1994-0504_SWALLOWS FOUNDATION, THE_Preservation Easment AgreementRecording Requested by:
The City of San Juan Capistrano
After Recordation Mail to:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
(Free Recording Govt. Code 6103)
�s _i�rV eR.je
- if t
^ecce:;- _. v __A pa
... nia
Lee
Vi VL'r
PRESERVATION EASEMENT AGREEMENT
TIJIS PRESERVATION EASEMENT AGREEMENT ("Agreement"), dated
as of , 1994 is entered into by and between the
City of an Juan Capistrano ("City"), and The Swallows
Foundation ("Property Owner").
RECITALS
WHEREAS, the purpose of this Agreement is to effectuate
the Los Rios Precise Pian (11LRPP11) for the Los Rios Historic
District by providing for the acquisition and redevelopment of
the hereinafter described portion of 26720 Verdugo Street,
(the "Site"); and
WHEREAS, the use, rehabilitation and improvement of the
Site by the Property Owner pursuant to this Agreement, and the
fulfillment generally of this Agreement, are in the vital and
best interest of the City of San Juan Capistrano (the "City")
and the health, safety, morals and welfare of its residents,
and in accord with the public purposes and provisions of
applicable federal, state and local laws and requirements; and
WHEREAS, the buildings (the Lupe Combs House and the Old
Jail Building) located upon the site are designated as
contributing historic structures in a National Register of
Historic Places Historic District and are of direct benefit to
the City;
NOW, THEREFORE, the City and Property Owner agree as
follows:
Section 1. Conveyance of Preservation Easement
Property Owner, upon payment by City of the consideration
set forth in Section 4 hereof, shall grant and convey in
perpetuity to the City, its successors and assigns, a
preservation easement for historic preservation purposes on
all four (4) sides and the roof ("facades") of the Lupe Combs
House and the Old Jail Building, the native and historic
landscaping and all currently existing Site improvements
(fencing, flat work) located on the Site which is described in
the attached Exhibit "A" entitled Legal Description:
s
0�
Section 2. "Historic Preservation Purposes"
"Historic Preservation Purposes" as used in this
Agreement means the preservation by the Property Owner, its
successors or assigns, of all four (4) sides (and the roof) of
the Lupe Combs House and the Old Jail Building, the native and
historic landscaping and all currently existing Site
improvements (fencing, flat work) located on the Site for
historic purposes for the benefit of the City. The Property
Owner shall rehabilitate the building facades of the Lupe
Combs House and the Old Jail Building and the native and
historic landscaping and all currently existing Site
improvements in accordance with plans approved by the City.
the Property Owner shall, throughout the terms of this
Agreement, maintain the building facades of the Lupe Combs
House and the Old Jail Building, native and historic
landscaping and all currently existing Site improvements in
good condition as determined by the City.
Section 3. Rehabilitation and Maintenance
The building facades of the Lupe Combs House and the Old
Jail Building, native and historic landscaping and all
currently existing Site improvements shall be maintained and
rehabilitated by the Property Owner at its sole cost and
expense and in accordance with the Secretary of the Interior's
Standards for Rehabilitation of Historic Properties and Sites
in effect as of the date of this grant.
Section 4. Consideration
The City agrees to pay the Property Owner the sum of
Thirty Six Thousand and Five Hundred Dollars ($36,500) as full
consideration of this preservation easement.
Section 5. Easement to Run With the Land
This grant of easement shall be recorded against the
property and shall run with the land, in perpetuity, and shall
be binding on, and shall insure to the benefit of the parties
hereto, their successors or assigns.
Section 6. Subject to Los Rios Precise Plan
This Agreement is subject to the provisions of the Los
Rios Precise Plan which was approved and adopted on February
15, 1978. The Los Rios Precise Plan is incorporated herein by
reference and made a part hereof as though fully set forth
herein.
0 0
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
COUNTY OF �, n
On before me, �(Ic T( / %[6�t "-t-'
A E Io 4JQ AME, T gOF OFFIC R - .G., �TNE DOE, IN ARV PU@LIq" -
l. e.)JUa/L LC%S ��c/illE,0/1
personally appeared,�ae/C.e�lrivesrrctl',,ye/beS,ua,�Ct>rancS:P,2�S/dr
personally known to me (or'proved to me on the basis of satisfactory evidenEe) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
c:GCa � i-1 (SEAL)
NOT Y PUBLIC SIOAATURE
TITLE OR TYPE OF DOCUMENT
DATE OF DOCUMENT
SIGNER(S) OTHER THAN NAMED ABOVE
State of 1,
Akt.ce—
County of / /Lk7O'
NUMBER OF PAGES
On 9`/4 before me, /117 1 it UJ4.InSMI /U6!-7- &blic ,
DAT ...i NA TITLE OF OFFICER - E G., "ANE DOE, NOTARY P LIC"
personally appeared
ersonally known to me - OR
Y NAME(S) OF SIGNER(S) U
❑ proved to me on the basis of satisfactory evidence
to be the person() whose name(6) is/are--
subscribed to the within instrument and ac-
knowledged to me that he/she/they executed
the same in his/hertttsdir authorized
capacity(iee), and that by his/!Tgl lr
signature(s)-on the instrument the person ,
or the entity upon behalf of which the person)
_ CHERYL A. JOHNSON acted, executed the instrument.
COMM. t lopaa7o z Witness my hand and official seal.
Z - Notary Public — Coliforrdc n
ORANGE COUNN
My Comm. Expire, DEC 13. 1497
CAPACITY CLAIMED BY SIGNER
❑ INDIVIDUAL(S)
,Ej c PORATE tile,
OFFICER(S)
TITL IS)
❑ PARTNER(S)
❑ ATTORNEY-IN-FACT
❑ TRUSTEE(S)
❑ SUBSCRIBING WITNESS
❑ GUARDIAN/CONSERVATOR
❑ OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSONS) OR ENTITY(IES)
�� n V✓GIiJ! �R�
ATTENTION NOTARY: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to unauthorized document.
THIS CERTIFICATE Title or Type of Document a _ .7
MUST BE ATTACHED
TO THE DOCUMENT Number of Pages —/ Date of Document 51,41f DESCRIBED AT RIGHT: Signer(s) Other Than Named Above t n
®1991 NATIONAL NOTARY ASSOCIATION • 8236 Remmet Ave. " P.O. Bax 7184 • Canoga Park, CA 91304-7184
SALLY FREY �
-,02550
NOTA �IyORNIA�
O COL.
NUMBER OF PAGES
On 9`/4 before me, /117 1 it UJ4.InSMI /U6!-7- &blic ,
DAT ...i NA TITLE OF OFFICER - E G., "ANE DOE, NOTARY P LIC"
personally appeared
ersonally known to me - OR
Y NAME(S) OF SIGNER(S) U
❑ proved to me on the basis of satisfactory evidence
to be the person() whose name(6) is/are--
subscribed to the within instrument and ac-
knowledged to me that he/she/they executed
the same in his/hertttsdir authorized
capacity(iee), and that by his/!Tgl lr
signature(s)-on the instrument the person ,
or the entity upon behalf of which the person)
_ CHERYL A. JOHNSON acted, executed the instrument.
COMM. t lopaa7o z Witness my hand and official seal.
Z - Notary Public — Coliforrdc n
ORANGE COUNN
My Comm. Expire, DEC 13. 1497
CAPACITY CLAIMED BY SIGNER
❑ INDIVIDUAL(S)
,Ej c PORATE tile,
OFFICER(S)
TITL IS)
❑ PARTNER(S)
❑ ATTORNEY-IN-FACT
❑ TRUSTEE(S)
❑ SUBSCRIBING WITNESS
❑ GUARDIAN/CONSERVATOR
❑ OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSONS) OR ENTITY(IES)
�� n V✓GIiJ! �R�
ATTENTION NOTARY: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to unauthorized document.
THIS CERTIFICATE Title or Type of Document a _ .7
MUST BE ATTACHED
TO THE DOCUMENT Number of Pages —/ Date of Document 51,41f DESCRIBED AT RIGHT: Signer(s) Other Than Named Above t n
®1991 NATIONAL NOTARY ASSOCIATION • 8236 Remmet Ave. " P.O. Bax 7184 • Canoga Park, CA 91304-7184
CITY
-� MEMBERS OCOLENECAM BELL
GARY L.
CAMPBELL
GARY JON HAUSDORFER
CA JONES
� U - IAIOA,aAnlfo CAROLYN NASH
u,Iwsrtn 1961 JEFF VASOUEZ
1776
• • CITY MANAGER
GEORGE SCARBOROUGH
May 19, 1994
Mr. Don Frey
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, California 92675
Re: Lupe Combs House
Dear Mr. Frey:
Attached for your information are copies of our letters received back from the the Orange County
Recorder's Office containing recording information relating to the Irrevocable Offer of Dedication
and the Preservation Agreement for the Combs House.
Very truly yours,
chz %—�
Cheryl Johnson
City Clerk
Enclosure
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171
0
April 21 , 1994
Mr. Don Frey
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, California 92675
Dear Mr. Frey:
Jw�
-' arlonva+ne
W11MI(I 1961
1776
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
GARY L, HAUSOORFER
GIL JONES
CAROLYN NASH
JEFF VASQUEZ
CITY MANAGER
GEORGESCARBOROUGH
At their meeting of April 19, 1994, the City Council of the City of San Juan Capistrano again
considered your request for assistance in providing a Visitor's Tourism Bureau at the Combs House.
The City Council took action to approve the staff recommendation, as follows:
1. Authorized the City Manager to negotiate a facade easement on the
Combs House from the Swallow's Foundation for $36,500;
2. Declared that the Council approved the purchase of the facade
easement due to specific circumstances of the project and the
historical improtance of the building.
Thank you for your interest in providing a tourism facility in the City. If you have any questions,
please do not hestiate to call.
Very truly yours,
a'y
Cheryl Johnson
City Clerk
cc: Rich Hanson
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171
is .
0
(2) Kelly Sylvester, representing BIA of Orange County, concurred with the modified recommendation.
There being no further input, the hearing was declared closed with the right to reopen at any time.
