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HomeMy WebLinkAboutCC Min 1989-06-19 6-l2-89 / 6-19-89 of the I Approved: Mayor Atte,t, 9~.J2J.( C1t C erk a 7 Seal Beach, California June 19, 1989 The City Council of the City of Seal Beach met in regular session at 7:40 p.m. with Mayor Grgas calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Mayor Grgas Councilmembers Hunt, Laszlo, Wilson, Risner I' Absent: None Also present: Mr. Nelson, City Manager Mr. Stepanicich, City Attorney Mr. Thomas, Finance Director Capt. Maiten, Police Department Capt. Garrett, Police Department Chief Dorsey, Lifeguard Department Mr. Knight, former Director of Development Services Ms. Massa-Lavitt, Interim Director of Development Services Mr. Archibold, Assistant to the City Manager Mrs. Yeo, City Clerk WAIVER OF FULL READING Wilson moved, second by Risner, to waive the reading in full of all ordinances and resolutions and that consent to the waiver of reading shall be deemed to be given by all Councilmembers after reading of the title unless specific request is made at that time for the reading of such ordinance or resolution. I AYES: NOES: Grgas, Hunt, Laszlo, Risner, Wilson None Motion carried PROCLAMATION Mayor Grgas proclaimed June 9th through June 23rd as "Grad Night Weeks." 6-19-89 CONTINUED PUBLIC HEARING - PROPOSED 1989/90 FISCAL YEAR BUDGET Mayor Grgas declared the public hearing open to consider the proposed 1989/90 fiscal year budget. The City Clerk certified that notice of the public hearing had been advertised for the meeting of June 5th, continued to June 12th for a budget workshop, and continued until this 1 meeting, and reported no communications had been received either for or against this item. There being no communications from the audience, Mayor Grgas declared the public hearing closed. RESOLUTION NUMBER 3865 - ADOPTING 1989/90 FISCAL YEAR BUDGET Resolution Number 3865 was presented to Council entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH, CALIFORNIA, ADOPTING A BUDGET FOR THE CITY OF SEAL BEACH FOR FISCAL YEAR 1989/90 AND REPEALING RESOLUTION NUMBER 3792-A." By unanimous consent, full reading of Resolution Number 3865 was waived. With regard to the Rossmoor/Leisure World bus, the City Manager reported the budget reflects an additional $12,880 due to the increased cost for this service, that an initial meeting was held with Ryder Transportation, representatives of the Rossmoor Merchants Association, the Center's management, and the City, in an attempt to negotiate a mechanism to reduce the cost pursuant to direction of the Council, a significant factor being whether Golden Rain, Coultroup, and Bixby participate in the funding. Hunt moved, second by Wilson, to adopt Resolution Number 3865. In ~esponse to Councilmember Risner, the Finance Director reported the budget had been adjusted to reflect $66,000 associated with landfill gate fees, $12,880 for the Rossmoor/Leisure World bus, and $5,000 in the City Manager's budget for increased League of Cities membership fees, the City Manager adding that miscellaneous changes and corrections had been made pursuant to the memorandum from Mrs. Risner. Councilman Laszlo noted the recent application of the Utility Users Tax to interstate and international telephone use, the increase of various fees, and stated his desire to increase certain business license fees, as an example licenses for large markets, doctors, and attorneys, to more equitably cover the cost of City services and facilities that are provided and used by those businesses, and for which the citizen presently pays. Councilman Hunt noted that a business such as a large market does generate sales and other taxes to the City, however--in looking at business licenses in general the tax for large generators may be considered-unfair. He noted the indepth consideration that went into the most recent increase of business licenses, yet stated he could possibly support Mr. Laszlo's point if there were some equitable, legal way to impose a-higher business tax on large generators. Councilmember Risner recalled that after a number of objections to a license fee based on gross receipts, the Council doubled the business license fee and included an annual increase based upon the CPI. AYES: NOES: Grgas, Hunt, Laszlo, Risner, Wilson None Motion carried PUBLIC HEARING - COMPREHENSIVE FEE SCHEDULE Mayor Grgas declared the public hearing open to consider amendments to the Comprehensive Fee Schedule. The City Clerk certified that notice of the public hearing had been I I 6-19-89 I advertised as required by law, and reported no communications had been received either for or against this item. The Assistant to the City Manager reported revisions had been made to the fee schedule based upon Council directives of June 12th. There being no communications from the audience, Mayor Grgas declared the public hearing closed. RESOLUTION NUMBER 3864 - COMPREHENSIVE FEE SCHEDULE Resolution Number 3864 was presented to Council entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH ESTABLISHING FEES, RATES AND CHARGES FOR GOODS AND SERVICES PROVIDED BY THE CITY OF SEAL BEACH." By unanimous consent, full reading of Resolution Number 3864 was waived. After discussion, Risner moved, second by Laszlo, to amend Resolution Number 3864, Section 5-F, to reflect no charge for processing a special activity request application for resident non-fundraising activities of civic or service organizations and resident fundraising activities of civic or service organizations. By unanimous consent, the Council reopened the public hearing to allow comments from a resident. Ms. Wendy Morris, Crestview Avenue, made reference to an annual block party in her neighborhood, the neighbors petitioned and a City permit applied for, and questioned the fee where the applicant is charged with the responsibility of notifying the public safety departments and no written permit is provided. There being no further comments, Mayor Grgas declared the public hearing closed. Motion to approve amendment of Section 5-F: I AYES: NOES: Grgas, Hunt, Laszlo, Risner, Wilson None Motion carried Wilson moved, second by Risner, to adopt Resolution Number 3864 as amended. AYES: NOES: Grgas, Hunt, Laszlo, Risner, Wilson None Motion carried I CONTINUED PUBLIC HEARING - HELLMAN PROPERTY DEVELOPMENT Mayor Grgas announced this item to be a continued public hearing to consider amendment to the Hellman Specific Plan, General Plan Amendment la-88, Land Use Element, General Plan Amendment Ib-88, Open Space/Conservation/Recreation Element, Tentative Parcel Map Number 86-349, Vesting Tentative Tract Map 13198, Precise Plan 1-88, and Amendment Number 5 to the Riverfront Redevelopment Plan. The Redevelopment Agency meeting reconvened at this time, 8:15 p.m., to consider the items stated under a joint/consolidated public hearing with the City Council. Mayor Grgas reviewed his proposal for the procedural order of conduct of this hearing, and declared the joint/consolidated/continued public hearing open. The City Clerk certified that notice of the continued public hearing from May 15th had been posted as required by law, and that notice of the hearing relating to Amendment Number Five to the Riverfront Redevelopment Plan had been advertised and mailed as required by law. The Clerk reported receipt of a June 13th letter supporting the Wetlands Restoration Society Plan, a June 13th communication from Community Systems Associates regarding amendment to the Redevelopment Plan, fiscal and environmental impact on the Coast Community College District, a June 16th communication from a Long Beach resident supporting a park and gardens on the Hellman land instead of development, a copy of California Geology, April issue, submitted June 5th for information of the Council, three cards from non-residents 6-l9-89 in support of the Restoration Society plan, a letter in support of the Mola plan with a golf course, and a June 19, 1989 communication from the law offices of Parker and Covert, representing the Los Alamitos Unified School District, addressing the Environmental Impact Report as it relates to the District. with consent of the Council, Mr. Walton Wright was permitted to address the Council at this time for the reason that he had a conflicting commitment. Mr. Wright, consultant to the Wetlands Society, stated there appeared to be an inadequate understanding of salt water marshes on the part of Mola and their consultants. He provided for reference a chart of tides and elevations, explaining that this year the low tide is minus 1.4 feet, the high tide 6.9 feet, zero tide in between, that about five feet elevation is defined as the mean high tide, also defined as zero elevation on a topographic map. Mr. Wright stated nothing below a minus 1.4 foot tide is considered open water, zero being an average low tide, anything above that is considered mud flat, above that is salt marsh and extends from the mean high tide to the-high tide with possibly a foot variable either way, and above the salt marsh, upland vegetation. He stated in looking at the maps for the project and the EIR, in concept the salt marsh was only excavated down about two feet below the elevation of the channel that runs across the site, and if dropped another two feet you would only reach the mud flat zone-with no open water. Mr. Wright suggested that if one were to consider an average fill across the site, approximated at seven feet, then above the zero tide there would be twelve feet of fill and if any open water is desired one would need to excavate down another yard, therefore estimated a five yard deep fill across the site. Mr. Wright stated to excavate five yards deep on the forty acres proposed for wetlands there would be 968,000 cubic yards of fill to be removed, 96,800 truck loads, at a cost of more than four million dollars, and noted that there have been comments that Mola Corporation would allocate only 1.8 million for restoration of that area in some form. Mr. Wright stated the reference to the area is wetlands/open space, that there is no proposal for restoration, and if considered open space and without Mola's commitment, questioned who would provide the restoration. He said there is no guarantee that the Ports would undertake the project, especially with the amount of material that would need to be removed and further, their requirement is for open water restoration, not salt marshes. He advocated increasing the wetland acreage to possibly one hundred five acres and deleting all development in the lowland areas, which would then be more cost effective should the Port consider undertaking the restoration. Mr. Wright expressed his feeling that there is a potential flood danger on the site even though the Flood Insurance Rate Map and the EIR calls out otherwise, questioned where the removed fill would be disposed of or if left on-site what would grow in that saline soil, and offered that if there were one hundred five acres of wetlands, the sand from the site could be used to augment -the beach. Mr. Wright concluded that although there is inadequate information on any of the proposals at this time, they would call for a restoration and management plan prior to the adoption of any of the plans in order to guarantee that restoration will be accomplished. The Interim Director of