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12/11/2001, BUS 8 - APPROVAL OF AN AMENDED MEMORANDUM OF UNDERSTANDING FOR COURT STREET PROJECT AND PALM/MORRO PARKING/
council j acEnba REpoRt CITY O F SAN LU I O B I S P O 1 FROM: Ken Ham , CAO and Jeff Jorgensen, City Attorney Prepared By: Shelly Stanwyck, Economic Development Manager SUBJECT: APPROVAL OF AN AMENDED MEMORANDUM OF UNDERSTANDING FOR COURT STREET PROJECT AND PALM/MORRO PARKING/OFFICE STRUCTURE. CAO RECOMMENDATION Approve an Amended Memorandum of Understanding with Chinatown-Court Street Partners, which outlines the principles for several property transactions, predominately the purchase and sale of publicly and privately owned surface parking lots in Downtown San Luis Obispo. REPORT-IN-BRIEF This report is the result of continued negotiations authorized by Council to amend the terms of existing Memorandums of Understanding between the City and Chinatown-Court Street Partners LLC. The Amended Memorandum of Understanding (Amended MOU) continues to provide the framework necessary for several property transactions, which will facilitate the redevelopment of a portion of Downtown. The Amended MOU acknowledges and attempts to anticipate potential issues which could arise. Some of the key features of the Amended MOU include: • Definition of the property transactions • Details on a proposed Parking/Office Structure • Discussion of property easements and transfers • In Lieu Fees Alternative The amended project concept has many risks and many rewards. In comparing the risks of the existing project concept to the amended project concept, several of the former risks have been eliminated or reduced. The project concept has gotten better. The project concept, today, in our current economic climate, truly represents our best chance to achieve many of the community's goals for Downtown in the next ten years. Although the Amended MOU would be a non-binding agreement, it nevertheless provides the City and Chinatown-Court Street Partners, LLC with an understanding of the necessary requirements and commitments that the amended project concept will demand of both parties. If the Amended MOU is approved, the next step is for the developer to file an application with the City beginning the formal development review process. Necessary studies, such as archeological and environmental will begin shortly thereafter. BUS 8-1 i Council Agenda Report—Amended MOU, Court.St. & Palm/Morro Structure Page 2 DISCUSSION Background 1. How Did the City of San Luis Obispo Become Involved in a Quasi Redevelopment Project in Downtown? Many City goals and policies recognize the importance of Downtown to our community. Downtown San Luis Obispo is the commercial and social center of the City. Downtown is where people go to work, shop, dine, be entertained, and simply gather and enjoy the company of friends and family. When major retail developments are proposed outside of Downtown, their potential impacts on Downtown are carefully analyzed. Downtown's success depends on its ability to evolve and change. In February 1999, PCR/Kotin completed an economic analysis of the impacts of a proposed retail development in the Madonna Road area on Downtown [copy available in Council's reading file]. The analysis suggested that retailing in Downtown would benefit significantly from an expansion of available space in Downtown. Downtown could enhance its retail presence and compete better with outlying areas (and adjacent communities) by offering larger sized locations for selected local and chain stores. Under today's style of retailing, these types of stores require floor areas in the range of 5,000 to 10,000 square feet or more. Assemblage of properties into one ownership and reuse of land would be one way to accomplish this improvement of Downtown. In September 1999, Chinatown-Court Street Partners LLC (the "Copelands"), presented a conceptual proposal to the City entitled "Chinatown-Court Street: A Vision for the Future of Downtown San Luis Obispo, California, Inspired by its Past" [Attachment 2 of the September 19, 2000 Agenda Report]. The proposed concept was to utilize Downtown properties, primarily City-owned surface parking lots, and put them to more active uses. Specifically, the City-owned Court Street parking lot would be developed as a multi-use retail, restaurant and office structure; underneath the City owned Palm Street surface parking lot a parking garage would be built and on top of the garage another multi-use retail,restaurant and residential structure would be built in the near future; and on property primarily owned by the Copelands, they would build City offices. When complete, the project promised to satisfy many community goals. The project required the use of lands owned by both the City and the Copelands. In October 1999, Council authorized entering into exclusive negotiations with the Copelands to outline the terms for the agreements required to carry out the necessary property transactions. Due to the complexity of the transactions, it was not until August 2000 that the negotiations were complete. On September 19, 2000, Council approved two Memorandums of Understanding (MOUs) with the Copelands. 2. Why Amend the MOUS Now? On February 14, 2001, Council received correspondence from Tom Copeland regarding the MOUS (Attachment 1). In his correspondence, Mr. Copeland identified several problems that would prevent the Copelands performance under the terms of the MOUS, including dramatically higher.than anticipated costs for the construction of an underground parking garage at Palm BUS 8-2 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 3 Street and engineering difficulties with the site. On May 15, 2001, Council rejected the Copelands' proposed modifications to the MOUS. Because of the potential cost implications to the real estate transaction it was the consensus of Council that the MOUS could not be modified unless significant progress was made toward solving the parking issues created by removing surface parking on Court Street. Council directed staff to request that the Copelands come back with a better strategy for resolving the parking issues created by the Court Street Project before negotiating changes to the MOUs. After working for several months to come up with a feasible parking solution, the Copelands' concept for the use of property at Palm and Morro streets, as a Parking/Office Structure, was presented to the City. Staff then worked with the Copelands to assist them in further analyzing and refining their proposal, which was formally presented to the community on November 2, 2001. Council then authorized staff to negotiate the terms of an amended MOU for consideration on December 11, 2001. Overview of the Amended MOU 1. What is the Purpose of the Amended MOU? The Amended MOU (Attachment 2), like the MOUS it would supercedc, is a non-binding agreement. The Amended MOU is intended to provide both the City and the Copelands with a clear sense of their respective commitments and requirements prior to making the substantial investment in time and money necessary to complete this project. If the Amended MOU was approved, the next step would be for the Copelands to begin the development review process by submitting a development application. Archeological, environmental and other necessary studies would then be undertaken. Regulatory issues have not been addressed in the Amended MOU as they belong in the development review process. 2. What MOUS Exist between the City and the Copelands? Currently, there are two MOUS (entered into on September 19, 2000) between the City and Copelands. The MOUS outline the steps necessary to purchase and sell properties between the two entities. One outlines the purchase and sale of City owned properties (essentially the Court Street and Palm Street surface parking lots). The other generally outlines the purchase and sale of private surface parking on Palm and Morro owned by the Copeland and French Families (the Copeland/French MOU). The existing MOUs contain several contingencies so that the Copelands and the City can finalize future development plans. Specifically, the Copeland/French MOU is structured so that the City can decide what uses are most appropriate on the property and exactly how much of the property it needed. In the Copeland/French MOU, the Copelands have approximately five years to finalize plans and begin the development of the Chinatown Historic District on top of the Palm Street underground parking garage.. 3. What are the General Characteristics of the Amended MOU? The fundamental purpose of the Amended MOU is to outline the purchase and sale of properties. One of the most significant updates in the Amended MOU from the existing MOUS is its level of BUS 8-3 i 1 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 4 specificity. It is more detailed than the existing MOUs in discussing the actual development of parking and the associated costs for such development. An analysis of the "before and after" for each property will illustrate the changes that the Amended MOU presents. In summary, those changes are in property uses and in the actual size of the properties to be purchased. Key Features of the Amended MOU 1. Disposition and Uses of Property Involved in Transaction Attachment 3 depicts the properties involved in this transaction. The following discussion of the proposed buyer and proposed use for the properties subject to the Amended MOU provides an overview of the real estate transactions contemplated. a. Court Street The only change to the Court Street component in the Amended MOU is the location of replacement parking. The square footage and property to be purchased has not changed nor has the price for the purchase. The Copelands still intend to develop the property for mixed-use purposes including office, retail and restaurant. The replacement parking will be located in the Palm/Morro Parking/Office Structure rather than in a subterranean parking structure at Pahn and Monterey streets. The following chart illustrates the minor change in the treatment of Court Street. Property Court Street Area No change Purchase Price $60 per square foot No change 30,000 square foot area $1,800,000 total purchase price plus $162,000 for Court Street Right of Way purchase Property Use Mixed use No change retail,office,.restaurant Replacement Parking Paha Street Underground Structure Palm/Morro Office/Garage Structure Location b. Parking/Office Structure One of the biggest challenges with developing Court Street is finding and constructing replacement parking. In addition to removing existing parking (107 spaces), the development of Court Street creates new demands for parking (128 spaces). When the Copelands found that it was infeasible to provide replacement parking for Court Street by a subterranean garage on Palm and Monterey Streets, the development of Court Street seemed unlikely. However, with the Parking/Office Structure proposed for Palm/Morro streets, the development of Court Street is once again possible. An added advantage of the Parking/Office Structure is its possible future use as facilities for the City's Public Works department that would be displaced by the development of a Historic Chinatown District at Palm and Monterey Streets. Thus it removes a previously unresolved obstacle to the Chinatown Historic District project, should that development go forward at a future date. BUS 8-4 i C Council Agenda Report—Amended MOU,Court St. & Palm/Morro Structure Page 5 The significant changes to the treatment of the Copelands Property at Palm/Morro in the Amended MOU can be summarized as follows: Property Copeland/French Defined property area is larger;Copeland Parcel A or Parcel A&B has purchased former French property. Several easements to be acquired to meet size demands of functional parking structure. Purchase.Price $35 per square foot(plus improvements), $35 per square foot for 18,585 square feet total purchase price dependant upon of Copeland property and for 3,751 square decision regarding how much is being feet of Tartagha/Vintage property purchased easement(plus improvements)for a total of$I,113,680. The consideration for 1,680 square feet of City/County owned land is presently being negotiated and it is contemplated to be on terms and nota cash transfer. [PropertyUse To be determined Parking garage and office space Replacement Parking Palm Street Underground Parking Palm/Morro Office/Parking Structure Location Structure c. Chinatown Historic District—An Option In the original MOUs, it was intended that a subterranean parking garage would be constructed underneath the surface parking lots between Palm and Monterey Streets. After finishing the subterranean garage, the Copelands would have had approximately five years to complete plans for, get development approval, and begin construction of the Chinatown Historic District. Failure to construct the Chinatown Historic District would result in the Copelands having to pay a penalty to the City. Rather'than protract the current negotiations, and acknowledging that there are several issues to resolve (such as replacement parking), the Amended MOU acknowledges the uncertainties associated with the future development of the Chinatown Historic District and has made it an option rather than a deal point. The following summarizes the Chinatown Historic District Option: VARIABLES CHINATOWN HISTORIC DISTRICTOPTION Property Palm Street and Monterey Street Areas Purchase Price Option Agreement:$88,500 for 18-month term(3%of purchase price),extension of Option requires payment of 1%per year of the purchase price for an additional three- year extension based on performance standard. Purchase rice for property$2,950,000 Property Uses In event Copeland purchases,Copeland shall incorporate a residential component. Any proposed development of the property shall recognize the historical significance of the property. Replacement Parking Location Unknown demand and unknown re lacement location BUS 8-5 Council Agenda Report—Amended MOU, Court St & Palm/Morro Structure Page 6 Z Parking/Office Structure—Further Details a. Design Concept for Parking/Office Structure As mentioned, this concept arose as a solution to the Court Street Parking deficit in light of the Copelands inability to construct the originally planned subterranean parking garage at Palm Street. The basic concept is that the Copelands will construct, on various properties on Palm and Morro streets, a structure that will house four levels of parking and one level of office space. In conjunction with their architect, Mark Rawson, APS Architects, and parking consultant, Nick Watry, Watry Design, the Copelands worked for months developing a design for the Parking/Office Structure. Ten different designs were drawn, engineered, and analyzed. Different ramping techniques were analyzed for safety and efficiency. Some designs were rejected because they would require too much space for efficient parking; others were rejected because the parking would not be convenient for short-term parkers. Other designs were rejected because they were not compatible with Downtown San Luis Obispo. The final design (Amended MOU, Exhibit 3) includes the following highlights: • Building style to resemble a series of smaller buildings • Morro Street grade change allows for first level of parking below grade • Mid-block Morro Street access to first level of parking, as well as to the existing parking behind J.P. Andrews and adjacent buildings, including the Library • Approximately 15,700 square feet of office space at street level on Palm Street • Four levels of parking above the offices,with access off of Palm Street • Predominately pedestrian"Library Plaza"proposed between Library and Structure • Majority of the parking is tailored to short term parking and is therefore 60 degree angled parking,with one-way configurations • Flat parking decks that could be converted in the future to alternate uses • Basic building footprint not too exceed 177 feet in length and 118 feet in width The property to be purchased represents the minimum dimensions necessary to complete the Parking/Office Structure. The Copelands' parking consultants analyzed ramping and turning movements and this design yielded the maximum number of spaces with the most efficient access to them. The structure cannot be any narrower and still function well. Additionally, the City's building code also dictates the minimum dimensions, since code requires ten feet of separation between a building and the property line when there are windows and openings. Therefore, in addition to the Copelands' properties, the City must also obtain possessory interests in the TartagliaNintage easement and control a portion of the City/County owned land adjacent to the Library. The details of the"easements" are discussed later in this report. b. Guaranteed Maximum Price The detailed design work that the Copelands completed for the Parking/Office Structure was necessary for accurate project costing. As stated in the Amended MOU,it is the intent to have a Guaranteed Maximum Price (GMP) contract for the construction of the Parking/Office Structure. In the existing MOUS the subterranean garage at Palm Street was subject to a guaranteed BUS 8-6 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 7 maximum price of $5,597,782. As the Copelands discovered, this price was an inaccurate estimate. Not wanting to make the same mistake twice, the Parking/Office Structure GMP is not a rough estimate, but rather the price it would take for J.W. Design & Construction (a local general contractor) to build the proposed Parking/Office Structure. The Parking/Office Structure project costs can be summarized as follows: Costs office Gara-c Total ii i Direct/Hard $86/s.f.