Introduction of Ordinance Amending Title 4 of the Municipal Code:
The City Clerk read the title of the Ordinance next in order. Further reading of all Ordinances had been waived
earlier in the meeting. It was moved by Council Member Hausdorfer, seconded by Council Member Nash, that
the following Ordinance be introduced, as modified:
AMENDMENT TO TITLE 4 OF THE MUNICIPAL CODE - ADOPTING
UNIFORM FIRE CODE, 1991 EDITION - AN ORDINANCE OF THE CITY OF
SAN JUAN CAPISTRANO, CALIFORNIA, AMENDING CHAPTER 2, "FIRE
PREVENTION," OF TITLE 4, "PUBLIC SAFETY," RELATING TO ADOPTION
BY REFERENCE OF THE UNIFORM FIRE CODE, 1991 EDITION, WITH
APPENDICES; THE UNIFORM FIRE CODE STANDARDS 1991 EDITION;
AND AMENDMENTS THERETO
The motion carried by the following vote:
AYES: Council Members Campbell, Hausdorfer, Nash, Vasquez, and Mayor Jones
NOES: None
ABSENT: None
Council recessed at 7:50 p.m. to convene the San Juan Capistrano Community Redevelopment Agency, and reconvened
at 7:51 p.m.
ADMINISTRATIVE ITEMS
CITY MANAGER
Council Members Jones and Vasquez indicated they had a potential conflict of interest due to the proximity of their
residenceslbutsinesses to this project and left the Council Chamber.
Written Communication:
Report dated April 19, 1994, from the City Manager, recommending that the City negotiate a facade easement
from the Swallow's Foundation for $36,500. The facade easement would include:
1. The requirement to rehabilitate the two standing buildings on the site and to grant an easement to
protect the facades;
2. The requirement that the property owner rehabilitate and maintain the buildings in good repair;
3. The requirement to ensure continued maintenance of the native and historic landscaping and site
features;
4. The requirement that the easement nm with the land, in perpetuity and be binding on all successors and
assigns;
City Council Minutes -6- 4/19/94
t • •
5. The requirement that the Swallows Foundation offer the City an irrevocable offer to purchase the
property for $1.00 when the Foundation owns the property free and clear of all loans or encumbrances:
6. The approval of the holder of the first trust deed on the property.
Council Member Hausdorfer reiterated the concerns he expressed on April 5, 1994, regarding the City's funding
of the Visitor's Center over a five-year period that would not guarantee long-term historical preservation of the
structure. After discussions with the Swallows Foundation, he felt that the current proposal for the City to
purchase a facade easement on the property for $36,500 satisfied his concerns, since it would guarantee historic
preservation of the structure in perpetuity, and no funding or ongoing operating expenses would be required of
the City. He suggested that the City include a line item in the budget specifically for historic preservation to
address issues such as this project. Council Member Nash stated that the City Council's highest goal is the
preservation of natural resources and historic structures in the City. She felt that although the current proposal
was not a perfect solution, it was the best solution for this project.
Don Frey, President of the Swallows Foundation, expressed appreciation to Council Member Hausdorfer and
the Council on their efforts in resolving their concerns for this project and spoke in support of the current
proposal.
Authorization to Negotiate Facade Easement:
It was moved by Council Member Hausdorfer, seconded by Council Member Nash, that the City Manager be
authorized to negotiate a facade easement on the Combs House from the Swallow's Foundation for $36,500,
based on the finding of specific circumstances of the project and the historical importance of the structure. The
Council emphasized that approval to purchase the facade easement was not appropriate or available to other
properties in the City. The motion carried by a 3-0-2 vote, with Council Members Jones and Vasquez absent.
Council Members Jones and Vasquez returned to the Council Chamber and resumed their duties.
DIRECTOR OF ADMINISTRATIVE SERVICES
RESOLUTION EXTENDING THE CABLE TV FRANCHISE AGREEMENT BETWEEN THE CITY
AND TIMES MIRROR CORPORATION (DIMENSION CABLE SERVICES) (600.30)
Written Communication:
Report dated April 19, 1994, from the Director of Administrative Services, recommending that the contract
between the City and the Times Mirror Corporation (Dimension Cable) be extended for a period of 160 days to
allow the City and Times Mirror staff to refine the terms, conditions, and content of the draft franchise renewal
document.
Ms. Pendleton made an oral presentation.
Mayor Campbell expressed concerns regarding approval of another extension of the existing franchise
agreement She felt dig a 160 -day extension was excessive and recommended that a three-month extension be
considered. Council Member Jones agreed and felt that a strong message should be sent to the cable company
to move quickly to conclpde the negotiations. Mr. Scarborough indicated that reducing the extension to 90 days
would s®d a message to Dimension Cable but would not expedite the completion of the agreement negotiations.
Adoption of Resolution Approving 90-dav Extension of the Cable TV Franchise A�eemem:
It was moved by Council Member Hausdorfer, seconded by Council Member Jones, that the following
Resohmon be adopted extending the existing Cable TV fraachise agreement, with the modification to reduce the
extension from 160 days to 90 days from April 22, 1994:
EXISTING FRANCHISE OF TIMES MIRROR CABLE TELEVISION - A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN YUAN
CAPISTRANO, CALIFORNIA, EXTENDING THE EXISTING FRANCHISE OF
City Council Minutes -7- - 4/19/94
PJ
E
AGENDA ITEM April 19,1994
TO: Honorable Mayor and City Council
FROM: George Scarborough, City Manager
SUBJECT: Consideration to Purchase a Facade Easement on the Lupe Combs House from the
Swallow's Foundation
RECOMMENDATION:
By motion,
a. Authorize the City Manager to negotiate a facade easement on the Combs House from the
Swallow's Foundation for $36,500; and
b. Declare that the City Council is approving the purchase of this facade easement because of
the specific circumstances of the project and the historical importance of this building. This
agreement for a facade purchase is not appropriate or available to other properties in the City.
SITUATION:
Summary and Recommendation -
Since February 1, 1994, the City Council has been working with the Swallows Foundation to assist
in the rehabilitation of the Lupe Combs House in the Los Rios Historic District. The proposed City
contribution to the Swallows Foundation was to fund a Visitor/Tourism Center and continuing
assistance towards the operation of the center and rehabilitation of the house.
On February 15, 1994, the City Council voted 2-1, with two Council members abstaining because of
a conflict of interest, in favor of an this agreement. Although, the vote represented a majority of the
voting quorum, Government Code Section 3693 states that, resolutions and orders for payment of
money and all ordinances require the affirmative vote of at least three Council Members.
Consequently, the item did not pass, as originally thought.
At the City Council meeting on April 1, 1994, the City Council reconsidered the proposed agreement
with the Swallows Foundation. Councilman Hausdorfer raised concerns regarding the appropriate
method and manner of City assistance to the Swallows Foundation. At the core of the issue is the
City's interest in the preservation and rehabilitation of the Lupe Combs house. City Council directed
staff to meet with Don Frey and develop an alternative approach to City involvement in the project.
FOR CITY COUNCIL AGEN�
9
0
Agenda Item - 2 - April 19, 1994
Staff is recommending that the City Council purchase a facade easement over the house and out
building, and that the property owner provides a commitment to the continued maintenance of
historic and native landscape elements and site amenities.
Back r and
The Lupe Combs house is a contributing element of the Los Rios Historic District. The Los Rios
District is on the National Register of Historic Places as one of the oldest continually occupied
residential communities in California. Its heritage is linked with the development of the community.
The Combs house was built in 1878 in the new tract called Forster City, developed near San Onofre.
It was relocated to San Juan Capistrano in 1882 and was used as a home, general store, and post
office at various times. Its residents are associated with the lure of the adjacent railroad known for
stringing close lines across the tracks to arguments over landscaping adjacent to the rails.
The Lupe Combs house sits at the gateway to the Los Rios Historic District adjacent to the entry
plaza. The house is one of the most photographed and painted homes in the district. The General
Plan encourages the City and its citizens to establish the ways and means to preserve historic features
of value within the community.
Staff believes the dedication of a facade easement on the Lupe Combs house to the City is one way
to meet this General Plan charge. The facade easement should contain the following elements:
The rehabilitation of the two standing buildings on the site including all four (4) sides
and the roof of each building (facade) and the granting of an easement that protects
the facades.
2. In accordance with rehabilitation plans approved by the City, the property owner shall
rehabilitate and maintain in good repair the buildings in accordance with the Secretary
of the Interior's Standards for Rehabilitation Projects.
3. The property owner shall ensure the continued maintenance of the native and historic
landscaping and site features such as the fence.
4. A facade easement shall be granted that runs with the land, in perpetuity, and shall be
binding on all successors and assigns.
The Swallows Foundation or its successor organization shall offer the City of San
Juan Capistrano an irrevocable offer to purchase the property for $1.00 when the
property is owned free and clear of all loans or encumbrances by the Foundation.
6. Approval of the holder of the first trust deed on the property.
Staff has some concerns that the purchase of the facade easement may set the assumption of a
precedent for other historically important buildings in the community. Staff has not had sufficient
time to evaluate or financially analyze the impacts of this issue. The City Council, in approving this,
should be aware of this issue and indicate the unique nature and circumstances associated with this
project.
•
Agenda Item
-3-
E
COMMISSION/BOARD REVIEW AND RECOMMENDATIONS:
April 19, 1994
The Los Rios Review Committee has received a copy of this report. Staff was unable to solicit their
comments prior to this meeting.
FINANCIAL CONSIDERATIONS:
No funds have been budgeted for this appropriation, but the project could be funded from
unallocated General Fund reserves. It should be noted that the value of the facade easement or
corresponding property tax implications have not been appraised or analyzed.
NOTIFICATIONS:
Mr. Don Frey, Chairman
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, CA 92675
Mr. Rich Hansen, President
San Juan Capistrano Chamber of Commerce
26832 Ortega Highway
San Juan Capistrano, Ca 92675
ALTERNATE ACTIONS:
1. a. Authorize the City Manager to negotiate a facade easement on the Combs House
from the Swallow's Foundation for $36,500; and
b. Declare that the City Council is approving the purchase of this facade easement
because of the specific circumstances of the project and the historical importance of
this building. This agreement for a facade purchase is not appropriate or available to
other properties in the City.
2. Do not authorize City funds for the purchase of a facade easement from the Swallows
Foundation for the Lupe Combs House.
3. Request additional information from Staff.
0
Agenda Item - 4 - April 19, 1994
RECOMMENDATION:
By motion,
a. Authorize the City Manager to negotiate a facade easement on the Combs House from the
Swallow's Foundation for $36,500; and
b. Declare that the City Council is approving the purchase of this facade easement because of
the specific circumstances of the project and the historical importance of this building. This
agreement for a facade purchase is not appropriate or available to other properties in the City.
0
AGENDA ITEM
April 19, 1994
TO: Honorable Mayor and City Council
FROM: George Scarborough, City Manager
SUBJECT: Reconsideration of Agreement to Provide a Visitor's
Tourism Bureau at the Combs House (Swallows Foundation)
Reconsideration of this item was continued to the Meeting of April
19, 1994, to provide an opportunity for Council Member Hausdorfer
to work with staff and proponents of the Swallows Foundation to
determine whether an acceptable financial strategy could be found.
