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HomeMy WebLinkAboutMinutes - City Council - 2001-03-06 58 City Council, Regular Meeting Council Chambers 777 Cypress Avenue Redding, California March 6, 2001 7:00 p.m. The Pledge of Allegiance to the Flag was led by Council Member Kight. The Invocation was offered by Pastor Al Cassel, St. James Lutheran Church. The meeting was called to order by Mayor McGeorge with the following Council Members present: Cibula, Kight, Stegall, and Mayor McGeorge. Council Member Pohlmeyer was absent. I Also present were City Manager Warren, Assistant City Manager Perry, Deputy City Manager Starman, Development Services Director Hamilton, Electric Utility Director Feider, Economic Development Director Mitchell, Administrative Services Director Bachman, Support Services Director Kersten, Finance Officer Strong, City Treasurer Clark, Personnel Manager Johnson, Housing Program Supervisor Meek, Housing Program Supervisor Buckley, Senior Redevelopment Project Coordinator Morgon, Assistant Redevelopment Project Coordinator Dent, City Clerk Strohmayer, Assistant City Clerk Sherman, Office Services Supervisor Rudolph. CONSENT CALENDAR The following matters were considered inclusively under the Consent Calendar: Approval of Minutes - Regular Meetings of January 16,2001, and February 6,2001; Special Meetings of February 15,2001, February 20, 2001, and February 22,2001 I Approval of Payroll and Accounts Payable Register (A-050-100-500) It is recommended that Accounts Payable Register No.16 check numbers 286562 through 286853 inclusive, in the amount of $2,318,645.85, for the period of February 20,2001 through February 27, 2001, be approved and paid, and Payroll Register No. 17, check numbers 478856, through 478887, and electronic deposit transaction numbers 87482, through 88070 inclusive, in the amount of$I,515,454.74, for the period February 4,2001 through February 17,2001, be approved. TOTAL: $3,834,100.59 Treasurer's Report - January 2001 (A-050-100-600) Total Treasurer's Accountability - $104,031,132.08 Total City of Redding Funds, Funds Held in Trust, and Funds of Related Entities - $145,078,577.32 ACR133 Report and Cash Reconciliation (F -205-095-650) It was recommended that the ACR133 Report and Cash Reconciliation as of January 31, 2001, be accepted as presented. I Property Status Report (C-070) It is the recommendation of the Assistant City Manager that City Council accept the Property Status Report as of February 23, 2001., which includes the following: (1) Surplus City Property; (2) Leases/Renewal of Leases of City Land; (3) Offers to sell land to the City; and (4) City-initiated purchases ofland. 03/06/2001 59 Resolution - Residential Anti-Displacement and Relocation Assistance (G-l 00-030-1 00) It is the recommendation of the Deputy City Manager that Resolution No. 2001-35 be adopted, a resolution of the City Council of the City of Redding adopting the proposed Residential Anti-Displacement and Relocation Assistance Plan as required by the U.S. Department of Housing and Urban Development (HUD). I License Agreement - Ubiquitel Leasing Company (A-090-020 & C-175-825) It is the recommendation of the Support Services Director that the License Agreement with Ubiquitel Leasing Company for the installation of a mono pole, and the operation of a telecommunications facility at Benton Airpark be approved. The term of said Agreement would be for a five-year period commencing on March 1,2001, and expiring on Febr:uary 28, 2006, with an option to renew for four additional five-year terms. The monthly license fee . for the initial 12 months would be $900 and adjusted annually on March 1,2002, by five percent (rounded to the nearest dollar). Electric Utility's Monthly Financial Report - January 2001 (B-130-070) It is the recommendation of the Electric Utility Director that the City Council approve the Electric Utility's Monthly Financial Report for January 2001. Retail power sales revenue amounted to $802,904, or 1.8% below projections, and wholesale power sales to date are $91,593,898, or 679.3% above projections. Operating revenue after energy costs was $36,486,681, or 173.8%, above projections. The total cost of electricity through January 2001 was $54,615,017, or 146.2% projections. The Utility's earnings before interest, depreciation, and amortization were $37,695,014 or 274.2% above plan. The current outstanding balance for the Debt Reduction Program is $21.6 million. I Resolution - Natural Gas Procurement for Multiple Years (E-120-150-600) It is the recommendation of the Electric Utility Director that Resolution No. 2001-36 be adopted, a resolution of the City Council of the City of Redding authorizing the Redding Electric Utility to enter into enabling"agreements to have enhanced natural gas procurement capability, and authorizing the City Manager to enter into such contracts. Council