Development Services presented the staff report relating to the recommendations of the Planning Commission regarding the "B.2" and "C.I" alternatives. Ms. Massa-Lavitt reported the Planning Commission recommended adoption of the "B.2" plan with the conditions that 1) the 1 I I 6-l9-89 I private streets be accessible sixty days prior to an election or to an initiative petition being circulated; 2) that the developer make clear to each purchaser of a property in the development that-the area includes significant geological hazards and liquefaction; 3) that the fill material for development of the site be extracted from the wetlands if feasible, and the developer contribute 50,000 towards its restoration studies; 4) eliminated the developer's proposal for construction of the park, specifically items IV-B and C of the Mola Corporation letter of June 14, 1989, relating to potential financing of the park; and 5) the first lot located adjacent to Pacific Coast Highway and First Street shall be split between the adjacent lot, the remainder of that lot to be a landscaped entry statement. Ms. Massa-Lavitt explained that the "B.2" alternative consists of three hundred forty-six single family lots, no golf course, increased park area by incorporating Gum Grove and a community park, designed to combine all of the open space into a sizeable parkland area that could accommodate several different modes of recreation simultaneously. She read in full the staff analysis of the "C.l" alternative having two hundred seventy-three single family lots, a nine hole "pitch-and-put" golf course, the acreage of the community park less than "B.2", both plans providing approximately forty acres of wetland acreage, yet restoration of same uncertain at this time, both alternatives having private interior streets, accessible through controlled gates, with First Street to be a public street. The Interim Director reviewed the June 14th communication from Mola to the Planning Commission relating to the community park improvement program for the "B.2" plan, 25.4 acres of active recreation and wilderness park, phasing of the park system, funding, dedication and maintenance. The program included a fifteen acre community park and trail system with recommended use for nine tennis courts, two basketball courts, playground with play equipment, greenbelt with picnic area, trail system from Gum Grove Park to tennis and basketball areas, two ballfields for little league and softball, open turf-area for frisbee, catch, etc., tot lot adjacent to Gum Grove Park, parking lot, snack shack, restroom facilities, wetlands observation area, and open turf/picnic area, a $150,000 commitment by Mola Development to perform various improvements to the 10.4 acre Gum Grove Park. The park improvements proposed to be built in two phases, funded by Mola at a cost approximated at $1.8 million and reimbursed to the developer by the City through tax increment over a period of ten years at an estimated $256,500 per year with the first payment commencing one year after completion of the last unit, Mola development to dedicate the approximate twenty-five acres of parkland to the City without charge, provide funds for park maintenance for a period of ten years, the park improvement program to be written into a development agreement, first phase improvements to be completed with the first eighty-six homes, the second phase with the next eighty-seven homes, the total park system completed with the construction of one-half of the homes. Councilman Hunt questioned the correctness of a statement that the optimum size of a pitch- and-put golf course would be forty-five acres, noting there are other courses in the area of less acreage that are not pitch-and-put, yet the Leisure World course of 7.5 acres is. Councilmember Risnerlsaid her understanding was that yardage rather than acreage is what a golfer would look at, and cited an example of the Ben Brown Aliso Creek course of about 2230 yards compared to the "C.I" proposal of 1723 yards. 1 I 6-19-89 Mayor Grgas expressed his support for the "C.l" plan, proposing the least number of dwelling units, two hundred seventy-three, in turn providing the greatest amount of open space, preferably owned by the City, and the widest range of uses, including baseball diamonds, a plan that he said he felt could be profitable to the developer and the community in terms of revenue and benefit. He noted that the Redevelopment Project boundary cuts the proposed development I site nearly in half, and the units in the Redevelopment Area will generate tax increment revenue to the Agency. Using the approximate one hundred sixty-four units within the Agency area at the Kotin, Regan, Mouchley projected average sales price of $512,000, plus half of the estimated land valuation or $ll million, the total assessed valuation within the Redevelopment Area would be $94,968,000, the tax increment flow to the Agency approximately $950,000 annually, therefore the bonding available to the Agency, after the setaside required by the bond underwriter, would be approximately $7.5 million. At the request of the Mayor, the City Attorney explained that tax increment can not be used for services or maintenance, however may be used for capital or major reconstruction projects, also confirmed the allowable use for such things as purchase and/or improvement of parkland, purchase of a golf course if publicly owned, to construct streets, water and utility lines, and undergrounding of utilities, yet could not be used for police or fire services or maintenance and operation of parkland. Mayor Grgas pointed out that tax increment is to be used to the benefit of the Project Area. He continued with a-review of General Fund projections under the "C.I" alternative based upon the one hundred thirteen units outside the Redevelopment boundary and surrounded by the golf course at an average sales price of $612,000, plus half I of the land valuation, for a total assessed valuation of $80,156,000, the net revenue to the General Fund approximately $103,588 taking into consideration the property tax, other revenue generators, and recurring City costs. Mr. Grgas made reference to an April 17th memorandum from Mr. Jirovsky of KRM that provided analysis of plans "C" and "B.l" and used a target return on investment of twenty- five percent which, given the risks of this project, is not unreasonable. He stated the analysis showed that "B.l" provided the developer with a pre-tax rate of return of 19.9 percent with a residual land value of $22 million, short of the return threshold, yet when a preference for the "C.l" plan was indicated to the developer, Mr. Mola presented the "B.2" plan and eliminated the eighty-four townhomes. Mayor Grgas questioned the preference for the "B.2" plan given the financial impact of that action on the project. He noted receipt of a June 13th KRM analysis of the "B.2" and "C.l" plans using the same threshold rate of return, which demonstrated that "C.l" could be achieved presuming that a financing mechanism, such as Mello-Roos at one-half of one percent of the fair market value of the unit, were utilized for the project, an assessment applied only to the project and used to offset certain costs the developer would normally absorb, the result of that being the rate of return raised to 23.6 percent and the residual land value raised to I $24 million, and likewise the analysis showed that "B.2" without Mello-Roos had a return of 20 percent and residual land value of $20 million, short of the threshold, noting also that an average lot premium of $10,000 per unit would make a $2 million difference in residual land values. Mayor Grgas pointed out the KRM analysis described the Alternative "C.l" as representing at least a $5 million reduction in the net value to Mola Development versus "B.2", therefore it is understandable why they would prefer "B.2" as it provides the potential for additional profits. The Mayor noted 6-19-89 I comments that "C.l" provides the choice of either a golf course or baseball diamonds, and stated he felt "C.l" provides both of those amenities. He made reference to a October 26, 1988 letter to the attention of the Recreation Director that confirmed agreement by Hellman to sell five acres of the remaining parcel to the City for park use, specifically for baseball diamonds, and asked the developer if that property is still available for acquisition by the City, where purchase and improvements may be possible through tax increment monies. Mayor Grgas expressed his feeling that if a golf course is not approved at this time it will forever foreclose that opportunity, the golf course providing the opportunity of either acquiring additional land through the second phase of improvements on the Hellman site, possibly for a driving range or an additional nine holes, or to pursue use of the flood control basin for golf course purposes through the County. He noted the size and economic-viability of a golf course has also been at issue, some interest having been indicated in the operation or possibly the purchase thereof, and stated he felt if a golf course were to only cover it's own maintenance and operation it would be worth pursuing and would provide an additional twenty-five acres of open space. Mayor Grgas stated if the "C.l" plan were approved he would not dispute the developers need for financial assistance, and he would urge consideration of using Redevelopment Agency funds to do so in the interest of acquiring additional open space and allowing the development to move forward, the question being the amount that the City would need to commit. He concluded by stating his desire that a partnership could be achieved in this effort to provide as many and as wide a range of opportunities for benefit and profitability as can possibly be attained. Councilmember Risner recalled that the five acres was offered by Hellman when the seven hundred seventy- three units were being considered which provided no addition community park space. She said that under the "C.l" plan only slightly more than four acres would be required to be dedicated by the developer, thus the City would need to purchase the additional acreage, and noted that another report had estimated the tax increment for "B.2" at $678,406, $674,878 for "C.l", which was possibly based on a more realistic sales price of the units. Mrs. Risner also pointed out the need to consider the required twenty percent housing set aside. Mayor Grgas stated he would request that the City Attorney provide a clarification of the twenty percent set aside and/or deferral thereof. Councilman Hunt stated it would not be his intent to approve any plan that did not include tennis courts, ballfields, trails, the Gum Grove and other amenities that have been mentioned and that his preference would also be to include a golf course, yet he too would not jeopardize the City financially to achieve a golf course, however if it could be included and achieved through tax increment, possibly $5 million or less, the golf course should be given consideration as to it's worth. I I With unanimous consent a recess at 9:25 p.m. with the Mayor calling of the Council, Mayor Grgas declared The Council reconvened at 9:50 p.m. the meeting to order. Mayor Grgas corrected his previously reported tax increment