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RA1985/11/19 229 Anaheim Civic Center, ANAHEIM REDEVELOPMENT AGENCY November 19, 1985, 9:30 A.M. PRESENT: ABSENT: PRESENT: AGENCY MEMBERS: Kaywood, Bay, Pickler, Overholt and Roth AGENCY MEMBERS: None CITY MANAGER: William o. Talley CITY ATTORNEY: Jack White SECRETARY: Leonora N. Soh! EXECUTIVE DIRECTOR OF COMMUNITY DEVELOPMENT/PLANNING: Norman J. Priest ASSISTANT EXECUTIVE DIRECTOR OF COMMUNITY DEVELOPMENT: Lisa Stipkovich Chairman Roth called the regular meeting of the Anaheim Redevelopment Agency to order at 9:55 a.m. MINUTES: Agency Member Kaywood moved to approve the minutes of the regular meeting held November 5, 1985. Agency Member Bay seconded the motion. MOTION CARRIED. FINANCIAL DEMANDS AGAINST THE ANAHEIM REDEVELOPMENT AGENCY in the amount of $60,174.33 for the week ending November 8, 1985 and $50,878.68 for the week ending November 15, 1985, in accordance with the 1985-86 Budget, were approved. 161/181: REQUEST FOR REDEVELOPMENT FUNDS FOR REHABILITATION OF THE CARNEGIE __ LIBRARY: Request by Anaheim Museum Inc. for the subject funds for the rehabilitation of the Carnegie Library as an historical museum. Submitted was report dated October 22, 1985 from the Community Development Department recommending that the Agency set a policy on the use of Redevelopment funds for the subject rehabilitation. This matter was continued from the meeting of November 5, 1985, to this date. Mr. Herb Leo, 2906 Bellamy, Anaheim Museum Inc., (AMI), stated AMI was prepared to ask the Agency to give a yes or no on the program presented for the rehabilitation of the Carnegie Library. (See letter dated November 15, 1985 from the Law Offices of F~bert D. Ricks on behalf of Anaheim Museum Inc.). Agency Member Overholt asked for clarification of the program and if the funding being requested was an out-right grant or to be provided on a loan basis. Mr. Leo answered it was for a "turnkey" rehabilitation of the Carnegie Building itself, with the Agency ultimately turning the building over to the Museum. It also included returning the $165,000 already provided from Community Development Block Grant (CDBG) and not expended. He was agreeable to the Museum Corporation signing a contract with the City agreeing to operate the Museum including the maintenance of the exterior, as well as a pay-back program that would start perhaps four years from now with terms to be determined between staff and AMI. 85-66 ?~O Anaheim Civic Center, ANAHEIM REDEVELOPMENT AGENCY November 19, 1985, 9:30 A.M. "'"""" Mr. Overholt stated his interest was in the fact that it would be understood that AMI would undertake a pay-back plan reimbursing the Redevelopment Agency for those funds used to bring the Museum up to speed; Mr. Leo confirmed that AMI would be amenable to such a pay-back plan and that was their proposal. Agency Member Bay stated the foregoing proposal was different from previous proposals discussed and he also had nothing before him in writing. The request, as he understood it, was that AMI would sign an agreement to handle the recurring costs of the Museum when the Agency agreed to put it in a turnkey operation. This was the first time he had heard officially of any pay-back agreement. It was his opinion, if the Agency, as a part of the total Redevelopment plan, was going to spend the necessary money to make the Museum a turnkey operation, it should do so. Applications for grants had been submitted for a maximum of $300,000 which he assumed made up the figure of $410,000 within the Staff Report (see Page 2 of Staff'Report from the Community Development Department dated October 22, 1985). He did not believe that the Museum would get the $300,000 on the grant program. the best estimate was $90,000 and he personally felt it would be $50,000. MOTION: Agency Member Bay moved that the Redevelopment Agency grant $710,000 from Redevelopment funds less any State grant money received to finance putting the Carnegie Library building in "turnkey" operation to be used as an historical museum; instructing staff to set up an operating agreement with ~ Anaheim Museum Inc. in a contract along the lines recommended in letter dated November 15, 1985 from the Law Offices of Robert D. Ricks, guaranteeing in that contract that Anaheim Museum Inc. will handle the recurring costs for the Museum for the term of its existence. Before action was taken, Mr. Bay stated his concern had always been the recurring costs of a museum operation. A museum was a desirous function of the Redevelopment program to contribute to the cultural and historical heritage within the downtown project area using tax increment funds. He was not certain that $710,000, the estimated rehabilitation cost as outlined in the October 22, 1985 report would, in fact, put the building in a turn key operation. Since the contract would solve the recurring costs, the Agency should go all the way. Agency Member Roth seconded the motion but questioned the status of the $165,000 previously allocated. City Manager Talley stated his recommendation would be that the motion include the return of the $165,000 which came from CDBG funds and, further, it was his understanding that as an Agency, $710,000 was being allocated to the subject program. Mr. Bay thereupon amended his motion to include that the $165,000 from CDBG funds previously allocated be returned