+ $45/s.f. for 238 stalls Costs, $35/s.f.tenant improvements= $20,485 per stall $121/s.f. $4,875,331 $1,351,880 On&Offsites $97,008 $248,738 (sitework, sidewalks,etc. -Contingency $99,919 $256,203 Indirect Costs2 $533,069 _ $1,366,842 Financing $151,304 $387,959 Total Costs $2,782,680 $7,135,074, . _ _ $9,917,754 Total Cost Per $177/s.f. $66.43/s.f.. $80.57/s.f Square Foot Total Cost Per N/A $29,979 N/A Parking Stall 3. Easements and Transfers As previously noted, the footprint of the Parking/Office Structure is such that the City must obtain interests in two different properties in addition to the Copelands' at Palm and Morro Streets. One of the properties is held in private ownership and is an access easement providing access to rear of the J.P. Andrews Building and other buildings along Monterey Street. The other property is held jointly by the City and the County and is adjacent to the Library where metered parking and Bookmobile parking are presently located. Attachment 4 shows the properties necessary to construct the Parking/Office Structure. On Attachment 4, the dashed line represents the actual building footprint and the hard line around the various shaded areas represents the property necessary for sufficient building setback pursuant to our building code. a. Tartaglia/Vintage Property Representatives of both Tartaglia and Vintage Properties have agreed to sell a portion of their properties so that the Parking/Office Structure can be constructed as designed. Access to the rear portions of their properties will be accommodated.by the Morro Street parking entrance, as vehicles will be able to drive all the way through to their properties. A total of 3,751 square feet Direct/Hard costs include the basic costs of construction including the premiums necessary to build in downtown (such as staging areas,noiseabatement,limited construction times and traffic controls). Z Indirect costs include architecture and engineering,other consultant costs,predevelopment planning,City permits and fees(approximately$302,000),insurance and taxes,legal and accounting,EIR allowance,and development overhead and management. BUS 8-7 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 8 will be purchased from Tartaglia and Vintage Properties. The purchase price shall be $35/square foot for a total of$131,285. b.City/County The City and the County jointly own the second property necessary for the Parking/Office Structure construction. The City has a 53% possessory interest and the County a 47%. Staff members from both the County and the City have met and discussed the impacts of the Parking/Office Structure on the Library. The construction of the Library Plaza could result in changes to the short-term City parking next to the Library, as well as the Bookmobile and delivery van parking. The County has provided staff with a list of several needs and interests related to the Library, most of which can be accommodated. The City's intent is to make the Library, to the extent possible, `whole" for any impacts the changes in ownership of this property presents. Some issues, however, will need to be worked out over time. For example, questions related to possible uses of the added office space will be considered when the City evaluates its timing and specific needs related to the office use. This will occur in the coming months, as the actual construction of the project nears. 4. In Lieu Fees Alternative The Amended MOU, like the original MOUS contains a provision wherein the Copelands, like any other developer in the Central Commercial zone, can pay an in lieu fee rather than develop parking on site. The fee in the Amended MOU is $4,000 per space,. the current City fee. Because staff is presently working on bringing a proposal to Council to increase the in lieu parking fees (the fee has no cost of living index and has not been increased since 1987), staff felt it would be appropriate to require some kind of additional payment from the Copelands in anticipation of the increase in this fee. However, since the new fee level has not yet been determined, this additional compensation is found in Section 6.5 of the Amended MOU. There, the Copelands have agreed to provide a surety bond, at no cost to the City, to guaranteed the construction of the Office/Parking Structure. It is estimated that the surety bond will cost the Copelands an additional $200,000. Furthermore, when the Copelands exercise their option for the Chinatown Historic District, parking required by that development would be subject to the current in lieu fee. Potential Risks and Rewards One of the most interesting aspects in analyzing the potential risks and rewards of the Amended MOU, is that several of the risks presented by the original MOUs have been minimized or addressed by the Amended MOU. That is not to say that the Amended MOU is without risks. As with most complex real estate transactions, there are several possible risks. Some of the Potential Risks 1. Unknowns —Archeological, Environmental and Economic. There are many archeological, environmental and economic unknowns. The extent to which the sites will require remediation of historically or archeologically significant materials is not known. The archeological testing of the sites and the development of a mitigation plan will have to occur prior to any development. BUS S-8 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 9 An Environmental Impact Report and any mitigations will also have to be completed prior to any development. Lastly, the economic downturn that we are currently experiencing could deepen and present difficulties in tenanting the Project. Z Completion of Chinatown Historic District The Copelands have an option to purchase the property where a Chinatown Historic District could be constructed. Though intended, there is no guarantee that this component will be initiated. 3. Increases to the GMP from the Development Review Process. When the Parking/Office Structure goes through the development review process it is likely that design changes could be mandated by our advisory bodies. These changes could increase the GMP cost. Any increases to the GMP will be borne by the City. 4. Approval of County Property Transfer. The County must agree to transfer its interest in property adjacent to the Library necessary to construct the Parking/Office. That approval could be withheld if the Supervisors feel that the consideration negotiated by staff is insufficient. Former Risks Eliminated or Reduced 1. Reduced Parking Deficit. At the end of construction under the existing MOUS it was anticipated that current and new parking demands would have resulted in a deficit of 342 spaces. Under the Amended MOU, it is anticipated that there will be a parking deficit upon the completion of Court Street of only 46 parking spaces. This does not take into account possible reductions required by the development review process. The following chart summarizes the parking supply and demand. StWLY Before Court Street After Court Street French Parldng 12 3 Copeland Office Parldng 42 0 Court.Street Parldng 107 0 Library Side Par)dng 11 1 On-Street Palm 1 0 On-Street Morro 12 9 On-Street Monterey, 0 0 Vintage Properties 39 39 New Parldrig Gaza e 0 238 Total Su l _— 224 290 I)F�Mii�D/REQ-D Before Court Street After Court Street Copeland Office 24 24 Bladerunner 6 6 French Office 5 0 New Office 0 32 New Court Street 0 128 Vintage Properties 39 39 Old Court Street Supply 107 Total Demand 74 336. NET PAMUNG 150 <46> BUS 8-9 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 10 2. Replacement Location for 955 Morro. When the original MOUs were entered into, office space for the possible relocation of 955 Morro (Public Works Department), was not identified. The construction of the Parking/Office Structure would present a location for the Public Works Department. Some of the Potential Rewards 1. Willing and Able Developer. Since the tragic events of September 11, 2001, many cities have had the unfortunate experience of losing developer commitments for potential and approved projects. For many developers, the uncertain economic climate has made them leery of pursing new or ambitious projects. In the case of the Copelands, the City is fortunate to have a willing and able developer. At one time, it was the assumption of our economic advisor, Allan Kotin, that another willing developer would step into the Copelands' place if for some reason they chose to opt out. This is not the case today. Copeland is a local developer who has unique insight into retail trends. These factors make the Copelands a much better risk than another developer would be in this economic climate. 2. Achieving Policy Objectives. The Amended MOU presents a project that implements City growth policies because it is compact, mixed-use, and an infill development that emphasizes the improved, efficient use of existing land resources. 3. New Retail Opportunities. As noted in the 1999 Kotin Report, in order to stay competitive, Downtown San Luis Obispo needs new, larger retail spaces that chains, franchises and independents can locate in. According to the Main Street National Historic Trust Organization, chains and franchises provide the needed name recognition to serve as anchors for the independent merchants in downtowns. Downtown is better off having a mix of tenancy types rather than having to compete with the draw of franchises and chains in other locations in San Luis Obispo. 4. New Restaurant and Social Opportunities. As with new retail opportunities, new space in Downtown is difficult to find. The Amended MOU provides opportunities for new restaurants and entertainment spaces, leading to increased social and cultural experiences in Downtown, which our residents and our policies have identified and supported as being important to Downtown's character. S Additional Office Space for Public and Private Uses. Court Street and the Parking/Office Structure will provide new office space. Office space in Downtown is always in demand. The City and other public agencies are sure to benefit from additional office space near existing government facilities. The precise timing and use of this space will be determined by the City at a later time, and could, as mentioned earlier, include some Library uses, in addition to City uses. 6. Improvement of Downtown Properties. This project could have subtle effects on other Downtown properties. One of the benefits of any revitalization project is that the neighborhood as a whole improves itself. Improvements could be simple, like a fresh coat of paint or a new BUS 8-10 f � Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 11 sign. Improvements could be more dramatic, like the removal of a non-historic building to create a new paseo and garden spot. 7 Increased Opportunity for Residential Construction in Chinatown Historic District. The Chinatown Option provides the opportunity for the Copelands to refine their plans for a Chinatown Historic District. The public has overwhelmingly requested additional housing in that area. There is the opportunity for additional residential construction in the Chinatown Historic District as its development concept is refined and the Copelands have indicated a strong interest in this pursuit. 8. Reduction in the Parking Construction Costs. The revised project will reduce the construction cost for required parking from $12.7 million to $7.1 million. Without the Chinatown component of the project, the new parking demand requirement is reduced and no replacement parking is required for the Palm Street lot. FISCAL IMPACT Parking Fund Adequate Resources Are Available to Fund this Project As reflected above, there are two distinct construction cost components to this project: the office component at about $2.8 million; and the parking component at about $7.1 million, for a total construction cost of$9.9 million. Underlying these construction costs are the property purchase components: sale of the Court Street site by the City to the Copelands (estimated at $1,962;000, including the right-of-away); and the sale of the Copeland-French site to the City (estimated at $1,113,000). This results in a net gain to the City from land sales of$849,000. (However, there will be additional but-not-yet identified land costs offsetting this for 1,680 square feet required in easements.) The following summarizes the funding for these two construction components. Office Space. While the office space component of this project (estimated at $2.8 million for 15,700 square feet) may be occupied by the City at some point in the future, this decision has not yet been made: other tenants may occupy some or all of this space. As such, all costs associated with the project are assumed to be the Parking Fund's obligation at this point. Based on the current office space rental market and the likely debt service costs on this portion of the project (about $195,000 annually), there should be no "net costs" to the Parking Fund for this component. (In fact, it might result in a net gain. At a very conservative estimated rental of $1.50 per square foot per month, this space would generate about $282,000 annually in lease payments. While there would be operation and maintenance costs associated with this, they are unlikely to exceed the $87,000 difference between rental revenues and debt service costs.) Parking Spaces. As noted above, the parking component is estimated to cost $7.1 million. As part of the original MOU, we prepared an extensive analysis of the Parking Fund's ability to finance the then-proposed underground parking structures [copy available in the Council reading BUS 5-11 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 12 file]. This analysis concluded that the project could be funded within existing sources and adopted rates, assuming that the revenue programs already set forth in the Draft Parking and Downtown Access Plan are implemented. Since then, the situation has only improved: 1. The construction costs for parking have been reduced from $12.7 million to $7.1 million. (This is largely due to the reduced number of"new demand" parking spaces that would have been required by the Chinatown component, and the replacement parking that would have been required due to the loss of the Palm Street parking lot). 2. The debt service costs for the Marsh Street garage expansion will be $215,000 less annually than previously projected due to the favorable financing under the recently approved State infrastructure bank loan for this project. 3. Net available working capital available is higher, again largely due to the $500,000 savings resulting from the State infrastructure bank loan for the Marsh Street garage expansion. It should be noted that after funding this project, there will be limited revenues available for fin-ther parking initiatives (under current rates), such as the North Area Regional Facility (NARF). However, this was also true under the prior MOU;and as discussed above, the finances of this project and the Parking Fund in general have improved significantly since then. General )hind Favorable Impact At this point, any impacts on the General Fund would be positive. As discussed above, there is no direct General Fund participation in the project at this point. On the other hand, PCR/Kotin (the City's economic advisor for this project) estimates that this project will generate about $300,000 annually in sales tax revenues. Of this amount, 60% to 70% is net new revenue to the City after considering transfer effects, resulting in net annual sales tax revenues of about $200,000. While there will be incremental ongoing costs associated with providing City services to this project, these will be more than offset by increased revenues from other sources such as property,business and utility users taxes. If the City decides to consider occupying some or all of the office space in the future, we will need to analyze how we will pay for this at that time. (In fact, this will undoubtedly be a key factor in considering this). However, that is a separate and distinct decision from approval of the proposed MOU revisions—and one that can (and should) be made in the coming months. In short, while this was a critical consideration in the prior MOU—since Public Works offices would have to be immediately replaced for the Chinatown component—this is no longer the case. CONCLUSION The Amended MOU continues to provide the necessary framework to complete the property transactions which will result in an exciting redevelopment project in Downtown. Staff believe the terms of the Amended MOU are fair to the City and to the Copelands. The amended project BUS 8-12 Council Agenda Report—Amended MOU, Court St. & Palm/Morro Structure Page 13 presents risks to the City. But, the rewards that the amended project presents have increased from those of the originally proposed project. In these uncertain economic times, the City is fortunate to have a ready, willing and able developer who is deeply familiar with the community — and who brings very beneficial property to the City. If successful, the strategic public-private partnership formed by the Amended MOU should secure the future of Downtown San Luis Obispo for many years to come. ATTACHMENTS 1. February 14, 2001 correspondence from Tom Copeland 2. Amended MOU and Exhibits 3. Map of Properties Involved in Transaction 4. "Easements"Map COUNCIL READING FILE 1. September 19, 2000 Agenda Report and Attachments 2. February 1999, Economic and Fiscal Impact of Proposed San Luis.Marketplace and Implications for Downtown Retail Activity 3. Attachments to GMP Proposal including: a. Watry Design Group Schematic Pricing Sheets b. Architectural Drawings and Specifications c. Soils Report 4. Parking Fund Financial Analysis BUS 8-13 _ ATTACHMENT 1 PALM STREET .