projections for "C.I" to conservatively reflect an $84 million total assessed valuation, annual tax increment of $840,000 and assuming the necessity for the housing set aside, $537,000 tax increment, therefore the ability to bond for an amount in excess of $5 million without taking into consideration the roll-over of sales, recurring increase of tax increment, or the cost savings the developer may realize as the result of a Mello-Roos. He noted that the consultant 6-19-89 had indicated that the difference between "C.l" and "B.2" was $5 million. Councilmember Risner concluded that according to those figures the City could not subsidize the developer and improve the parks, and questioned if that amount would be adequate to extend First Street, develop parks, or obtain the additional five acres. Mayor Grgas stated he was uncertain whether he would be willing to commit to that amount of funding at this time. Mr. Tim Roberts, Director of Operations and Finance for Mola Development, saided their corporation has never planned a significant land use decision in any city based upon economics, and stated the issue is a land use decision, not a decision based on the developers profit or how much the City can lever to make "C.l" work. Mr. Roberts pointed out that the two alternatives were referred to the Planning Commission, at the Commission meeting the developer presented their program for "B.2" and added a further commitment to the amenity package which related to the active recreational park element for the project as well as the Gum Grove Park. He stated the "B.2" plan is a well designed package, approximately 2.5 units per acre, no cost to the City, no financing, no tax increment, no requirement for Mello-Roos. He reviewed the specifics of the "B.2" program, the developer dedicating approximately fifteen acres of parkland at no charge to the City, the developer improving the fifteen acre active parkland, a financing package proposed for the park system where the developer would provide the recommended uses by the time one-half of the development is built with no return of the developer's investment until one year after the last unit is built at an interest rate of approximately 7.5 percent. He noted the Commission recommended the developer assume all costs for the park-improvements, and stated that is a consideration that should be-addressed as a condition of approval for the Tentative Tract-Map. He continued, stating a program has been developed to provide funding, between $50,000 to $80,000 annually, for maintenance of the fifteen acre park for ten years, the 10.4 acre Gum Grove Park to be dedicated to the City at-no cost with $150,000 committed for improvements, and the construction of First Street from Regency to PCH. -Mr. Roberts spoke of the extensive planning for this property over the past three years, the constraints of the site, environmental issues, etc., with an attractive, well thought-out recreation amenity designed for use by the entire community and an offset to the desire of some for a public golf course. He noted their concern with the "C.l" plan, specifically the nine hole golf course, small in size, short in revenues, which he said is a severe compromise from the original plan proposing an eighteen hole, challenging course with a driving range. He reported their firm had discussed how the "C.l" plan could be achieved, yet the related values are a concern and although the returns projected by KRM appear to be acceptable, are unrealistic. With the assumption that "C.l" may be approved, Mr. Roberts aSked that the Council consider the following: 1) the developer shall dedicate 4.8 acres of land pursuant to the Subdivision Map Act1 2) the developer shall sell to the City an additional 1.2 acres to complete the six acre parcel1 3) the City shall improve and maintain the six acre park1 4) the developer shall sell Gum Grove Park to the CitY1 5) the City shall pay to improve Gum Grove Park1 6) the developer shall construct the golf course and sell same to the City at the developer's cost, -including grading costs1 7) the City shall post an adequate security to guarantee payment to the developer at completion1 8) the developer shall improve First Street northeast from Pacific Coast Highway to the first project entrance and southwest from Regency Court to 1 1 1 6-l9-89 1 the second project entrance~ and 9) the portion of First Street adjacent to the wetlands and the six acre park shall be developed by the City. Mr. Roberts stated he felt the requirements to finance a project such as "C.l" would be too costly for this City, and although $5 million of bonds could be available through the use of tax increment, their subsidy requirement for the improvements are between $lO and $14 million, and cautioned that if there is a turn in the economy, increase of interest rates, or the absorbion rate declines, there would be considerable concern with completion of the project. With regard to the financing methods of Mello-Roos and tax increment, he questioned what those monies could be used for since there would be private streets, sewers, utilities, etc., if tax increment monies could be applied to the construction of a golf course that is outside the Redevelopment Agency boundary, also what could be funded with regard to development of a park. The City Attorney responded that under the tax laws neither Mello-Roos or tax increment could be used to fund private improvements, they would need to be public improvements, however confirmed that a Mello-Roos private activity program to offset develpment costs, with a higher interest rate calculation, could be used. Mr. Roberts noted that if the streets are to be public, financed through Mello-Roos, the City would be responsible for the on-going maintainance thereof. The City Attorney explained that tax increment monies may be used for public improvements, can be within the project area or outside of the project area if they are deemed a benefit to the area, pointing out the Zoeter site as an example, and the fact that the public golf course was outside the Project Area would not bar the use of tax increment as long as a finding was made that it would be a benefit to the Project Area. With regard to the deletion of the eighty-four townhomes, Mr. Roberts stated that was a generous action by Mola Development to emphasize their commitment to do a project in this City. Mr. Roberts again referred to "B.2" as a well designed, site and community sensitive plan at no cost to the City, while he said the "C.l" plan would be very costly for the City, and stated a condition of "C.l" would be that the City agree that the conditions set forth, golf course, parks, streets, etc. are reasonable and have a nexus to that project. Councilman Hunt questioned why the nexus was being mentioned in relation to the "C.I" plan and not others. Mr. Roberts explained that nexus is the relationship of conditions to a project, thus does the project need a golf course, development of six acres of park, and development of the full length of First Street to be approved, noting that the City's General Plan has called for an active recreational park for a number of years, not a golf course. The City Attorney explained that legally there must be a reasonable relationship between any conditions imposed as an exaction on the project and the project itself, however in the event that the public agency agrees to participate in financing the improvements, then the nexus does not apply, and made reference to the Supreme Court decision on Nolan that determined the Coastal Commission could not require a dedication of an easement for free and the owner was entitled to compensation for the exaction. He added that in this case, to the extent that there were improvements required beyond what is necessary to mitigate the impacts of the project there would need to be a contribution by the public agency for those particular improvements, that nexus would not apply to another plan where there would be some public involvement in the financing of those improvements, the nexus test applying when there is a unilateral demand by the City on the property owner, not when there is agreement between the City and the property owner for certain 1 I 6-19-89 improvements or amenities. With regard to a City subside between $10 to $14 million, Mayor Grgas again made reference to the consultant's analysis that reported a difference of $5 between "B.2" without Mello-Roos and the "C.l" plan, also that "B.l" had been reported to be marginally feasible yet the eighty-four units were deleted, then questioned the estimated subsidy. Mr. Grgas emphasized that Mello-Roos is not a subsidy, it is a tax on the property within the 1 project and in this case for the purchase of open space, a financing tool to aid the developer. In response to Councilmember Wilson, Mr. Roberts advised that the monies set aside for park maintenance is a contribution, the principle and interest paying the total estimated maintenance costs for a ten year period, the City responsible for that cost after that time. Discussion continued with the focus on elements of the "C.l" plan. With regard to projection of profit to the developer, Mr. Roberts stated if Mola Development were to go forward based upon the numbers presented at this meeting, numbers that he did not agree with, he would want a guarantee that those numbers are correct. He noted that if there were a Mello- Roos, that constitutes a tax on the property that the home buyer pays until the-bonds are paid, and typically a developer discounts the price of the house to offset those Mello-Roos public improvements. Mayor Grgas responded that customarily the additional tax of one-half percent of the fair market value is considered acceptable, and based upon a $600,000 house, in his opinion a $300 per month additional cost for the open space and proximity to a golf course should be marketable. Mr. Roberts also stated a $125,000 lot premium on a three par executive public golf course without a driving range on a zero lot line product was not understandable to him. The Mayor stated the argument in 1 that case would be that the projected average home prices are lower than those previously estimated, the average home being two thousand eight hundred square feet. Mr. Roberts noted that Mola Development, not the City, would be assuming the risks involved with the project, and that he could not endorse the "C.I" plan to Mr. Mola, especially without the City sharing the costs. With regard to the availability of the additional five acres, Mr. Roberts stated that parcel was discussed in relation to the original plan only, that it is not available with this low density plan. Councilmember Wilson asked if Hellman would be willing to offer the five acres in conjunction with the "B.2" plan, with a possible use for ball diamonds and allow additional housing. Mr. Roberts responded in the negative, stating "B.2" is a self- contained plan and does not need additional units. Councilmember Risner questioned the analysis of KRM, the $125,000 premium for houses on the golf course as compared to a previous report that used a $50,000 premium, also why a $25,000 premium was applied to the other units in "C.l" while the same units in "B.2" did not have that premium. Mr. Grgas noted that if a $25,000 premium were