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HomeMy WebLinkAboutRDA Min 2004-09-27 7-26-04 / 8-23-04 / 9-27-04 I Seal Beach, California August 23, 2004 The regularly scheduled meeting of the Redevelopment Agency was canceled by action of the City Council. Seal Beach, California September 27, 2004 The City Council and Redevelopment Agency met in joint session at 7:10 p.m. with Mayor Yost calling the meeting to order with the Salute to the Flag. I ROLL CALL Present: Mayor Yost Councilmembers/Agency Members Antos, Larson, Levitt, Ybaben None Absent: Also present: Mr. Bahorski, City Manager/Executive Director Mr. Barrow, City Attorney/Agency Counsel Mr. Whittenberg, Director of Development Services Mr. Vukojevic, Interim Director of Public Works/City Engineer Chief Sellers, Police Department Captain Schaefer, Police Department Ms. Yotsuya, Assistant City Manager Mrs. Devine, City Clerk/Secretary APPROVAL OF AGENDA Antos moved, second by Ybaben, to approve the order of the agenda as presented. I AYES: NOES: Antos, Larson, Levitt, Ybaben, Yost None Motion carried ORAL COMMUNICATIONS Mayor Yost declared Oral Communications open. Ms. Joyce Parque, Seal Beach, questioned what was the result of closed session agenda Item NA" relating to the Zoeter property. Mayor Yost responded that the issue is a public hearing on the regular meeting agenda. Ms. Mizti Morton, Seal Beach, stated she was confused as to the urgency of starting the meeting at 6:00 p.m. Mayor Yost advised that after the next Closed Session there would be reportable action. Ms. Jean 9-27-04 Ashmead, Seal Way, said she wanted to speak to the elimination of one of the animal control officers. Mayor Yost stated that item will be on the City Council agenda and clarified that this was the time to comment on anything pertaining to items on the joint meeting agenda or issues dealing with the Redevelopment Agency. Ms. Joyce Parque, Seal Beach, repeated her opinion about hiring an Orange County appraiser who would know the value of the Zoeter land, if the City would wait thirty-five years it would own the property. Ms. Sue Corbin, Seal Beach, said it was unwise to give Zoeter away at such a low appraisal price, repeated her concerns over the contracts in the City, such as the Trailer park, and warned the Council that they are responsible and if the law is violated there will be a Grand Jury investigation. Ms. Corbin warned the Council that she is capable of making sure they follow the law and made a promise that they will serve time in prison if they violate the law. Mr., Frank Boychuck, Seal Beach Trailer Park, referred to the previous speakers and wanted to clarify that the Council and Agency handled the Trailer Park issue fairly and gave the residents security with their homes. Ms. Reva Olson, Seal Beach, repeated that Prop 13 was passed to protect the people and to have a say as how to spend their tax dollars, the Redevelopment Agency takes the taxes, goes behind closed doors, the people need to know how their money is spent, and said do not give the Zoeter property away. There being no other speakers, Mayor Yost declared Oral Communications closed. I AGENCY ITEMS AGENCY MINUTES Larson moved, second by Antos, to approve the minutes of the regular meeting of June 28th and special joint City Council/Redevelopment Agency meeting of July 12th. I AYES: NOES: Antos, Larson, Levitt, Ybaben, Yost None Motion carried RESOLUTION NUMBER 04-01 / CALHOME PROGRAM APPLICATION Director of Development Services gave a brief report indicating that the City has an opportunity to apply for the second round of funding in the amount of $498,000 under the CalHome Program (HUD), this program for rehabilitation of owner-occupied homes and mobile homes within the entire City. Antos moved, second by Larson, to adopt Resolution Number 04- 01 entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING THE FILING OF AN APPLICATION FOR FUNDING UNDER THE 2004 CALHOME PROGRAM AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS NECESSARY TO PARTICIPATE IN SAID PROGRAM." By unanimous consent, full reading of Resolution Number 04-01 was waived. AYES: NOES: Antos, Larson, Levitt, Ybaben, Yost None Motion carried I PUBLIC HEARING / RESOLUTION NUMBER 5270 - RESOLUTION NUMBER 04-03 - EXERCISE OF OPTION - ZOETER PLACE PURCHASE OPTION 11190-1198 PACIFIC COAST HIGHWAY I Mayor Yost declared the public hearing open to consider the transfer of Zoeter Place. The City Clerk certified that notice of the public hearing was advertised as required by law and reported receipt of no communications for or against this item. The City Manager explained that the Council and Redevelopment Agency would be approving the exercise of an 9-27-04 I option by Rodi Properties to purchase Zoeter Place, presented a brief staff report reminding that a full report of the facts and history of the Zoeter School property was given at the June 28th City Council meeting, copies of that report were made available at City Hall. He noted that the Rodi Family Trust have operated Zoeter Place, the commercial portion of the property, since 1996 and have exercised their option to purchase the Agency's interest in Zoeter