An oral report will be presented at the City Council Meeting
regarding the outcome of these discussions.
ly.submitted,
Georgecarborqugh�--
City M nager
GS
FOR CITY COUNCIL AGENDA'/..
G/a
ADIVUNISTRATIVE ITEMS
L RECONSIDERATION OF AGREEMENT TO PROVIDE A VISITOR'S TO IRISM BUREAU AT
THE COMBS HOUSE (SWALLOWS FOUNDATION) (60
Council Member Jones indicated he would abstain on this in due to a potential conflict of interest relating
to the proximity of his residencelbusiness to this project.
Written Communications:
(l) Report dated April 5, 1994, from the City Manager, advising that the two votes approving the
expenditure of funds on February 15, 1994, were insufficient and, pursuant to Government Code
Section 36936, three votes were necessary. The requested agreement would provide City funding for
initial facility rehabilitation and operation in the amount of $36,500, with the City to be repaid over
a five-year period. The Report recommended that the proposed agreement with the Swallows
Foundation be approved based on the Foundation's ability to obtain proper financing, staff, and
business participation.
(2) List of the Board of Directors and Founding Members of the Swallows Foundation, submitted by Don
Frey.
Mr. Scarborough made an oral presentation.
Public Comments:
(1) Donald Frey, Acting President of the Swallows Foundation, urged Council approval of the project to
preserve the historic property and make the proposed use economically viable. He advised that at the
Foundation's Board of Directors meeting on March 30, 1994, a signed lease was received from the
Chamber of Commerce to occupy a portion of the subject property for a fee. He indicated that funds
necessary to operate the Visitor's Center could be obtained from grants and other funding over a
period of time. He stated that as soon as the property was paid for, the property would be deeded
back to the City for historic preservation. He emphasized the community's desire and need for this
use.
(2) David Swerdlin, as a downtown merchant and current President of the Friends of Historic San Juan
Capistrano, spoke in support of the project as proposed because of its benefit to the City, its potential
for success, and its preservation of an historic structure.
(3) Heather Hale, 234 Avenida Santa Barbara, San Clemente, indicated she owns a business in the City
and is a co-founder of the Swallows Foundation. She felt that deeding the property back to the City
would satisfy the concerns previously expressed by Council Member Hausdorfer.
Council Comments:
With regard to the project, he stated he had consistently voted in opposition to this project from the beginning.
He noted that the total net income projected for the Visitor's Center was $3,765, which would not service the
debt. He inquired how the funds received from the City would be spent over the five-year period.
Mr. Frey explained that the initial funding would be used to debt service the property to prevent it from being
deeded back to the lender, with the balance to be used for rehabilitating the property and operating the Center.
He noted that donations have been promised by various service industries to be utilized over the five-year
period He felt that the property could be improved to $100,000 more than its current value. He noted that
the Foundation needed time to work with City staff and community organizations to apply for grant funding
and conduct fundraisers. He stated that the pro forma included in the Staff Report constituted a "worst-case"
scenario and indicated the Foundation's available cash as of October 1993. He noted that the jail might be
City Council Minutes -& 4/5/94
AGENDA ITEM:
0 0
April 5, 1994
TO: The Honorable Mayor and City Council
FROM: George Scarborough, City Manager
SUBJECT: Consideration of Agreement to provide a Visitor's/Tourism Center at the
Combs House - Swallows Foundation
RECOMMENDATION:
By motion:
A. Request the Swallows Foundation to provide evidence of the following:
- Ability to obtain community -private donations of $20,000 (50% of the maximum
financing gap)to provide the funds necessary to refinance the property
- Ability to finance the property at 80% of appraisal value after rehabilitation.
- Ability to staff the Visitor's/Tourism Center.
- Ability to provide a tenant at $6,000 annually.
- Ability to obtain businesses to participate in the business promotion services.
B. Authorize the City Manager to execute a contract with the Swallows Foundation to
provide a Visitor's/Tourism Center.
C. Authorize an additional appropriation of $36,500 from General Fund Reserves to
account number 01-62538-4122 for the rehabilitation and operation from April 1,
1994 to June 30, 1994 and direct staff to allocate funds in subsequent years
budgets for funding based on contract.
SITUATION:
Summary and Recommendation:
On February L5, 1994, the City Council considered an agreement with the Swallows
Foundation to assist with the rehabilitation of the historic Lupe Combs House. The vote
regarding this issue was 2-1 in favor of the agreement with two Council members abstaining
due to a conflict of interest. The vote was a majority of the voting quorum, however
Government Code Section 36936 states that, resolutions and orders for payment of money,
and all ordinances require the affirmative vote of at least three Council members for
passage. This means that the item did not pass, as originally thought, by the Council and no
agreement can be made with the Swallows Foundation. Therefore, Swallows Foundation is
requesting reconsideration of this item by the City Council.
FOR CITY COUNCIL AGEND A/ ( /��
U``vim///
0 0
AGENDA ITEM -2- April 5, 1994
Background:
Facility Acquisition
In April 1993, the Swallows Foundation requested a $35,000 loan from the City in an effort to
acquire the Combs House. The Combs House is located in the Los Rios Historic District at
26711 Verdugo Street, adjacent to the railroad tracks. The Swallows Foundation has
identified this facility as a location for a Visitor's/Tourism Center. The City Council agreed
to provide a loan, provided the Swallows Foundation could provide the City a secured first
trust deed. The Swallows Foundation was unable to complete the acquisition at that time. In
September 1993, the Swallows Foundation was successful in renegotiating the purchase and
acquired the house. The Swallows Foundation was able to secure a loan from a private lender
for the entire purchase of $199,500 at fourteen percent (14%). The annual debt service on
this loan is $27,930.
The appraisal price of the property was $173,000. However, this was a residential appraisal
as opposed to an historic dwelling appraisal. The Swallows Foundation feels that an appraisal
conducted in the manner necessary to value an historic building would have resulted in
additional appraised value. This has not been done since this type of appraisal is very
costly. The rehabilitation of the property will increase the value. Based on the residential
appraisal, the new value after rehabilitation would be approximately $200,000 to $250,000.
Based on this value, the maximum conventional loan amount would be $160,000 to $200,000.
Conventional financing would result in annual payments of $15,000 - $18,750. The Swallows
Foundation would need to generate additional donations to fund the difference between the
amount they can secure and what they currently owe. Depending on the new appraised value
the Swallows Foundation may need to generate as much as $40,000 in donations.
Swallows Foundation Request
The original request from the Swallows Foundation for a loan of $35,000 could now be used
for the rehabilitation and start-up costs associated with their operation. However, the loan
would be in the form of an unsecured second trust deed. This would be repaid over five years
at the City's average rate of return on investment. The Swallows Foundation believes that
upon completion of the rehabilitation, they will be able to secure financing in an amount
sufficient to pay-off the current first trust deed and provide the City a secured second
position on the property.
The City could also provide the $35,000 to the Swallows Foundation as part of an agreement
to provide the Visitor's/Tourism Center. This would result in the City entering into an
agreement for the Swallows Foundation to provide for the rehabilitation of the building as
well as certain Visitor's/Tourism related services, with the City participating in the funding
of these services. Additionally, in order to provide these services during the first five years,
the Swallows Foundation is requesting the City to provide $6,000 annually toward operations.
Visitor/Tourism Center Operation
The Visitor/Tourism Center should be required to be staffed seven days per week during
regular business hours, especially during peak holiday and vacation periods. The center
should provide the following type services:
Tourism Information - seven days per week
Community Marketing
Promotional Brochures
Bookings for tour groups
Business Promotional Services
•
AGENDA ITEM -3- April 5, 1994
The Swallows Foundation anticipates leasing a portion of the facility to the Chamber of
Commerce for $6,000 annually. Additionally, the center would generate revenue from a
business promotion service. This service would include advertising space within the lobby
area of the facility to display flyers, promotional brochures, discount coupons or other visitor
related material for the business. The Swallows Foundation anticipates charging
participating businesses $20.00/month or $240.00/annually for this service. The following is a
projection of start-up costs for 1994:
Projected Start-up and Operation
(February 1, 1994 - December 31, 1994)
Opening Date - April 1, 1994
Income:
Rent - Chamber of Commerce
$5,500
Rehabilitation Contribution - City of San Juan Capistrano
35,000
Rehabilitation Contribution - Outside Vendors
75,000
Visitor's Center Contract - City of San Juan Capistrano
5,500
Total Revenue
$115,500
Expenses.
Building Improvements & Rehabilitation
$75,000
Interest - First Trust Deed (Nov. 1993 - Dec. 1994)
32,585
Insurance
1,320
Maintenance & Utilities
1,125
Telephones
1,350
Office Supplies
500
Postage
350
Total Expenses $111,735
Net Income (Available for staffing center) L_2L765
The projection shows a net income of $3,765 available for the facility before staffing. Staff
anticipates the Center would open around April 1, 1994. This amount combined with revenue
generated from the business promotional service would be available to provide staffing,
marketing and overall coordination of the center. A position of this nature would cost
minimally $2,300 per month or $20,700 for the first year. This means the Swallows
Foundation would need to secure approximately seventy (70) businesses @ $240.00/year for
the business promotion program. The Swallows Foundation projects that it can secure one
hundred fifty (150) businesses for the program. City staff feels that initially fifty (50)
businesses is more realistic.
AGENDA ITEM
-4-
Projected Operating Statement
Subsequent Years
Swallows
Foundation
Projection
Income:
Rent -Chamber of Commerce
Business Promotion Service
City Contribution
Total Income
Expenses:
Mortgage
Insurance
Maintenance & Utilities
$6,000
36,000
6,000
$48,000
$ 18,750
1,320
750
0
April 5, 1994
Conservative
Estimate
$6,000
12,000
6,000
$24,00
$ 18,750
1,320
750
Visitor's Center Staff $ 28,000 $ 28,000
Telephones 1,800 1,800
Office supplies 1,000 1,000
Promotional flyers & brochures 1,000 1,000
Postage 1,000 1,000
Total Expenses 53,620 $53,620
Net Income/(Loss) 0 620)(29 620)
The rent received from the Chamber of Commerce and the initial revenue from the business
promotion service would cover general facility operation including mortgage, insurance and
any maintenance or utilities for the Swallows Foundation for the first year.
In order to provide the appropriate hours of operation and services, the foundation would
need to increase participation to over one hundred seventy five (175) businesses. If the
visitor's tour center is as successful as the Swallows Foundation anticipates they should be
able to operate independently.