Member Cibula requested that, if time permitted, the agreements be brought before the City Council for consideration. General Fund Monthly Financial Report - January 2001 (B-130-070) It is the recommendation of the Administrative Services Director that the City Council accept the General Fund's Monthly Financial Report for January 2001. Total revenue to date ($25.8 million) is $2,084,547 (8.8%) above staffs original cash flow projection. Expenditures to date (excluding encumbrances) t9tal $24,385,172 or $1,147,074 (4.5 %) below staff s original cash flow projection. I Resolution - Accepting Improvements and Streets in La Rinconada, Unit 1, Subdivision (S- 9-94) . *(S-070-230 & S-101-013) It is recommended that the improvements in the La Rinconada, Unit 1, Subdivision, be accepted as satisfactorily completed and the City Clerk be instructed to return the securities to the developer, Lyle L. Tullis and Charles Heller, Jr. It is further recommended that Resolution No. 2001-37 be adopted, a resolution ofthe City Council of the City of Redding accepting for maintenance and operation La Rinconada Place and S1. Charles Drive in Unit 1 of the La Rinconada Subdivision. 03/06/2001 60 MOTION: Made by Council Member Kight, seconded by Council Member Stegall, that all the foregoing items on the Consent Calendar be accepted, approved, and adopted as recommended. Voting was as follows: Ayes: Noes: Absent: Council Members - Cibula, Kight, Stegall, and McGeorge Council Members - None Council Members - Pohlmeyer Resolution Nos. 2001-35, 2001-36, and 2001-37 are on file in the office of the City Clerk. PUBLIC HEARING - Amendment of Redding Municipal Code Section 18.47, Floodplain . Combining District (L-O 1 0-500-050) The hour of7 :00 p.m. having arrived, Mayor McGeorge opened the public hearing regarding the amendment of Redding Municipal Code Section 18.47, Floodplain Combining District. I The following document is on file in the office of the City Clerk: 1. Affidavit of Publication - Notice of Public Hearing City Clerk Strohmayer advised that no protests were received. Development Services Director Hamilton related that the Planning Commission at its February 13, 2001, meeting recommended approval of revisions to Chapter 18.47 of the Redding Municipal Code, entitled "Floodplain Combining District," as outlined in the Report to City Council dated February 22, 2001, incorporated herein by reference. He noted that the proposed amendments would bring the City's floodplain regulations into conformance with the Federal Emergency Management Agency's (FEMA) requirements. In addition, the amendments would ensure the City's continued participation in the National Flood Insurance Program and allow for increased discounts in flood insurance premiums for the citizens of Redding by way of the City's active participation in the Community Rating Service Program. I It is the recommendation of staff that the proposed amendments be considered environ- mentally exempt under the California Environmental Quality Act (CEQA) Section 15308. It is further recommended that the ordinance amending Chapter 18.47 be offered for first reading by title only, that the full reading of the ordinance be waived, and the City Clerk be authorized to publish a summary of said ordinance. Mayor McGeorge determined that there was no one present wishing to speak on the matter and closed the public hearing. In response to Council Member Kight, Development Services Director Hamilton stated that the City has a long history of floodplain management, and the proposed changes will result in a positive economic impact for homeowners. MOTION: Made by Council Member Kight, seconded by Council Member Stegall: 1 )declaring that the required findings for approval of the proposed amendments are in evidence; 2) approving amendments to Redding Municipal Code Chapter 18.47, entitled "Floodplain Combining District" as recommended by the Planning Commission; and 3) declaring that the amendments are environmentally exempt under the California Environmental Quality Act (CEQA) Section 15308, entitled "Actions by Regulatory Agencies for Protection of the Environment". The Vote: Unanimous Ayes I Council Member Kight offered Ordinance No. 2284 for first reading, an ordinance of the City Council of the City of Redding amending Redding Municipal Code Chapter 18.47, "FP" Floodplain Combining District. 