applied to the lots in "B.2" the $5 million difference would be even smaller. In response-to Councilman Hunt, Mr. Roberts confirmed their acceptance of the Planning Commission conditions with the exception of those relating to 1 reimbursement of the park improvement costs, that it would be their desire to reserve consideration of the $1.8 million decision until the Tentative Map is considered and all conditions are known. Councilman Hunt asked if the additional five acres were absolutely out of consideration unless the original plan is considered. Mr. Roberts stated he could not speak for the Hellman's. Mayor Grgas declared the hearing open to public comments. Mr. Marshall Krupp, President of Community Systems 6-19-89 I Associates, redevelopment consultants, stated he was present at the direction of the Board of Trustee of the Coast Community College District, and that a letter dated June 13th had also been transmitted to the City addressing Amendment Number 5 to the Redevelopment Plan. He stated his comments were intended to protect the legal remedies of the District should they wish to challenge adoption of the Amendment, that there is a relationship between amendment of the Specific Plan and the Redevelopment Plan creating a detriment and burden on the Community COllege District through the loss of tax increment. Mr. Krupp stated a written response to the June 13th communication has not been made therefore the Redevelopment Plan Amendment could not be adopted at this meeting, also that the Environmental Impact Report and supplement thereto did not address the impact on the Community College District, therefore can not be certified, and that legal procedures for Amendment under Redevelopment law have not been fully complied with. He added that they do not oppose adoption of a Specific Plan or development of property or land use decisions within the Project Area, yet such decisions will impact the Community College District, and suggested that the developer be directed to meet with the District, or that the Agency or City develop some means of mitigating the financial impact on the District. The City Attorney responded that this issue had been looked into initially when determining the procedures necessary to amend the Redevelopment Plan, the determination being that there was no need for consultation in this case, therefore it is felt the College District has no legal basis for challenge of the Redevelopment Plan Amendment. In terms of the environmental review, he advised that the College District, as well as the Los Alamitos School District, did not respond within the time allocated for comments, noting that only comments within that time period are required by law to receive a response. Mr. Stepanicich pointed out that depending upon the plan that is approved, and due to the changes that have been made, there is a question as to whether or not the Redevelopment Plan would require amendment at this time. He concluded that they do not believe there were any irregularities or defects in the proceedings to date. Mr. Krupp said the District could provide an estimate of impact on a countywide average in terms of the number of students generated per one thousand from the new development, and once the cost is identified he stated he would consider a pass through, a fee imposed through Mello-Roos, a developer contribution, or the construction of a facility, his request being that the developer reasonably address his fair share of costs. Mr. Laird Mueller, 142 - 11th Street, spoke of the major differences between the "B.2" and the "C.l" plans, recreation versus golf, increased community parkland, ball diamonds, tennis courts, tot lot, trails, Gum Grove Park and improvements thereto, and paid park maintenance for ten years. He said the City could reimburse the costs for the park improvements with approximately half of the annual tax increment, also stated the City can not afford a golf course and recreation improvements without considerable debt, noting that the housing set-aside must also be addressed. Mr. Mueller expressed his support for the "B.2" recreation plan. Mr. Galen Ambrose, Seabreeze Avenue, said he had pictures of historic wetlands on the Hellman Ranch, urged the Council to vote denial of the original plan, rezone the property, and give consideration of the Wetlands Society plan which would improve the City, the wetlands, and the environment. Mr. Jake MUller, Chairman of the Whittier Audubon Society, stated all California Chapters and the National Society are in support of the Wetlands Society plan, restoration being the issue, an area for birds and 1 I 6-19-89 nature, a nursery for coastal shrimp and fish, and charged that the area is unsafe to build upon. Mr. Muller submitted twenty-one postcards in support of the Wetland Society plan. Ms. Dorothy Geisler, 138ll Thunderbird Drive, inquired as to who developed the "C.l" plan, the feeling of the Council regarding subsidies, noted the comment of the developer that at least $10 million would be necessary under "C.l", suggested that information relating to the fault, etc. discussed at a previous meeting should be reviewed by each member of the Council and staff, therefore stated a decision should not be made at this meeting. Mr. Pete Jax, 1030 Fathom Avenue, stated a golf course is not open space nor what most residents want, and asked that the Council listen to the people's desire for active parkland. Mr. Don May, Southern California representative of Earth Island Institute, stated although the proposals for the Hellman site are improving they are a long way from one hundred five acres of marsh. He said they continue to believe there are a number of items that have not been adequately considered, sovereign land and public trust issues, flooding, subsidence, and liquefaction problems from a legal and liability standpoint. Mr. May noted the power of the Council to zone all of this property for open space and seriously consider one hundred five acres of wetlands, and recommended that the only issue before the Council, the original plan, be voted down, and in doing so the developer may still be interested in purchasing a small portion of the site for up to twenty-five percent of his project. Mr. May also stated that the San Gabriel River is one of the major sources of pollution flowing into the Bay, wetlands being one means of resolving that problem, and that a number of other concerns should be considered before any action is taken other than denying the original plan. Dr. Winchell, Long Beach State geology professor, stated he had previously told the Council that this site should not be developed, and reiterated his opinion that there is a moral, ethical and legal responsibility to reject all plans for development on the Hellman property, and recommended that the Wetlands Restoration Society plan be considered. Mr. Robert Lamond, Long Beach, representing the Sierra Club, stated their belief that the best of use of the low lands of the Hellman property is an extensive wetlands project. Mr. Paul Klahr, 716 Sandpiper Drive, Sea and Sage AudUbon, spoke in support of the Wetlands Society -plan. Mrs. Sally Hirsch, 1325 Crestview Avenue, expressed her feeling that the citizens should have been involved in-a study session in -order to understand the financial structure of "C.l", asked if the monies provided by the developer for park maintenance would also include Gum Grove Park maintenance, spoke for a wetlands restoration plan and financial commitment for that purpose, and stated her support of the "B.2" plan. Mr. Charles Bragg, Pacific Palisades, Santa Monica Bay Audubon Society, spoke in support of the wetlands plan and restoration thereof. With unanimous consent of the Council, the Mayor declared a recess at ll:33 -p.m. The Council reconvened at 11:48 p.m. with Mayor Grgas calling the meeting to order. Ms. Alice Davis, 224 - 4th Street, stated if given a choice she would support the wetlands plan, however if a decision is made at this meeting she said she would hope it is to benefit of the most people in the community with the greatest amount of active open space. She also expressed concern with any subsidy of the development. -Mr. Charles Parker, attorney, Villa Park, spoke for the Wetlands Plan and denial of the original plan. He spoke regarding the instance of drought and restricted use of water and the I 1 I 6-19-89 I impact that a development such as proposed would have on water usage. He also spoke of disappearing rain forests, smog, the greenhouse issue, and rising oceans which will impact areas of Newport Beach, Bolsa Chica, and portions of Seal Beach, issues that should be taken into consideration. Ms. Jane McCloud, 700 Balboa Drive, expressed support for the Wetlands Plan and concern with the "C.I" proposal with a golf course of benefit to a few and requiring a subsidy. She stated her support for the "B.2" plan with the full Gum Grove Park and active recreation opportunities for many. Mr. Ron Moore, 605 Taper Drive, referred to the Bixby Village and Recreation Park golf courses that offer reduced rates for seniors to play, and at those rates questioned how a Seal Beach course would support itself. Mr. Moore spoke in support of parkland and recreation facilities that are accessible to everyone as proposed by "B.2", stated neither he nor his neighbors supported the nine hole golf course, that he did not feel a $612,000 selling price per unit was realistic, and if put to a vote either the wetlands or "B.2" would be supported. Mr. Mario Voce, 730 Catalina Avenue, said his preference would be the Wetlands Plan for environmental reasons, stated a restoration plan is necessary whatever plan is approved, and that he continued to have concern with the geological issues. Mr. -Voce stated his second choice would be the "B.2" plan with it's recreational amenities, spoke against a gated community and in support of access for any political issue. Mr. Carl Sanfilippo, BOl Avalon Drive, questioned the whereabouts of a petition of approximately five hundred signatures in support of the original plan. Mr. Sanfilippo reported the residents on Avalon, Catalina and Surf object to the proposal for houses behind their properties, citing car exhaust, fumes, and noise as some concerns, suggesting a fifty to one hundred foot separation rather than thirty. Stating that he did not have a preference of the alternative plans, and if the wetlands plan were approved he would suggest that the developer be allowed the option of the type of development to be constructed adjacent to Seal Beach Boulevard, or if the other alternatives are approved he would requested that the homes abutting the properties previously mentioned be relocated. Mr. Gordon Shanks, 215 Surf Place, questioned construction on the liquefaction soils, spoke favorably of relocating the homes adjacent to Catalina, Avalon, and Surf or increasing the buffer area, and stated he felt the original plan, with somewhat fewer units, was a more desirable plan. Ms. Suzanne Andre, 1300 Crestview Avenue, noted that few persons have come forward in support of a golf course yet it remains a strong consideration even though substantially changed from the original proposal, however many have supported retention of Gum Grove and recreation facilities as provided by the "B.2" plan, a plan