Place according to Amendment Three to the original Agreement, reported that an appraisal was conducted July 1, 2004, also, there is a remaining balance owed to the Los Alamitos Unified School District of approximately $610,672.00. The City Manager reminded the Council, Agency and community members that in that report it was clearly stated in the Third Amendment that the Rodi Trust has the right to exercise the option to purchase Zoeter Place, the City does not have the ability to deny that right, it is clear as to how the sale is to occur and the method for also obtaining the appraisal. Mr. John Ellis, Certified General Real Estate Appraiser for Integra Realty Resources in Los Angeles, reviewed the Complete Appraisal Summary Report, as had been given to Council. He stated the City is negotiating the sale of the leased fee interest to the owner of the master leaseholder, the date of value of the analysis corresponds with the date stipulated in the master lease agreement and provides a fair market value pursuant to the agreement of $3,180,000. The report provided the Council/Agency was intended to comply with the reporting requirements, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the opinion of value, supporting documentation is retained at Integra Realty Resources. Councilman Ybaben questioned the method used to determine the appraised value, the income stream is what it is but the projected value does not seem to make sense. Mr. Ellis noted that the land is zoned for commercial, it is residential that has sky rocketed, the City Manager interjected that the Third Amendment was meant to protect both parties, the language provides that the high and low appraisals be thrown out. Mayor Yost asked for clarification of what the City owns. The City Manager responded that the City owns the land yet the Rodi Family has the right to exercise the option to purchase the land. Councilman Ybaben followed up with the statement that with the method used, at the present time the land is worth $230,000, if it were leveled and put up for sale today everyone would opt to purchase it. Mr. Ellis illustrated, an analogy using residential property an example would be if one purchased a $1,000,000 plus home but could not occupy it for forty years, this is the same concept using a residual value for a valuable piece of property which requires the discounting process because there have been rights transferred because of the lease. He mentioned that the appraisal equates to forty dollars per square foot, the Pavilion Center sale was twenty- four dollars per square foot that reflects property rights not the value of the land. Councilman Ybaben questioned if the Rodi Family is required to maintain the property as it is currently. Mr. Ellis responded that after the transaction is completed the Rodi Family will buyout some the controlled leases, become their own tenant, and will be able to modify some of the restrictions thus the value could be enhanced. Councilman Ybaben asked how the City could capture some of the gain that the Rodi Investment Company would realize once the transaction is completed. Mr. Ellis said the appraisal is a market value appraisal assuming the property is exposed to the open market, the motivation of a buyer is not I I 9-27-04 considered. Mayor Yost asked for clarification as to how the income stream was calculated, is it from market property or on this particular property and if the Rodi Trust gains control of the property and can charge any rent they want would the income stream be more. Mr. Ellis stated that the income stream to the City is set by contract and is not flexible for the next forty years, clarified that the income stream used to analyze the property was the income stream the City receives from the Rodi Trust, what the tenants pay to the Rodi Trust is not controlled by the lease, the City does not participate in that income stream, it has no bearing on the Rodi Trust obligation to the City. Councilman Levitt inquired that if there were other appraisals received would this not be the lower one. The City Manager responded that it is not just the arbitral high or low appraisal, but the middle appraisal would be if the high or low is ten percent one way or the other then they would be disregarded. Mayor Yost asked how many appraisals were done, to that the Manager answered that there were two. Councilman Levitt posed the scenario whereby ten years from now the Rodi Trust were to seek to rezone this property, should that not be part of the consideration to determine the true value of the property. Mayor Yost reminded everyone that the contract is specific as to how this is to be considered. Councilman Antos said the concerns expressed were not to the appraisal rather the dissatisfaction with the contract that the City got themselves into some years ago and the recognition that the property owners can do whatever they choose and the hands of the City are tied. Councilman Ybaben asked if, after hearing the concerns of the community and Council, would he have come to a different appraisal. Mr. Ellis stated that he researched the assignment thoroughly, understands that this is a valuable piece