� T K ; , February 14, 2001 Dear Mayor Settle and Council members: On behalf of Chinatown/Court Street Partners, please find enclosed a status report bringing you up to date on our progress towards construction of the Chinatown/Court Street project. As you will see from the status report, we are requesting approval of a few revisions to the Memorandum of Understanding("MOU")between the City and Chinatown/Court Street Partners. In particular, we request that the Council agendize our request for proposed revisions pursuant to your Communications Agenda item during the February 20 City Council meeting. Because time is a critical factor in the success of this project, we request that this matter be placed on the Council agenda for discussion at the earliest possible date. We look forward to hearing from you, and to formally addressing the Council at the earliest possible time, regarding the attached. Thank you for your consideration. Very truly yours, Tom Copeland RECEIVED FEB 1 5 2601 SL O CITY COUNCIL BUS 8-14 ATTACHMENT 1 February 14, 2001 Dear Mayor Settle and Council members: Our proposed Chinatown/Court Street project is at a crossroad. Obstacles have arisen which necessitate a change in the way we proceed with the phasing of the project to insure we meet important time restraints. The obstacles relate to(1)the delays in construction of the Marsh Street Expansion, (2) increased costs for the proposed Underground Parking Structure, and (3) the need to construct the Chinatown phase at the same time as the Underground Parking Structure. A more detailed description of those obstacles, and their consequences, is attached as Attachment A. In order to continue moving the project forward, we believe an amendment to our existing Memorandum of Understanding("MOU") is necessary. When we first proposed the project, our vision was simple. We felt that better uses of the Court Street, Monterey Street, and Palm Street parking lots would benefit our Downtown. These areas once supported thriving businesses, before fire and obsolescence converted these properties into the existing parking lots that you see today. The better uses that we envisioned included mixed- use commercial in-fill on Court Street, a Chinatown-inspired mixed-use complex on the Monterey/Palm Street properties, and expanded City facilities on Palm Street. In reality, the project is made up of two distinct components, i.e., Court Street and Chinatown. We believe that both are very important to our Downtown. We still believe that we can create a highly desirable Chinatown-inspired project, including(1) a historic Chinatown theme, (2) mixed uses, (3)a residential component, (4)open space, and (5)the liberal use of environmentally sensitive construction standards. We still believe that our project, as proposed, is the best use for the Palm Street area of our Downtown. However, obstacles we have encountered which are associated with the Underground Parking Structure, need additional time and effort to resolve. Because Chinatown as currently designed is to be built on top of the proposed Underground Parking Structure, its future is currently dependent on the viability of the parking structure. On the other hand, we certainly do not want the complexities of the Underground.Parking Structure and Chinatown to prevent Court Street from becoming a reality. We feel very strongly that Court Street is vital to the continued success of our Downtown. Downtown businesses are not just at the mercy of the economy, they are also affected by the recently opened Promenade, with a remodeled and a considerably larger Gottschalks, and other recently completed shopping areas within a short drive from Downtown. Newly proposed projects will have a similar effect. These competing projects offer new and exciting businesses, restaurants and entertainment facilities. The new Court Street project will give our Downtown a much-needed `spark' in the form of a new mixed-use retail shopping area with restaurants and offices. This will insure that our Downtown will stay competitive and remain the center of our community. The last time anything new happened Downtown was when the Downtown Centre opened in 1993 and that was 7 years ago. Simply put, Downtown needs a"shot in the arm" and we need it soon. Another benefit Court Street would have for the City would be a substantial increase in sales tax revenue. This will help the City meet its recently established goal of increasing sales tax revenue by 5 percent annually. BUS 8-15 1 ATTACHMENT 1 In order to succeed, it is imperative that we begin construction on Court Street quickly;or we risk the loss of necessary commitments from our tenants. We originally anticipated that commencement of construction would occur by now, and based upon our projections we were able to secure commitments from tenants. When the project was delayed due to causes beyond the control of the parties, we were forced to obtain extensions from our tenants. We provided them with a new turnover date of not later than the summer of 2002, which means we need to start construction by not later than the end of this year. We cannot risk the loss of our tenants by delaying them further. The MOU stipulates we must give the City a guaranteed maximum price contract to build the Underground Parking Structure before starting construction on Court Street. This effectively means that we must build the Underground Parking Structure concurrently with Court Street. If construction of the Underground Parking Structure is delayed,we face a similar delay in starting Court Street, even through the Underground Parking Structure does not directly affect Court Street. In fact, converting the Copeland/French property to public parking, at least on an interim basis, would go a long way to replace the parking spaces lost at Court Street. We have prepared a revised version of the MOU with the changes that we are requesting indicated. The revised version is attached.as Attachment.B. The revisions are shown on pages 8 and 13. This change would allow the construction of Court Street to begin soon, without delays attributable to the Underground Parking Structure. If this change is acceptable, we suggest an amendment to the MOU, to reflect our new understanding. The proposed change to the MOU does not materially change the economics of the transaction. The,property transactions can still take place as agreed. The City can still purchase the Copeland and French properties directly across Palm Street from City Hall. The interim use of this property as public parking could help to mitigate the spaces lost on Court Street, as well to give the.City the room to expand as needed. The Underground Parking Structure, Chinatown and Monterey Street portions of the project will continue to be tied together, but would proceed within a separate time frame from Court Street. This would allow the City, and the community, to profit from a timely completion of Court Street, while giving all parties the necessary time to work through the parking issues prior to completion of the final phases of the project. We sincerely hope that you will be supportive of the change we are proposing. If you allow us to amend the MOU to take these circumstances into account, we will continue with the Court Street phase full speed ahead, so as not to lose the momentum that currently exists in our community. We still intend to complete all phases of the originally proposed project, as well as create a viable and attractive project on Court Street. Very�aly yours- Tom oursTom Copeland BUS 8-16 2 J I 1 ATTACHMENT 1 Attachment A Obstacles confronting the project and their consequences. The major obstacles which the project faces at this time relate to(1)the delays in construction of the Marsh Street Expansion, (2) increased costs for the proposed Underground Parking Structure, and(3)not constructing the Chinatown phase at the same time as the Underground Parking Structure. I will address each of these problems separately. Our first concern relates to the timing of the Marsh Street Expansion. During the MOU negotiations, we were optimistic that the Expansion would be completed in a timely manner, and would help in mitigating the parking deficit that would result when the existing Palm Street lot is closed for construction. We thought that the Expansion would be completed before we began construction of the Underground Parking Structure at Chinatown, and before we broke ground on Court Street. Instead, the Marsh Street Expansion has been substantially delayed. Although we do appreciate the Council's efforts to insure its eventual completion, the new estimated completion date is March 2003. We do not believe-that either the EIR analysis or the community would allow us to break&ound on the Underground Parking Structure before the Marsh Street Expansion is completed. Our MOU, as currently-written, prohibits us from proceeding with any construction on Court Street until after we provide the City with(1) a guaranteed maximum price contract to build the Underground Parking Structure and(2) a plan to mitigate the loss of parking spaces during construction. The problem is, we cannot proceed with Court Street until we provide a guaranteed maximum price contract for the Underground Parking Structure. We cannot provide the City with such a contract until all conditions are known and we know with some certainty when construction can begin, as no contractor will guarantee unknowns. This, combined with the difficulty of mitigating the loss of parking before the Marsh Street Expansion is completed, will effectively prohibit us from moving forward with Court Street until at least 2003, which is unacceptable. Our second concern arises because we have received revised cost figures for construction of the Underground Parking Structure. Our consultants have provided us with a revised estimate, which is higher than previously anticipated by a factor of$34 million. We have been informed that the increased cost estimate is due to at least the following factors: • Geological conditions at the site which suggest a higher water table than originally anticipated, necessitating increased dewatering costs; • Soil conditions which will likely require increased, and more expensive, shoring than previously anticipated; • The lack of complete information regarding archeological and environmental conditions; preventing the determination of complete and accurate engineering and construction conditions which will be encountered; • Changes in the.design of the Underground Parking Structure from the original design, depicted in the MOU exhibits,to meet city requirements; and • Current economic conditions, which limit the number of contractors available and willing to bid on similar projects without exorbitant contingency reserves. BUS 8-17 3 ATTACHMENT 1 Our third concern arises because we have learned that phasing the Chinatown portion of the project(separating construction of-the Underground Parking Structure from the rest of Chinatown) adds substantially to the overall construction costs, by a factor of at least$1 million. Accordingly, we feel that separating the Chinatown portion into two phases may be economically infeasible. Instead,we now believe that this portion of the project should be constructed concurrently with the Underground Parking Structure. In summary, the problems outlined above, in addition to the ongoing uncertainties relating to potential archeological findings, directly and adversely impact our proposed project. As a result, construction of the Underground Parking Structure under the timing and terms suggested in the MOU would effectively prevent our project from proceeding for several years, which would likely render the project infeasible. BUS 8-18 4 1 ATTACHMENT 2 PROPOSAL AMENDMENT DATED December 11 ,2001 TO . __...... ......... ... .... .. . . .. . MEMORANDUM OF UNDERSTANDING Between The City of San Luis Obispo And Court Street Partners LLC For the Sale and Subsequent Development of Selected City Properties Dated: September 19, 2000 BUS 8-19 Table of Contents For Amendment to Memorandum of Understanding between The City of San Luis Obispo and Court Street Partners LLC For the Sale and Subsequent Development of Selected City Properties RECITALS .................................................................................................................................... 4 1 PROJECT DESCRIPTION ................................................................................................ 5 1.1 Overview .............................................::................................................................. 5 1.2 Project Parcels and Components ............................................................................ 6 1.3 _ - .Court Street ............:.........:....................:..:............................................................... 6 1.4 Parking/Office Structure ........................................................................................ 6 2 PROVISION FOR NEW AND REPLACEMENT PARKING ......................................... 6 2.1 No Guarantee of Additional Offsite Public Parking .............................................. 6 2.2 Location and Timing of Additional New Demand Parking ................................... 6 2.3 Public Parking Requirement ........................:..........:............................................ 7 2.4 Parking In-Lieu Fee ..:......:....................................:.:.....::....................................... 9 2.4.1 Basic Arrangement ..................................................................................... 9 2.5 The Copelands' Construction of Public Parking .................................................... 9 2.5.1 Specifications and Finish ........................................................................... 9 2.5.2 Contract Arrangements .............................................................................. 9 2.5.3 City Rights of Approval and Inspection .................................................... 9 2.5.4 Cost .......................................................................................................... 10 2.5.5 Cost Confirmation .................................................................................... 10 2.5.6 Conditions Precedent to Transfer ..........:.............:..................................... 10 3 LAND PURCHASE ......................................................................................................... 10 3.1 Land Area and Purchase Price ............................................................................. 10 3.2 Payment for Court.Street and.Copeland Property ................................................ 11 3.3 Conditions Precedent to Initial Closing ............................................................... 11 3.3.1 Court Street .............................................................................................. 1.1 3.3.2 Parking/Office Structure .......................................................................... 11 3.3.3 Managed Parking Plan ............................................................................. 12 3.4 Chinatown Option.Agreement .............................................................................. 12 4 ENTITLEMENT PROCESSING AND TRANSACTION SCHEDULE ........................ 12 4.1 Timing of Initial Closing ............................................................:........................ 12 4.2 Commencement of Court Street Construction ..................................................... 12 4.3 Commencement of Parking/Office Structure Construction ................................. 12 4.4 Managed Parking .................................................................................................. 12 4.4.1 Managed Parking Plan ............................................................................. 12 4.4.2 Administration of Parking Plan ............................................................... 