Other Organizational Support
The Chamber of Commerce has signed a lease with the Swallows Foundation to occupy space
in the proposed Tourist and Visitors Bureau. The Chamber of Commerce feels that by being
housed with a Tourist and Visitor's Bureau they will be able to back one another up, enhance
the strength of the events they sponsor, and improve the quality and distribution of
publications that will represent the City.
AGENDAITEM
0 0
-5- April 5, 1994
The Mission San Juan Capistrano, however, does not feel that this location is the most
effective. The Mission feels that such a facility should be at the entrance to our community
with high visibility to incoming traffic. The Mission is presently working towards a Visitor's
Information Project to be located near their exit gate. This project would include business
flyers and other advertisements for tourists as they leave the Mission. This project provides
direct competition to the Swallows Foundation Business Promotion Service and has more
access to the large number of tourists who visit the Mission annually. City staff agrees this
is not the optimal location for a visitors center, however, the proposal by the Swallows
Foundation does provide a visitors center while also providing the significant community
benefit of restoring & enhancing the historic Combs House.
COMMISSION/BOARD REVIEW, RECOMMENDATION:
N/A
FINANCIAL CONSIDERATIONS:
The proposal is a high risk venture with a strong possibility that even with the City funding
$36,500, the Foundation will not succeed, the current loan will default and our funding will
result in little, if any, community benefit. However, the significant community benefit that
can be realized with a successful venture of a Visitor's/Tourism Center and restoration and
enhancement from a proportionately small City involvement of $36,500 probably justifies the
City's involvement. There has been no funding provided in the Fiscal Year 1993-94 budget to
fund a Visitor's/Tourism Center. For Fiscal Year 1993-94 total funding required under this
agreement would be $36,500 and require an additional appropriation from General Fund
Reserves.
NOTIFICATION:
Mr. Don Frey, Chairman
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, California 92675
Mr. Rich Hansen, President
San Juan Capistrano Chamber of Commerce
26832 Ortega Highway
San Juan Capistrano, California 92675
Los Rios Review Committee
AGENDA ITEM -6- February 15, 1994
ALTERNATE ACTIONS:
1. By motion, authorize the City Manager to execute an agreement between the City and
the Swallows Foundation to provide a Visitor's/Tourism Center for a $35,000 contribution
to building rehabilitation and $6,000 annually for operations for five years upon obtaining
appropriate information from the Swallows Foundation.
2. By motion, authorize a loan in the amount of $35,000 to the Swallows Foundation in the
form of an unsecured second trust deed on the property and authorize the Mayor and the
City Manager to execute a promissory note with interest at the City average rate of
return, due and payable in five years.
3. Do not authorize the commitment of City funds to an agreement between the City and
the Swallows Foundation to provide a Visitor's/Tourism Center.
4. Request additional information from staff.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
RECOMMENDATION:
By motion:
A. Request the Swallows Foundation to provide evidence of the following:
- Ability to obtain community/private donations of $20,000 (50% of the maximum
financing gap) to provide the funds necessary to refinance the property
- Ability to finance the property at 80% of appraisal value after rehabilitation.
- Ability to staff the Visitor's/Tourism Center.
- Ability to provide a tenant at $6,000 annually.
- Ability to obtain businesses to participate in the business promotion services.
B. Authorize the City Manager to execute a contract with the Swallows Foundation to
provide a Visitor's/Tourism Center.
C. Authorize an additional appropriation of $36,500 from General Fund Reserves to
account number 01-62538-4122 for the rehabilitation and operation from April 1,
1994 to June 30, 1994 and direct staff to allocate funds in subsequent years budgets
for funding based on contract.
Respectfully
417ie 03wallo)rs C5�riunPwz .
27184 OPTEGA HIGHWAY, SUITE 210
SAN JuAN CAPisTRANO, CA 92675
Swallow's Foundation Board of Directers
Mr. Donald Frey President
Realtor, Partner in ERA Top Deck Realty, Foundation founder and traditionalist, with
profound interest in historic preservation. '
Ms. Heather Hale Vice President
Mortgage banker and partner in A & D Approved Mortgage, board of directers with _. .
The Chamber of Commerce, family history of historic restoration on such projects as
Jamestown and Sonora in northern California.
Mrs. Sally Frey Secretary
Realestatc broker, Board of Directem South Orange Co. Ass. of Realtors, chairman of
local government relations committee,& Sec. of Ambassadores S.J.C.
Ms. Connie Kendig Treasurer %
Owner of Connie Kendig Bookkeeping Services and Treasurer of San Juan Chamber of
Commerce.
Mr. Torry Forester
Owner of Rancho Storage, current President of San Juan Historical Society, former City
Council mcmber,former Mayor, former President Chamber of Commerce and commited
local resident.
Mr. Larry Buchheim
Owner of Buchheim Co., former City Council member, former board of Education,
former Mayor and very involved member of our community.
Mr. Tony Bland ,
co-owner Dinamation Corp.,former City Council member,former Mayor
0
• � � � �'he C�bwallafvs�aun8atr� _
27154 ORTEGA HIGHWAY, SUITE 210
SAN JUAN CAPIsrRANO, CA, 92675
Mr. Frank Sariol Attorney at Law
Local attorney & business owner, fluent in Spanish and very involved in our hispanic
community and sees special needs for this facit to become b become positively involved
in our historic preservation.
Mr. Steven Rios Attomy at Law ,
Local business man, long time resident of the Los Rios district and very interested in our
arra maintaining ifs historic character.
Mr. Jeff Schroeder
Mortgage banker with Rancho Santa Margarita Mortgage.. a member of the board of
directers of The Fiesta Assoc. and very involved local citizen. _
Ms. Carol Me Mahon
Co-owner Veldhaus & Me Mahon Interiors. A highly qualified decorator with special
interest in historic restoration and preservation.
Mr. GordonThillips Attorney at Law
Co-owner of Robinson & Phillips Law Firm a highly regarded company in domestic as
well as international legal circles and a very interest resident of San Juan and it's heritage.
ue
I
U
0
FOUNDING MEMBERS OF THE SWALLOW'S FOUNDATION
0
FOUNDING MEMBERS ARE THOSE WHO HAVE CONTRIBUTED MONEY, TIME,
OR MATERIALS VALUED AT OVER $500 FROM THE DATE OF INCEPTION TO
FEBRUARY 26TH,1994.
GORDON G. PHILLIPS
FRANK AND MIRTHA SARIOL
DON AND SALLY FREY
ERA TOP DECK REALTY
DAN AND CYNTHIA HALE
A & D MORTGAGE/HEATHER HALE
DANA NIGUEL BANK
GIL AND MILLIE JONES
BRAD AND LYNN MILLER
RICK AND MARYBETH TRAVIS
AMERICAN SPEEDY/BOB AND ELAINE SORGATZ
MR. AND MRS. LARRY BUCHHEIMiBUCHHEIM RANCH
GARY AND COLLENE CAMPBELL
TOM AND SALLY CRANE
MR. AND MRS. JOE CAMPBELL/RUBY'S
SUE EMERY
OLIVE ANN EVINGER
THOMAS FORSTER
MONARCH BANK
MR. AND MRS. DENNIS PAQUIN/SAN DIEGO GAS AND
MR. AND MRS. PETE HENDERSON/DEPOT RESTAURANT
MR. AND MRS. TONY BLAND
CONNIE KINDIG/CONNIE K. BOOKEEPING
MR. AND MRS. ED LOHRBACH
MR. AND MRS. RICHARD ZODNIK
MR. DAVE BUSK/BUSK CONSTRUCTION
MR. AND MRS. DAVID HANSCH/HANSCH FINANCIAL
MR. CHARLES RAPP
MIKE AND NANCY DARNOLD
TONY FORSTER/ FORSTER AND HAMNER
SOLAG DISPOSAL COMPANY
MR. AND MRS. BARRY WILLIAMS
JEFF AND JANICE SCHROEDER
CAPISTRANO/LAGUNA ROP CONSTRUCTION CLASS
SCOTT AND DIANA SCHMITT/ MOTO PHOTO
OTTIMO'S ITALIAN RESTAURANT
THE CAPISTRANO COLLECTION BUSINESS CENTER
MR. AND MRS. TIM HOLSTEN
MR. JOE PIERCE/ CALIFORNIA JEWELRY SCHOOL
CAPISTRANO LUMBER
CONTINENTAL ESCROW
MR. AND MRS. MARK GIBSON
MR. RICH MONOYA/ APPRAISER
SAN JUAN CAPISTRANO CHAMBER OF COMMERCE .
NANCY TOBIN
SUSIE BOSTRUM
RICHARD NIPPERT
ELECTRIC
COMMUNITY PRESBYTARIAN CHURCH YOUTH GROUP
DOUG GILLMORE AND JOHN PETERS/MISSION HARDWOODS
JEFF HUNTRESS/ CONSTRUCTION SITE SERVICES
JON PETERS/ MARVIN WINDOWS
DONNY, KEN AND DEBBIE FOLGNER/ BEACH PLUMBING
PHIL WILLIAMS/ CEE ELECTRIC
CHRIS AND CECELIA BUENO/
MR. AND MRS. DAVE NAILS/
MR. AND MRS. AL JIMENEZ/
MERRILL LYNCH
SCOTT BROWN ARCHITECT
DAN NICHOLL ARTIST
THE PARTY MAKERS
BUENO DISTRIBUTION
LAGUNA RENTALS
CONSOLIDATED SUPPLY
TIM AND CAROL MCMAHON /VELDHAUS MCMAHON
JOHN C. FORSTER
PHILLIP S. PERONA MD
TIMES MIRROR CABLE TV
SANDRA MORTENSON WEAVER
RICH HANSON
DR. BOB ROSE/ CAPO VALLEY CHIROPRACTIC
BOB EDING
DIMENSION CABLE
SUMICH DESIGNS
WEBB FOOD SERVICE DESIGN
DAVID OLSON
FRANK JR. AND CAROL WORT
RATHFON GARDEN DESIGN
DON AND MARY TYRON
STAN AND NANCY KENSIC
MILO AND SANDRA WEAVER
DR. ELIZABETH MC NABB
COMMANDER ROBERT ELSTER
ED AND TRICIA RAYMUND
JOYCE DORAN
MICHAEL AND LISA PALMER
DOUG AND CAROLYN NASH
THE SATIN EXPRESS
CONSULTANTS
THE CITY OF SAN JUAN CAPISTRANO???????
0
Council Member Nash noted that a protester had been removed from a construction crane at the
construction site.