of property to the City, yet this is a solid appraisal analysis. I I Mayor Yost invited persons wishing to speak for or against this item to do so at this time. Ms. Sue Corbin, Seal Beach, believes that the income stream was manipulated, referred to the Sherman anti-trust law, and claimed the property was run down on purpose. She asked the whereabouts of the three appraisals, who paid for them, and said this should not go forward. Ms. Corbin believes the attorney did not protect the citizens and the City should retain a real estate attorney. Mr. Bob Heenan, President of the Seal Beach Chamber, said he is involved with real estate investment trusts and believes the flaw is that not only was a discounted cash flow analysis used but the property was valued at a rate of inflation yet California property values far exceed appreciation from the rate of inflation and a ten percent discount rate was used therefore why was a discount rate on the inflation rate not used, this is a flaw in the analysis, the property was undervalued by using that mathematical formula. Ms. Reva Olson, Seal Beach, said there is need for another appraisal, no one is denying the Rodi Family should get the property, just get a real estate attorney to look at the contract. Ms. Mizti Morton, Seal Beach, disagreed with legal counsel, said the Council should not consider the option, the appraisal is too low, lots around town are selling much higher, believes the rents were kept low on purpose, and said another appraisal is needed. Mr. Jim Klisanin, broker for Bay Town Realty, did not fault the appraiser, yet said when you appraise beach property you have to throw out formulas because they do not apply. He owns three lots, knows that he can get more, claimed the Zoeter property is being under sold, it could get about ten I 9-27-04 I million. Mr. Whit Latimer, Bancap Commercial Real Estate Services and property manager for the City of Seal Beach, pointed out that the City owns the income stream by a contract agreed to back in 1997, the City hired Mr. Ellis and the Rodi Trust hired a different appraiser, by contract the two met and came up with the value, the City does not have the option to seek another appraiser at this point. Ms. Joyce parque, Seal Beach, stated the City has the option to get legal advice to sort out this convoluted situation, if the City has to go to court then do so. She said the property across the street sold for $17,800,000, any lot can be rezoned, and suggested an Orange County appraiser be sought. There being no other speakers, Mayor Yost closed the public hearing. I Mayor Yost inquired as to what would happen if the Council/Agency said no to the sale. The City Attorney advised that under the Third Amendment the City has no discretion and because of possible litigation that would need to be discussed in Closed Session. Councilman Larson pointed out that good or bad there is no choice, the agreement was signed long before this Council, the contract states that the Rodi Family has the option to purchase and the City can not withhold the sale, the formula was set forth, each side gets an appraisal, then a third, and split it down the middle. He said the only legal issue is whether the Rodi Trust has the option to buy the property and if the contract specifies how the value is determined, the City does not have an option and is restricted by the agreement. The City Attorney offered that Mr. Ellis would have an opportunity to rebut any statements made, that this is a unique situation unlike someone approaching the City wanting to buy the property at a specific value, the Rodi Trust is valued differently as it has been investing money upgrading the property since 1997. He reminded that this is not residential property, this is not a simple matter, and there are a lot of factors to consider. Councilman Larson said he wished to clarify that if the City gets another appraisal and it is twice as much it would be thrown out and the City would have wasted money on the process. The City Attorney announced that pursuant to Government Code Section 54956.8 the Redevelopment Agency/Council would adjourn to Closed Session to confer with the real property negotiators with regard to Zoeter School Parcel No. 043-122- 37. The Agency/Council adjourned to Closed Session at 8:20 p.m. The joint City Council and Redevelopment Agency meeting reconvened at 8:44 p.m. and the City Attorney reported that there was no direction given and no reportable action taken. I Councilman Antos mov~d, second by Ybaben, to continue this item until the October lIt. meeting, that the City contract with an independent law firm with expertise in contracts and real estate law to review the entire current agreement process and the sale of Zoeter Place, and submit a report to the Council/Agency for consideration. Upon recommendation of the City Attorney, Mayor Yost reopened the public hearing to be continued to October lIt.. He explained that when this decision was made by a previous City Council the City was in a difficult situation, the real estate market was depressed, there were lay-offs at City Hall, the City was virtually bankrupt, at that time the 9-27-04 