12 F:\TRANS\AGR\COPELA4D\CounStMOU7.wpd 2517006/12301 Q 2 8 BUS -20 5 CONTINGENCIES TO CLOSING ................................................................................. 13 5.1 City Contingencies ...............................................................:..................I............. 13 5.2 The Copelands' Contingencies ............................................................................. 13 6 DOCUMENTATION ......................:...................:........................................................... 13 6.1 Purchase And Sale Agreement for the Parcels ........v........................................... 13 6.2 Application For Regulatory Approval ................................................................... 13 6.3 Development Agreement ........................................::........................................... 13 6.4 Parking Construction and Purchase Agreement ................................................... 13 6.5 Performance Bond for Parking/Office Structure Completion .............................. 13 6.6 Enhancement and Maintenance of Court Street Streetscape ................................ 14 6.7 Additional Documents ......................................................................................... 14 7 RESPONSIBILITIES OF THE PARTIES...:....... .................:......................................... 14 7.1 The Copelands ............................................ ........................................................ 14 7.2 The City ....................................................................:.......................................... 14 8 OTHER MUNICIPAL PROCESSING ............................................................................ 15 9 NON-BINDING NATURE OF THE AGREEMENT ..................................................... 15 10 POSSESSORY INTEREST TAXES ............................................................................... 16 1 I TAX FREE EXCHANGE ................................................................................................ 16 12 ACCEPTANCE AND ACKNOWLEDGMENT ............................................................. 16 F:\TRANS\AGR\COPELAND\CourtStMOU7.wpd 2517006/12301 3 BUS 8-21 RECITALS Whereas, Court Street Partners L.L.C. ("the Copelands") desire to construct retail, office, and restaurant facilities in downtown San Luis Obispo("Court Street")over a project area which totals approximately 34,656 square feet which is currently owned by the City of San Luis Obispo ("the City")which the Copelands shall purchase from the City outright;and,on an approximately 18,595 square-foot parcel which is owned by the Copelands and on approximately 5,431 square feet owned by others, the Copelands shall build a Parking/Office Structure ("Parking/Office Structure") consisting of 238 spaces and office space consisting of approximately 15,700 square feet,which the City will purchase, own and operate (Court Street and the Parking/Office Structure together, "the Project"); and Whereas it appears the Project will have an important revitalization effect on the downtown area, and therefore may be worthy of particular consideration by the City, and Whereas the acquisition of City property and the rearrangement of City parking is critical to effect the Project; and Whereas the City will incur costs not traditionally associated with private development of retail,and Whereas the City has no formal Redevelopment Agency or Redevelopment Areas but the Project is consistent of downtown revitalization and redevelopment; and Whereas the City contemplates the sale of the property without a competitive bidding process that might be used were it not for the revitalization objectives served by the Project;. and Whereas the City Council has directed the staff and consultants of the City of San Luis Obispo to prepare for their review an amendment to the MOU, dated September 19, 2000, describing the Project and proposed transactions; and Whereas the City has determined that the Project will.be-designated as.the highest priority private development project in the City; and Whereas the City Council had previously directed the staff and consultants of the City to prepare for their review the MOU,dated September 19,2000,describing an earlier proposed transaction which incorporated the prospective development of parking and mixed retail office and residential uses on portions of five parcels facing on Palm.and Monterey Streets,familiarly known as the"Chinatown" component; and Whereas the Copelands were unable to proceed with the Chinatown component due to significant parking mitigation issues and the unexpectedly high cost of the required subterranean parking; however, the Copelands propose to enter into an option agreement with the City to allow the Copelands to continue to study the feasibility of the Chinatown component; and F:\TRANS\AGR\COPELAND\CourtStMOU7.wpd 2517006/12301 4 BUS 8-22 Whereas the Copelands are still willing to proceed with Court Street which will provide much of the economic and revitalization benefits originally contemplated; and Whereas the Copelands now propose,partially in response to a request by the City, to construct a multi-level Parking/Office Structure including approximately 15,700 square feet of office space, which construction will mitigate most of the parking deficit created by Court Street; and Whereas the continued commitment of the Copelands to Court Street in the face of uncertain market conditions and the Copelands'willingness to commit to concurrent construction of the parking at a fixed cost to the City 'represent a special opportunity to go forward with critical new retail development that might not otherwise be available; and Whereas the MOU is non-binding in nature; Now, therefore,the parties have prepared the following MOUS 1 PROJECT DESCRIPTION 1.1 Overview The Project shall be built in two distinct components of real property in downtown San Luis Obispo. _Each of the two component areas is described below and shown on the Map in Exhibit 1. Area definitions correspond with information in the April 27,2000, appraisal performed by the Ventura Appraisal Consulting Corporation. (a) Court Street Area (Court Street) - Three adjacent parcels located at the southwest comer of the intersection of Monterey Street and Osos Street and a portion of the adjacent 40-foot right of way, which is now Court Street,.together consisting of approximately 34,656 square feet. (b) Copelands Property Area. (Palm and Morro Streets) - A parcel located on the southeast comer of Palm and Morro.Streets, consisting of..approximately 18,595 square feet owned by the Copelands and an additional 5,431 square feet owned by others adjacent to the Copelands' property. (c) Due Diligence The Copelands shall perform and rely upon their own pre- development inspections and testing to assure that the parcels to be conveyed are suited for the proposed development,with any warranties or representations of City to be negotiated subsequently, including but not limited to: i. Soil and geology ii. Hazardous materials iii. Archaeological and historical F:\TRANS\AGR\COPELAND\CourtStMOU7.wpd 2517006/12301 5 BUS 8-23 i 1.2 Project Parcels and Components Court Street and the Parking/Office Structure development review shall be processed simultaneously. 1.3 Court Street Court Street shall consist of uses currently estimated to be: Retail 45,873 s.f. Office 10,669 s.f. Restaurant/Food 5.000 s.f. Total 61,542 s.f. 1.4 Parking/Office Structure The Parking/Office Structure shall consist of uses currently estimated to be: Office 15,700 s.f. Parking 238 spaces 2 PROVISION FOR NEW AND REPLACEMENT PARKING The Copelands shall be obligated to meet parking requirements for all new construction by paying in-lieu fees as set forth in Section 2.4.1. In addition, the Copelands shall sell to the City the real property described in Section 1.1(b)and construct for the City the Parking/Office Structure as part of a purchase and sale agreement. The parties acknowledge that the Parking/Office Structure will not be adequate to meet the combined needs of the new parking required and the existing public parking to be replaced. Furthermore, the City makes no representation as to where and when the additional parking for which.the Copelands will pay in-lieu fees will be provided. 2.1 No Guarantee of Additional Offsite Public Parking If development review of the Project specifies the need for additional offsite public parking,the City cannot guarantee its availability. 2.2 Location and Timing of Additional New Demand Parking The City cannot specify where and when it will provide additional parking spaces for which the Copelands will pay in-lieu fees: F:\TRANS\AGR\COPELAND\CounStMOU7.wpd 2517006/12301 6 BUS 8-24 2.3 Public Parking Requirement Currently, there are 107 public surface parking spaces on the Court Street Area which will be eliminated during construction and which must be replaced(see table below). There are 30 spaces of required private parking serving the Copelands' Property Area, 27 of which will be eliminated during construction. The net need for replacement public spaces will be 107 spaces.The 238-space Parking/Office Structure will be completed as the need for 160 spaces is generated by the development(32 by Office in Parking Structure; 128 by Court Street).Insofar as replacement public parking takes precedence over required new parking, the first 107 spaces in the Parking/Office Structure will be available for use as replacement public parking spaces, with the remaining 131 spaces available as new spaces.Therefore,the overall deficit for new spaces is 29 public spaces and 27 private spaces at the end of construction.This 29 public space deficit and 27 private space deficit will need to be addressed as part of the CEQA process. [Space intentionally left blank] F:\TRANS\AGR\COPELAND\CamtStMOU7.wpd 2517006/12301 C 7 BUS 8-25 Analysis of Parking Availability Start of Construction End of Construction EXISTING SPACES Court Street 107 0 Copelands' Property -30 238 Total Existing- Public and Private 137 238 AVAILABLE PUBLIC SPACES Court Street 107 0 Copelands' Property 0 238 Total Public Spaces Available 107 238 AVAILABLE PRIVATE SPACES Copelands' Property 30 3 Total Private Spaces Available 30 3 SPACES NEEDED - Public Court Street Replacement 107 107 New Demand - Court Street Retail 0 128 Morro/Palm St. Offices 0 32 Total Public Spaces Needed 107 267 SPACES NEEDED - Private Private Replacement 30 30 Total Private Spaces Needed 30 30 Public Parking Deficit 0 -29 Private Parking Deficit 0 -27 F:\TRANS\AGR\COPELANDXCourtStMOU6.wpd 2517006112301 8 BTS 8-26 2.4 Parking In-Lieu Fee 2.4.1 Basic Arrangement The Copelands shall pay, in cash,a parking in-lieu fee of$4,000 per space for new development at Court Street. 2.5 The Copelands' Construction of Public Parking - 2.5.1 Specifications and Finish With respect to general design, the Parking/Office Structure shall generally correspond to the baseline project set forth specifically in Exhibit 3. In its capacity as the subsequent owner and operator of the Parking/Office Structure,and.separate from its capacity as regulator,the City shall have rights of specific approval and review of all designs and plans, initially at the concept and schematic plan level,and subsequently at the final plans as set forth herein. Upon execution of the MOU the City shall have 14 days to review and approve the Preliminary Design. After approval of the Preliminary Design,the Copelands shall begin preparing the working drawings and shall submit 60%completed working drawings to the City which shall be reviewed and approved within 14 days. No earlier than 15 days,nor more than 30 days, following submission of the Draft Environmental Impact Report,the Copelands shall submit to the City the final plans for the Parking/Office Structure and draft of the GMP set forth in Section 2.5.2 below. Within 30 days of such submission,the City shall exercise its final right of review and approval of such plans.These rights shall be supplemental to and not concurrent with its rights of inspection in connection with building permit,fire and other regulatory functions. Following execution of the MOU, the Copelands shall provide periodic reporting acceptable to the City,detailing any changes to the baseline project for the Parking/Office Structure from that set forth in Exhibit 3,.including any delays in the time schedules which may result in a change to the baseline project. 2.5.2 Contract Arrangements Prior to initiation of construction of the Parking/Office Structure, the Copelands shall provide the City with a final construction contract containing a fixed price contract.for all work,materials,and contingencies("Guaranteed Maximum Price Contract" or"GMP"). The form and content of these documents shall be acceptable to the City. 2.5.3 City Rights of Approval and Inspection During the construction process of the Parking/Office Structure,the City shall have the right,as an owner, to review all change orders, to require change orders which the City reasonably deems necessary only in order to ensure consistency or equivalency with the approved plans and specifications,and to inspect all parts of construction at any time.These rights,like the rights of plan review and approval, are supplementary to and separate from the regulatory functions of the City. F:\TRANS\AGR\COPa AND\CourtStMOU7.wpd 2517006/12301 9 BUS 8-27 J. 2.5.4 Cost The proposed GMP(with performance and completion bonds)for the Parking/Office Structure based upon the baseline project is$9,917,754.00. Any changes to the baseline project set forth in Exhibit 3 may result in a change to the GMP. The GMP is based on a construction start of September 1, 2002. For a period up to 90 days after September 1,2002,the GMP shall be adjusted upward based upon the percentage increase as reflected in the Construction Cost Index published by the Engineering News Record("CC Index")using the Ju1y2002Index Value as the beginning index and the Index Value for the month when construction is intended to commence as the ending index. Following this 90-day period, the Copelands shall have the right to submit a new GMP provided all changes in excess of the CC Index shall be documented and reasonable. 2.5:5 Cost Confirmation The proposed GMP contract with the City (with performance and completion bonds) for the construction of the parking improvements in the amount set forth in Section 2.5.4 or in a changed- amount hangedamount accepted and approved by City shall at a minimum take into consideration the following factors: L Contractor shall pay prevailing wages. ii. City shall own all rights in the plans, and Copeland shall deliver "as-built" plans. iii. The Copelands shall provide City, upon City's request, reasonable back-up and cost confirmation for any part of the baseline project. iv. A completion guarantee shall be provided by the Copelands to commence and complete construction of the Parking/Office Structure. V. City's satisfaction that the City shall have a source of finding to pay for the GMP contract(issuance.of bonds or other financing arrangements)and that City shall not be liable for any capital:expenditures except the payment of the GMP contract. 2.5.6 Conditions Precedent to Transfer The City, in its capacity as owner, shall have the right to review completion of the Parking/Office Structure and assure itself of satisfactory completion in addition to its capacity as building inspector before issuing an initial Certificate of Occupancy for the Parking Structure and "Substantial Completion" of the Office Building. A second condition precedent to the actual 'payment for the garage shall be the submission by the Copelands to the City of a complete set of"as built" plans. "Substantial Completion" shall mean completion of the shell and core to a point at which the only remaining requirements for tenant occupancy shall be those things normally designated as tenant improvements. F:\TRANS\AGR\COPELAND\CounStMOU7.*pd 2517006/12301 10 BUS 8-28 3 LAND PURCHASE 3.1 Land Area and Purchase Price The Copelands and the City of San Luis Obispo have agreed on the purchase price for the two property areas.For the Court Street Area and the Parking/Office Structure Area,the square footage used to calculate area is based on the Copelands'site plan.The agreed upon prices and approximate square footages are as follows: LAND PURCHASE AREA PRICE PRICE Court Street Land 30,000 s.f. $60/s.f. $1,800,000 Court Street Right-of-Way 2,700 s.f $60/s.f. $ 162,000 Copeland Land& Improvements* 18,595 s.f. $ 982,395 Vintage Partners/ Nelson Estate Land* 3,751 s.f. $35/s.f. $ 131,285 City/County Owned Land* 1,680 s.f to be determined *See Exhibit 6 3.2 Payment for Court Street and Copeland Property The City and the Copelands.shall consummate the land purchase by way of a trade of each other's property pursuant to a Purchase and Sale Agreement:on.the "Initial.Closing.Date". The Copelands shall pay the difference in purchase price by.a promissory note which shall carry an interest rate at the then-existing prime rate,which shall be paid interest only quarterly,which shall be all due and payable on the earlier of two (2) years from the Initial Closing Date or on the commencement of construction of the Court Street Project and which shall be secured by a first deed of trust on Court Street. 