that requires no subsidy. Ms. Andre inquired about the twenty percent setaside and how that would affect the financial forecast of "C.l". Ms. Mary Purcell, Audubon Society, stated her support for the Wetlands Society plan, cited restoration and management plan concerns and the size of the wetlands with regard to the proposals currently being considered. Ms. Doris Moore, 605 Taper Drive, said she felt "B.2" would be a good plan for the community, a plan supported by the majority. Ms. Mitzi Morton, 153 - 13th Street, questioned who the Mayor had met with to discuss the "C.l" plan and suggested they should be present to support that plan if they in fact did. She stated there was inadequate opportunity to study the "C.l" proposal, and if that plan meant the process would need to commence again the choice of development should be left to the voters and the developer should initiate a legal challenge, and suggested that attention should be paid to providing recreation I I 6-19-89 facilities for the community now and in the future. Mayor Grgas responded that he had met with and received input from a group of persons who live and are involved in the community and are knowledgable of business and development. He stated that "C.l" was originally a concept of Mr. Mola who subsequently withdrew his support for the proposal, that reference to subsidy is actually a proposal to purchase additional open space, and that "C.l" has the same tennis courts, basketball courts, tot lot and playground area as "B.2". Councilman Laszlo said he wanted the record to reflect his objection to the clandestine meeting of Mr. Grgas, Dennis Courtemarche, Gary Johnson, and Jim Funk to develop the new "C.l" plan, as reported in the News Enterprise. Ms. Frances Johnson, 125 Coastline Drive, charged that the "C.l" plan removes the most desirable part of Gum Grove Park, that open space is for the enjoyment of everyone, and that a golf course is not open space. Ms. Miriam Kelly, 1125 Catalina Avenue, expressed concern with subsidizing the "C.l" plan, and stated although it reduces the number of units it will generate golf traffic, and that it was her feeling that the golf course is a holding zone for more homes in the future. Mr. Charles Antos, 210, - 8th Street, stated the original plan placed units in an area of liquefaction, took away Gum Grove, and provided no useable recreation area, and that the Wetlands Society plan is most likely the best however it is uncertain where the funding for purchase and restoration would come from. He said the "C.l" proposal also reduces Gum Grove Park, that the small golf course could pose a liability problem, and that the noise level at the location of the additional five acres is too high for park use, also that oil spillage has contaminated the soil. Mr. Antos spoke in favor of "B.2", a plan where everything fits and there is no requirement for Mello-Roos or subsidy. He also questioned the expenditure of tax dollars to analyze each alternative to determine if it were economically viable for the developer, without a participation or development agreement. The City Attorney responded that the determination to seek a financial analysis occurred when there was dissatisfaction with the original plan and a desire at that time to determine if certain alternatives were feasible, the Council having the option to seek such analysis given the responses of the developer that further burdens on the property would not be workable. Councilmember Risner noted also that the City does not have the right to force the developer to enter into agreement. Ms. Ethyle Rachlin, 1280 Oakmont Road, pointed out that when the number of residents of the development are reduced by half it likewise reduces traffic, and noted that even though Mola Development has presented the "B.2" proposal with park acreage and park maintenance, there continues to be objection to the park and support for a golf course. Mr. Frank Clift, 4489 Dogwood, reported he had attended the meeting with Mr. Grgas and others to review the "C.l" proposal that had been initated by Mr. Mola, stated that he felt that plan provided the basic types of recreation facilities as well as the golf course, for which he had voiced his support, and possibly an additional five acres for recreation purposes to accommodate the baseball diamonds. Mr. Clift confirmed his support for the "C.I" plan, however questioned the amount of City subsidy reported by Mr. Roberts that would be required for "C.l". Ms. Jane McCloud, 700 Balboa Drive, again addressed the Council stating she felt projected traffic has been cut by half with the "B.l" plan yet greater under "C.l" due to the golf traffic. She added she felt there to be a great difference between "B.2" and "C.l" and suggested that the Gum Grove, park and ball diamonds remain as proposed under "B.2" and that the golf course be located in the area of the proposed I I 1 . ~ 6-19-89 I extra acreage. with regard to reduction of noise generated from the oil wells, Mr. Knight advised that the motors can be electrified or block walls can be constructed to reduce the noise significantly to an acceptable standard. Mr. Galen Ambrose, Seabreeze Drive, stated that the EIR should not be certified because all questions submitted by the Wetlands Society were either not answered or not satisfactorily. He noted that there is support for the Wetlands plan and suggested that the original plan be denied, that other plans looked at further, that one hundred five acres be zoned open space, that eleven acres of park be zoned open space and at an $8000 purchase price the cost would be $840,000 and $88,000 respectively, that the remaining twenty acres be zoned residential, and if the selling price were $150,000 the return would be $3 million, thus not denying the Hellman's an economic benefit of their property. He suggested that as a result the seventy-nine homes would sell for around $1 million. Mr. Ambrose reported he had spoken with the Port this date and was informed they are continuing to speak to other agencies regarding this property. He also reported the Port would be very interested in one hundred five acres of wetlands as they would received a greater credit for restoration, the Port able to purchase the land from the developer. Mr. James Goodwin, Crestview Avenue, said he would favor the wetlands plan if it could be shown that there was money for the purchase and development, however that did not appear to be the case, and although he understood the desire to acquire additional open space with added recreational facilities, he felt "C.I" would require further indepth study, therefore he would support "B.2". 1 Mr. Frank Mola addressed the Council requesting that an action be taken at this meeting, that the EIR be certified, and whatever plan is approved that a time frame be acknowledged, their offer having been forty-five days for consideration of the Tract Map by the Planning Commission and two weeks thereafter before the City Council. Mr. Mola confirmed that he and Mr. Grgas had met, devised the "C.l" plan, which Mr. Mola said he offered to look at, the result being that he determined it did not work. He stated his custom is to work closely with his professional staff to develop plans that are acceptable and pleasing to a governing body as well as the public, an expensive and lenghty process. He noted that this City is very political, they are not, and the intent is to choose a plan that works for the community, a plan that is people sensitive within the realm of economics and safe to the public concern. Mr. Mola stated they had come to this City as good neighbors to develop a plan that was pleasing and economically feasible, a contribution that all could be proud of, however plans have changed and the wishes of the various agencies are continually in a state of flux. Mr. Mola again requested that consideration be given to their plan, asked that a decision be forthcoming from this meeting, and expressed appreciation for the time and effort that has been devoted to this process. Councilmember Hunt asked if, while the Council makes their comments, there would be an opportunity for Mr. Mola to respond to questions or provide clarifications. The City Attorney advised it would be preferable to leave the hearing open if further information or clarifications were to be requested of Mr. Mola, however public testimony could be concluded. It was the order of the Chair, with no objection of the Council, that the hearing be continued to allow comments from the developer only. I 6-19-89 Councilman Hunt expressed his continued preference for the original plan, however said he also liked the advantages of "B.2" and "C.I" because of the increased community recreation areas, yet the original plan provided affordable housing, and he felt that the City could have obtained between seventy-five to eighty acres of the total one hundred fifty as open space acreage. He stated his preference for the "C.l" alternative, if it is economically I workable, is because there is more open space, more acreage that the City will ultimately own, and that it does provide more recreational hours than any other plan. He noted that for every twelve people in this community that golf, there are eighty-eight that don't, yet the twelve percent represents more than participate in any other recreational activity, also where the ten and a half acres of Gum Grove Park has attracted only two to four persons per day over the past years, with the improvements more persons may be encouraged to participate in that area, however stated that participation would not be nearly as much as gOlf. Mr. Hunt stated he felt there should be provision for all recreation activities however they should be proportionate to their useage, concluding that he felt "C.l" provides a better balance than "B.2" primarily due to the golf course which provides the City with more publicly owned land -and open space. Councilman Laszlo asked if an action taken at this meeting would be final. The City Attorney responded that an action could be taken indicating preference for one of the alternatives and that staff be directed to prepare the appropriate documents to reflect that approval for consideration at the next meeting-, explaining that at the time of certifying -the EIR, the environmental findings would be made and mitigation measures incorporated into the plan. He noted there is still the issue of the original 1 application and the tract map having a time limit, therefore if the Council were to choose an alternative plan the developer would-either need to extend the time or an action could be taken to deny the original map and precise plan. In response to Councilman Laszlo, the City Manager-stated the figures set forth in the most recent KRM report reflected an interest rate of eleven percent, and should there be-a substantial change in the economy he reported a representative of Mola had indicated the plan would cease. In the event interest rates were to rise from eleven to fourteen percent, Mr. Mola stated the result of that would be a slowing of the absorption rate, construction of thirty rather than one hundred fifty houses a year, that being one reason it is important to have a plan that works. He noted that such a change in the economy is part of the cost of doing business, pointing