to the Redevelopment Agency. ~ Chairman Roth explained in the past 6 or 7 months it had been very difficult to raise funds for the Museum, the indication being that it was necessary to have the Museum open in order to have continuing successful fund-raising and that any additional major funding would not happen until the Museum was open. 85-67 227 Anaheim Civic Center, ANAHEIM REDEVELOPMENT AGENCY November 19, 1985, 9:30 A.M. He was always concerned about keeping anything in perpetuity. He favored using Redevelopment funds to provide a turn key operation subsequently turning the Museum over to AMI and it would then be their responsibility to maintain that Museum. He wanted a commitment that continuing operating costs would be the responsibility of AMI. Relative to a pay-back, if such a program was established, the Museum would be coming back to the City on an annual basis asking for financial support. He preferred giving up front money for a turnkey operation. Mr. Bay then explained for Agency Member Pickler that the document submitted by Mr. Ricks, attorney for AMI, was not intended to be the agreement, but a guideline for setting up a formal agreement .that would have to again be brought back to the Agency before final approval. Mr. Overholt asked if the motion was intended to preclude AMI from doing what Mr. Leo said they were willing to do - enter into an arrangement to ultimately reimburse the Agency; Mr. Bay answered yes. Mr. Overholt asked if AMI chose to do so, would he, (Bay) refuse that; Mr. Bay stated he did not know if AMI chose to do so but kept it as a caveat in case they were not going to get anything. AMI's budget for the first couple of years at $45,000 or $50,000 was a "bare bones" budget. He did not want to stifle added growth to the Museum endowment which endowment would eventually set up the interest to cover the full operating costs of the Museum by saying, along with raising and trying to get their endowment up to $1.5 or $2 million at the same time they were going to have to raise $700,000 across a 5-year period. It was too much of a task to place on them. If AMI wanted to do that voluntarily, that would be fine, but he did not feel it was necessary as a part of the agreement. Mr. Overholt stated he was looking for a commitment from the citizens to try to make the Museum who1e1y self supporting, not a government or City function but a private activity. If there was that pledge, te favored proceeding and bringing the building up to speed. If the pledge was withdrawn and if there were three votes to approve the refurbishment to the maximum of $710,000, that concerned him. He asked Mr. Leo if it was true that AMI was willing to, and would propose a plan whereby over the long term, the Redevelopment monies used to refurbish the Museum would be reimbursed to the City. Mr. Leo answered that the issue had been brought before the Building Committee and gone back to the Board of Directors and AMI was amenable to that type of agreement and they would not withdraw it; Mr. Bay reiterated it should be on a voluntary basis and 5 years was too short a period of time for pay-back. Mr. Overholt stated he was satisfied with Mr. Leo's representation to approve the action. If the Museum was amenable to presenting a program for ultimate payoff such as a refundable grant, that was satisfactory to him because his concern was with an outright grant. Mr. Leo stated he was authorized by the Museum to answer whatever questions the Agency had. He did not know what other assurances any other person in AMI could give than he could. They had a goal within the Museum to raise over a 85-68 228 Anaheim Civic Center, ANAHEIM REDEVELOPMENT AGENCY November 19, 1985, 9:30 A.M. - million dollars in a foundation as quickly as possible. That would be done with additional grants from individuals and corporations within the City. City Manager Talley described his understanding of the motion as far as what staff was going to do. They were talking about the Redevelopment Agency, but the building was owned by the City. The Redevelopment Agency was going to transfer at some time in the future $710,000 to the City and the City, in turn, was going to prepare plans and specifications. Talking about turnkey meant that the City would be turning over to AMI a fully finished facility. The plans and specifications would be those that the Museum created, and would approve before being brought back to the Agency. Those would be bid out and the bids brought back. The Agency would then award a contract to a construction company who would complete the building and turn it over to the City. The City would then sign a lease transferring either title or a 55-year lease to the Museum Corporation. As part of that agreement, there would be an agreement between the City and AMI and among other things would say that the City was going to give the Museum a turnkey operation and the Museum would agree that the City's expense would end at that point and they would take complete responsibility for insurance, exterior and interior maintenance, any further modifications or renovations, all grounds, utilities, etc. The City's liability would stop there. The proposal submitted by AMI yesterday agreed to maintain operation of the Museum. If not, it would be shut down and title to the building transferred back or the agreement would end. Also, the $165,000 of CDBG funds would be rescinded and the Agency would later apportion those funds wherever they wanted to do so. In the event all or any part of $300,000 in State grants were to commence, those funds would be applied against the $710,000. If bidding came in higher than $710,000, that was something that the Agency would have to deal with. - Mr. Bay interrupted and stated that up to this point, Mr. Talley had stated his motion clearly. Mr. lal1ey continued that in addition if the Agency wanted in the agreement either some voluntary or mandatory repayment provision, it could be included now or at a later date as an amendment to the agreement. That provision would be in the agreement between the City and the Museum. The City would then decide at the time repayment funds started to come back whether those funds should flow to the General Fund or back to the Agency. Mr. Leo stated that what Mr. Talley outlined was exactly what the Museum had in mind. Norm Priest, Director of Community Development and Planning, stated that he concurred with Mr. Talley. However, there were two or three points of clarification. The $710,000 figure was used because it was the best estimate. The bids could be considerably higher, but at the same time within that $710,000 it was important to understand there were fixtures and equipment which the Agency could not fund which would tend to reduce the amount - somewhat. Secondly, relative to title vs. lease, he believed it would have to remain a lease situation in that the provision of Law under which the Agency would fund the project would be funding a public facility. If for some reason it ceased to be a public facility and specifically ceased to be a museum, then 85-69 101 Anaheim Civic Center, ANAHEIM REDEVELOPMENT AGENCY November 19, 1985, 9:30 A.M. any grant funds received would be repayable. He explained further for Agency Member Pickler that the aim was to focus on the structural elements but more was involved such as replacement of friezes etc. To restore those would be more expensive than making the building structurally safe but they would also be included. Agency Member Kaywood asked if there were funds sitting unused in the Redevelopment Agency to accomplish the rehabilitation; Mr. Priest answered no, that would require that other projects be deferred. Agency Member Kaywood stated that Mr. Leo's proposal was a fine idea with a good business basis and she was willing to support that. Prior to 1978 she may have agreed to give the funds as a gift because the City needed a museum. However, unless there was an incentive to pay something back, people did not work as hard to do so. The citizens must also recognize the constraints on City funds, not only Anaheim, but also throughout California. She did not feel the City could make a gift of funds and then rely on good will for repayment. She had always supported the Museum and she did care. She then made a personal pledge of $1,000 if 100 other people would do the same. She reiterated, she favored the proposal but on a business-like basis and that the money be returned to the Redevelopment Agency. -- Agency Member Pickler stated he was going to support the motion as offered. He felt it was the responsibility of the City to put the building in good condition so that it could be used. The way the motion was offered by Mr. Bay was agreeable to him and in the future, the funds could be paid back if the Museum got to the point where the~ felt they could do so. Agency Member Kaywood asked for clarification relative to the provisions of the motion. Mr. Leo was saying on behalf of the Museum Board that they were agreeing to pay the money back; Chairman Roth stated that was not a part of the motion. Mr. Overholt stated that was not true. The Agency was authorizing the expenditure of the funds to provide a turnkey operation but the minutes wnu1d reflect Herb Leo's representation on behalf of Anaheim Museum Inc. that they would present some plan for the repayment of the money being taken from Redevelopment funds at some future date without any specifics being dictated. It was a pledge on the part of AMI and not something the City was demanding. Mr. Leo stated that was correct which was the portion following Mr. Talley's "if" when he stated his understanding of the direction given. The contract had to be negotiated after the facility was up to turnkey status. A Roll Call Vote was then taken on the foregoing motion clarified as follows: That the Redevelopment Agency grant $710,000 from Redevelopment funds less any State grant money received to finance putting the Carnegie Library building in ..turnkey" operation to be used as an historical museum; instructing staff to set up an operating agreement with Anaheim Museum Inc. in a contract along the lines recommended in letter dated November 15, 1985 from the Law Offices of Robert D. Ricks, guaranteeing in that contract that Anaheim Museum Inc. will handle the recurring costs for the Museum for the term of its existence, and that the $165,000 from CDBG funds previously allocated be returned to the Redevelopment Agency. MOTION CARRIED. 85-70 102 Anaheim Civic Center, ANAHEIM REDEVELOPMENT AGENCY November 19, 1985, 9:30 A.M. - ADJOURNMENT: Agency Member Pickler moved to adjourn. Agency Member Kaywood seconded the motion. MOTION CARRIED. (10:37 a.m.) LEONORA N. SOHL, SECRETARY - - 85-71