3.3 Conditions Precedent tor Initial Closing In order to assure that the Project will be constructed and completed, and in addition to any other requirements set forth in this MOU, all of the following are conditions precedent to the transfer of any of the properties described in Section 1 at the time of the Initial Closing Date. F:\TRANS\AGR\COPELAND\CounStMOU7.vipd 2517006!12301 Il BUS 8-29 3.3.1 Court Street The Copelands shall provide approved plans and a building permit for Court Street with evidence of financing for their development. 3.3.2 Parking/Office Structure The Copelands shall provide approved plans with evidence of financing for the Parking/Office Structure and a GMP contract with the City (with performance and completion bonds) for the construction of the Parking/Office Structure as specified in section 2.5.2. 3.3.3 Managed Parking Plan The Copelands shall provide a Managed Parking Plan acceptable to the City as.specified in Sections 4.4.1 -4.4.2. 3.4 Chinatown Option Agreement The City and the Copelands shall enter into an Option Agreement consistent with the option terms attached hereto as Exhibit 2 prior to the Initial Closing. 4 ENTITLEMENT PROCESSING AND TRANSACTION SCHEDULE 4.1 Timing of Initial Closing The Initial Closing shall occur as soon as possible after the Copelands'receipt of full entitlements, which shall include the expiration of the 30-day appeal period. 4.2 Commencement of Court Street Construction Construction of Court Street shall begin as soon as-possible after the.-Initial Closing Date: 4.3 Commencement of Parking/Office Structure Construction Construction of the Parking/Office Structure shall begin as soon as possible after the Initial Closing Date. 4.4 Managed Parking 4.4.1 Managed Parking Plan The Copelands shall prepare a Parking Management Plan to allow off-site and/or more intense use of existing parking during the period that either or both of the:Court Street and the Parking/Office Structure sites are under construction and unavailable for parking and prior to completion of the F:\TRANS\AGR\COPELAM\CounStMOU7."d 2517006/12301 12 BUS 8-30 Parking/Office Structure. This Parking Plan shall be presented to the City for its review and approval. 4.4.2 Administration of Parking Plan The initial costs for preparation of this parking plan shall be paid by the Copelands. Subsequently, this parking plan will be administered by the City but its implementation and net operating losses will be reimbursed by the Copelands according to the budget prepared by the Copelands and approved by the City. 5 CONTINGENCIES TO CLOSING 5.1 City Contingencies In its capacity as landowner.and land seller;the City is under no obligation to fulfill the terms of any purchase and sale agreement until the development review process is concluded and all approvals, including the review and approval process set forth in Section 2.5.1, are obtained and such other requirements as may pertain to final entitlement and approval of this project are fulfilled. 5.2 The Copelands' Contingencies The City acknowledges that the Copelands may have certain financing.or pre-leasing contingencies for the commencement of construction.Exhibit 4 enumerates these contingencies and indicates the process by which they will be satisfied as well as the notice to be provided to the City of the Copelands'satisfaction or of their failure to satisfy and associated termination of this transaction.In addition,the Copelands shall not be obligated to fulfill the terms of any purchase and sale agreement until the development review process is concluded and all approvals are obtained and such other requirements as may pertain to final entitlement and approval of this project are fulfilled. 6 DOCUMENTATION At a minimum the documentation to be created as a result of this MOU will include the following: 6.1 Purchase And Sale Agreement for the Parcels 6.2 .Application For Regulatory Approval 6.3 Development Agreement A statutory development agreement (and such other zoning changes, ordinance changes, environmental review,and certifications as may be necessary to confirm the Copelands'entitlement to construct the proposed project) shall be prepared. F:\TRANS\AGR\COPELAND\CourtStMOU7.wpd 2517006/12301 13 BUS 8-31 6.4 Parking Construction and Purchase Agreement An agreement between the City of San Luis Obispo and the Copelands for the construction of the Parking/Office Structure shall be'prepared. This documentation shall contain a.GMP for all work. 6.5 Performance Bond for Parking/Office Structure Completion In addition to the GMP contract,the Copelands shall also provide at no cost to the City a surety bond to guarantee completion of the Parking/Office Structure which meets City standards for such bonds. This surety bond and guaranty shall be conditioned on the facts and then-known remediation costs associated with any archaeological or environmental hazards impacts associated with the Parking/Office Structure construction. 6.6 Enhancement and Maintenance of Court Street Streetscape As part of the Court Street Project,the Copelands contemplate the installation of some mechanism to assure high levels of maintenance, uniformity of street facade appearance and maintenance, adequate security and a variety of other enhancement improvements to the streetscape of Court Street adjoining the project,some of which will occur on public property or on property not owned by the Copelands. Before undertaking or implementing any such plans,the Copelands shall either provide evidence of formation of a Property and Business Improvement District(PBID)including the other owners of property on Court Street who will be affected or, alternatively, provide evidence satisfactory to the City of the formation of some other voluntary cooperative enterprise to accomplish the same goals. 6.7 Additional Documents There may be additional documentation or further elaboration of this documentation. 7 RESPONSIBILITIES OF THE PARTIES 7.1The Copelands It shall be the responsibility of the Copelands to diligently pursue all aspects of the application for the development of the Project, including all environmental processing,all zoning processing,any supporting technical studies,and any other supporting studies as may be necessary,including visual, traffic and circulation,historical, and archaeological investigation and mitigation. All costs associated with both the processing of entitlements and City approvals and the production of studies and planning for the development shall be paid for (without any mark-up) by the Copelands,including reimbursement to the City for those certain third-party expenses(without any mark-up)identified on Exhibit 5 incurred after approval of the initial MOU in the preparation of the required documents identified in Section 6.It is anticipated that costs associated with development of the Parking/Office Structure will be included in the total cost of the Parking/Office Structure. . F:\TRANS\AGR\COPELAND\CounStMOU7.wpd 2511006/12301. 14 BIDS 8-32 7.2 The City The City,in its role as landowner,shall cooperate with and furnish information to the Copelands on the properties. With regard to zoning,the City's responsibility shall be limited to providing that level of interaction, timely response, and review as provided for in regulations and ordinances of the City of San Luis Obispo. 8 OTHER MUNICIPAL PROCESSING The Parties understand and agree that those approvals required of the City acting in its governmental or regulatory capacity are separate and distinct from those approvals required by the City under this MOU. Notwithstanding anything to the contrary in this MOU, nothing herein shall be interpreted to mean that the City is an any way waiving;limiting,or weakening any regulatory or police power the City may have in any of its governmental capacities. It is intended that the Copelands shall be obligated to fulfill such requirements as may be imposed by the City or any other governmental agency or authority having or exercising any jurisdiction over the Project or over any construction to be undertaken by the Copelands in, on or about said Project. Refusal or failure by the City in its governmental or regulatory capacity to take a legislative action, issue any permit, license or any other action or approval sought by the Copelands for construction of improvements on, or development of, the Project shall not constitute a breach of this MOU. 9 NON-BINDING NATURE OF THE AGREEMENT Without obligating either of the parties, this MOU summarizes what the Copelands and the City perceive to be the major deal points with respect to the Project.No binding obligation is created by this MOU or can be created other than by execution of both a binding Purchase and Sale Agreement and final, binding development agreement,,and other associated documents listed in Section 6, above. Notwithstanding the foregoing, the parties agree that if a Purchase and Sale Agreement is entered into between the parties, it shall substantially include the terms of this MOU. This MOU is an outline for discussion purposes only, is not intended to be contractual or binding for any purpose and is not an offer or representation by either party.It is designed to reflect the ideas being formulated,to provide a framework to attempt to resolve issues and concerns which have been raised, as well as for the resolution of issues and concerns which may arise. In some instances, a tentative, but hot binding, agreement on a matter is referred to, and in other instances, material agreements are yet to be defined and specified.The fact that any particular component or issue is not addressed in this MOU does not mean that it cannot be the subject of future discussions and negotiations,and the fact that a component is addressed does not mean that it cannot be rejected or modified by either party. The Copelands further acknowledge and agree that the officers,employees and consultants of the City, or any member of the City Council, do not have authority to bind the City,and the final form of any proposed agreement to be negotiated may have to contain matters not F:\TRANS\AGR\COPELAND\CouitStMOU7.wpd 2517006/12301 15 BUS 8-33 contemplated by this MOU, but which may be needed to accommodate compliance with the California Environmental Quality Act(CEQA),and that there is no agreement by City to reimburse or defray any cost or expense incurred by the Copelands.The parties acknowledge that neither party will be contractually bound to any sale,purchase or development nor to any element of the proposed development.until the final execution of a mutually acceptable final agreement approved and executed by authorized representatives.Alternatively,either of the parties may determine that further negotiations will not be fruitful and then terminate this MOU or allow this MOU to lapse without further liability to the other. 10 POSSESSORY INTEREST TAXES If the project contemplated by this MOU is subsequently approved and constructed, a possessory interest subject to property tax may be created and may rest in the Copelands.The Copelands or their interest in the property and the improvements thereon-may be subject to payment of property taxes levied on such possessory interest.The Copelands shall pay all such taxes,however categorized or calculated. 1 I TAX FREE EXCHANGE City agrees to cooperate with Copeland to effectuate a Section 1031 tax free exchange, or similar transaction,to the extent reasonably possible, provided that City will not bear any additional cost or expense for exchange transactions to benefit Copeland. 12 ACCEPTANCE AND ACKNOWLEDGMENT CITY OF SAN LUIS OBISPO By: Mayor Allen Settle ATTEST. Lee Price, City Clerk APPROVED AS TO FORM: Jeffrey G. Jorgensen, City Attorney COURT STREET PARTNERS, L.L.C. By: Tom Copeland,Managing Member F.\TRANSUIGR\COPELAND\CouftStMOU7.wpd 2517006/12301 16 BUS 8-34 MEETING AGENDA I E,2 11-Dl ITEM# O' San Luis Obispo Chamber of Commerce December 10, 2001 1039 Chorro Street • San Luis Obispo, California 93401-3278 (805) 781-2777 • FAX (805) 543-1255 • TDD (805) 541-8416 David E. Garth, President/CEO POUNCIL ❑ CDD DIR ❑ FIN DIR Mayor Allen Settle C3FIRE CHIEF M�KfORNEY ❑ PW DIR Members of the City Council Ef CLERWCRIO ® POLICE CHF City of San Luis Obispo ❑ D T HEADS ® REG DIR 990 Palm Street ® UTIL DIR San Luis Obispo, CA 93401 CJ HR DIR . gQ� Re: Amended MOU for the Court Street Project and Palm/Morro Parking/Office Structure Dear Mayor Settle and Council Members, We are pleased that you have the opportunity tomorrow night to approve an amended MOU for the Court Street Project and the Palm/Morro Parking Office Structure. This is an important next step in the process of maintaining and promoting the economic vitality of our downtown. It also coincides with our Chamber's goal of aggressively supporting downtown redevelopment with regard to retail. An injection of new retail and services in the downtown, such as this project proposes, specifically serves the efforts of our community and our Chamber to protect and enhance the downtown area as a multi-use restaurant, entertainment, shopping, and professional center. It also dovetails with the belief outlined in the Chamber's Economic Vision Document that existing surface parking in the downtown area can be put to better and higher uses, with the lost surface parking being replaced by consolidated structures. The synergy created by redevelopment in the downtown will help San Luis Obispo continue to target and attract major destination retailers which have regional drawing power. Since it is clear that most major developments do require some degree of City participation or collaboration, we encourage you to give staff distinct direction and a firm comrnitment to this amended MOU so that redevelopment for this portion of the downtown can occur as expeditiously as possible.Your support will go a long way toward achieving the community benefits that are derived from businesses developing, growing and locating here. Thank you for your consideration of our views on this matter. Sincerely, RECEIVED PEC : , 2001 SLO CITY COUNCIL DaveJuhnke Chairman of the Board e-mail: slochamber®slochamber.org • websites: www.slochamber.org www.visitslo.com Richard Schmidt !544-42470M PV'G 102AGENbX2 J Di,_ ITEM #® RICHARD SCHMIDT 112 Broad Street, San Luis Obispo, CA 93405 (805) 544-4247 e-mail: rschmidt@calpoly.edu December 10, 2001 To the City Council` Re: Item 8, Court Street/Morro/Palm I urge the Council not to proceed with the MOU at this time. To do so would constitute an end run around legitimate public involvement in deciding WHAT SHOULD BE DONE WITH PROPERTY THE PUBIC OWNS. Some points: 1. To date, there has been no unfettered public discussion about WHAT THE PUBLIC WANTS DONE WITH PUBLIC PROPERTY AT COURT STREET. This entire negotiation behind the scenes has been a public process sham. (The public has been invited to comment on the Copelands' plans, not to plan for PUBLIC USE of this PUBLIC PROPERTY.) All discussion of PUBLIC USE alternatives has been drowned out by the city's unwillingness to engage in appropriately timed and appropriately framed public discussion about PUBLIC USE of this property. With the MOU on the table, all discussion is prejudiced by the M OU's mere existence. When the city last put forth a development proposal for this property, the present mayor led a referendum against it on grounds it was a misuse of public property. Since then, although there have been many opportunities, the city has never facilitated serious public discussion of alternative uses for this property. Individual members of the public have proposed numerous public uses: a park, a cultural facility, a combination cultural facility/urban park (with the Oakland Museum often mentioned as a model), etc. Private commercial use has been at the bottom of the public's list. This is public property; the public must be heard, and if it isn't heard in an orderly fashion, it will be heard in a disorderly one, as it was last time. Prior to considering the MOU is the best time for the city to undertake serious effort to determine the public's sentiment. 