out specifically that the cost of processing this project over the past three years would have funded at least another ball diamond. He added that if interest were to go down, the price of the housing would likewise go down and possibly increase the absorption,- however it would not necessarily increase the return but there may be-some interest savings on the project. With regard to lot premiums, Mr. Mola stated they disagreed with the $l25,000 figure reflected in the consultant's report, however explained that a premium would apply to the lots 1 adjoining the golf course. He confirmed that if they were asked to build "C.I" a subsidy between $10 to $14 million would be needed, part of that subsidy coming from bonding. Mr. Mola explained that Mello-Roos is merely a financing tool, allowing the developer to bond to pay-the cost of improvements, the debt-repaid through assessment on the properties, noting that he was not certain Mello-Roos could be used on either "B.2" or "C.l" since most of the infrastructure is private, that one hundred thirteen houses are proposed for the area in the vicinity of the golf 6-l9-89 I course, one hundred sixty outside, yet the assessment would be basically the same for all units. With regard to basis for challenge of a Mello-Roos assessment at some time in the future, the City Attorney explained that if the property owner had approved the Mello-Roos District and the buyers of the property noticed of the existance of that District, it is believed -there would be no recourse against the City, the statute providing for an election of the property owner(s) initially as to whether such tax would be imposed, and if approved that action would be binding. Councilman Laszlo made reference to the KRM report, expressing specific concern with a statement that "KRM's observation is that residual land values are extremely sensitive to sales prices and the City should look at the results cautiously," also referred to a communication from the American Golf Corporation that indicated they were not interested in the nine hole golf course, that if a nine hole course were built and turned over to the City it would break even at best, yet there may be interest in buying the course from Mola after it was built, however it would not be a public course. Councilman Hunt noted that the communication did not say it would not be a public course, that American Golf did not want to be operators, but would be interested in buying and managing the course. Mayor Grgas said his impression of the letter was that they would not be interested unless they had control over the fees, but there may be interest in purchasing it. He stated that if the City purchased the course from Mola through the use of tax increment, it would be more advantageous to an operator if the City were to rent the course for one dollar a year rather than purchasing the property, the operator generating sufficient revenue to cover the maintenance and operation costs and realize a profit without concern of the debt service or a sizeable lease payment, and the City would accomplish the goal of acquiring additional open space. Councilmember Risner stated the discussion appeared to indicate the use of Mello-Roos as a means to finance the "C.l" plan, questioned what would be necessary to purchase the parkland and develop the open space, and surmised that something greater than $10 million would be necessary to accomplish the "C.l" plan. She stated her decisions over the past years have been based on what she perceived and believed the community perceived to be in the best interest of the City, land use decisions being the most difficult. She said she felt that the citizens now accept the fact that the Hellman Ranch will be developed in some manner, however have addressed the Planning Commission and Council requesting a sensible development that fits the Seal Beach lifestyle. Mrs. Risner stated she had reviewed the "B" and "C" plans and weighed the land use advantages and disadvantages of each, both alternatives an improvement over the ponderosa plan and the -orignal Mola plan, "B" offering more usable open space parkland for active and passive use, "C" offering more total open space yet eliminates -10.3 acres of the usable park area and intrudes into Gum Grove Park to provide for the nine hole golf course. She stated that the nine hole golf course may be acceptable to some if it were a viable entity, however noted insufficient acreage and more importantly short yardage which in turn affects the fees charged, as well as a potential for liability resulting from stray golf balls. Councilmember Risner stated that although the "C" plan attemped to preserve as much park space as possible, there is a resulting loss of the meadow and a tree area of the easterly portion of Gum Grove to the second hole of the golf course, also the trail system would be affected by the first fairway, making it unsafe to use, and although the tennis facilities would remain, the softball area would 1 I 6-l9-89 be lost, the restrooms, parking, and childrens playground all impacted by the 10.3 acre loss of community park. She pointed out that the "B" plan calls for more housing units yet no golf course, which mayor may not be an advantage, the "B" plan calling for a fully restored existing Gum Grove Park, a 15.7 acre community park with playground areas, tennis and basketball courts, baseball diamonds, all interconnected by a safe trail system. She stated the community needs usable open space, and the three hundred forty-six homes, comparable with the adjoining residential community of the Hill, makes sense. Councilmember-Risner expressed her feeling that based upon long term community needs and desires, the land use proposed by "B.2" is superior for this City, the second consideration being financial with the EIR estimating the return to the Agency to be approximately $675,000 annually, less the twenty percent low to moderate housing setaside. She said the question is then which plan will cost the City more, the "B" plan a known, -the only costs being improvements to the community park, the developer willing to ente~ into agreement for those improvements with reimbursement to the developer from tax increment monies commencing one year afte~ project completion and concluding ten years thereafter, the park to be completed by the time half of the units are built, and the developer to provide funding for park maintenance. She stated there would be no need for a bond issue with the "B.2" plan. With regard to .C.l", Councilmember Risner pointed out the prior KRM report said this plan would require a $lO-million Mello-Roos to cover the developer's costs and provide them a reasonable profit, yet did not cover Gum Grove restoration, dedication, land or improvements for the community park, purchase or improvements to the golf course, purchase of land outside the project area for ball diamonds, maintenance costs, and under "C.P the Quimby dedication would only be approximately four acres for open space. She stated that economically "B.2" is the-best plan, the tax increment generated from this development over the remaining twenty- two years of the Agency available for other needs such as the extension of First Street, a-supplement to develop the park on the Department of Water and Power site, -the pier groin, etc. Councilmember Risner noted that the Planning Commission, -the developer and the citizens prefer "B.2", and asked that the City Council also look favorably on the "B.2" plan. Councilmember Wilson expressed her continued preference for the original plan, requiring no subsidy, providing for affordable housing, and stated she felt the larger units will generate more-traffic than the condominium units, where golf traffic does not occurr at peak hours. She voiced support for obtaining the extra acreage outside the proposed project area to accommodate the baseball diamonds, thus night lighting could be allowed without impacting the residential dwellings, -and suggested that that acreage could be paid for from revenues generated by possibly allowing some additional units. Mrs. Wilson questioned a concern expressed regarding stray golf balls if there were to be a nine hole course where that was not mentioned with regard to the eighteen hole course, and again pointed out that a golf course provides a buffer zone and recreation, trees and open space. She also spoke favorably of ~equiring an indemnity bond, that access -to the community be allowed for political activities, -suggested that future-consideration could be given to developing the flood control basin into a lake, and stated if golf course plan is not approved she would support a twenty to thirty foot buffer between the residential units and Seal Beach Boulevard. Councilman Laszlo noted the I I- I , 6-19-89 I suggestion that tax increment funds be used in conjunction with the "C" plan, which he deemed to be a subsidy, stated the City's credit rating would be severely affected if there were inadequate monies to make bond payments, and that he did not understand a $10 million subsidy for a nine hole golf course. In response to the Mayor, Mr. Mola reported the average turnover of units in California is seven years. Mayor Grgas noted that the tax increment numbers are based upon the assumed value of the units at the time of sale however are not reflective of turnovers where the increased value is calculated into the sale price and generates an increase of tax increment thus providing assurance that a debt payment could be met. Mayor Grgas requested a clarification as to whether the developer would again consider the additional five acres to accommodate the ball diamonds if "B.2" were approved with such condition. Mr. Roberts said the five acre option was generated along with the seven hundred seventy-three unit plan only, however they could attempt to resurrect it under the two plans being considered. Mayor Grgas noted that he had requested the consultants and the analysis of the proposal initially given the questions relating to economics of the project, the assumptions, the risks involved and the return that should be realized by the developer. He reiterated that the developer is willing to go forward with "B.2", without Mello-Roos, yet the consultant has said that the pre-tax return would be twenty percent or less than the threshold for the developer's profit, therefore that would lead one to believe that either the consultant's numbers are overstated or the developer's is understated, noting also that the option agreement has never been seen to verify the sales price of that land, a substantial unknown. Mr. Grgas recalled an interpretation of open space, regardless of whether it was golf course or parkland, that as long as it is in the pUblic domain and not built upon, it is open space. He stated open space is what this City has fought for and demanded for years, and what may be achieved through this development for the future should not be overlooked, citing as an example the preservation of a large portion of the Zoeter site, through the use of tax increment, which will not be under total control of the City for fifty years. Mayor Grgas stated that from a statistics standpoint he has been advised that the "C" plan works both for the developer and the City, however he was not certain he was willing to make a $5 million commitment at this point, yet if the "C.l" plan is economically viable he would support that plan. Councilman Hunt confirmed the fact that the tax increment increases over time, increasing the amount of available funds, and should not be ignored. Mr. Hunt stated that although the numbers under discussion may not be an absolute, they do fall within the range of $5 to $l4 million and seem to relate directly to eighty houses, therefore if there were a further reduction of units under the "B.2" plan there would be the same detrimental affect and if the houses were to increase on the "C.l" plan the numbers would diminish, and asked if the developer could associate a number with each unit, suggesting possibly $200,000. Mr. Roberts acknowledged that there is a relationship. Mr. Mola responded that it relates to the cost of improvements. He suggested that if the numbers could be set aside, it would be interesting to see which plan works, stating that he must build the units, sell them, and live with the plan, and people will come to him when there is an issue of liability and as the resulting architect of the plan. Mr. Mola said that aside from the financial aspects of "C.l", it does not work, and even though they, as the developer, continue to feel the golf course plan with the varied housing types works, the goals and guidelines of other agencies have 1 1 ,,. 