- ..! •., ! • e.!,!•..M- MWUM- E 1
Mayor Campbell advised that she was never in favor of the Corridor, but has worked diligently to
obtain the best deal for the City, noting she had been advised that condemnation would begin
March 16th, depending on the City Council's action on the Rancho Viejo Road Concept Plan.
Council Member Jones noted that Mayor Campbell lobbied aggressively to obtain additional
landscaping. The Corridor Agency has agreed to provide an $480,000 for additional landscaping.
Council Member Vasquez advised that SERRA was currently preparing next year's budget and staff
had done a number of things to reduce operating costs.
Mayor Campbell noted that St Joseph's day is this Saturday, March 19th and the parade is scheduled for
Saturday, March 16.
2. Swallows Foundation/Combs House (6WJ0/590.10)
Council Member Nash received clarification that this item will be scheduled for reconsideration on April 5th.
The City Attorney recited that Government Code Section 36936 requires payments of money to be approved
by 3 votes. On February 15th the item went to vote with two abstentions, two votes to approve the City's
financial participation in the Swallow's Foundation project, and one negative vote on the City's financial
participation. On April 5th the Council would either have to have 3 votes for the City's financial participation,
or decide that participation would not be authorized.
Council recessed to a Closed Session at 11:46, p.m. for discussion of possible initiation of litigation pursuant to
Government Code Section 54956.9(a) and (c); and, pursuant to Government Code Section 54956.8, instructions to the
City negotiator regarding price, and tams of payment for real property located at 33949 Doheny Park Road, with Orville
Paul, as the party, the City Clerk being excused therefrom, and reconvened at 12:15 am., Wednesday, March 16, 1994.
City Council Minutes -14- 3/15/94
0
February 17 , 1994
J«Iwr
[Y�/ unneum
• ISIN IIIsIED 1961
1776
NS
Mr. Don Frey
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, Calfiomia 92675
I• -n-1 r r_r arn• •r -
Dear Mr. Frey:
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
GARY L. HAUSOORFER
GIL JONES
CAROLYN NASH
JEFF VASOUEZ
CITY MANAGER
GEORGESCARBOROUGH
At their meeting of February 15, 1994, the City Council of the City of San Juan Capistrano took
action to authorize the City Manager to, following provision by the Foundation of certain
information, execute an agreement with The Swallows Foundation wherein the City would provide
$35,000 for the rehabilitation of the Combs House and $6,000 annually over a five-year period for
operation of a Visitor/Tourism Center.
Thank you for your interest in this type of service in the City. If you have any questions, please
contact George Scarborough, City Manager.
Very truly yours,
Cheryl Johnson
City Clerk
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493.1171
I •rnci`lfG`1ir 1! nnn%IynC VTeirllmo T,1„n l[.f1 ,-., _-, .... r�`m.. ...�......
Larry Buchheim, 31591 Paseo Don Jose, San Juan Capistrano, advised that a letter would be forthcoming from
the Swallows Foundation requesting that the February 15, 1994, action to approve the expenditure of City
funds for the proposed Visitor's Tourism Bureau at the Combs House be scheduled for reconsideration at the
April 5th Council meeting. He took issue with the Government Code requirement that at least three affirmative
votes were necessary to approve the expenditure of funds and advised that members of the Foundation would
be contacting Council Member Hausdorfer regarding his opposition.
Dennis Paquin, 31165 Via Cristal, San Juan Capistrano, commended the Council for their support of the
Foundation and urged that all efforts be made to find a solution to the dilemma.
Stan Kensic, 31212 Belford Drive, San Juan Capistrano, representing the Friends of Historic San Juan, thanked
Council for the vote of confidence in the Swallows Foundation and urged that the obstacles to the City
providing financial assistance be overcome.
Elaine Sorgatz, 25281 Ginger Road, Lake Forest, a San Juan Capistrano business owner, spoke in support of
the Foundation and their proposed use of the Combs House.
• . I• • ,i , 1411J.1 t• ceffe, 111#1E, I1
Pauline Leonard, 27589 Brookside Lane, San Juan Capistrano, urged that the provision of low-income housing
in the City be given a high priority in the next year, citing its benefit to the City. She commended Council for
appointing a staff member to deal entirely with housing issues.
Eddie Tregarthen, 27625 Summerfield Lane, San Juan Capistrano, immediate past President of the Episcopal
Service Alliance, noted a press clipping from 1988 which described problems in the La Zanja neighborhood.
She felt San Juan Capistrano had not been able to supply the housing needs for the low- and very low-income
people and only through having more affordable housing would the overcrowding be alleviated.
Sylvia Stanley, 31164 Calle San Diego, San Juan Capistrano, cited opposition to City Council Resolution No.
94-1-18-4, which authorized the Homeowner Associations in the Capistrano Villas to administer an overnight
parking permit program. She requested that the City postpone action to implement the program since she felt
it was discriminatory, an invasion of privacy; an invasion of the public's right to use public facilities; and,
endangered private property since the use of a temporary guest placard would encourage vehicle vandalism.
She requestedthatthe program be re-examined. Council Member Vasquez suggested she meet with the City
Manager.
.• m (a] :4 1• I . Y•• 1
Dan Hicks, 32552 Alipaz Street, Sao Juan Capistrano, presented a certificate fiom the Orange County Tobacco
Use Prevention Coalition acknowledging the City's efforts in promoting a smoke-free environment.
City Council Minutes -2- 3/15/94
1. CONSIDERATION OFAGREEMENTTO PROVIDEA VISITOR'S/TOURISM BUREAU
AT COMBS HOUSE (SWALLOWS FOUNDATIONI (60030) (CONTINUED FROM
12:11ditoliS
Council Members Jones and Vasquez indicated they had potential conflicts of interest in this matter due to the
proximity of their residences/businesses to this project.
Written Communication:
Report dated February 15, 1994, from the City Manager, advising that City staff had begun negotiations
with the Swallows Foundation, as directed by the Council on February 1, 1994, regarding the
rehabilitation of the facility and services to be provided, including staffing, hours of operation, and
allowable tenants. The proposed agreement would require the City to provide $35,000 for initial facility
rehabilitation and $6,000 annually over a 5 -year period for staffing and visitor -related services. The total
cost to the City would be $65,000 over a five-year period.
Mr. Scarborough made an oral presentation. He advised that the Los Rios Review Committee met on
February 7, 1994, to discuss the proposal. The Committee had concurred that a visitor's center was
needed; that the Combs House would be a good location for the visitor's center if proper restoration
and preservation were assured; and, that all aspects of the plans should be reviewed by the Committee.
He noted that the Committee did not discuss public funding because it was not in their scope of
responsibilities.
Public Comments:
(1) Don Frey, President of the Swallows Foundation, concurred with the staff recommendations.
He requested that City fees be waived for this project and that if an archaeologist was required
on the site, use of the City s archaeological consultant, Roberta Greenwood & Associates, be
provided gratis.
Council Comments:
Council Member Hausdorfer stated he opposed this use of City funds as there was not enough assurance
that the City would not be continually involved with the property in the event the Swallows Foundation
was not able to meet its financial obligations.
Council Action:
It was moved by Council Member Nash, seconded by Mayor Campbell, that the following be approve&
(1) Request for Evidence from Swallows Foundation: The Swallows Foundation shall provide
evidence of the following:
(a)
Ability to obtain community/private donations of $20,000 (50% of the maa sw
financing gap) to provide the funds necessary to refinance the property;
Ability to finance the property at 80% of appraisal value after rehabilitation,
Ability to staff the visitor's/tourism center;
Ability to provide a tenant at $6,000 annually; and
Ability to obtain businesses to participate in the business promotion services
City Council Minutes -11- 2/15/94
2.
• 0
(2) Authorization to Enter Into Contract with Swallows Foundation: The City Manager was
authorized to execute a contract with the Swallows Foundation to provide a visitor's/tourism
center for $35,000 in building rehabilitation funds and $6,000 annually for five years for
operation upon completion of the rehabilitation.
(3) Authorization to Appropriate Funds: Funds in the amount of $36,500 were appropriated from
the General Fund Reserves to Account No. 01-62538-4122 for the rehabilitation and operation
of the visitor's/tourism center from April 1, 1994, to June 30, 1994. Staff was directed to
allocate funds in subsequent years' budgets for funding.
The motion was carried by the following roll call vote:
AYES: Council Member Nash and Mayor Campbell
NOES: Council Member Hausdorfer
ABSTAIN: Council Members Jones and Vasquez
ABSENT: None
RESOLUTION AMENDING CITY'S PERSONNEL CLASSIFICATION AND
COMPENSATION PLAN (EXECUTIVE EMPLOYEES) (700.20)
Written Communication:
Report dated February 15, 1994, from the City Manager, recommending that the City's Personnel
Classification and Compensation Plan 1* amended to: (1) provide a 2% salary increase for Executive
Employees for the 1993-94 fiscal year; (2) eliminate the existing Management Incentive Program; and,
(3) provide a 7% Deferred Compensation contribution --retroactive to July 1, 1993.
Mr. Scarborough made an oral presentation and noted that the amendments would have a cost savings
to the City of $1,805.
Adoption of Resolution Amending the City's Personnel classification and Com2ansation Plan:
It was moved by Council Member Hausdorfer, seconded by Council Member Jones, that the following
Resolution be adopted:
RESOLUTION NO. 94-2-19-10. AMENDING RESOLUTION NO. 89-10-17-3. THE
CITY'S PERSONNEL CLASSIFICATION AND COMPENSATION PLAN. FISCAL
YEAR 1993-94 (EXECUTIVE EMPLOYEES) - A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA,
AMENDING RESOLUTION NO. 89-10-17-3, THE CITY'S PERSONNEL
CLASSIFICATION AND COMPENSATION PLAN (FISCAL YEAR 1993-94)
The motion carried by the following vote:
AYES:
NOES:
ABSENT:
City Council Minutes
Council Members Hausdorfer, Jones, Nash, Vasquez, and Mayor Campbell
None
None
-12-
2/15/94
AGENDA ITEM:
0 0
February 15, 1994
TO: The Honorable Mayor and City Council
FROM: George Scarborough, City Manager
SUBJECT: Consideration of Agreement to provide a Visitor's/Tourism Center at the
Combs House - Swallows Foundation
RECOMMENDATION:
By motion:
A. Request the Swallows Foundation to provide evidence of the following:
- Ability to obtain community -private donations of $20,000 (50% of the maximum
financing gap)to provide the funds necessary to refinance the property
- Ability to finance the property at 80% of appraisal value after rehabilitation.
- Ability to staff the Visitor's/Tourism Center.
- Ability to provide a tenant at $6,000 annually.
