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ARA2006/08/08 ANAHEIM, CALIFORNIA ANAHEIM REDEVELOPMENT AGENCY MEETING AUGUST 8,2006 The Anaheim Redevelopment Agency met in regular session in the Chambers of the Anaheim City Hall located at 200 South Anaheim Boulevard. Present: Chairman Curt Pringle, Agency Members: Richard Chavez, Lorri Galloway, Bob Hernandez, and Harry Sidhu Staff Present: City Manager David Morgan, City Attorney Jack White, and Secretary Sheryll Schroeder A copy of the agenda for the meeting of the Anaheim Redevelopment Agency was posted on August 4, 2006 on the City Hall outside bulletin board. At 5:35 P.M., Chairman Pringle called the regular meeting of the Anaheim Redevelopment Agency to order for a joint public comment session with the City Council and the Housing Authority ADDITIONS/DELETIONS TO THE AGENDA: None PUBLIC COMMENTS: No comments offered during the Joint Agency/Housing Authority/Council public comment session related to the Redevelopment Agency agenda. CONSENT CALENDAR: Chairman Pringle removed Item 1 from the consent calendar for a brief presentation by staff. Agency Member Chavez moved to approve the remaining consent calendar item, seconded by Agency Member Sidhu. Roll Call vote: Ayes - 5; Chairman Pringle, Agency Members: Chavez, Galloway, Hernandez, and Sidhu. Noes - O. Motion carried. 2. Approve the Anaheim Redevelopment Agency meeting minutes of July 25, 2006. END OF CONSENT: 1. Approve that certain Exclusive Negotiation Agreement between the Anaheim 4136 Redevelopment Agency and Brandywine Homes for the site at 212 S. Beach Boulevard and authorize the Executive Director to execute the Agreement on behalf or the Agency. Elisa Stipkovich, Community Services Director, reported this agreement would provide an exclusive right to negotiate between the Agency and Brandywine Homes for a 1.9 acre site on Beach Boulevard for the purpose of building for-sale condominiums. The Agency was requested to approve the exclusive right to negotiate without any competition on this site as Brandywine had given the Agency an opportunity to purchase a 1.7 acre site on Lincoln next to the CHOC property and for that opportunity, had agreed to work with the developer to find a replacement parcel. Determining that Brandywine would be the property owner of the Beach Boulevard site, Agency Member Chavez requested a percentage of those units be designated affordable for moderate incomes. Ms. Stipkovich replied it had been her understanding that the City's emphasis for affordable housing was on rental units; however she would discuss this ANAHEIM REDEVELOPMENT AGENCY MINUTES AUGUST 8, 2006 Page 2 of 5 request with the developer. Chairman Pringle was not averse to having a discussion with the developer but pointed out the property on Lincoln that was sold to the Agency was originally proposed as a for-sale condominium project, but was now being developed as an affordable housing project and that Brandywine was now looking at the Beach Boulevard site as a replacement for those market place condominiums. Agency Member Hernandez moved to approve Item No.1, seconded by Agency Member Galloway. Roll call vote: Ayes - 5; Chairman Pringle, Agency Members: Chavez, Galloway, Hernandez and Sidhu. Noes - O. Motion carried. JOINT AGENCY/COUNCIL PUBLIC HEARINGS: 3. A Joint Public Hearing to consider approving a Disposition and Development Agreement 2894 by and between the Anaheim Redevelopment Agency and CIM Urban Real Estate Fund, LP (Retail Space, located along Center Street Promenade). Elisa Stipkovich, Community Development Director, reported this item was a request to approve the sale of property to CIM. She explained the City owned approximately 23,000 square feet of retail space that was incorporated into three parking structures the Agency owned along Center Street promenade. The disposition and development agreement (DDA) before Council and the Agency would be to approve the sale of that property to CIM for $1,500,000 with CIM adding approximately $700,000 of improvements. In addition, after CIM received a return on their investment, the City would receive 50 percent of the additional profit either from cash flow or from the sale of that property. Ms. Stipkovich commented this was an important component to the entire project now under construction by CIM and the retail space would now be controlled by CIM along the Center Street Promenade. Chairman Pringle opened the public hearing for comments. Jim Adams, Los Angeles/Orange County Building & Trade Council asked the City to consider continuing Item NO.3. He announced CIM had withdrawn their request for a prevailing wage determination from the Department of Industrial Relations (DIR) and that the language in Section 311 of the DDA was vague as to whether the developer would be paying prevailing wages. He added the Trade Council had sent a letter to CIM requesting an answer to that question and had received no response. No other comments were