Elements of work will include:
1. Project design
2. Environmental evaluation of the proposed project
3. Project design exception approvals
4. Coordination of financing for construction project
5. Acquisition of right of way
6. Clearance of utility facilities
7. California Transportation Commission approval of a new interchange
8. Preparation and approval of construction documents
9. Caltrans encroachment permit
10. Bid of construction project
11. Management of construction
If Council directs staff to assume project management, staff will need to return to Council with a
more thorough analysis of each of these steps in order to "size" the task. Some early tasks will
be lessened by work previously completed. On the other hand, the complications of managing a
project being processed in a different jurisdiction, through a State agency, will create added
demands and complications. A reasonable starting assumption is that project management will
require added staff resources and a reprioritization in workload. A significant appropriation will
also be needed for project work, if the developer does not deposit the $4 million in cash included
in Measure J to support early project costs. WouNCIL CD9408.L
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$ATTORNEY DPW D RHIEF JUL i 7 2007
Dear Friends CLERK/ORIG POLICE CHF
DEPT HEADS REC DIR SLO CITY CLERIC
fd Pi4 UTILDIR
The City of San Luis Obispo is at it again Z9 &ieAaC . 1 HR DIR )c 0.eez---e
On Tuesday night, July 17`j'the City Council will consider an agenda item that could have far reaching impact
on Measure J and the construction of the Prado Road interchange. Your help is needed in sending a message to
the council that the overpass and extension of Prado Road are essential elements to relieving cross town traffic
congestion in San Luis Obispo.
Let me bring you up to date on what has happened since Measure J was passed overwhelmingly in November.
We have filed an application to stock pile dirt on the project site, but have not yet applied for a permit with the
County. As of this date no other applications have been filed with any agency. We have met with the County to
discuss how the applications for the project will be handled, and we have started some special studies on the
property including soils analysis, flooding and biology but the reports are not yet complete.
Unfortunately nothing moves fast in the regulatory process.
In terms of the Prado Road interchange we have had discussions with the County and City and Cal
TFAAs4dht'requirements and financing mechanisms and leadership for project. The Board of Supervisors
directed the county Chief Administrative Officer to engage in a discussion with SLO City representatives on
constiiic6oiindha'gement of the Prado Road overpass. The overpass, while providing traffic improvements
for tete,gntire,region, will have the most positive effects in mitigating traffic problems for city.rgs'c}g>?1s.i t is.t
logical for.the.City to provide management of this project. ,.. r,. <i
:.
Ho-*Vewe9:ihe:City is balking.
CitYi nAounty officials have apparently forgotten the decision of county voters just eight months ago when
two-thiids'iif the electorate made a strong statement-"we want the Dalidio project and we need'th NPi~addolRoad
overpass.i: ::' i)erTnit with t1;.
A.,
To remind you, the overpass will be completely paid for through new sales tax revenues generawhet[etail
center. Our cross town circulation problems can be solved with this overpass. In 2004 the City Council
endorsed the construction of the overpass and voted for the same construction financing mechanism using sales
tax revenues. What's changed since then?
On Tuesday night, July 17`h the City Council will consider the issue of the Prado Road overpass;Qa
coriSti'-&tibf.management. New housing planned for the Margarita area and the extension of Prado'Roadlfo
Broad Street makes the interchange an essential part of fixing the serious traffic problems we exb6ieiie'eJn San
Luis Obj's .-``•I hope you can attend the meeting to express your support. Of course, any comtritfiYieatf6i19 with
our council"members is important. If you can't attend, please call or email them to tell them of y&t iggp orl in
movigg ahead in the construction of the Prado Road interchange.
Agairi,'thanks for your generous support and encouragement. It has been a lifeline during this difficuk process.
Zk-
RED FILE
MEETING AGENDA'
DA ! /7 O ITEM #-A25-
r
ERNEST F. DALIDIO, JR.
2706 Rodman Drive FRECEIVEDLos Osos CA 93402 1. 6 2001RED FILE TY CLERK
MEETING AGENDA
DATEZWO ITEM # ,�
44 COUNCIL VCDD DIP,
Mayor Dave Romero and City Council D CAO FfN DIR
City of San Luis Obispo Lf(ACAO FIRE CHIEF
990 Palm Street EfATTORNEY PW DIR
17 CLERIK/ORIG San Luis Obispo CA 93401 E3 DEPT HEADS Zo POLICE CHF
REC D R
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Dear Mayor Romero and Members of the City Council: r c,44c..sec4
e CZC=4r—
I have reviewed the City's staff report regarding project management of the
Prado Road interchange. As you know, we tried for 12 years to have our
project approved and built in the City. We now have an approved project in
the County. While we will now build it in the County, I recognize that
someday it will probably end up in the City.
If the City participates in planning and building the Prado Road overpass, we
will again be willing to sit down with both the City and the County to talk
about the funding necessary to build the overpass and our commitment to
allow our property to secure the funding for the overpass.
I hope this is helpful in proceeding with your deliberations in this matter
Very truly yours,
Ernest F. Dalidio, Jr.