- Ability to obtain businesses to participate in the business promotion services.
B. Authorize the City Manager to execute a contract with the Swallows Foundation to
provide a Visitor's/Tourism Center for $35,000 in building rehabilitation funds and
$6,000 annually for five years for operation upon completion of the rehabilitation.
C. Authorize an additional appropriation of $36,500 from General Fund Reserves to
account number 01-62538-4122 for the rehabilitation and operation from April 1,
1994 to June 30, 1994 and direct staff to allocate funds in subsequent years
budgets for funding.
SITUATION:
Summary and Recommendation:
On February 1, 1994, the City Council requested this item be continued to February 15, 1994
in an effort to allow the Los Rios Review Committee to meet and provide comments and for
staff to begin negotiations on a draft agreement with the Swallows Foundation. The Los Rios
Review Committee has received the information presented to the City Council on February
1, 1994 and will be meeting on February 7, 1994 to provide comments. City staff has begun
negotiations with the Swallows Foundation that outlines the following:
Rehabilitation of the facility, including designation of a project manager and
adherence to all appropriate guidelines; and
Services to be provided including staffing, hours of operation and allowable tenants
The Los Rios Review Committee comments and the initial draft agreement will be provided
to the City Council prior to their meeting on February 15, 1994.
FOR CITY COUNCIL AGEND /
0 0
AGENDA ITEM -2- February 15, 1994
The Swallows Foundation of San Juan Capistrano has purchased the historic Combs House in
an effort to provide a Visitor's/Tourism Center for our community. After discussions with
City staff, the Swallows Foundation is proposing an agreement with the City to provide the
facility and staff a Visitor's/Tourism Center for a period of five years. This agreement would
require the City to provide $35,000 for initial facility rehabilitation and $6,000 annually to
provide staffing and visitor/tourism related services for the next five years. The total cost
over five years would be $65,000. Staff recommends the City Council authorize the City
Manager to enter into an agreement with the Swallows Foundation to provide a
visitor/tourism center and related services based on the foundation's ability to obtain proper
financing, staffing and business participation.
Background:
Facility Acquisition & Rehabilitation
In April 1993, the Swallows Foundation requested a $35,000 loan from the City in an effort to
acquire the Combs House. The Combs House is located in the Los Rios Historic District at
26711 Verdugo Street, adjacent to the railroad tracks. The Swallows Foundation has
identified this facility as a location for a Visitor's/Tourism Center. The City Council agreed
to provide a loan, provided the Swallows Foundation could provide the City a secured first
trust deed. The Swallows Foundation was unable to complete the acquisition at that time. In
September 1993, the Swallows Foundation was successful in renegotiating the purchase and
acquired the house. The Swallows Foundation was able to secure a loan from a private lender
for the entire purchase of $199,500 at fourteen percent (14%). The annual debt service on
this loan is $27,930.
The appraisal price of the property was $173,000. However, this was a residential appraisal
as opposed to an historic dwelling appraisal. The Swallows Foundation feels that an appraisal
conducted in the manner necessary to value an historic building would result in additional
appraised value. This has not been done since this type of appraisal is very costly. The
rehabilitation of the property will increase the value. Based on the residential appraisal, the
new value after rehabilitation would be approximately $200,000 to $250,000. Based on this
value, the maximum conventional loan amount would be $160,000 to $200,000. Conventional
financing would result in annual payments of $15,000 - $18,750. The Swallows Foundation
would need to generate additional donations to fund the difference between the amount they
can secure and what they currently owe. Depending on the new appraised value the Swallows
Foundation may need to generate as much as $40,000 in donations.
Visitor/Tourism Center Operation
The Visitor/Tourism Center should be required to be staffed seven days per week during
regular business hours, especially during peak holiday and vacation periods. The center
should provide the following type services:
Tourism Information - seven days per week
Community Marketing
Promotional Brochures
Bookings for tour groups
Business Promotional Services
9 0
AGENDA ITEM -3- February 15, 1994
The Swallows Foundation anticipates leasing a portion of the facility to the Chamber of
Commerce for $6,000 annually. Additionally, the center would generate revenue from a
business promotion service. This service would include advertising space within the lobby
area of the facility to display flyers, promotional brochures, discount coupons or other visitor
related material for the business. The Swallows Foundation anticipates charging
participating businesses $20.00/month or $240.00/annually for this service. The following is a
projection of start-up costs for 1994:
Projected Start-up and Operation
(February 1, 1994 - December 31, 1994)
Opening Date - April 1, 1994
Income•
Rent - Chamber of Commerce $5,500
Rehabilitation Contribution - City of San Juan Capistrano 35,000
Rehabilitation Contribution - Outside Vendors 75,000
Visitor's Center Contract - City of San Juan Capistrano 5,500
Total Revenue $115,500
Expenses•
Building Improvements & Rehabilitation $75,000
Interest - First Trust Deed (Nov. 1993 - Dec. 1994) 32,585
Insurance 1,320
Maintenance & Utilities 1,125
Telephones 1,350
Office Supplies 500
Postage _ _ 350
Total Expenses $111,735
Net Income (Available for staffing center) 1__1765
The projection shows a net income of $3,765 available for the facility before staffing. Staff
anticipates the Center would open around April 1, 1994. This amount combined with revenue
generated from the business promotional service would be available to provide staffing,
marketing and overall coordination of the center. A position of this nature would cost
minimally $2,300 per month or $20,700 for the first year. This means the Swallows
Foundation would need to secure approximately seventy (70) businesses @d $240.00/year for
the business promotion program. The Swallows Foundation projects that it can secure one
hundred fifty (150) businesses for the program. City staff feels that initially fifty (50)
businesses is more realistic.
E
0
AGENDA ITEM
-4-
February 15, 1994
Projected Operating Statement
Subsequent Years
Swallows
Foundation
Conservative
Projection
Estimate
Income:
Rent -Chamber of Commerce
$6,000
$6,000
Business Promotion Service
36,000
12,000
City Contribution
6,000
6,000
Total Income
$48,000
$24,000
Expenses:
Mortgage
$ 18,750
$ 18,750
Insurance
1,320
1,320
Maintenance & Utilities
750
750
Visitor's Center Staff
$ 28,000
$ 28,000
Telephones
1,800
1,800
Office supplies
1,000
1,000
Promotional flyers & brochures
1,000
1,000
Postage
1,000
1,000
Total Expenses
53,620
53,620
Net Income/(Loss)
0 620)(29
620)
The rent received from the Chamber of Commerce and the initial revenue from the business
promotion service would cover general facility operation including mortgage, insurance and
any maintenance or utilities for the Swallows Foundation for the first year.
In order to provide the appropriate hours of operation and services, the foundation would
need to increase participation to over one hundred seventy five (175) businesses. If the
visitor's tour center is as successful as the Swallows Foundation anticipates they should be
able to operate independently.
Other Organizational Support
The Chamber of Commerce has signed a lease with the Swallows Foundation to occupy space
in the proposed Tourist and Visitors Bureau. The Chamber of Commerce feels that by being
housed with a Tourist and Visitor's Bureau they will be able to back one another up, enhance
the strength of the events they sponsor, and improve the quality and distribution of
publications that will represent the City.
0 0
AGENDA ITEM -5- February 15, 1994
The Mission San Juan Capistrano, however, does not feel that this location is the most
effective. The Mission feels that such a facility should be at the entrance to our community
with high visibility to incoming traffic. The Mission is presently working towards a Visitor's
Information Project to be located near their exit gate. This project would include business
flyers and other advertisements for tourists as they leave the Mission. This project provides
direct competition to the Swallows Foundation Business Promotion Service and has more
access to the large number of tourists who visit the Mission annually. City staff agrees this
is not the optimal location for a visitors center, however, the proposal by the Swallows
Foundation does provide a visitors center while also providing the significant community
benefit of restoring & enhancing the historic Combs House.
COMMISSION/BOARD REVIEW. RECOMMENDATION:
N/A
FINANCIAL CONSIDERATIONS:
The proposal is a high risk venture with a strong possibility that even with the City funding
$36,500, the Foundation will not succeed, the current loan will default and our funding will
result in little, if any, community benefit. However, the significant community benefit that
can be realized with a successful venture of a Visitor's/Tourism Center and restoration and
enhancement from a proportionately small City involvement of $36,500 probably justifies the
City's involvement. There has been no funding provided in the Fiscal Year 1993-94 budget to
fund a Visitor's/Tourism Center. For Fiscal Year 1993-94 total funding required under this
agreement would be $36,500 and require an additional appropriation from General Fund
Reserves.
NOTIFICATION:
Mr. Don Frey, Chairman
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, California 92675
Mr. Rick Travis, President
San Juan Capistrano Chamber of Commerce
26832 Ortega Highway
San Juan Capistrano, California 92675
Los Rios Review Committee
ALTERNATE ACTIONS:
1. By motion, authorize the City Manager to execute an agreement between the City and
the Swallows Foundation to provide a Visitor's/Tourism Center for a $35,000 contribution
to building rehabilitation and $6,000 annually for operations for five years upon obtaining
appropriate information from the Swallows Foundation.
2. Do not authorize the commitment of City funds to an agreement between the City and
the Swallows Foundation to provide a Visitor's/Tourism Center.
3. Request additional information from staff.
AGENDA ITEM -6- February 15, 1994
RECOMMENDATION:
By motion:
A. Request the Swallows Foundation to provide evidence of the following:
- Ability to obtain community/private donations of $20,000 (50% of the maximum
financing gap)to provide the funds necessary to refinance the property
- Ability to finance the property at 80% of appraisal value after rehabilitation.
- Ability to staff the Visitor's/Tourism Center.
- Ability to provide a tenant at $6,000 annually.
- Ability to obtain businesses to participate in the business promotion services.
B. Authorize the City Manager to execute a contract with the Swallows Foundation to
provide a Visitor's/Tourism Center for $35,000 in building rehabilitation funds and
$6,000 annually for five years for operation upon completion of the rehabilitation.
C. Authorize an additional appropriation of $36,500 from General Fund Reserves to
account number 01-62538-4122 for the rehabilitation and operation from April 1,
1994 to June 30, 1994 and direct staff to allocate funds in subsequent years
budgets for funding.
Respectfully submitted,
G orge Sc borough
4
11
0
Memorandum February 15, 1994
To: George Scarborough, City Manager
From: Cindy Pendleton, Director of Administrative Services
Subject: Swallows Foundation Information for Council Meeting 02-15-94
Attached are the minutes from the Los Rios Review Committee meeting and responses to their
questions regarding some issues on the project. The following is a summary of the points to be
negotiated with the Swallows Foundation for their scope of work:
- Adherence to all City historic restoration and building guidelines, including review
of their site plan by the Los Rios Review Committee.