offered and the hearing was closed by Chairman Pringle. Agency Member Chavez indicated he had reviewed the DDA and felt it was ambiguous on the issue of prevailing wage as it applied to this project and would appreciate continuing the item until that point could be clarified. Chairman Pringle confirmed with staff that the terms of the DDA stated if CIM was legally required to pay prevailing wage on this project, they would do so and if it was not legally required, CIM would pay responsible wages. Ms. Stipkovich added that it was questionable whether prevailing wage would be required as the property was being sold at fair market value. Mary Anderson, CIM representative, stated CIM withdrew their request for a wage determination from the DIR for a specific DDA relating to parcels A, Band C (Item No.4) and had agreed to pay prevailing wages for those sites to make the project move forward expeditiously. She added since CIM was paying fair market value for the retail property identified in Item 3, CIM was not required to go before the DIR as no consent to be able to pay responsible wages was ANAHEIM REDEVELOPMENT AGENCY MINUTES AUGUST 8, 2006 Page 3 of 5 needed. Chairman Pringle asked what type of improvements would be made on the retail space and Ms. Anderson responded CIM was attempting to revitalize the retail by inviting and repositioning retailers. She added the DDA was between CIM and the City as opposed to individual tenants and CIM could not extend any prevailing wage, if there had been that requirement, to the tenants themselves. Agency Member Chavez asked if CIM requested a wage determination from DIR on this project and Ms. Anderson responded CIM did not as there was no need to do so since they were paying fair market value. She believed Mr. Adams had misinterpreted CIM's withdrawal of the wage determination from the DIR relating to parcels A, Band C. Jim Adams stated the Trade Council believed prevailing wage was required on Item no. 3 and again requested it be continued to allow the legal staff to resolve the issue. Agency Member Chavez felt this was an issued that needed to be resolved and moved to continue Item No.3, seconded by Agency Member Galloway. Chairman Pringle confirmed with Ms. Anderson that CIM was not doing any major construction for the retail space but was looking at tenant improvements and possible repositioning existing tenant spaces. She also added mechanical amenities such as air conditioning could be added. Commenting that he did not see a need to continue this matter, Chairman Pringle stated CIM had been a responsible development partner in the City and was moving forward with several projects and making a huge investment in the City. They would also be taking over the management of existing retail space that had been underperforming and for which the City had subsidized for many years, to bring more economic value to downtown Anaheim. He favored approval of Item NO.3. Agency Member Sidhu concurred, stating CIM was buying air space, not the land nor the parking structure and would be making tenant improvements worth $700,000 for the 23,000 square foot retail space and he felt prevailing wage was not an issue on this project. Agency Member Hernandez concurred, stating any ambiguities in the contract could be hashed out by the parties and he would support approval of the CIM development and disposition agreement. Chairman Pringle called for a vote on the earlier motion to continue this item to August 22, 2006. Roll call vote: Ayes - 2; Agency Members Chavez and Galloway. Noes - 3, Chairman Pringle and Agency Members Hernandez and Sidhu. Motion failed. Agency Member Hernandez moved to approve RESOLUTION NO. ARA 2006-005, seconded by Agency Member Sidhu. RESOLUTION NO. ARA 2006-005 A RESOLUTION OF THE ANAHEIM REDEVELOPMENT AGENCY APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT (RETAIL SPACE) BY AND BETWEEN THE ANAHEIM REDEVELOPMENT AGENCY AND CIM URBAN REAL ESTATE FUND, LP, REGARDING CERTAIN REAL PROPERTY IN THE MERGED REDEVELOPMENT PROJECT, AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH. Roll Call vote: Ayes - 3; Chairman Pringle, Agency Members Hernandez and Sidhu. Noes - 2; Agency Members Chavez and Galloway. Motion Carried. ANAHEIM REDEVELOPMENT AGENCY MINUTES AUGUST 8, 2006 Page 4 of 5 4. A Joint Public Hearing to approve the First Amendment to the Amended and Restated 2894 Disposition and Development Agreement (Parcels A, B and C) between the Agency and CIM Urban Real Estate Fund, LP, regarding certain real property bounded by Anaheim Boulevard, Broadway, Harbor Boulevard and Center Street Promenade. Elisa Stipkovich reported this was an amendment to the CIM agreement regarding parcels A, B and C. She indicated there were five buildings being constructed under the CIM Disposition and Development agreement (DDA) and as part of the total project, CIM would also build certain public improvements, including the Cultural and Heritage Center now known as