Loading...
95-0103_CRA_Minutes_Regular Meeting00, JANUARY 3,1995 REGULAR MEETING OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY BOARD OF DIRECTORS The Regular Meeting of the Board of Directors of the San Juan Capistrano Community Redevelopment Agency was called to order by Chairman Swerdlin at 8:37 p.m. in the City Council Chamber, ROLL CALL: PRESENT: David Swerdlin, Chairman Carolyn Nash, Vice Chairman Collene Campbell, Director Wyatt Hart, Director Gil Jones, Director ABSENT: None STAFF PRESENT: George Scarborough, Executive Director; Thomas Tomlinson, Deputy Director; Richard K. Denhalter, Agency Counsel/City Attorney; Cynthia L. Pendleton, Finance Officer; Cheryl Johnson, Agency Secretary; William Huber, Director of Engineering and Building Services; Lt. Paul Sullivan, Chief of Police Services; Nancy Bernardi, Recording Secretary. MINUTES The Minutes of the Regular Meetings of November 15 and December 6, 1994, were approved as submitted as part of the City Council Consent Calendar, CONSENT CALENDAR It was moved by Director Campbell, seconded by Director Jones, that the staff recommendations be accepted for the following items listed on the Consent Calendar. The motion carried by the following vote: AYES: Directors Campbell, Hart, Jones, Nash, and Chairman Swerdlin NOES: None ABSENT: None CRA Minutes -1- 1/3/95 002 RECEIVE AND FILE WARRAN"TS OF NOVEMBER 28 AND DECEMBER 8. 1994 (300.30) The List of Demands dated November 28, 1994, in the total amount of $95,394.66 and the List of Demands dated December 8, 1994, in the total amount of $376.99 were received and filed. 2. RECEIVE AND FILE CASH BALANCES BY FUND FOR NOVEMBER 1994 (330,50) The Finance Officer's Report of Cash Fund Balances for the month of November 1994 in the total amount of $-88,905.56 was received and filed. 3. RECEIVE AND FILE FINANCE OFFICEWS REPORT OF INVESTMENTS A OF NOVEMBER 1994 350.30 The Finance Officer's Report of Investments as of November 30, 1994, in the total amount of $1,733,790.97 was received and filed. PUBLIC, HEARINGS JOINT PUBLIC HEARING WITH THE CITY COL TNCIL - FIRST AMENDMENT TO THE DEPOT LEASE AGREEMENT WITH ASSIQNMENT TO RANCHO CAPISTRANO LIMITED PARTNERSHIP AND SETTLEMENT AGREEMENT WITH TRA K IDE DINING- INC. (CAPISTRANO DEPOT 26701 VERDUGO STREET) (600.40 Recess to Closed_Session: The Board recessed to a Closed Session at 7:11 p.m, for a Conference with Real Property Negotiator per Government Code Section 54956.8 for property located at 26701 Verdugo Street, with Henderson, Rancho Capistrano Limited Partnership, as the negotiating party, to consider price and terms of payment. Director Jones advised that he would attend the Closed Session for his information only but would not participate. The Board reconvened at 8:15 p.m. Mr. Denhalter noted that Director Jones had a potential conflict of interest in this matter and would not participate because of the proximity of his residence/business to the subject site and because he had business dealings with the proposed Iessee. Proposal: Consideration of a request by Trackside Dining, Inc. to assign its existing lease with the Community Redevelopment Agency to Rancho Capistrano Limited Partnership, beginning February 1, 1995, for the operation of a Rancho Capistrano style restaurant. Proposed terms included: an initial 5 -year lease with two 5 -year options; a minimum monthly rent for the first five years of $3,500 against 6% of the gross revenues; reimbursement by the CRA to the Lessor for up to $100,000 in tenant improvement costs, financed from the monthly rental CRA Minutes -2- 1/3/95 income exceeding the minimum rent of $3,500; commencement of rent on February 1, 1995, or upon the opening of the restaurant, whichever occurred first; and, assumption of full liability and responsibility for the site by Rancho Capistrano Limited Partnership upon execution of the First Amendment. The proposed Settlement Agreement between Trackside Dining and the Community Redevelopment Agency would release both parties from any existing and future claims. The Agency would pay Trackside Dining $50,000 and waive any obligation for payment of past -due rent totaling approximately $25,000. Written Communications: (1) Report dated January 3, 1995, from Cassandra Walker, Community Development Manager, recommending that the proposed First Amendment to the Depot Lease Agreement with assignment to Rancho Capistrano Limited Partnership, and the Settlement Agreement with Trackside Dining, Inc., be approved. (2) Memorandum dated January 3, 1995, from the City Clerk, forwarding a petition submitted by Ann Williams -Utter requesting that the Golden Eagles be allowed to continue playing their Dixieland music at the Depot on weekends under the new management. Cassandra Walker, Community Development Manager, made an oral presentation. Public Hearing: Notice having been given as required by law, Mayor Nash opened the Public Hearing, and the following persons responded: (1) Joe Campbell, representing Rancho Capistrano Limited Partnership, indicated he was present to answer any questions. (2) Ann. Williams -Utter urged that the character of the Depot be retained under the new management and that the Golden Eagles band be allowed to continue playing their music on weekends. Mayor Nash