6-l9-89 changed as time has passed, and that the other plans p'~oposed are merely compromises. He confirmed that the value of the land, depending upon what is done with it, how ie is graded, how the infrastructure is put in, and the number of lots, and in this case the given of forty acres of wetlands, the "C.l" plan is unworkable due to the 'golf course design and the subsidy factors. Given-the opinion that "C.I" would not work, Councilman Hunt noted that would then leave only the original proposal and "B.2" for_ ., 1 consideration. He asked Mr. Mola if, in the event he were allowed to construct a few additional units and realize, as an example, $200,000 per unit, supposing the "B.2" plan were approved, and given the $1.8 million being requested to be a credit against the Quimby Act requirement, he would-consider that the Quimby monies could possibly be paid in cash for use by the City in other ways. Mr. Mola responded in the affirmative. Mr. Hunt clarified his point that whatever plan is approved, that there might be some accommodations that Mr. Mola would agree to, where the City could realize more benefits than have been mentioned, he cited as an example, if he were allowed to build five or six additional homes on possibly an acre of the community park-there would then be money available to pay for five acres outside the project area. Mr. Mola responded in the affirmative that there is the possibility for such flexibility in a good plan. He added that there is a known with the Coastal Commission wanting open space and wetlands, then the community's desire for 10.4 acres of Gum Grove-Park, that equaling fifty acres, another six acres allocated to park use, and again noted the major problem with the "C.l" proposal lies with the design of the golf course. Councilman Hunt reiterated his desire for the City to-own as much land as possible, if there were some way for minor I concessions to be made, and stressed the need for agreement on the part of the Council and the need for-certain changes to accomplish that. Councilmember Risner stated he.r understanding that possibly Councilman Hunt would look more favorably of "B.2" if the recreation amenities were paid by the developer with no reimbursement required to the developer through tax increment, noting however that the payback-or a reduced payback over ten -years was not an unacceptable plan, -and that adding more units would not be what people have been asking for. - Mr. Mola pointed out that for every month that a project such as this goes on, $200,000 is spent monthly between the option payments, staff and consultants, and suggested if the Council could come to agreement on a plan all parties would win. With unanimous consent a recess at 2:15 a.m. with the Mayor calling of the Council, Mayo~ Grgas declared The Council reconvened at 2:23 a.m. the meeting to order. In response to Councilmember Risner the-City-Manager stated the figures presented by-the Mayor-relating to "C.l" were based upon assumptions, some of the figures obtained from the developer, some the developer contests. Mr. Nelson said he had looked at the figures in terms of magnitude, whether I-_ it would or would not work, and in a case where the figures were close he would tend to agree with the developer since they are taking the risk -and making the expenditure of money. He stated that he believed that "C.l" requires developer to participate and if he does not, it would be a risky plan, and if they did agree it would take time to develop the funding package. with regard to the most beneficial plan for Seal Beach based on financing alone, the City Manager indicated it would be the original proposal, then "B" and "CA. Councilmember Risner asked what would happen if Mello-Roos were not agreed upon. The City Manager 6-19-89 I advised that realistically the only financing he could visualize would be tax increment, general obligation bonds requiring a two-thirds vote, the standard threshold fo~ Mello-Roos being 1.5 percent, and now subject to a use test under Federal income tax law to determine if it is taxable or.nori~taxable.. Mayor-Grgas made reference to his statements in support of the "C.l" plan, however as a fOllow-up to Councilman Hunt's thoughts, he said he wanted ~ to state his_re~~~ns for not supporting "B.2" and asked that the developer take under consideration means of improving that"plan further. He first noted that the "B" plan requires a subsidy as does the "C" plan in the form of - repayment to the developer through tax increment for park improvements. Mayor Grgas voiced concern with the reduction of the buffered open space along Seal Beach Boulevard and at a minimum he felt that could be improved upon, even it meant the loss of one or two lots or reduction of the lot size, in order to achieve a buffer that is more consistent with the area adjacent to the Police Department, thus improving the asthetic quality of that portion of the development, specifically increasing the width of the buffer, adding more specimen trees, etc. He stated that given the desire to provide for a City park, and in his opinion baseball diamonds in the center of that park not necessarily the most desireable location, he suggested that the baseball diamonds again be a consideration however located in the area originally considered outside of the project boundary, thus allowing expansion of park setting use, furnished with quality playground equipment, and possibly provide a duck pond in the center of the park with picnic tables and benches. Noting Mr. Hunt's comments, Mayor Grgas stated he would be open to consideration of allowing the developer to do somewhat more than had been thought by possibly trading one acre of parkland and relocating the baseball diamonds out of the project, thus allowing a possible six additional units that would result in increased revenue to the developer and in turn should be a benefit to the City in the terms of cash, suggesting at least one million dollars. Mr. Grgas stated from his perspective to consider the "B.2" plan he would look to deriving further benefit from the developer to the City. He acknowledged the support of the wetlands plan by a number of people, and support of the "B.2" proposal as the result of the community park element, however stated his feeling that if the "C.l" plan were removed from consideration, that would foreclose a number of options for the City, a loss of certain benefits for which the City should realize a return. Councilmember Risner noted that in speaking with-Mola she had mentioned the Seal Beach Boulevard buffer, sidewalk, and green area with trees, and that she too would support a water element in the park with ducks, that she had not thought of the baseball diamonds impacting the residential area, and surmised that some adjustment of the project area would be necessary to accommodate a wider buffer zone, etc., most-likely a taking of some portion of the park. The Mayor reiterated that he would not consider a swapping of sites as a net gain, a net gain being the addition of acreage, payment of recreation facilities, financial contribution, etc., and acknowledged that low income housing could also be an option if the developer could secure additional acreage from Hellman. Councilman Hunt again stated his preference of plans, noting that if improvements were made to the "B.2" plan to the point of resolving certain objections, he could possibly give it due consideration. He-said that in addition to the five acres,-possibly the Hellman's would consider the sale of additional land-at a fair market price or provide a long term option-for -a token payment per year, to allow the City the option at some point in the future. With regard to the 1 I 6-19-89 wetland acreage, he said he was personally against a restoration program and would prefer the area be fenced and left in-tact, and that the city be allowed an option at a dollar per year, thus providing some control over that land. Mr. Hunt referred to the -proposed thirty foot buffer zone and stated he was not familiar with the restrictions that would be placed on those property owners, however given the depth of those specific lots he would be willing to ease 1 certain restrictions of use in order to promote a premium sales price which in turn would bring forth additional monies. Councilmember Risner made reference to the Planning Commission approval of "B.2" with the condition that eliminated the-repayment to the developer of park improvement costs, and asked if commitment by the developer to pay those costs or to commit an amount equal to the present estimate of $1.8 million for the improvements, would be acceptable. Mr. -Hunt responded in the negative, citing his concern with the Quimby fees and the credit for such fees requested by the developer, again stating that if there were means to generate additional income from the development there would also be ,a potential for cash dedication to -the City. The City Attorney explained that the land value being -dedicated to the City and the improvement costs must be taken into consideration, the total dedication exceeding the Quimby requirement. Mr. Mola-stated from a landscape standpoint he felt the Seal Beach Boulevard buffer -could be accomplished, and listed the points of discussion for clarification, the five acres to the north of the project, as considered along with the original plan, which would modify the center park to a more passive open space with possibly a pond, six additional units equating to $l million and dedication of wetlands, and 1- inquired if the intent was that these concessions be a package or considered separately. He noted that they had allocated $1.8 to the park-improvements, that their last agreement with Hellman to purchase that acreage was -between $1.6 to $1.7 million, an additonal $1 million as a result of Mr. Hunt's comments, plus the estimated $800,000 maintenance costs, resulting in