the Museo, the public plaza areas as well as improving the Carnegie Library building to make it accessible and tie into the new facility they would be constructing for the City on Parcel A. She reported the City was seeking to increase the dollar amount of CIM public improvements by $9 million which represented an increase in the cost to build the Museo facility, the plaza areas as well as the improvements to the Carnegie Library. Ms. Stipkovich emphasized this was a prevailing wage project as well as everything else associated with Parcels A and Band C. Chairman Pringle asked if this included the improvements on Broadway and Ms. Stipkovich confirmed there were street improvements to Broadway allowing for angled parking and reducing the street size slightly to make it more pedestrian friendly. Chairman Pringle opened the public hearing for comments and receiving none, closed the hearing. Jim Adams, Building & Trade Council representative, thanked staff and CIM for their explanation offered earlier relating to prevailing wages and stated his organization would not be asking for a delay in the approval of this item if CIM would confirm that prevailing wages would be utilized in this project. Bill Taormina, resident, acknowledged the work being done by staff and CIM and their commitment to the downtown. He spoke of CIM's investment in the downtown area with almost $150 million which would change the face of the downtown area, and thanked the developer for their efforts and City leaders for their progressive thinking. Mary Anderson, CIM representative, stated it was CIM's intention to continue to build Parcels A, Band C with prevailing wage labor. Agency Member Chavez moved to approve and authorize the Executive Director to execute that certain First Amendment to the Amended and Restated Disposition and Development Agreement (Parcels A, Band C) between the Agency and CIM Urban Real Estate Fund, LP, regarding certain real property bounded by Anaheim Boulevard, Broadway, Harbor Boulevard and Center Street Promenade; and make the finding that, other than set forth in the First Amendment, no other reasonable means of financing the public improvements are available to the community, seconded by Agency Member Sidhu. Roll call vote: Ayes - 5; Chairman Pringle, Agency Members: Chavez, Galloway, Hernandez and Sidhu. Noes - O. Motion carried. 5. A Joint Public Hearing to approve a Disposition and Development Agreement with WL 2732 Homes, LLC, regarding certain real property bounded by Santa Ana, Olive, Atchison, and Water streets. Elisa Stipkovich reported Item 5 was to approve a disposition and development agreement with WL Homes (dba John Laing Homes Company) on a project the City had been working on for some time, the Kwikset site. She indicated John Laing Homes had been working with the ANAHEIM REDEVELOPMENT AGENCY MINUTES AUGUST 8, 2006 Page 5 of 5 community and with staff on site planning and had received their entitlements to construct 135 town home condominiums of which 27 would be affordable to low and moderate incomes. She added the developer was paying fair market value excluding the discount for the affordable units which translated to a $3 million write-down. The developer would also be paying $15.25 million and would give the Agency 25 percent of the sales prices if units sold for more than the projected sales price. She added the Agency would commit $1.35 million for down payment assistance from State funds and set asides. Chairman Pringle opened the public hearing for comments. Steve Cable, John Laing Homes representative, reported the developer was glad to build both market rate and affordable housing for the City and was available for questions. With no other public comments offered, Chairman Pringle closed the hearing. He stated this project had been a long time in coming and that John Laing Homes was a good builder whose marquis project on Anaheim Boulevard stood out as an appealing and attractive complex with 20 single family homes and 36 affordable units attached on the front end and he would be supportive of this development agreement. Agency Member Sidhu voiced his support and thanked the developer for taking a difficult site needing environmental clean-up and building homes of which 20 percent would be affordable for-sale units. Agency Member Hernandez moved to approve RESOLUTION NO. ARA 2006-006, seconded by Agency Member Galloway. RESOLUTION NO. ARA 2006-006 A RESOLUTION OF THE GOVERNING BOARD OF THE ANAHEIM REDEVELOPMENT AGENCY APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH WL HOMES LLC AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH. Roll call vote: Ayes - 5; Chairman Pringle, Agency Members: Chavez, Galloway, Hernandez and Sidhu. Noes - O. Motion carried. ADJOURNMENT: There being no further business, Chairman Pringle adjourned the Anaheim Redevelopment Agency meeting at 7:15 P.M. Respectfully submitted, ~~ Sheryll Schroeder, MMC Secretary, Anaheim Redevelopment Agency