2. Palm/Morro is the wrong place for another monster garage, for a number of reasons. First, there is already too much parking concentrated in this area. To permanently institutionalize the Copeland property, in addition to all the adjacent city property, as public parking is a long-term mistake. It ghettoizes this part of town as parking lot and traffic corridor for parking. Parking needs to be more dispersed. —FQq0L1NCIL F801D biRRECEIVED C1 FIN DIR A 0 ❑ FIRE CHIEF I tiv, 4 c) 2001 YrORNEY ❑ PW DIR 20`CLERK/ORIG ❑ POLICE CHF ❑ D T EADS ❑ REC DIR 9LO CITY COUNCIL I �O UTIL DIR 0 HR DIR Richard Schmidt 4 5444247 IM12M/1 (911:02 PM 0212 Second, the design of this parking monster is a disaster. The renderings that have been published show how huge, how ugly, how out of scale, how out of place it is at this location. Third, building this garage would have disastrous consequences for the civic center's logical expansion. This site should be reserved for expansion of the public library, and for expansion of city hall. The library, through the city's cheapness and shortsightedness, was built at 27,000 square feet when it needed 30,000 square feet even a decade ago. Instead of using it to build a half-underground story, the excavation for removal of the old hotel on this site was refilled. Now the library is desperately short of space. The only contiguous site for expansion.is the proposed parking garage site. Likewise, the residue of the site has long been considered the ideal place for expansion of city offices, and development of an elevated civic plaza from which views of downtown and the hills could be enjoyed. If the parking monster goes ahead on this site, all these potentials will be lost, and views from Palm Street will be forever blocked instead of enhanced. The investment of public funds in a too-small library will be jeopardized by lack of opportunity for contiguous expansion. Fourth, the property the Copelands' are trying to foist upon the city at Palm/Morro is very poor property. I suspect they are anxious to get it into city ownership because it's not much use to them for anything else. All the problems they cited as impediments to developing the Chinatown site also pertain to this property as well. I think the city would be extremely foolish and short-sighted to jump into this deal. So, Please don't proceed with the MOU at this time. Sincerely, Richard Schmidt ',Diane Reynolds- Dec. 11 Council meed _ _ � - _ - i DATE !a- -o/ ITEM #_______ From: <bvance1359@att.net> To: <sstendah@slocity.org> Date: 12/6/01 10:55AM Subject: Dec. 11 Council meeting I am a member of the Board of Directors of the SLO Friends of the Library. At our meeting this week we looked at the proposed Copeland's project at the comer of Palm and Morro. I have one concern with the project which I would respectfully ask that you look into. The OCLERKMRIG NCIL" M CDD DIA elevator from the garage,which would be used by ❑ FIN DIR handicapped library patrons and volunteer workers, is 0 ❑ FIRE CHIEF mid-block on Morro Street. This would require a steep RNEY El PW DIR uphill walk or wheelchair push/ride in order for these ❑ POLICE CHF folks to get to the library entrance. I would ask that 13P1 HEADS ❑ REC DIR consideration be given to either moving the library to ❑ LITIL DIR the Palm St. side of the proposed building, or that ❑ MR DIR. handicap parking be placed where the current parking is in the small lot adjacent to the library. Thank you very much for taking a look at this and coming up with a solution that will make access to the library easier for physically impaired individuals. Barbara Vance 543-7557 RECEIVED PEC 10 2001 SLO CITY COUNCIL LIST OF E)GHBITS Exhibit 1 Site Map Exhibit 2 Option Terms Chinatown Project Exhibit 3.- Baseline Parking/Office Structure Plan Exhibit 4 Copeland Contingencies Exhibit 5 Expense Items Eligible for Copeland Reimbursement Exhibit 6 Area Map F:\TRANSXAGR\COPELAND\CounStMOU7.wpd 2517006/12301 17 BUS 8-35 call MENNEN miss ..Us No MEMNON IN 114,52"M IN IN IN ■ NO 0 %�j % ;ll /),m m �Mv EN m /,ggm I q VIY ,vg1m A ffil / � q/,j■ ■ / ��/i`''ii FE� R A 0 Al sm� /00' M W16 OEM- 77 . ..... , ,g�llmy A AWnrWd /-FIR ffil INS za ell irl pal i Exhibit 2 OPTION TERMS CHINATOWN PROJECT 1. PARTIES Copeland Entity to be determined("the Copelands") City of San Luis Obispo ("City") 2. OPTION City shall provide the Copelands with an option to purchase certain real property owned by the City on the corner of Morro Street and Palm Street in the City of San Luis Obispo and additional real property located on Monterey Street which is more particularly described in Exhibit 2-1 attached hereto. 3. OPTION PRICE The Copelands shall pay City Eighty-Eight Thousand Five Hundred Dollars ($88,500) as consideration for the option. 4. TERM OF OPTION The term of the option shall be for 18 months: The Copelands shall have the right to extend this option prior to the expiration of the original 18 months for an additional three(3)years upon the payment of an additional l%per year of the Purchase Price for the property upon the condition that the Copelands submit a completed application for the Chinatown Project. 5. PAYMENT OF OPTION PRICE The option price shall be paid prior to the Initial:Closing as forth in Section 3.4 of the Amendment to the Memorandum of Understanding for the Court Street and Parking/Office Structure Proj ects. 6. PURCHASE PRICE OF PROPERTY The purchase price for the property shall be Two Million Nine Hundred Fifty Thousand Dollars ($2,950,000). 7. DEVELOPMENT OF PROPERTY In the event the Copelands purchase the property then,to the extent feasible,the Copelands shall incorporate a downtown residential component into any proposed development of the Chinatown Property which would recognize the historical significance of the property. The Copelands shall pay parking in-lieu fees in effect at the time of development. F:\TRANS\AGR\C0PEI.AND\Exd»bit2.1203.rtfwpd BUS 8-37 Exhibit 24 Chinatown Option 11111 Ul Ul , , 4ragoW TL ?Ocei; I Ll � a , a , - MONTEREY /TEEET - a e `0/ O i II I Ij I Court HMStreet - Area i a Nt00EYA GTOEET y ® Chinatown Land Purchase S i t e M a p SCALE CHINATOWN MtokDkoid a 50' COURT STREET Bea We ObbFxx Offcn is BUS 8-38 Exhibit 3 Parking Structure Proposal to City of San Luis Obispo For a Guaranteed Maximum Price ("GMP") Contract To construct an Office/Parking Structure at the northeast corner of Palm and Morro Streets Prepared by: TD3Spikell,Development Consultant,Bruce C. Spikell Watry Design Group,Parking Consultant,Nick Watry APS Architects Inc.,Architecture&Design,Mark Rawson J.W.Design& Cosntruction Inc.,Contractor,Jerry Williams November 2001 BUS 8-39 Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo CONTENTS Introduction to the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Baseline Project Concept The Proposed Baseline Project Project Goals Site Description . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Proposed Project Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Schedule for Completion . . . . . . . . . . . . . . . ... . . . . ... . . . . . . . ... .. . . . . . . . ... . . . . . ... . . ... . . . . . . . . . . . . 10 Project Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Summary of costs Direct Costs Additional Assumption/Contingencies to Costs Indirect Costs BUS 8-40 Court Street Partners,LLC Proposal for OfficelGarage at Palm and Morro Streets City of San Luis Obispo LIST OF EXHIBITS (Attached herein) Exhibit A Design Drawings by APS Architects, Inc. Progress Plot 8/7101 A1) Overall Project Context Site Plan;A2) Project Site Plan;A3) Exterior Elevations West, North A4) South, East; and A5) Floor Plan Exhibit B Project Schedule Exhibit C GMP and Allocation of Costs Exhibit D Construction Scope Exhibit E Contacts LIST OF ATTACHMENTS (Attached separately) Attachment 1 Drawings& Specifications (Delivered to City on November 30, 2001) Watry Design Group Schematic Pricing Set dated 8/8101 Sheets TO.1 2;A2.1, 2.2, 2.2a, 3.2, 5.1, 5.2, 6.1, SL 1, 1.2, 2.1, 2.2, 3.1, 4.1, 4.2, 4.3, 5.1, 6.1, 6.2, 6.3, 7.1, 7.2, 9.1, 9.2, 9.3 Attachment 2 Drawings& Specifications (Delivered to City on November.30, 2001) APS Architects,.Inc. Schematic Design Drawings dated 9114101 Sheets ARC-1, ARC-2, ARC-3 Attachment 3 Earth Systems Soils Report (Delivered to City on November 30, 2001) INTRODUCTION FATRANS\AGR\COPELAND\Fxhibit 3-1203.wpd 3 251700&12301 September 2001 BUS 8-41 � 1 Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo The Copeland family dba Court Street Partners, LLC ("the Copelands'l desire to construct a retail project("Court Street'l in the downtown area on property, known as the Court Street parking lot,that the Copelands propose to purchase from the City of San Luis Obispo. The Copelands have received letters of intent from tenants to occupy space in the proposed project if they can be open by the spring/summer of 2003. The Copelands desire.to proceed as soon as possible to meet this deadline. The City has indicated that it does not want to proceed with the development of the Court Street Project without some meaningful relief for the parking shortage that the project will create. The City has also identified a need for approximately 15,700 square feet of additional office space in close proximity to City Hall. In order to accommodate these two City goals:as well as allow The Copelands..to proceed with Court.Street, the Copelands propose to give the City a guaranteed maximum price contract to construct an Office/Parking Structure for City"use, consisting of approximately 15,700 square feet of office space and 238 parking spaces. This proposed project is to be built on a site currently owned by The Copelands located at the northeast comer of Palm and Morro Streets directly across from City Hall, and one block from the proposed Court Street.Project. The Copelands proposes to sell this site to the City in conjunction with the City's sale of the Court Street site to The Copelands. The Copelands are asking the City to accept the proposal, described herein, as a basis to authorize The Copelands to proceed with the Court Street development. FATRANMAMCOPELANDExhibit 3-1203.wpd 4 2517OW12301 September 2001 BUS 8-42 Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo The Proposed Baseline Project& Guaranteed Maximum Price The Copelands, in coordination with City staff, have identified a "baseline project" that can be delivered for a GMP of$9,917,754 summarized as follows: Office Garage Total Hard Costs $.1,351,880 $ 4,875,331 $6,227,211 *Other Costs 1,430,800 2,259,742 3,690,543 Total $ 2,782,680 $ 7,135,074 9,917,754 Hard Cost per Sq. Ft. $ 86.11 $ 45.39 $ 50.59 Hard Cost per Stall $ 209485 Total Cost per Sq. Ft. $ 177.24 $ 66.43 $ 80.57 Total Cost per Stall $ 29,979 *Other Costs include On &Offsites, Office Ti's, Indirect Costs, Financing and Contingencies. Hard costs,the actual construction costs for the office and garage portions,are summarized separate from `other' costs so that similar projects in the City can be compared. Details of these costs are discussed in Project.Costs and Exhibit C (GMP Allocation of Costs),and Exhibit D(Construction Scope). (See Cost section below.) A"baseline project"is one in which a basic design is offered which can be further developed and/or expanded upon, if desired or required. The benefit of this concept is that it offers the City a privately-developed project for public use that: • meets the minimum planning and design requirements of the City • aesthetically meets the demands of the community • provides an economically viable project. The purpose of the baseline project concept and GMP contract is to allow the Court Street Project to proceed as stipulated in the Amended Memorandum of Understanding. The Copelands are flexible and wish to work with the City to develop the project further to meet any specific needs or desires of the City. In order to give the City a GMP, there must be a good starting point. The baseline project concept achieves this starting point and gives the City a guaranteed price for a specific project. FATRANMAGMCOPELANDExhibit 3-1203.wpd 5 2517006/12301 September 2001 BUS 8-43 Court Street Partners,LLC Proposalfor Office/Garage.at Palm and Morro Streets City of San Luis Obispo The Proposed Baseline Project The baseline project includes 15,700 square feet of office space and parking for 238 cars. The project is represented by all of the documents set forth in the Exhibits and Attachments.. The proposed Office/Parking Structure attached is designed with a program for general office use and parking,but without knowing all the specific requirements of the City. No major architectural or structural modifications to the building will be required to occupy and use as intended,however modifications can be made to meet the City's specific requirements,as the City clarifies its specific requirements and needs. The project proposed will be built.to- standards on a fast track schedule. The Copelands will develop the baseline project into a fully executable set of contract documents suitable to build the project. The Copelands will provide contract documents consisting of architectural and engineering working drawings and specifications to meet the City's criteria. Except to the extent changes are necessary to bring the application into compliance with building or safety codes then in effect,any increases in cost as a result of City requested changes or modifications to the baseline design would be at additional cost to the City. The hard costs(contractor's construction price),shown in the cost section of this proposal,represent the minimum that a private developer (or the City) would have to spend to construct this project. Indirect costs include all normal development costs for a project of this scope. Project Goals The primary goal of this project is to improve a portion of an existing privately owned downtown commercial property,for the benefit of the City. This property is currently developed with a large private parking area and small office. The Copelands are proposing to provide public parking and ground floor office-space that would be attractive.and useful to the community. Some of the design goals of the project include: • An improved downtown commercial property • Ground level office space to "activate" the street • A parking component designed as a less dominant feature • A building that looks like a combination of several smaller buildings A structure that fits into the current "look" of downtown • A multi-use public plaza • Enhanced pedestrian traffic. FATRANS\AGR\COPELAND\Exhibit 3-1203.wpd 6 251700&12301 September 2001 BUS 8-44 i Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City o{San Luis Obispo Site Description The site (Exhibit Al Context Site Plan) includes a portion of the Copelands' property at the northeast corner of Palm and Morro Streets with 101 feet fronting Palm and 1764" fronting Morro. The site slopes approximately 11 feet in the long direction of the project and presently provides surface parking and a small office building. A 15'access parcel parallel to Morro,between the property and the Library site,and an approximate 1'-10" encroachment on either the Library site or the city street will also be used. As mitigation for the use of the easement and encroachment,the baseline project will include.paving,landscape,and lighting the courtyard between the new structure and the Library. Proposed Project Design The Copelands are proposing to construct a building that will appear like a combination of several smaller buildings. This would be consistent with the current "look" in the downtown area. The building would link the City and County government areas with the downtown. The proposed building would contain ground level offices,accessed at the corner of Palm and Morro Streets. Upper level parking decks could be.converted to office/commercial use at a later date. One level of parking is located below grade, with access occurring off of Morro Street, at mid block. This access also provides a means of access to the existing parking area located behind the J.P. Andrews Building and adjacent buildings. The sloping nature of the site allows the below grade level of parking to be open and at grade at one end. This parking area is open to a.proposed pedestrian street that would link Morro Street and Monterey Street with the Library plaza and areas to the north and west. The area along the northern side of the site, between the library and the project, is envisioned as a multi-use space with paving to match the city sidewalks. This space will primarily serve pedestrians, While still allowing access for the Bookmobile, service, and emergency vehicles. Providing office and public use areas at the ground floor follow City precedent and will "activate the street"and avoid the sometimes-uninviting feeling that results when parking occurs at the street level. FATRANMAGMCOPELANMExhibit 3-1203.wpd 7 25170.06/12301 September 2001 BUS 8-45 I Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo Proposed Public Plaza r The area between the Library and the project is proposed as a public plaza - referred to as the Library Plaza. Adjacent to this new plaza is the access to the public parking located above the new offices. This access is conveniently located across from the existing city offices and council chambers, adjacent to the library, and at a mid-block location, away from street intersections. Proposed Building Exterior Downtown San Luis Obispo is comprised of many smaller scale shops and buildings. The exterior concept for this building is to break the massing into sizes and scales that are compatible with the existing downtown. This will be done through the use of a combination of exterior finishes and varied articulation of the facades. Materials.such as brick,painted textured concrete and stucco,and the are proposed. Variations in"window" sizes, parapet heights, details, and materials will create a variety of"building types" and blend with the existing downtown. Proposed Parking Areas Another of the design goals is to have the parking component become the less dominant feature of the building. Parking should be convenient, safe, and easily used, and have an appearance that is harmonious with the look of the downtown. The proposed design incorporates the following minimum criteria: • Consistency with City design criteria. • 60 degree angled parking,with one-way parking configurations, as preferred by the City (as exists in both existing city parking structures) • Make the parking as efficient as possible • Provides an easy means of egress • Provides a separate basement level for office parking • Provides "flat" level parking decks that could at some future date be converted to other uses. • The building footprint should not exceed 177 feet in length or 118 feet in width. Multiple parking schemes were studied to evaluate efficiency and cost. Parking schemes, which were rejected, were rejected for the following reasons. FATRANS\AGR\COPELAND\Exhibit 3-I203."d 8 2517006/12301 September 2001 BUS 8-46 a Court Street.Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo • Parking on ramped floors,generally the most efficient parking,was rejected due to a minimum floor length requirement of 230 feet,exceeding the 177 feet of available site length. • 90 degree parking, while more efficient than 60 degree parking, is generally considered unacceptable for short term parking because it does not provide the ease of in and out needed for short term durations. (Shoppers and public use parking is generally considered 'short tern' parking as opposed to 'all day' or 'long term' parking, which would be more typical for office type uses. It should be noted that the existing parking at Court Street,which this parking is proposed to replace,as well as the new demand parking at Court Street retail;are.both short term.) • Midlength speed ramps and circular speed ramps were eliminated as all generally required 90 degree parking and created more difficult means of egress. Hybrid parking schemes,such as overlapping decks,required modified speed ramps,which are more difficult for users. • Eliminating access from Palm Street,thereby requiring all entry from Morro Street, became impractical because of the requirement to maintain private access to the properties behind the J.P.Andrews building. In addition this would prevent the city from securing the'basemenf..level parking at night,which has been brought up as a security issue. The baseline design incorporates angle parking, separate access to office and public parking, a straight speed ramp between floors, and minimum building dimensions to achieve a reasonable solution. The majority of parking is on a 60 degree angle which provides the:easiest and quickest in-out for short term parking. The City office parking entry is separated from thepublic parking. This parking area provides 49 stalls at the lowest level for'the use of the City offices with access off Morro Street. This also provides through access to the adjacent properties. A separate ramp system for the public parking is off Palm Street to four levels of parking over the offices space. The building is 1764" long and 117'-10" wide with a parking area of 107,400 square feet,totaling 238 stalls. The Efficiency Ratio (107,400 square feet per 238 stalls)of 451 square feet per stall is relatively high due to the requirement for speed ramps and the use of angle rather than 90 degree parking. FATRANMAGMCOPELANMExhibit 3-1203.wpd 9 2517006/12301 September 2001 BUS 8-47 Court Street Partners, LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo Schedule for Completion For the proposed project,the Copelands have designed a milestone schedule that demonstrated the fast-track nature of the project and therefore requires a coordinated effort by the City,the contractor and the development group. Exhibit B sets forth the project schedule. The schedule recognizes the need to complete the EIR and entitlements for the Baseline Project in time to allow for the sufficient completion of shell construction of the Court Street Project in order to turn over for tenant improvement by late 2002. This will allow for tenants to open for business in the spring of 2003. While the time7to.actually complete.the Baseline Project may be flexible,the time to complete the Court Street Project is critical.to meet tenant commitments. If all approvals are in place, and for reasons unrelated to the Court Street Project the City chooses to delay construction of the Parking/Office Structure, the Copelands shall be entitled to commence construction of Court Street immediately upon obtaining City approvals and permits. Based on the information.shown on the schedule, the contractor proposes to guarantee that the GMP will be firm for a construction start no later than September 1, 2002, with delivery of the building approximately 10 months later in the Spring/Summer of 2003. Highlights of the project milestone dates shown on Exhibit B are discussed in the following chart. FATRANS\AGR\COPELAND\Exhibit 3-1203.wpd 10 2517006/12301 September 2001 BUS 8-48 17\ Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo Project Milestones+ i E:::rnx.....:i:...:�a5 ;.r.;;>o2k;n: :r'•k':;9'<>:::K;Ya ..�,,., ,.:.kc..�,.,�.,�».:_..;:;.. .9'::r.:: r.;3�C:w.,,;,a,+:ye;nx:.rr.:.ra.::, ru. J",^ k�,'�'�'o < °G5 �: � ,::nw ,j•��;r;�•' �:.v.»;o-,.??, n<a�h re>F�; •.xt...oC•?.».9.,.k..�..'axrh•"x»F.{:}...aoo:�k..h:k:,:`Y.•arS`n:.'krti:aJkr::.xY`aiki�r�.:n..`.:,.z:.�.:.,�:.'>�L:•.:�:•;,a.:<U.xi',:;.a:Yra°°:Gv`r�e».:sY:.:r°.{:.,'rY a zvnk ^..:.,+,.�..<o:,..:;0..�•.•.�@.u.,.ar•.e:.,.}e:r:..oaa:?.<.:.fik..:h.a�..:.x..�P:ya..<::..r r.h....r;rOdr2r.�rr.qr:e::a':.:a.:....>L?b9?Y,•a::.) 2:#:::`.,•+,k..:::*a. a o07tQ.x ? "'tr^ •�StS'}Lwrt Emmar.:t.<r..r:0.':.,..Qr<h:t»•;3.o,:;.'f:.:;+.:;>•'.:.R,.nr+.».;::.$.,oe;•c:Aojo�:l.'�, Office/Parking Structure *Memorandum of The City Council's approval of the MOU will be the basis for the Understanding(MOU)finalized Copelands to proceed with the project as envisioned(see footnote*). Environmental Impact This document,taking approximate)y 240 days.to complete-during the Report(EIR)&Entitlements time we will-proceed concurrent with City reviews,design development, ARC desi review,and preparation of working-drawings(see footnote*� City Review This includes a 14-day period reserved for the various City departments to review and give input. This review occurs concurrent with the EIR timeframe. See Section 2.5.1 of MOU. Design Development This milestone will be achieved by the architects in 21 days after the City has completed its review and input. This occurs concurrent with the EIR timeframe. ARC Design Review Comes from the various governing agencies(ARC,Historical Society Planning commission,et.al)and occurs concurrent with the EIR timeframe. Working Drawings Preparation These drawings will be prepared by the architects and engineers and approved by the various ovemingg agencies during the 90-day timeframe just prior to completion oTthe EIK Building Permits The contract documents for construction of the project will be prepared and submitted for building permits after receiving approval of the designs from the Various govrnin eg agencies. It is estimated that 75 days will be required to receive the permits. This is the first activity that occurs after the completion of the EIR. Construction Thiseriod begins after all other milestones have been reached and will last for 300 days. Court Street Retail Entitlements Court street Entitlements are received upon completion of the EIR above. Building Permit*** Allows 75 days(concurrent with entitlement processing) Construction of building Shell Allows 180 days for sufficient completion of shell construction to allow Turnover to Tenants for purpose of starting their Tenant Improvements Completion of Shell Runs concurrent with Tenant Improvements Turnover to Tenants This is the critical date,which forms the basis for lease start times. Tenant Improvement Varies from 60 to 150 days. F:\TRANS\AGR\COPEL.AND\Exhibit 3-1203.wpd 1 1 2517006/12301 September 2001 BUS 5-49 Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis.Obispo +Any delays to the project that are not caused by Court Street Partners, LLC would affect the scheduled completion.and would be subject to an extension of the schedule. *Critical to continued maintenance of the schedule will be timely reviews by the City and receipt of entitlements delivered in the timeframes indicated. **There is a normal risk in starting the working drawings and specifications prior to the approval of the EIR since construction permits generally will not be issuedprior to EIR completion. It is understood that any mitigations or revisions to the development plops that could be required as a result of the EIR are not included in the baseline GMP and would be an additional cost. Sixty days of slack time exist for the completion of the EIR prior to or concurrent with the issuance of a Building permit. ***Owner design,design review with agencies,and working drawings are prepared on a fast track basis during the same time frames-as the office-parking above. PROJECT COSTS Summary of Costs The proposed Baseline Project Guaranteed Maximum Price is $9,917,754.00. This price represents a total cost in place for the proposed project including all direct and indirect costs as set in the attached Exhibits and Attachments. The office portion includes those costs which would not have occurred in the garage if the office was not a portion of the project, including the cost of providing additional ramping on that floor to reach parking above,waterproofing and reinforcing the slab above for sound and movement, storefront and window fenestrations, additional block and infill-walls, stuccoandpainting finishes, and separate electric panel and utilities. The office floor will be left for finishing utilizing a tenant improvement(TI) allowance of$35/sq.ft. A chart included in Exhibit C allocates costs to determine the value of the office and garage components. Direct costs, actual hard costs, are used for a basis of quantifying unit costs and per stall costs so that comparisons with other projects in the City can be made. FITRAWAGMCOPELANMExhibit 3-1203.wpd 12 2517006112301 September 2001 BUS 8-50 Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets CityofSan Luis Obispo Based on direct costs,the 15,700 sq.ft. office is approximately $86 per square foot with a TI allowance of$35 per square foot for a total direct cost of approximately$121 per square foot. Based on direct costs the 107,400 sq. ft. garage is approximately $45 per square foot and, with 238 stalls, a$20,485 per stall cost. Total costs include an allocation for contingencies,on and offsite costs, indirect costs and financing costs. Based on total costs,the 15,700 sq. ft. office is approximately $177 per square foot. (This includes the TI allowance of$35 per square foot.) Based on total costs the 107,400 sq. ft. garage is approximately $66.50 per square foot and;with 238 stalls, a$29,979 per stall cost. Direct Costs The Copelands interviewed local and regional contractors to determine the best general contractor to assist with determining the baseline project cost. JW Design and Construction, Inc. of San Luis Obispo was selected as project contractor. To establish construction costs,J.W. Design& Construction,Inc.,used competitive subcontract prices for all major costs for the plans and specifications set forth in Attachments 1 and 2 and Exhibit D. Included in these costs we have attempted to capture the premium of costs associated with construction in the downtown environment including allowable closures for staging areas, noise abatement requirements, limited construction times, and traffic control. FATRANMAGMCOPELANMExhibit 3-1203.wpd 13 2517006/12301 September 2001 BUS 8-51 i Court Street Partners,LLC Proposal for OfcdGarage at Palm and Morro Streets City of San Luis Obispo Indirect Costs Indirect costs represent actual and estimated costs for the following: - Architecture& Engineering includes Architecture, Structural, Mechanical, Electrical, and Plumbing Engineering - Other Consultants include Civil and Soils Engineers, Survey,.Topography and Landscape Lighting - Predevelopment Planning-includes owner expense prior to.authorization of project - Permits &Fees include Building Permits,Water Impact,Water Meter Installation, Wastewater Impact,Traffic Impact,Affordable Housing and Public Housing, Public Art, attached as estimated by the City of San Luis Obispo - Insurance &Taxes to cover the period the property is under development - EIR Allowance established at 60%for the Parking/Office Structure and 40% for the Court Street Project. Any mitigation required by the EIR, or otherwise, for archaeological work or hazardous materials clean-up shall be paid by the City for Court Street property and by the Copelands for the Parking/Office Structure property up to an amount not to exceed 2%of the GMP for the City and an amount not to exceed 2%of the GMP for the Copelands. In the event such mitigation exceeds 2% on either property,then the affected party shall have the right to terminate this MOU. Development Management includes.owner expense for construction and project management Development Fees include owner overhead and profit Financing for a 10-month period FATRANS\.AGR\COPELAND\Exhibit 3-1203.wpd 14 2517OW12301 September 2001 BUS 8-52 i Court Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City of San Luis Obispo Additional Assumptions/Contingencies To Costs 1. Soils information providing the basis for cost is based on Earthsystems report (Attachment 3). Actual borings may determine a change to the Baseline Cost. 2. Bonding cost of the General Contractor is not included in the Baseline GMP. However, the Copelands shall pay such cost as an accommodation to the City. 3. Prevailing wage rates will be used and, accordingly, current wage rates are the basis of cost. 4. Offsite costs included in the Baseline Project are as shown on the attached•exhibits, and are limited to new sidewalks, curb and-gutters-around the perimeter of the project, street trees,the Library Plaza improvements,and pedestrian walk paving. Any other offsite costs are not included in the Project Baseline Cost. As they are identified, such costs will be added and tracked separately. These costs may include, and are not necessarily limited to street modifications, traffic signalization and/or signing, underground utility disruption, upgrades, or relocation, etc. 5. Any changes to this proposal or the assumptions contained herein or in the Exhibits or Attachments due to EIR requirements, other governmental agency requirements, the archaeological work or hazardous material clean-up, redesign, delays, change in circumstances,force majoure or any other unforeseeable events may result in increases to the Guaranteed Maximum Price set forth herein. 6. A staging area will be provided by the closing a portion of Morro Street along the property line during construction; with access to the parking behind the JP Andrews Building from Morro and closed off at Palm Street. 7. The City has not determined the scope of an Environmental Impact Report for this project. An estimated EIR preparation cost for this project and the proposed Court Street project is $350,000.. Based on a ratio of proposed areas(70,000 sq.ft. Court St. and 115,000 sq,ft. Baseline Project) approximately 60%has been allocated as an EIR Allowance of$200,000 to this Baseline Project. Any additional EIR preparation costs shall be allocated 40%to the Copelands and 60%to the City (the latter shall be included in the Baseline Project) unless such additional costs are directly related to a specific project and, in such event,the attributable project shall be solely responsible for such costs. Mitigation costs for archaeological work and hazardous materials clean-up shall not be included in the Baseline Project and shall be paid by the City for the Court Street property and by the Copelands for the Parking/Office Structure property in an amount not to exceed 2%of the GMP for the City and an amount not FATRANMAMCOPELANMExhibit 3-1203.wpd15 2517006/12301 September 2001 BUS 8-53 Court.Street Partners,LLC Proposal for Office/Garage at Palm and Morro Streets City ofSan Luis-Obispo to exceed 2%of the GMP for the Copelands. In the event such mitigation exceeds 2%on either property,then the affected party shall have the right to terminate this MOU. FAA RANSWGR%COPELAND\Exhibi[3-1203.wpd 16 2517006/12301 September 2001 BUS 8-54 Morro Street Office & Parldng Building ft ■■ i i Z i ■■ ■■ ■ ■ i z :� ■ ■ ■■■■■■u■r `■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■r �■■■■■■■■■■■■■■ 1 ■,-,, • .•.: •:. _. 1�� � =Ilii■�li■�■ •�).i' .mac ►P,' �"7T0' ■ Cn ■ ��� ■ Courdialm M 24" WAS �:� ■ ■ ■ ■ ■ ■ •DWMMI ■ ot■;ur ■■■■■■■■■■■■■g1111■■■■■■■■■■ I I■■■■■■n■ �y Andaws Hdd � ■ •: ,'„'is�.::•T ...