suggested that Ms. Williams -Utter work with the City Manager and Rancho Capistrano Limited Partnership regarding her request. (3) Carlos Negrete, 27422 Calle Arroyo, spoke in opposition to the proposed lease terms, stating that the proposed rent was lower than prevailing market rates, that there were no audit controls in the lease, and that the Agency should not reimburse the lessor for up to $100,000 in tenant improvement costs. He inquired why the Agency did not call for public bids on this project. Ms. Walker explained that the proposed rent was competitive with the prevailing market rate at about $1.00 per square foot, resulting in a rent of approximately $5,000 per month. She added that audit controls had been included in the proposed lease agreement providing for the City's review of financial statements. She explained CRA Minutes -3- 1/3/95 004 that the Agency did not have control of the lease and bids had not been solicited for this project since the proposal was for a transfer of the existing lease, as provided for in the original agreement with Trackside Dining, Inc. She stated that the Agency's proposed reimbursement for tenant improvements was standard and typical for new operators. Mr. Negrete felt that the Agency had no obligation to provide for tenant improvements and that there was no guarantee that the Agency would receive $8,000 in rent per month. He felt that public funds were being used for no public purpose in this project and urged that the proposed lease not be approved. (4) John Mione, 807 Calle Puente, San Clemente, noted his restaurant experience and stated that the proposed lease was very standard in the industry to obtain qualified tenants. There being no further input, the hearing was declared closed with the right to reopen at any time. Board Discussion: Chairman Swerdlin indicated that although he was not completely satisfied with the terms, he would support the lease as proposed. He felt that the Agency would receive an excellent return and the new tenant would have an excellent facility. Although he had concerns with the Settlement Agreement, he indicated he would support it to ensure the continuity of the business and to avoid further delays. Director Hart indicated he was not opposed to the new lessee but objected to the Agency "being in the real estate business." He felt that the Agency had a poor record as a lessor in the past and opposed the micromanaging and subsidizing of competitive businesses in the community. He indicated his preference for selling the property. Director Nash spoke in support of the lease reassignment to Rancho Capistrano Limited Partnership. She felt that the proposed lease and Settlement Agreement were acceptable and would provide for a high-quality operation and provide additional revenue for the Agency and the tenant. She concurred with Director Hart's concerns regarding the Agency owning property but noted that the proposal was simply for a reassignment of the existing lease. She felt that this matter should be dealt with expeditiously to avoid the potential restaurant closure and to avoid further litigation by Trackside Dining, Inc. Adop2lion of Resolution Approving the First Amendment to the Depot Lease Agreement and Assianment to Rancho Capistrano Limited Partnership: It was moved by Director Campbell, seconded by Chairman Swerdlin, that the following Resolution be adopted: CRA Minutes -4- 1/3/95 005 RE5QIIMQN 95-1-3-1 APPROVING FIRST AMENDhENT TO THE LEASE A E NT FOR CAPISTRANO EP T LOCATED AT 26701 VERDUGO STREET AND CONSENTING TO AS51QNWNT OF LEASE TO RANCHO CAPISTRANO L] IITED PARTNERSHIP - A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, APPROVING THE FIRST AMENDMENT TO THE LEASE OF CERTAIN PROPERTY WITH THE SAN JUAN CAPISTRANO CENTRAL REDEVELOPMENT PROJECT AREA AND CONSENTING TO ASSIGNMENT OF LEASE TO RANCHO CAPISTRANO LIMITED PARTNERSHIP (CAPISTRANO DEPOT) The motion carried by the following vote: AYES: Directors Campbell, Nash, and Chairman Swerdlin NOES: Director Hart ABSTAIN: Director Jones ABSENT: None Approval of settlement Agreement with Trackside DiningInc.: It was moved by Director Campbell, seconded by Chairman Swerdlin, that the Settlement Agreement with Trackside Dining, Inc. be approved. The motion was carried by a 3-1-1 vote, with Director Hart voting in opposition and Director Jones abstaining. CLOSED SES-SION The Board recessed to the Council meeting at 8:40 p.m. and reconvened in Closed Session at 9:48 p.m. for: Conference with Legal Counsel, Anticipated Litigation, per Government Code Section 54956.9(b), for significant exposure to litigation in one case, and Government Code Section 54956.9(c), the initiation of litigation in one case; and 2. Liability Claims pursuant to Government Code Section 54956.95, McLaughlin, etc, et al, claimant, against the Community Redevelopment Agency, The Agency Secretary was excused therefrom, and the meeting reconvened at 11:07 p.m. Mr. Denhalter advised there was no action to report on either item. CRA Minutes -5- 1/3/95 M ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 11:08 p.m. to the next regular meeting date of Tuesday, January 17, 1995, at 7:00 p.m. in the City Council Chamber. ATTEST: DAVID SWERDLIN, CHAIRMAN CRA Minutes Respectfully submitted, -b- i `3/95