95-1121_CRA_Minutes_Regular Meeting147
NOVEMBER 21, 1995
REGULAR MEETING OF THE SAN JUAN CAPISTRANO
COMMUNITY REDEVELOPMENT AGENCY
BOARD OF DIRECTORS
The Regular Meeting of the Board of Directors of the City of San Juan Capistrano Redevelopment
Agency was called to order by Chairman Swerdlin at 7:50 p.m. in the City Council Chamber.
ROLL CALL: PRESENT: David Swerdlin, Chairman
Collene Campbell, Vice Chairman
Wyatt Hart, Director
Gil Jones, Director
ABSENT: Carolyn Nash, Director
STAFF PRESENT: George Scarborough, Executive Director; Thomas Tomlinson, Deputy Director;
Richard K. Denhalter, Agency Counsel/City Attorney; Cynthia L. Pendleton, Finance Officer; Dawn
Schanderl, Deputy City Clerk; William Huber, Engineering and Building Director; Joe Arranaga,
Public Lands and Facilities Director; Al King, Jr., Community Services Director; Lt. Paul Sullivan,
Chief of Police Services; Nancy Bernardi, Recording Secretary.
P HEARINGS
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Director Jones indicated that because of the proximity of his residencelbusiness to the proposed
project, he would abstain in this matter because of a potential conflict of interest.
Proposal:
Consideration of two alternative revisions to the Purchase Agreement and Escrow
Instructions for the sale of the Depot property, which were executed on October 18, 1995:
1) leasing the Depot property to Manna Station, Inc. until threats of pending litigation are
resolved and indemnifying the buyer from any future litigation; or 2) revising the terms of the
proposed short-term loan of $410,000, including a possible time extension of the loan and
reduction in the interest rate. Currently, the terms of the note are 9% over a three year period
with a balloon payment due at the end of three years. Option #2 would require the Buyer to
obtain releases to protect the City, Agency, and the Buyer from any future litigation threat
and would provide indemnification for the City and Agency.
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Written Communication:
Report dated November 21, 1995, from Cassandra Walker, Community Development
Administrator, recommending that one of the two options revising the Purchase Agreement
and Escrow Instructions for the sale of the Depot property to Manna Station, Inc. be
approved.
Cassandra Walker, Community Development Administrator, made an oral presentation. She
noted that after additional staff study, option 42 would allow the note to be paid off within
four years at an interest rate of 7%. She recommended that the Board approve option #2
because it would avoid the expense of nuisance litigation, provide entitlements that would
help move the property in the event of a sale, reduce the interest rate from 9% to 7% over a
four-year period, and allow the new restaurant to open before the holidays.
Public Hearing:
Notice having been given as required by law, Mayor pro tem Hart opened the Public Hearing,
and the following person responded:
(1) Carlos Negrete, 27422 Calle Arroyo, inquired as to the amount of the lease for option
#I and the pending threat of litigation.
Mr. Scarborough indicated that the proposed lease would be $8,500 per month, in addition
to the present annual revenue of $1,800 from the Amtrak ticket booth. Regarding the threat
of litigation, Mr. Denhalter advised that the threat was from the former offerer of the
transaction who opened escrow and made two separate deposits of $25,000. The offerer
refused to close escrow, and the escrow is still pending. He stated that the pending litigation
was of nuisance value only and could be won by the City in a reasonable period of time. He
noted that the litigation, however, could affect the marketability of the property and its value.
He added that if the City were to initiate litigation, there would be a substantial delay in the
purchase of the property.
Mr. Negrete felt that with option #2, the City would be giving the new buyer a special
discount and opposed either option as not being in the best interest of the City.
There being no further input, the hearing was declared closed with the right to reopen at any
time.
Board Discussion:
Director Campbell and Chairman Swerdlin felt it was important to have the Depot restaurant
open again as soon as possible to boost business and activity in the downtown area,
particularly during the holiday season.