►���• ' � ow OO r \■■■■■■■■/■tel-t ni •�i'`E'9 M P.I.N= ZZ Overall - ■ / ' • Puking COURTq. design palm / Morro Street = Office & Parking Building P a l m S t r e e t 0El Eal 0 e �a � ® 4i01� NEW !GARAGE/ 001 CE Existing Library o � I — —a (D I L _ o Existing L Parking Area DL — ' O 6 Existing Copeland o Building L] L Project Site Plan Exhibit A-2 SCAB Pa./marra Street Offim&pa&iog Note: This exhibit Is intended for schematic purposes only. it Is not Intended to represent the final design. instead It is one COURT STREET possible design provided for Illustration purposes only. The final 0 design will be subject to the usual City review process and no ibbcb44cWW* approvals have been granted. BUS 8-56 Palm / Morro Street Office & Parking Building West Elevation Facing Morro Street rJ T+n'" Crtvw SwlusOwcra ' I North Elevation Facing Palm Street Exterior Elevations SCALE Exhibit A-3 OffimitPkma$ Note: This exhibit is intended for schematic purposes only. It Is not intended to represent the final design, instead it is one COURT STREET possible design provided for illustration purposes only. The final design will be subject to the usual City review process and no &E ink cbwncam-a approvals have been granted. BUS 5-57 Palm / Morro %c.-aet Office & Parking Building 0 11 ■ 0 R � East Elevation Facing Library Plaza I — ' I r South Elevation Facing Pedestrian Walk Exterior Elevations SCALE Exhibit A4 Ofam&Pkkiag Note: This exhibit is intended for schematic purposes only. It is not intended to represent the final design, instead it is one COURT STREET possible design provided for illustration purposes only. The final design will be subject to the usual City review process and no aen approvals have been granted_ BUS 8-58 Palm / Morro Sues. Office & Parking Building I � t T- - la 0FW i FF.=ZW I I I CL io -- I i ---- I I ----- I Ground Level SCALE r�...� Exhibit o-5.2 0 30 Offowatpmking Note: This exhibit is intended for schematic purposes only. It is not intended to represent the final design. It is provided COURT Smmr for illustration purposes only. The final design will be subject to the usual City review process and no approvals have been granted. Am 1�mYPn atfac6 BUS 8-59 Palm / Morro Stree. Office & Parldng Building I I I I Pwm v I 4 --- - -7 t.T II I I I 1011111 2nd , 3rd & 4th Levels sCAI F I1 Sant Exhibit A-5.3 0 30 OfficmaPkiiing Note: This exhibit is intended for schematic purposes only. It o is not intended to represent the final design. It is provided COURT 3T wr for illustration purposes only. The final design will be subject to the usual City review process and no approvals have been granted. e.e�a.ae�atcme BUS 8-60 - Palm / Morro Streee Office & Parking Building � O— _. a---- - --T -- -- -- -- . T-111— Roof Level scaIF Exhibit A-5.4 ° 30 Officmapadwmg Note: This exhibit Is Intended for schematic purposes only. It is not intendedto represent the final design. It is provided COURT STREBT for illustration purposes only. The final design will be subject to the usual City review process and no appro4als have been grante& e.res rxa�►oytmr BUS 8-61 ƒ } ƒ ) } 2 u- \ 2 { � oCL ) \ ) 0 RCL } R CO ( co cm tm < { ♦ ♦ < ) ( _ 2 g k { ca 7 a ] . a § E 2 \ ) £ $ a ) } £ cm� u- 5 I § . § _ 0 a q K a q q # g q q q 0 q nB0 « « a s ■ ■. � §■ N2 CM S ® L a \ = t k ® f § + otm § a E Co § E ! A § ` § f < f 2 - oa # a « aJoaom _& 2kf § $ ° • E - ° 3 E , a v ■ u- w a A - #. k K 2 . o ■ ° D a ® 2 r K § 1 d § - * / / a o 0 Ir a CL w » � a s © - § � ir Ei . . Q o .a .< < ■ G 2 o. _ JODI® cm 0 2 # BUR 8-62 i to O Q Q 7 � C C 7 � � W O Q L`p W a ; a m LL V- i c I c W W r. 7 O ° W a O CL O Z a O O a m O O d W (j) W J CID C W co cc CM CO Cc, N c m O r a � v w v c g w m v c W _ o a � a W � CL CL m m W LL LL W W O W i � O CD o m 0 N O i ZO Z r C O O O O O O O 01 O O O O O O O O O O O O O O O O O a O G G O O to C G 6 G O l`0 R L`) co N N n m O 11 W N f0 O mo m W m m o W m o N O Q o 0 m a 0 m m o O W Q' m Z Q E E m a = Cap •- at ti o E o m t Iml Im 0o « a o € m W o $ c c c a N m Co o Q a a g y W W W °D °° U U o v E E E _0 m w V w` _ o o a 3 m' m m v v L= .. N C -Re Mt1� w0oBUSS-63 Exhibit C Proposed GMP and Allocation of Costs Proposed Baseline Project for the Guaranteed Maximum Price of: $9,917,754.00 This represents a total cost in place for the proposed project including all direct and indirect costs described in the Summary of Baseline Project Costs, attached. Allocation of Costs (costs allocated by ratio of direct costs) <�:F:+fi'ax+::: :y4::;.. ,}itn4::,.+ a. ..;}; }..,.:>i.•}.: .}ti}%%::`.`3F.r.*.33ko:<;;°4x;ko*,1Y f>:c:<?zze<:4?:ix+•}:+:Faf:�' ,:`x..;Y y,�F:.„.i., ;'s.:• :F r•:...:. :.S.f...o }...4.:i6:i;6 '.mJ:;.:e.}:.}:.}'cx:.}'e.5.. w d::ri}::6;:y.:...,p:r.x}::�.4:.:;^:.}}::::0�4:� :.i,..;..:::.>,.rox.}:0}•e:::x'6+.:e::::£.;x•.f:0:.}:4}: .:o-:9 "Yi::#°�: :,ho. ».i .k,.,, .•icOJxV'•:'r•J:}•:�:.^... <i o:•,.. `:'#c`iu i''. .3':a::i":R:i::+. :c.:.#`}?:..: .:o.FfF:c•',:J;c:,: .:.�,k, .o v �,.•�,�,74„V,.;,.. .: i ',Ti,N; :if:;`:,;t::<:w.i•.:n 'S.:?'R:':7Y� :... .�}.:..o.:.:..+.:.;�4c.J.;::..:oAJ t.::.:..:.u.c..c,..'}OF:+.i.}}}:}::Fi4: .i#Qk ii:v :#F;�,?{ ::;:” .}. <}6.:t,,.. .:4 :f:::<>•�.9;x' .!{e3:;+:• ,.:.:.:.o-n}:;;.x..c...:.v.. 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':.•:4.?.'h`'}:.Yintir•' $ 177.24 $ 66:43 ' '6wh $ 80.57 x?<Y.h�: .' k $ 29,979 C:£;;v:ic,+.a}:W:': :;•.. :::::;n,'.:;:>fu.:::ii 0J 4• •:teff?.: '{;: ,.'i.k} :: .:e0xe+.cax.:e.xic+x BUS 8-64 Exhibit "D" Scope of Work and Qualifications The scope of Work for the direct costs of the Baseline Project is set forth in the Drawings and Specifications as reflected in Attachments 1 and 2 of the Parking/Office Structure Proposal. Costs included in the Baseline Project are based on current material rates with the following qualifications.. 1. Baseline Project costs assume hauling and disposal of exported materials from demolition,earthwork and footings within fifteen(15)mile radius of the project. 2. Excavation, shoring and lagging system assumes a single level of standard drilled tiebacks extending under adjacent properties, vertical steel soldier piles,and timber lagging spanning between the soldier piles. 3. Preliminary Soils Investigation does not indicate existing ground water in the project area. Dewatering or any unanticipated subsurface.conditions during earthwork, foundations,and elevator plunger drilling are not included. 4. Project pedestrian barricades are as follows: A. Palm Street-Two sided wood structure located in the parking lane. B. Mono Street-At times,portions of the east side of Morro Street may need to be closed to be used as a construction lay-down area. It is assumed that this can be coordinated with Public Works. It is understood that final approval of Public Works will be required for any street closures. The area will be demised by chain link fence and gates. C. Interior Sides-Chain link fences and gates. 5. Non-Load bearing concrete block masonry is assumed at stair walls, roof parapet, Office demising wall and 42"high perimeter infill walls between concrete columns. 6. Exterior ceramic tile facing to be standard colors and sizes, as manufactured by American Olean, or equal,applied with a thin set mortar. 7. Exterior wall finish to be painted.plaster..Where concrete shear walls occur,plaster may be applied as a finish coat only.. An accent of thin brick is included, applied with a thin set mortar. 8. Hydraulic elevator to be as manufactured by Western Pacific Elevator Co.,or equal, and shall be direct plunger, 3,500 lb. capacity capable of operating at 100 fpm. Standard cab and entrance finishes shall include stainless steel car door, stainless hand rail, plastic laminated wall panels with stainless reveals, stainless front and transom,aluminum drop ceiling with light diffusers. 9. A mechanical exhausting system for the sensing and removal of carbon monoxide is included in the Basement Level only. F:\TRANS\AGR\COPELAND\F.xhibit D-1203.wpd BUS 8-65 Exhibit E Contacts Court Street Partners, LLC Tel: (805) 543-0660 Tom Copeland Fax: (805) 547-9654 P.O. Box 1348 tomcopena.aol.com San Luis Obispo, CA 93406 Bruce Spikell Tel: (415) 538-7068 650 Fifth Street#303 Fax: (415) 538-7088 San Francisco, CA 94107 TD3SPIKELLna.aol.com Watry Design Group Tel: (650)298-8150 Nick Watry Fax: (650) 298-8151 815 Hamilton Street wdgaa,watrydesingn com Redwood City, CA 94063 APS Architects,Inc. Tel: (805) 541-6294 Mark Rawson, AIA Fax: (805)541-2739 444 Higuera Street, #201 markaapsarchitects.com San Luis Obispo, CA 93401 J.W. Design Construction,Inc. Tel: (805) 5443130 Jerry Williams Fax: (805)544-0115 P.O. Box 1154 Jwgiwdci.com San Luis Obispo, CA 93406 Sinsheimer, Schiebelhut&.Baggett Tel: (805) 541-2800 K. Robin Baggett Fax:-(805) 541-2802 1010 Peach Street krb@ssbiaw.com San Luis Obispo, CA 93401 BUS 8-66 C Exhibit 4 The Copelands' Contingencies Section 5.2 of MOU 1. The Close of Escrow and the Copelands' obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction or waiver ofthe following conditions for the Copelands'benefit on or prior to the Initial Closing Date. Copeland may,in the Copelands' sole and absolute discretion,terminate this Agreement at any time by written notice of cancellation to City if the Copelands determine that any of the conditions set forth in this Agreement will not be satisfied. A. The development review process is concluded and all approvals and entitlements are obtained,including all requirements or conditions as may pertain to final entitlements and approvals of the project, and such approvals, conditions and requirements (however phrased) are acceptable to the Copelands in their sole discretion. .The timing, conditions and cost of the permits and approvals(including any mitigation fees)imposed on the Project by any governmental entity having jurisdiction are acceptable to the Copelands. B. The Copelands have received binding commitments from a lender or lenders to provide construction and permanent financing for acquisition of Court Street and the construction of all improvements to be undertaken by the Copelands in connection with the Court Street and the Parking/Office Structure on terms satisfactory to the Copelands in their sole discretion. C. The Copelands have received commitments for leases from tenants on terms satisfactory to the Copelands in their sole discretion,including minimum amounts of square footages deemed satisfactory to the Copelands. 2. Removal of the Copelands; Contingencies.. The Copelands shall provide City with written notice within ten(10)days of satisfaction of each of the contingencies listed herein. If the Copelands do not give City written notice of removal of contingencies or notice of cancellation prior to the Initial Closing Date,the Copelands shall have the right to cancel this Agreement by giving written notice to City. FATRAWAGMCOPELANMExhibit 41120.wpd . BUS 8-67 Exhibit 5 Expense Items Eligible for the Copelands' Reimbursement Subsequent to the adoption of the MOU by the City Council, the Copelands have agreed to reimburse the City on a monthly basis for additional third-party costs without any mark-up by the City incurred in conjunction with the processing ofthe Project. Such third-party costs shall include, but not necessarily be limited to,the following items: 1. Charges for the services of PCR Kotin,the city's Economic Consultant. 2. - Charges for special counsel- retained to assist in drafting the documentation, tentatively identified as Herbert Weiser of King, Weiser,Bazar and Jacobs LLP. 3. Charges(whether in reimbursement of salary and benefits or subcontractor costs)for any additional planning staff hired to expedite the review process for this project in the Planning, Public Works and other affected departments of the City. As a matter of information but not of consent, and subject to the City's unrestricted judgment of deletion and editing, the Copelands will be provided in advance with copies of the contracts and scope of work statements governing the services provided by third parties and for which the Copelands will be billed. Subsequently,the Copelands will be billed at monthly intervals with all reimbursement requests due and payable within thirty(30) days. FATRANS\AGR\COPELAND\Exhibit 5-1 I20.wpd a BUS 8-68 l Palm / Morro Street Office & Parking Building AREA B : Access Property Vintage/Tartaglia 2756 SF PALM STREET Existing Fee Parcel - Provides vehicle access to private property parking areas I I I I Pedestrian Walk and Vehicle Access I I i ARBA A AREAE Copeland Property I Library Property - — — , 18.595 SF 1.277 SF No-Building - Property area required for setbacks to allow openings in building I AREA D Library Property -- -- - I 403 SF Area required for building -- -structure. I AREA C Vintage Properties ea+ SF uD ng r I Area of Private Property Required for Building and Setback (E) Surface Parking -- -- i. 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III//IIIII %IIIIIIII IIIII/IlIIII IIIIIIJIII III//II/!I. IIIIIIII �IIIJII///I/,II/IIIII/I IIIIIIIIIII "IIIIIIIII ♦ •IIIII//IIIII'IIIIIII/I' IIIIIIIII %IIIII /IJI/IIIIIII.wJJIIIIY IIS III/III. IIS IIIIIIIJII/I,I//I� "III/IIIIJJI lI� •IlIIII IIIII."I! VIIIIIIIJI IIIII/IlIIII.�� IIIIIII/IIv I/IIIIIIII/ /I�IIIIIII, "IIIIIIIII/ wi��oli�In I�i II (IIIIIIIIIII /I!p 'IIIIIIpII III" !IIIII/ SII/' • /IIJ ♦ • • • AI IAGHMLN 1 4 ARk B : Access Property Vintage/Tartaglia 2.756 SF PALM STREET I I 1 I I Pedestrian Walk and Vehicle Access 1 I I I A I p o I AREA E Library Property 1 59 S 1,277 SF I No—Build Property area Nevi Property Line required for openings in build E-+ 1 E" I AREA D Library Property -- I 403 SF c 1 I 1 I AREA C Vintage Properties 844 SF Area of Private Easement u ng tp t I Required for Building 1 ® ® (E) Surface Parking I 1 -- -- r=� EA F : -- — — — — — e — — — Tartaglia Property T7 J151 SF Area of Private Easement o i I Required for Bulding 1 I US 1 1 I 1 1 I ' 1 I I 11 1 I I 1 I _ - 1 From: Jean An, _ 'on <slohpver@charter.net> "`\ To: John Evwi---<jewan@slocity.org>, Jan Marx <jmarx@t y.org>, Christine Mulholland <cmulholland@slocity.org>, Ken Schwartz<kschwartz@slocity.org>, Allen Settle <asettle@slocit .or > Date: 12/10/011:15PM MEETING Ag& Subject: Proposed Palm/Morro Parking/Office StructureDATE/9-LO/ ITEM # . Re: Item 8 on Tuesday night's business agenda: 8. APPROVAL OF AN AMENDED MEMORANDUM OF UNDERSTANDING FOR COURT STREET PROJECT AND PALM/MORRO PARKING/OFFICE STRUCTURE. (HAMPIAN/JORGENSEN/STANWYCK A i2 HOURS) RECOMMENDATION: Approve an Amended Memorandum of Understanding with Chinatown-Court Street Partners,which outlines the principles for several property transactions, predominately the purchase and sale of publicly and privately owned surface parking lots in Downtown San Luis Obispo. Dear City Council Members, UNCIL ❑ CDD DIR �0 ❑ FIN DIR At the board meeting of the Friends of the Library on,3 December, AO ❑�FIRE CHIEF Judy Rohr, librarian, brought to our attention that it apbears that �ORNEY ❑ PW DIR access and parking for visitors with special needs/disatilitiesmight CLERK/ORIO M POLICE CHF be even more difficult than it is now with the new Copeland/City plan ❑ D9 ® AEC DIH for the block bounded by Morro&Osos, Palm & Monterey streets. C UTIL IOIR n HA DIR At present, there is only one parking place for the disabled at the Palm Street library driveway entrance-and it appears that parking place will be moved closer to the Morro Street entrance (next to the pedestrian walk leading to the library"plaza"). Once again, I truly hope that planners early on will consider the very real needs of our seniors and the disabled (several of whom are also volunteers at the library)for access to all public buildings when such large projects are planned for the city.This includes motor vehicle parking,walking,walkers (the push kind with wheels) and wheelchair access. Also, because many people also ride bicycles to the library(I ride my recumbenttrike),there is rarely enough practical bicycle parking in the present entrance area to the library-and no secure parking at the rear entrance, please remember that these patrons should also be considered in any planning for access and secure parking. Regards, --Jean Anderson Friends of the Library board member Bicycle Advisory Committee member Jean Anderson (544 Pacific St. #210): Residence PO Box 12858 San Luis Obispo, CA 93406-2858 Phone: 805-545-9003 RECEIVEDf1 L " 20011 SLO CITY COUNCIL Fax : 805-545-9005 E-mail: slohpver@charter.net-or-jean.anderson @ ihpva.org ------------ CC: "Lee Price" <LPrice@ci.san-luis-obispo.ca.us>, Judy Rohr<jrohr@slolibrary.org>, Mary Lou Johnson <miohnson@writestart.com> ITEM # a memoRanoum December 6, 2001 NCIL CDD DIR r ❑ FIN DIR 2WAO ❑ FIRE CHIEF TO: Mayor and Council Members ORNEY ❑ PW DIR CLERK/ORIG 13 POLICE CHF FROM: Sherry Stendahl [3D PT HEAD ❑ REC DIR O UTIL DIR O HR DIR SUBJECT: Agenda Item 8 on December 11, 2001 . Attached is Exhibit A-5.1 (Palm/Monro Street Office and Parking Building). It appears that some copies of the proposed amended Memorandum of Understanding may not have this page. Attachment mttlING AGENDA ITEM # JATE i�-ll-8 l Palm 1 Morro Street Office & Parking Building Palm Street Q J_ 1 � am, 1 -- - --- tb R. SON 1 Basement Level SCALE r®o>, Exhibit As-5.1 pakp,� Note: This exhibit is intended for schematic purposes only. It is not Intended to represent the final design. it is provided COURT STREET for illustrafion purposes only. The final design will be subject to the usual City review process and no apProvois have been granted. am W Cerpa Oman&