- Assignment of one board member of the Swallows Foundation to act as a liaison
to the City during the term of this agreement. This will probably be the president of
the Foundation. At this time the president is Don Frey.
-Maintain regular hours of operation, specifically weekends and appropriate holidays.
Staff proposes 10:00 AM to 5:00 PM Monday through Saturday and noon to 5:00
PM on Sunday.
-Respond to requests and distribute information on the City.
- Create, market and publish visitor information ( Maps, Guides, Directories,
Calendars, Brochures, etc.)
- Assist City staff and Chamber of Commerce in promotional activities as requested.
- Hire staff to solicit advertising and handle the everyday functions of the visitor
center.
- Provide advertising space for the Business Promotion Services.
- City approval of additional tenants during the term of the agreement.
We will be finalizing this agreement over the next two weeks. Please let me know if you have any
fiuiher questions.
F
MEMORANDUM
E
February 7, 1994
TO: George Scarborough, City Manager
FROM: Thomas Tomlinson, Director of Plannini.
SUBJECT: Los.Rios Review Commission Actions of February 7, 1994
This report summarizes actions taken by the Los Rios Review
Commission on February 7, 1994. No action is required unless
Council wishes to hold special review of an item.
Attendance
John Taylor, Chairman
Bill Hardy
Frances Perguson
Mary Raskin, Secretary
Cindy Pendleton, Director of Administrative Services
1. Committee Concerns and Information
a) Consideration of Agreement to Provide a Visitor's/Tourism
Center at the Combs House- Swallows Foundation.
The Director of Administrative Services, Cindy Pendleton,
attended the meeting and answered questions that the
Committee members had regarding the proposed agreement
with the Swallows Foundation. Ms. Pendleton stated that
she would prepare a memo for the Committee members in
response to several of the questions raised at the
meeting.
Committee Member Hardy proposed that the following
comments be transmitted to the City Council, which were
unanimously approved by the Committee.
1. The Los Rios Review Committee agrees that a
Visitors Center and home for the Chamber of
Commerce is needed.
2. The Los Rios Review Committee agrees that the Combs
House would be a good location for such a use,
provided that proper handling of the
restoration/preservation of the property is
assured.
3. The desirability and ability of the City to provide
public funding for this project is considered to be
beyond the scope of the Los Rios Review Committee,
therefore no comment is considered appropriate.
0
0
Los Rios Review Committee 2 February 7, 1994
4. If and when this project is funded, the Los Rios
Review Committee wishes to review the
restoration/preservation of all aspects of the site
plan and specifics, as they become available for
comment.
LRRC27AC
TT: MR: hs
CC: Indy Pendleton
Carole Sacklin
0
0
Memomdum February 11, 1994
To: Mary Raskin, Assistant Planner
From: Cindy Pendleton, Director of Administrative Services
Subject: Swallows Foundation -Responses to Los Rios Review Committee Questions
The Los Rios Committee had some minor questions regarding the Swallows Foundation and the
Combs House project. The following are their questions and the information provided by the
Swallows Foundation on these issues.
Qlestions #1 - What is happening to the proceeds from the sale of unusable items from the
property?
Don Frey, president of the Swallows Foundation indicated that the property included a number of
items that would not be used in their operation. The proceeds from the sale of these items is being
deposited in the Swallows Foundation account to assist in the funding of their rehabilitation and
overhead costs for the facility.
Questions #2 - What are the overhead costs for the facility, specifically liability insurance during
this start-up period?
This questions was initiated based on a conversation between Mary Raskin and Don Frey regarding
the Foundations cost for liability insurance. Mr. Frey has indicated that their liability insurance costs
are approximately $1,200 per quarter during construction to cover worker's compensation on
volunteer labor. Upon completion of the rehabilitation, the insurance cost will be $1,320 per year
as stated in the Foundations pro forma (See Attached).
Question #3 - Why was good building material discarded during the clean-up of the property and
not used for rehabilitation?
Mr. Frey has indicated that only unusable material has been removed from the sire. All usable
building material is currently stored on the property.
If you have any additional questions, please let me know. Additionally attached is a summary of the
Swallows Foundation Board of Directors as requested by the Los Rios Review Committee.
CP\
1. SELECTION OF
CONSULTANT
FOR CITY
OF SAN JUAN CAPISTRANO AND
CAPISTRANO
VALLEY
WATER DISTRICT
CLASSIFICATION/COMPENSATION
CONSULTANT
(600.30)
SERVICES
AGREEMENT (RALPH
ANDERSEN & ASSOCIATES)
Council Member Hausdorfer indicated he had a potential conflict of interest in this matter and would abstain.
Written Communication:
Report dated February 1, 1994, from Julia Kimminau, Management Assistant, recommending that the
firm of Ralph Andersen & Associates be retained to conduct a Classification and Compensation Study
for the City and the Capistrano Valley Water District. The funding of the study will be shared by the
City and the Water District based on the number of employees in each organization. The City will
contribute $13,185, or 75%, and the Water District will contribute $4,395, or 25%, for a total of $17,580.
Mr. Scarborough made an oral presentation and noted that the amendments approved at the Water
Board meeting earlier in the evening regarding public/private comparisons would be included in the
proposed Agreement.
Aonroval of Agreement:
It was moved by Council Member Hausdorfer, seconded by Council Member Nash, and unanimously
carried with Council Member Hausdorfer abstaining, that the Agreement for Consulting Services with
Ralph Andersen & Associates be approved in the amount of $17,580 to conduct a Classification and
Compensation Study for the City and the Capistrano Valley Water District, including amendments
regarding public/private comparisons. Staff was authorized to transfer $13,185 in funds for the City's
share of the Agreement from the General Fund Reserve to the Personnel Division's Special Studies
Account No. 01-62139-4121.
2. CONSIDERATION OFAGREEMENTTO PROVIDEA VISITOR'S/TOURISM BUREAU
(SWALLOWSAT COMBS HOUSE
Council Members Jones and Vasquez indicated they would abstain on this item due to a potential conflict of
interest relating to the probmity of their residences/businesses to this project. Council Member Vasquez left
the Council Chamber.
Written Communication:
Report dated February 1, 1994, from the City Manager, advising that the Swallows Foundation had
proposed a 5 -year agreement with the City for a Visitor's/Tourism Bureau at the Combs House,
wherein the City would provide $35,000 for the initial rehabilitation of the historic Combs House for
use as a Visitor's/Tourism Center and $6,000 annually for staffing and visitor/tourism-related services,
for a total cost of $65,000. The Report recommended that the Swallows Foundation provide evidence
of their ability to obtain proper financing, staffing, and business participation for the proposed use.
Mr. Scarborough made an oral presentation. He noted that since the submittal of the staff report, the
Swallows Foundation had provided City staff with a series of letters and documents as evidence of their
ability to obtain proper financing, staffing, and business participation for the proposed use. He clarified
that the money would be considered a grant by the City.
City Council Minutes -4- 2/1/94
Public Comments:
(1) Francie Perguson, 26632 Ramos Street, on behalf of the Los Rios Review Committee,
requested that this item be continued to allow the Los Rios Review Committee to review the
proposal and provide their comments.
(2) Don Frey, President of the Swallows Foundation, urged the Council's support of the proposed
use as it would preserve the historic Combs House, educate students, and provide a much-
needed visitor's center for the City. He requested that fees be waived for the various permits
needed for to complete the project and requested the City's assistance in hiring the City's
consultant archaeologist, Roberta Greenwood & Associates to monitor the site if necessary.
He felt that the proposed site was suitable for a visitor's center because of its proximity to the
Depot, the theater, the Mission, and the Los Rios Historic District.
(3) Tim Bolen, 31103 Rancho Viejo Road, #2131, stated that an agreement with the Mission San
Juan Capistrano to provide a visitor's center at the Mission's exit was currently in negotiations
and requested that this item be continued.
Council Comments:
Council Member Nash supported the location of a visitor's center at the proposed site since it would
preserve an historic structure, provide a much-needed visitor's center, and bring visitors further into the
community. She expressed concern regarding potential risks and suggested that the City appoint one
person to be in charge to monitor and make decisions regarding any modifications to the structure.
Council Member Hausdorfer opposed the use of City funds for this historic structure at this time as
there was not enough assurance that the City would not be continually involved with the property in the
event the Swallows Foundation was not able to meet its financial obligations. He agreed, however, that
the City should waive the processing fees for the project.
Mr. Frey expressed concern with delaying the project because of voluntary commitments obtained for
materials, labor, etc. He noted that the Swallows Foundation secured a lease with the Chamber of
Commerce and backup financing when a loan -to -value level is attained. He advised that experts were
being sought to manage the visitor's center in a professional manner.
Mayor Campbell felt that it was the City's responsibility to provide its visitors with information on the
City and urged Messrs. Frey and Bolen to cooperate with each other. She felt the proposed use in the
Combs House would assist in preserving the City's heritage and providing a much-needed service. She
expressed concern that too many delays might cause financial hardship to the Swallows Foundation.
Continuation of Item:
It was moved by Council Member Nash, seconded by Council Member Hausdorfer, that this item be
continued to the meeting of February 15, 1994. Staff was directed to work with the Swallows
Foundation on details, to obtain comments from the Los Rios Review Committee, and to provide a final
recommendation on February 15. The City Manager was directed to begin negotiations on an
agreement for funding. The motion carried with Council Member Jones abstaining and Council
Member Vasquez absent.
Council Member Vasquez returned to the Chamber.
Written Communication:
Report dated February 1, 1994, from Jennifer Murray, Assistant to the City Manager, recommending
that a $25 administrative fee be assessed by the City for the retrieval and storage of abandoned shopping
City Council Minutes -5- 2/1/94
0
AGENDA ITEM:
TO: The Honorable Mayor and City Council
FROM: George Scarborough, City Manager
0
February 1, 1994
SUBJECT: Consideration of Agreement to provide a Visitor's/Tourism Center at the
Combs House - Swallows Foundation
RECOMMENDATION:
By motion:
A. Request the Swallows Foundation to provide evidence of the following:
- Ability to obtain community -private donations of $20,000 (50% of the maximum
financing gap) to provide the funds necessary to refinance the property
- Ability to finance the property at 80% of appraisal value after rehabilitation.
- Ability to staff the Visitor's/Tourism Center.
- Ability to provide a tenant at $6,000 annually.
- Ability to obtain businesses to participate in the business promotion services.