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Approval of Revisions to Purchase Agreement and Escrow lngwction5 for the Sale
pf„the Depot Pr"eMl:
It was moved by Director Campbell, seconded by Chairman Swerdlin, that the terms of the
Purchase Agreement and Escrow Instructions executed on October 18, 1995, for the sale of
the Capistrano Depot to Manna Station, Inc. be revised as follows:
The term of the short-term loan of $410,000 shall be extended to four years
at an interest rate of 7%. The Buyer shall obtain releases to protect the City,
Community Redevelopment Agency, and the Buyer from any future litigation
threat or provide indemnification for the City and Agency.
The motion was carried by a 3-0-1 vote, with Director Jones abstaining.
It was moved by Director Jones, seconded by Director Hart, 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, and Chairman Swerdlin
NOES: None
ABSENT: Nash
The Minutes of the Regular Meeting of October 17, 1995, were approved as submitted.
The List of Demands dated November 7, 1995, in the total amount of $52,468.29 was
received and filed.
3. RECEIVE AND FILE FINANCE OFFICE'S REPORT OF INVESTMENTS AS OF
OCTOBER 1995 (350.30)
The Finance_ Officer's Report of Investments as of October 31, 1995, in the total amount of
$1,406,463.50 was received and filed.
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Written Communication:
Report dated November 21, 1995, from the Deputy Director, recommending that alternative
land use options be investigated by staff for the Del Obispo Home Furnishing Center. The
property owner of the center submitted a proposal to convert a portion of the existing
building to a congregate care facility.
Mr. Tomlinson made an oral presentation.
Director Campbell stated that a congregate care facility such as this needs an outdoor area
for seniors to walk and get fresh air. Council Member Jones concurred, indicating that he has
his own concerns with the use, such as the need for a soundwall in the area.
The applicant, Shirley Yu, explained that the center has been a failure, is suffering financial
problems, continues to lose more tenants, and cannot attract new tenants. In researching
other uses for the center, Ms. Yu felt that a congregate care facility is the only feasible use
she could consider at this time because of the market demand by seniors. She preferred that
the facility be an "assisted living" facility, which requires occasional care for the seniors. She
indicated her intent to do a business pian to determine the feasibility of the use.
Authorization to Investieate Alternative Uses for the DeLObisno Home Furnishing
It was moved by Director Jones, seconded by Director Hart, and unanimously carried that the
present use restrictions to a home furnishing land use for the Del Obispo Home Furnishing
Center are no longer financially feasible. The property owner and City staff were authorized
to investigate alternate land use options for Agency consideration.
CLOSED SESSION (610,85)
The Board recessed to the Council meeting at 8:01 p.m. and reconvened in Closed Session at 10:38
p.m. for:
Conference with Real Property Negotiator per Government Code Section 54956.8 for
property known as the Capistrano Depot, 26701 Verdugo Street, with Guy Edwards as the
negotiating party, to consider price and terms of payment;
2. Conference with Real Property Negotiator per Government Code Section 54956.8 for
property known as Parcels Nos. 121-240-020 and 121-240-039, with Tarr Development
Company/Solag as the negotiating parties, to consider price and terms of payment;
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3. Conference with Real Property Negotiator per Government Code Section 54956.8 for
property located at the Old Elementary School site at the corner of El Camino Real and
Acjachema, Parcels A and B on Parcel Map 80-853, and related parcels, with Capistrano
Unified School District as the negotiating party, to consider price and terms of payment; and
4. Conference with Legal Counsel, Anticipated Litigation, per Government Code Section
54956.9(b), for significant exposure to fttigation in two cases, and Government Code Section
54956.9(c), the initiation of litigation in two cases.
The Agency Secretary was excused therefrom, and the meeting reconvened at 11:00 p.m.
:r•��: r r r t r__i_ r�
Mr. Denhalter advised there was no action to report on any of the items.
There being no further business before the Board, the meeting was adjourned at 11:00 p.m. to the
next regular meeting date of Tuesday, December 5, 1995, at 7:00 p.m. in the City Council Chamber.
Respectfully submitted,
CHERYL JOHNSON, AGENCY SECRETARY
JcAaxdz� Ej-
By DAWN SCHANDERL, ACTING SECRE ARY
ATTEST:
�1� r
DAVID SWERDLIN, CHAIRMAN
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