direction the Council gave the City Attorney and City Manager was to save Zoeter School without it costing the taxpayers money and this was the vehicle used to accomplish that, the current Council is assessing the obligations of that contract as amended, and is desirous of another opinion on the issues. AYES: NOES: Antos, Larson, Levitt, Ybaben, Yost None Motion carried I PUBLIC HEARING / RESOLUTION NUMBER 5271 - RESOLUTION NUMBER 04-02 - TRANSFER - ANIMAL CARE CENTER PROPERTY Mayor Yost declared the public hearing open to consider transfer of the Animal Care Center property. The City Clerk certified that notice of the public hearing was advertised as required by law and reported no communications received for or against the item. Captain Schater, Police Department, presented a brief report outlining the points set forth in the Organizational Effectiveness Consulting Report presented to the Council at the June 28th meeting. The staff, City Attorney, and representatives from the Friends of Seal Beach Animal Care Center, Inc. have worked out an agreement for the Redevelopment Agency to sell the property on which the Shelter and the adjacent dog play yard occupy to the uFriends" for one dollar. He pointed out the benefits to both the City and the Friends, the facility can only be used as a uno kill shelter". Mayor Yost invited members of the public wishing to speak to this item to come to the microphone and state their name for the record. Ms. Annelle Aveani-Baun, Seal Beach, thanked the Council for conveying this property to the "Friends" which will enhance the lives of the animals in Seal Beach and has saved over 35,000 animals, the Friends plan on extending the cat in-house area and improve the shelter overall, and showed digital pictures of what some of the improvements might look like. There being no other speakers, Mayor Yost closed the public hearing. I Councilman Levitt was pleased to see that there was no controversy over this item. At the request of a member of the audience, Mayor Yost reopened the public hearing. Ms. Karen Hadley, 8th Street resident, said she supports and donates to the Animal Shelter but is upset that the City is eliminating one of the Animal Control Officers, claimed she was not treated well by a former City employee, and has decided not to leave any money or property to the City. Ms. Hadley stated her concerns over the City loosing valuable employees and contracting everything out. Ms. Julie Shields, Animal Care Center liaison since 1989, thanked the Council for their support, the volunteers are behind the sale one hundred percent, and look forward to the challenge. Ms. Jean Ashmead, Seal Way, expressed sadness about loosing the two Animal Control Officers. Ms. Sue Corbin, Seal Beach, concurred with another speaker about how the citizens are treated at city Hall and restated her comments with regard to the City Manager and City Attorney. Mr. Chuck Feenstra, Seal Beach, was concerned about getting rid of the Animal Control Officers. There being no other speakers, Mayor Yost closed the Public Hearing. I Councilman Antos wanted clarification as to where the language could be found regarding boarding of animals at the Care Center. Captain Schaefer said it was not in the purchase agreement but in the CC&R's, the section would provide a provision for that use if the Friends so desire. 9-27-04 / 10-11-04 I Ybaben moved, second by Levitt, to approve Resolution Number 5271 entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH APPROVING A PURCHASE AND SALE AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, AS SELLER, AND THE FRIENDS OF SEAL BEACH ANIMAL CARE CENTER, INC., AS BUYER." By unanimous consent, full reading of Resolution Number 5271 was waived. AYES: NOES: Antos, Larson, Levitt, Ybaben, Yost None Motion carried Larson moved, second by Antos, to approve Resolution Number 04-02 entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING A PURCHASE AND SALE AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, AS SELLER, AND THE FRIENDS OF SEAL BEACH ANIMAL CARE CENTER, INC., AS BUYER." By unanimous consent, full reading of Resolution Number 04-02 was waived. AYES: NOES: Antos, Larson, Levitt, Ybaben, Yost None Motion carried ADJOURNMENT It was the order of the Chair, with consent of the Agency, to adjourn the meeting to October 11th, 2004 at 7:00 p.m. to meet in joint session with the City Council. By unanimous consent, the meeting was adjourned at 9:05 p.m. I ~d Chairman ~. ~ ~ 1 1pI~1 t ~rk ~ecretary Seal Beach, California October 11, 2004 Mayor Yost called the regular adjourned session of the Seal Beach City Council and Seal Beach Redevelopment Agency special session to order at 6:00 p.m. The Redevelopment Agency Special Meeting Notice read as follows: I "r.AT.T. ANn NOTTr.P. OF ~PFr.TAT MEP.TTNG OF THE SEAL BEACH REDEVELOPMENT AGENCY TO THE PUBLIC AND MEMBERS OF THE BOARD OF DIRECTORS OF THE SEAL BEACH REDEVELOPMENT AGENCY: Charles Antos, 136 - 14th Street #A, Seal Beach John Larson, 13741 Annadale Drive #18G, Seal Beach Michael Levitt, 1320 Knollwood Road #42F, Seal Beach Ray Ybaben, 4373 Hazelnut Avenue, Seal Beach Paul Yost, 485 Schooner Way, Seal Beach .'