B. Authorize the City Manager to execute a contract with the Swallows Foundation to
provide a Visitor's/ Tourism Center for $35,000 in building rehabilitation funds and
$6,000 annually for five years for operation upon completion of the rehabilitation.
C. Authorize an additional appropriation of $36,500 from General Fund Reserves to
account number 01-62538-4122 for the rehabilitation and operation from April 1,
1994 to June 30, 1994 and direct staff to allocate funds in subsequent years
budgets for funding.
SITUATION:
Summary and Recommendation:
The Swallows Foundation of San Juan Capistrano has purchased the historic Combs House in
an effort to provide a Visitor's/Tourism Center for our community. After discussions with
City staff, the Swallows Foundation is proposing an agreement with the City to provide the
facility and staff a Visitor's/Tourism Center for a period of five years. This agreement would
require the City to provide $35,000 for initial facility rehabilitation and $6,000 annually to
provide staffing and visitor/tourism related services for the next five years. The total cost
over five years would be $65,000. Staff recommends the City Council authorize the City
Manager to enter into an agreement with the Swallows Foundation to provide a
visitor/tourism center and related services based on the foundation's ability to obtain proper
financing, staffing and business participation.
FOR CITY COUNCIL AGENDIO /�
9
AGENDA ITEM
Background:
Facility Acquisition & Rehabilitation
0
-2- February 1, 1994
In April 1993, the Swallows Foundation requested a $35,000 loan from the City in an effort to
acquire the Combs House. The Combs House is located in the Los Rios Historic District at
26711 Verdugo Street, adjacent to the railroad tracks. The Swallows Foundation has
identified this facility as a location for a Visitor's/Tourism Center. The City Council agreed
to provide a loan, provided the Swallows Foundation could provide the City a secured first
trust deed. The Swallows Foundation was unable to complete the acquisition at that time. In
September 1993, the Swallows Foundation was successful in renegotiating the purchase and
acquired the house. The Swallows Foundation was able to secure a loan from a private lender
for the entire purchase of $199,500 at fourteen percent (14%). The annual debt service on
this loan is $27,930.
The appraisal price of the property was $173,000. However, this was a residential appraisal
as opposed to an historic dwelling appraisal. The Swallows Foundation feels that an appraisal
conducted in the manner necessary to value an historic building would result in additional
appraised value. This has not been done since this type of appraisal is very costly. The
rehabilitation of the property will increase the value. Based on the residential appraisal, the
new value after rehabilitation would be approximately $200,000 to $250,000. Based on this
value, the maximum conventional loan amount would be $160,000 to $200,000. Conventional
financing would result in annual payments of $15,000 - $18,750. The Swallows Foundation
would need to generate additional donations to fund the difference between the amount they
can secure and what they currently owe. Depending on the new appraised value the Swallows
Foundation may need to generate as much as $40,000 in donations.
Visitor/Tourism Center Operation
The Visitor/Tourism Center should be required to be staffed seven days per week during
regular business hours, especially during peak holiday and vacation periods. The center
should provide the following type services:
Tourism Information - seven days per week
Community Marketing
Promotional Brochures
Bookings for tour groups
Business Promotional Services
The Swallows Foundation anticipates leasing a portion of the facility to the Chamber of
Commerce for $6,000 annually. Additionally, the center would generate revenue from a
business promotion service. This service would include advertising space within the lobby
area of the facility to display flyers, promotional brochures, discount coupons or other visitor
related material for the business. The Swallows Foundation anticipates charging
participating businesses $20.00/month or $240.00/annually for this service. The following is a
projection of start-up costs for 1994:
AGENDA ITEM -3- February 1, 1994
Projected Start-up and Operation
(February 1, 1994 - December 31, 1994)
Opening Date - April 1, 1994
Income:
Rent - Chamber of Commerce $5,500
Rehabilitation Contribution - City of San Juan Capistrano 35,000
Rehabilitation Contribution - Outside Vendors 75,000
Visitor's Center Contract - City of San Juan Capistrano 5,500
Total Revenue $115,500
Expenses:
Building Improvements & Rehabilitation $75,000
Interest - First Trust Deed (Nov. 1993 - Dec. 1994) 32,585
Insurance 1,320
Maintenance & Utilities 1,125
Telephones 1,350
Office Supplies 500
Postage 350
Total Expenses $111,735
Net Income (Available for staffing center) Lj.L765
The projection shows a net income of $3,765 available for the facility before staffing. Staff
anticipates the Center would open around April 1, 1994. This amount combined with revenue
generated from the business promotional service would be available to provide staffing,
marketing and overall coordination of the center. A position of this nature would cost
minimally $2,300 per month or $20,700 for the first year. This means the Swallows
Foundation would need to secure approximately seventy (70) businesses @ $240.00/year for
the business promotion program. The Swallows Foundation projects that it can secure one
hundred fifty (150) businesses for the program. City staff feels that initially fifty (50)
businesses is more realistic.
Projected Operating Statement
Subsequent Years
Swallows
Foundation Conservative
Projection Estimate
Income:
Rent -Chamber of Commerce $6,000 $6,000
Business Promotion Service 36,000 12,000
City Contribution 6,000 6,000
Total Income 48,00 24 000
'AGENDA ITEM
Expenses:
Mortgage
Insurance
Maintenance & Utilities
Visitor's Center Staff
Telephones
Office supplies
Promotional flyers & brochures
Postage
Total Expenses
Net Income/(Loss)
0
-4- February 1, 1994
$ 18,750 $ 18,750
1,320 1,320
750 750
$ 28,000
$ 28,000
1,800
1,800
1,000
1,000
1,000
1,000
1,000
1,000
53,620
53,620
(5 620)
29 620)
The rent received from the Chamber of Commerce and the initial revenue from the business
promotion service would cover general facility operation including mortgage, insurance and
any maintenance or utilities for the Swallows Foundation for the first year.
In order to provide the appropriate hours of operation and services, the foundation would
need to increase participation to over one hundred seventy five (175) businesses. If the
visitor's tour center is as successful as the Swallows Foundation anticipates they should be
able to operate independently.
Other Organizational Support
The Chamber of Commerce has signed a lease with the Swallows Foundation to occupy space
in the proposed Tourist and Visitors Bureau. The Chamber of Commerce feels that by being
housed with a Tourist and Visitor's Bureau they will be able to back one another up, enhance
the strength of the events they sponsor, and improve the quality and distribution of
publications that will represent the City.
The Mission San Juan Capistrano, however, does not feel that this location is the most
effective. The Mission feels that such a facility should be at the entrance to our community
with high visibility to incoming traffic. The Mission is presently working towards a Visitor's
Information Project to be located near their exit gate. This project would include business
flyers and other advertisements for tourists as they leave the Mission. This project provides
direct competition to the Swallows Foundation Business Promotion Service and has more
access to the large number of tourists who visit the Mission annually. City staff agrees this
is not the optimal location for a visitors center, however, the proposal by the Swallows
Foundation does provide a visitors center while also providing the significant community
benefit of restoring & enhancing the historic Combs House.
0 0
AGENDA ITEM -5- February 1, 1994
COMMISSION/BOARD REVIEW, RECOMMENDATION:
N/A
FINANCIAL CONSIDERATIONS:
The proposal is a high risk venture with a strong possibility that even with the City funding
$36,500, the Foundation will not succeed, the current loan will default and our funding will
result in little, if any, community benefit. However, the significant community benefit that
can be realized with a successful venture of a Visitor's/Tourism Center and restoration and
enhancement from a proportionately small City involvement of $36,500 probably justifies the
City's involvement. There has been no funding provided in the Fiscal Year 1993-94 budget to
fund a Visitor's/Tourism Center. For Fiscal Year 1993-94 total funding required under this
agreement would be $36,500 and require an additional appropriation from General Fund
Reserves.
NOTIFICATION:
Mr. Don Frey, Chairman
The Swallows Foundation
27184 Ortega Highway
San Juan Capistrano, California 92675
Mr. Rick Travis, President
San Juan Capistrano Chamber of Commerce
26832 Ortega Highway
San Juan Capistrano, California 92675
Los Rios Review Committee
ALTERNATE ACTIONS:
By motion, authorize the City Manager to execute an agreement between the City and
the Swallows Foundation to provide a Visitor's/Tourism Center for a $35,000 contribution
to building rehabilitation and $6,000 annually for operations for five years upon obtaining
appropriate information from the Swallows Foundation.
2. Do not authorize the commitment of City funds to an agreement between the City and
the Swallows Foundation to provide a Visitor's/Tourism Center.
3. Request additional information from staff.
AGENDA ITEM
RECOMMENDATION:
By motion:
0 0
-6- February 1, 1994
A. Request the Swallows Foundation to provide evidence of the following:
- Ability to obtain community/private donations of $20,000 (50% of the maximum
financing gap)to provide the funds necessary to refinance the property
- Ability to finance the property at 80% of appraisal value after rehabilitation.
- Ability to staff the Visitor's/Tourism Center.
- Ability to provide a tenant at $6,000 annually.
- Ability to obtain businesses to participate in the business promotion services.
B. Authorize the City Manager to execute a contract with the Swallows Foundation to
provide a Visitor's/Tourism Center for $35,000 in building rehabilitation funds and
$6,000 annually for five years for operation upon completion of the rehabilitation.
C. Authorize an additional appropriation of $36,500 from General Fund Reserves to
account number 01-62538-4122 for the rehabilitation and operation from April 1,
1994 to June: 30, 1994 and direct staff to allocate funds in subsequent years
budgets for funding.
Respectfully submitted,
r
May 9, 1994
Reccrder's Office
County of Orange
P. O.Box 238
Santa Ana, California 92702
dww,
('.i nro,rw,m
6111,pA,1 1961
1776
Re: Preservation Easement Agreement
Gentlemen:
The following document is enclosed for recordation:
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
GARY HAUSDORFER
GIL JONES
CAROLYN NASH
JEFF VASOUEZ
CITY MANAGER
GEORGESCARBOROUGH
HICRrrlllu.DQrt';;I_rF
F.
Preservation Easement Agreement between the Swallows Foundation and the City
of San Juan Capistrano to preserve the facade of an historic building in the City's Los
Rios District in accordance with and to further the goals of the Los Rios Precise Plan
When placed of record, please return said document to this office.
A duplicate copy of this letter is enclosed. Please stamp Document Number and date of recording
on the letter and return it to this office in the enclosed, stamped, self-addressed envelope at your
earliest convenience.
Thank you for your cooperation.
Very truly yours,
0�ci s2
Cheryl Johns 1
City Clerk
Enclosure
Document Number 0333 us
Dao/ 5-/7 1 f'1
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO. CALIFORNIA 92675 0 (714) 493.1171