a $5.3 million package. With regard to maintenance costs, Mr. Roberts stated that under an annuity program to cover the $80,000 annual cost for a period of ten years, the front to the annuity would be something less than $800,000 given the interest earnings over the period. Mayor Grgas explained it was not the intent to require the developer to donate the additional five acres to the City since there was a previous willingness to purchase-that acreage, the request being that there be some assistance in arranging purchase pursuant to the original terms. At the request of Mr. Mola and consent of the Council, the Mayor declared a recess at 3:00-a.m. The Council reconvened at 3:08 a.m. with Mayor Grgas calling the meeting to order. Mr. Mola stated by adjusting certain areas of the project he felt extra lots could be generated, requesting that they be allowed to generate three hundred fifty-five lots, ten more 1- than the present "B.2" proposal, through adjustment of lot lines for greater efficiency and the use of up to two acres of park. He said they would again try to negotiate with the Hellman's for the additional five acres. He suggested that as a result of generating the ten lots they would give the City the park land, plus the improvements, including a duck pond, plus maintenance of the park for a period-of ten years through whatever mechanism is the most efficient, that the equivalent of the Quimby requirement of 5.5 to 6 -acres be provided in lieu of fees, the balance -of -the parkland, improved, dedicated with no fee, and give the City $1 6-l9-89 I million for either the General Fund or for the purchase of the Hellman property if they are successful in that negotiation, and assuming the accuracy of the $1.8 park improvement costs, a $3.6 million package. In addition he confirmed the request for increased setback along Seal Beach Boulevard with intensified landscaping. with regard to the wetlands, he stated their ownership of that area was not of importance to them, noted that the Port may have an interest, and from a restoration standpoint he said he felt one of the agencies will purchase and restore same, and most likely any monies required will go towards restoration. Councilman Hunt reiterated his previous comment with regard to allowing the City the option of obtaining the wetland acreage for $1 per year given the lack of value to this development. The City Attorney advised that discussion of the wetland issue may be premature at this time, suggesting that the tract map stage of the process may be a more appropriate time to address a restoration plan, maintenance, and interest in that land. Mr. Mola added that the maximum leverage regarding the wetlands would be at the time the matter is before the Coastal Commission. Councilmember Risner also noted that the Commission may require restoration of the three acres of wetlands that are being impacted, adding that she would like Mola Development to prepare a restoration plan that would be acceptable to the Coastal Commission. The developer stated they would be willing to consider Mr. Hunt's suggestion if possible, however pointed out it is important to leave the wetlands issue open at this time since the Port Authority needs wetlands to restore and they have the funds to accomplish the restoration in a more acceptable manner than leaving the area as marshland, noting however there may be some requirement for subsidy by Mola Development. Mayor Grgas said he found the develper's offer appealing and that he would give it due consideration, however emphasized the importance of the five acres to any approval. Mr. Mola stated they would do their best to acquire that land. Councilman Hunt stated from his standpoint the additional five acres would be absolutely required, and as part of any discussions again requested that acquisition of additional Hellman land be considered, either through purchase with tax increment or an option, possibly $120,000 per acre plus a small percentage per year. The developer said they would explore that request, however advised of his knowledge that the Hellman's are going forward with an oil recovery program. Councilman Laszlo concurred that difficulties may arise if the five acres are not made available to the City. Mr. Nola stated the Specific Plan would be before the Council within two weeks, that they would submit the Tentative Map to the City by the following Monday, that they would like to be before the Planning Commission on July 26th, return to the City Council on August 7th, explaining that the suggested dates are critical to their being to the Coastal Commission by the end of the year. In response to Councilmember Risner, the City Attorney advised that it would be appropriate for the park improvements to be reviewed by the Parks and Recreation Commission, however there would be no need for further review by the Environmental Quality Control Board. Councilmember Risner moved to approve the "B.2" plan that would generate three hundred fifty-five lots based on the developer's agreement to: negotiate with Hellman for an additional five acres of their property, contribute the improved park site including a duck pond, install all park facilities, dedicate the parkland and facilities to the City excluding the five acres, provide park maintenance for a period of ten years through an annuity or other feasible I I 6-l9-89 means, receive credit for the Quimby dedication, provide the City with $1 million for the purchase of the five acres or for the General Fund, -enhance the buffer zone along Seal Beach Boulevard, -and that the first lot on Pacific Coast Highway and First Street be split between the adjacent lot and an entry plot--with appropriate signage, as recommended by-the Planning-Commission. Councilman Laszlo-seconded the motion. The City -Attorney explained that the action taken I at this meeting would not be legally binding until adoption of the appropriate ordinance and resolutions, that the development-agreement will take some time however may be completed for consideration along with the tract map. AYES: NOES: Grgas, Hunt, Laszlo, Risner, Wilson None Motion carried The unanimous vote was cast at 3:20 a.m. CONSENT -CALENDAR - ITEMS "In THROUGH "P" Councilmember-Wilson requested that Item "I"-be removed from the Consent-Calendar, noting that she would abstain from voting on that item as she was absent-from the June 5th meeting. Wilson moved, second by Laszlo, to approve the recommended action for items on the Consent Calendar, except Item "I", as presented. J. Approved regular demands-numbered 74879 through 75066 in the amount of $996,049.63 and payroll demands numbered 35432 through 35606 in the amount of $187,998.43 as approved by the Finance Committee and authorized warrants to be drawn on the Treasury for same. K. Denied the claim-of William and Irene Lamb for personal injuries and referred same to the City's liability attorney and adjuster. L. Authorized the City Manager to engage Security Pacific Bank, without obligation, to prepare all documents needed in conjunction with the 1989 TRAN. 1 M. Approved the Agreement with the County of Orange for animal shelter services for the term of July I, 1989 through June 30, 1990, and authorized the City Manager to execute the Agreement on behalf of the City. N. Approved the Agreement with the Orange County Consolidated Transportation Service Agency for the Senior Nutrition Transportation Program for the period July 1, 1989 through June 30, 1990, and authorized the City Manager to execute the Agreement on behalf of the City. O. Approved the Agreement with Senior Meals and Services, Inc. for continuation of the Senior Meals Program-from July 1, 1989 until June 30, -1992, and authorized the City Manager to execute the Agreement on behalf of the City. I P. Autho~ized-staff to utilize -the O~ange County Cities Risk Management Authority's workers compensation administrator, Southern California Risk Management ASSOCiation, Inc. AYES: Grgas, Hunt, Laszlo, Risner, Wilson NOES: None Motion carried 6-19-89 ITEMS REMOVED FROM THE CONSENT CALENDAR ITEM "I" - MINUTES Risner moved, second by Laszlo, to approve the minutes of the regular meeting of June 5, 1989. 1 AYES: NOES: ABSTAIN: Grgas, Hunt, Laszlo, Risner None Wilson Motion carried RESOLUTION NUMBER 3858 - TWENTY YEAR TRANSPORTATION IMPROVEMENT PLAN Resolution Number 3858 was presented to Council entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH APPROVING THE TRAFFIC IMPROVEMENT AND GROWTH MANAGEMENT PLAN FOR THE PURPOSE OF PLACING THE PLAN BEFORE THE VOTERS OF ORANGE COUNTY." By unanimous consent, full reading of Resolution Number 3858 was waived. Hunt moved, second by Wilson to approve Resolution Number 3858 as presented. Mayor Grgas suggested that if there are continuing concerns with regard to this issue the City can provide further input. AYES: NOES: ABSTAIN: Grgas, Hunt, Wilson None Laszlo, Risner Motion carried JULY 3. 1989 CITY COUNCIL MEETING It was the consensus of the Council to cancel the July 3rd regular meeting and that it be adjourned to Monday, July lOth. I APPOINTMENT - AD HOC COMMITTEE ON RETAIL SALES Councilman Hunt moved to appoint Ms. Margery Brueggemann to the Ad Hoc Committee on Retail Sales. Mayor Grgas seconded the motion. AYES: NOES: Grgas, Hunt, Laszlo, Risner, Wilson None Motion carried It was the unanimous consensus of the Council to continue until the next -meeting the joint public hearing regarding Amendment Number Five to the Riverfront Redevelopment Project, Resolution Number 3866 regarding trash collection charges, Resolution Number 3867 regarding the law enforcement communications system, the District One appointment to the Ad Hoc Aiport Committee, the District Two appointment to the Environmental Quality Control Board, and the annual apPointments/reapPointments to Boards and Commissions. ORAL COMMUNICATIONS There were no Oral Communications. I CLOSED SESSION The City Attorney announced the Council would meet in Closed Session to discuss personnel negotiations. By-unanimous consent, the Council adjourned to Closed Session at 3:34 a.m. The Council reconvened at 3:39 a.m. with Mayor Grgas calling the meeting to order. The City Attorney reported the Council had discussed the matter previously announced. ADJOURNMENT with unanimous consent of the Council, the Mayor adjourned the meeting at 3:42-a.m. with -the direction that the City Clerk adjourn the July 3rd regular meeting until Monday, July lOth. 6-19-89 / 7-3-89 / 7-10-89 ~ of the erk and ex 0 of Seal Beach Attest: I Approved: NOTICE OF CANCELLED/ADJOURNED MEETING NOTICE IS HEREBY GIVEN that the City Council of the City of Seal Beach did, at their regular meeting of June 19, 1989, determine to cancel the regular meeting of the City Council of Monday, July 3, 1989 and_adjo~rn same to Monday, July 10, 1989 at 7:00 p.m. in City Council Chambers, 211 - 8th Street, Seal Beach, California. 1989. I o ne M. Yeo, City 'ty of Seal Beach Seal Beach, California July 10, 1989 The City Council of the City of Seal Beach met in regular adjourned session at 7:13 p.m. with Mayor Grgas calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Mayor Grgas Councilmembers Laszlo, Risner, Wilson Absent: Councilmember Hunt With consent of the Council, Mayor Grgas declared Councilman I Hunt's absence from the meeting excused.