03/06/2001 61 ELECTRIC UTILITY DIRECTOR'S COMPENSATION (A-050-125) City Manager Warren provided an overview of the Report to City Council dated February 22, 2001, incorporated herein by reference, regarding an increase in the Electric Utility Director's compensation. Mr. Warren noted that California is in the midst of one of the most volatile periods any state has experienced regarding power, and yet, the City's Electric Utility has weathered the storm very well, due in large measure to tp.e leadership of Electric Utility Director Feider. I Mr. Warren pointed out that in the private sector, such leadership is compensated accordingly through bonuses or salary. He opined that even though Mr. Feider is one of the best Electric Utility Directors in the state, he is vastly underpaid when compared to his counterparts in both the private and public sectors. He recommended that the City continue to operate all aspects of the Electric Utility like any other successful business and assure that top quality management is retained. Mr. Warren continued that in the brief three plus years Mr. Feider has lead the Electric Utility, the City has seen significant improvements in Department morale and operations. To reward Mr. Feider for his exceptional performance and retain his services, Mr. Warren recommended that Mr. Feider be provided a five percent salary increase in July 2001, and that an amount equal to 20 percent of his salary in the form of a supplemental retirement program, be provided. He further recommended that both actions be implemented each year beginning in 2001 through 2004. As Council liaison to the Electric Utility Department, Council Member Kight said that he has had the pleasure and opportunity to work closely with Mr. Feider over the past three years. Mr. Kight remarked that Mr. Feider stands head and shoulders above anyone else in the industry, and the City should not hesitate in taking the necessary steps to retain Mr. Feider's services. Mr. Kight expressed the utmost gratitude to Mr. Feider and his staff for their success in protecting the City's investment and achieving low electric utility rates. I Council Member Stegall echoed Council Member Kight's comments, and related that while attending a recent legislative dinner, it b.ecame obvious to her that Redding has earned the respect of council members from other cities as they sought information about Redding's Electric Utility. MOTION: Made by Council Member Kight, seconded by Council Member Cibula, that Resolution No. 2001-38 be adopted, a resolution of the City Council of the City of Redding providing a compensation package to the Electric Utility Director, providing a five percent salary increase in July of the years 2001 through 2004, and an amount equal to 20 percent of the salary in the form of supplemental retirement beginning in each of the calendar years 2001 through 2004. Voting was as follows: Ayes: Noes: Abstain: Absent: Council Members - Cibula, Kight, Stegall, and McGeorge Council Members - None Council Members - None Council Members - Pohlmeyer Resolution No. 2001-38 is on file in the office of the City Clerk. I WAIVER OF DEVELOPMENT'-RELATED FEES and BUDGET RESOLUTION *(B-130-070 & F-205-600) City Manager Warren highlighted the Report to City Council dated February 23, 2001, incorporated herein by reference. He indicated that the Shasta Builders' Exchange, along with business partners, KRCR, Holiday Markets, North Valley Bank, and Palomar Construction, propose to build a home valued at over $300,000 to be give away in a fund- raiser for the Shasta Builders' Exchange's (Exchange) Community Fund. He stated that the Community Fund provides scholarships to children of Exchange members, Regional Occupation Program (ROP) construction class students, and high school players in the KRCR Academic Challenge. In addition, the Community Fund provides monies to local community projects, i.e., Cascade Theater, Library Park, Sacramento River Trail, etc. Mr. Warren explained that the Shasta Builders' Exchange is requesting that the City waive 03/06/2001 62 the estimated $10,300 in development-related fees for the Community Fund Housing Project. He stated that City Attorney Wingate advised that gifts are constitutional provided they are made for a valid public purpose. It is the recommendation of staff that the City Council approve the request by the Shasta Builders' Exchange to waive the estimated $10,300 in development-related fees for the Community Fund Housing Project, subject to the project being identified and approved by the City Manager to assure the project has a valid public purpose, and adopt the budget resolution transferring funds from the General Fund to the appropriate Enterprise Funds. I MOTION: Made by Council Member Stegall, seconded by Council Member Kight, to approve the Shasta Builders' Exchange's request to waive the estimated $10,300 in development-related fees for the Community Fund Housing Project, subject to the project being identified and approved by the City Manager to assure the project as a valid public purpose, and to adopt Resolution No. 2001-39, a resolution of the City Council of the City of Redding approving and adopting the 83rd Amendment to City Budget Resolution No. 99- 93 appropriating $10,300 for building and permit fees for the Community Fund House Project for Fiscal Year 2000-01. The Vote: Ayes: Noes: Abstain: Absent: Council Members - Cibula, Kight, Stegall, and McGeorge Council Members - None Council Members - None Council Members - Pohlmeyer Resolution No. 2001-39 is on file in the office of the City Clerk. COST ANALYSIS - POTENTIAL LIBRARY SITES (L-050) Council Member Cibula advised that he will abstain from discussion and voting on this matter due to an interest in real property in the downtown area near one of the proposed library sites. I City Manager Warren reviewed his report to City Council dated March 2, 2001, incorporated herein by reference. He said that for over a decade, the County Main Library located in Redding has been in need of replacement. Mr. Warren referenced several failed attempts to obtain a new library and the reasons they were unsuccessful. The passage of Proposition 214, which provided $350 million statewide, brought a newfound hope and a unique opportunity for the County and City to jointly pursue construction of a new library. Over the past six months, elected officials have been working together to develop a joint proposal. He submitted a list of conditions stipulated by the Shasta County Board of Supervisors in approving ajoint library venture. 03/06/2001 City Manager Warren recalled that at its February 20, 2001, meeting, the City Council directed staff to prepare a cost analysis of potential library sites. The cost analyses contained the following assumptions: 1. 2. Library costs are based on an 80,000 square-foot building. Actual construction in the Downtown Mall will be slightly higher due to increased code requirements for fire walls associated with property line construction. Land value at the Civic Center is estimated at $7 per square foot. Cost for acquisition of the Rite-Aid building in the Downtown Mall is estimated at $2 million; the Dicker's building is estimated at $800,000; and the Oregon Street property is estimated at $1.5 million. The Dicker's building is not on the market and the acquisition estimate may be low. Soil remediation for the three sites at the Civic Center is estimated at $50,000 and soil remediation for the Oregon Street site is estimated at $200,000. Parking at the Civic Center is estimated at $1.5 million and parking at the Oregon Street site is estimated at $500,000. No money has been budgeted for Rite-Aid or the Dicker's building under the assumption that existing parking will be adequate. Sixty Thousand dollars is provided in the South City Park expenditures for replacement of the tennis courts. I 3. 4. 5. 6. 7. 63 Mr. Warren discussed the pros and cons of the proposed library sites and reviewed the various cost estimates including total project costs as follows: Civic Center Sites Fire Administration (Parkview) South City Park CDF-Cypress Total Project Cost $18,418,000.00 $18,503,000.00 $18,921,000.00 I Downtown Sites Rite-Aid Dickers Oregon Street $20,667,200.00 $22,462,200.00 $19,528,000.00 Mr Warren related that he considered three factors in recommending the Civic Center campus for a new library site as follows: 1. Library grant criteria: Since the California Public Library Construction Renovation Board sets the rules/priorities and also determines who receives the grants, Mr. Warren said it behooves the City to listen carefully to what they want or expect in a successful application. The City's grant coordinator indicated that the State Library Board set only two priorities: 1) Cooperative agreement(s) with school districts(s) for use of the library and 2) joint use facilities with school districts. The remaining criteria are simply "considerations." Because ofthe availability and proximity to Cypress Academy School, the Civic Center site meets two of the important grant criteria. In addition, one of the conditions the County stipulated in agreeing to a joint grant application effort was that the library be sited on the Civic Center campus. 2. Partnerships: Another important factor to consider is the City's three financial partners consisting of the State, Shasta County, and the New Library Now! (NLN) citizens group. Both the County and NLN have expressed their site preference for the Civic Center campus. I 3. Cost: The local match or cost needs to be considered. The least expensive alternatives for the local match are the Civic Center campus sites. The NLN has agreed to raise the local match and, the lower the amount, the easier it will be for them. Given the above circumstances, Mr. Warren believed the old Fire Administration building site places the City in the best position of getting the grant at the least cost; therefore, he recommended that it be selected with the caveat that should the CDF site become available, that it be designated as the library site. Relative to financing library operations and maintenance, he said the City should plan accordingly and not add to the General Fund. According to Mr. Warren, planning now by decreasing planned expenditures in the amount of $250,000 by the year 2004 in the current 1 0- Year Plan, would be wise. James Theimer, architect, said he has heard nothing which requires Council to select a site at this time, and he felt it was important for a project manager and architect to provide input into this facet. I Marj Cantrell opined that the City is rushing its decision on selecting a library site. She opposed the removal or relocation of the ballparks located at the Civic Center site, and questioned funds being spent on the demonstration block in the downtown revitalization project. Denise Thompson expressed her understanding that the competition for the library grant will be keen and that she'has confidence in the City's grant writer. Brian Van Voris, Chair of the "New Library Now" citizens' committee, opined that a new library should be designed and built for success and involves four considerations: 1) What is best for the project? - Without the 65% state contribution, there will be no library, so choosing a site that places the City in the best position for the grant is essential. 2) What is best for the citizens? - Choosing a site that includes proximity to schools will also place Redding in a good position to be awarded a grant, and it will best serve the needs of its users. 3) What is best for the library? - The expert in the library field confirmed that the Civic 03/06/2001 64 Center site offers the best opportunity for the best library. 4) What is best for the partnership? When the City offered property on the Civic Center campus, the citizens ad-hoc committee and Shasta County accepted the offered site. Mr. Van Voris asserted that to suggest a different property than that offered would be counter to a successful partnership. Carolyn Chambers, Shasta County Library Director, stated that the Civic Center campus site provides easy access to all citizens, it meets the grant criteria, thus maximizing use of the library. She maintained that parking in the Downtown Mall is inadequate and sufficient parking is essential for school buses and vans. She also expressed concern about the lack of access for emergency vehicles in the Mall's underground parking structure. She envisioned more programs and events for children with grassy areas and believed the Civic Center site was more conducive to these types of activities. I While Pam Hughes, local area high school teacher, agreed that the Civic Center site is clearly the most economical alternative, she believed the downtown sites more adequately addressed the issue of maximizing use of the library because of proximity to the RABA Intermodal Transfer Facility making it easily accessible to senior citizens for whom transportation is a significant factor. Due to their accessibility, parking, and proximity to mass transit, Ms. Hughes contended that the downtown Rite-Aid and Dicker's sites deserve serious consideration, and they represent a giant step forward in the revitalization of Downtown Redding. Jerry Bronson, retired Redding Police Officer, believed the traffic flow and parking were deterrents to the Downtown Mall site. During his tenure on the Downtown Mall Association representing the Police Department, the vast majority of issues dealt with traffic and parking which he said perplexed even the experts. Over the years, much time was spent on various issues relating to the Mall such as: traffic congestion in and around the Mall, prime parking spaces taken up by employees or residents of the Mall, security problems with the dark underground parking structures, lack of safe access to and from the parking lots regardless of mitigation measures taken, inability for public safety vehicles to access the lower level parking structure due to the low ceiling, homeless people and gang-types frequenting the mall, and limited restroom facilities. He feared that if a child wondered off into the downtown traffic pattern, it would be disastrous. Unless these issues are resolved, Mr. Bronson said placing a library in the Downtown Mall would only exacerbate the problem. I Al Weissberg, member of the "Friends of the Library" citizens committee commended the City Council for taking forward steps in efforts to build a new library. As a deeply involved citizen in the educational and cultural affairs of the community for many years, he was interested in every possible effort for acquiring a new library. He urged the City Council to follow the City Manager's recommendation in order to ensure that the City is successful in receiving a library grant. Sue Morehouse applauded the City Council for efforts to proceed with a library and supported the City Manager's recommendation. Missy McArthur, member of "New Library Now" citizens' committee, opined that government dollars should be spent in ways which produces the best value. While revamping the downtown is a noble goal, she said the City must meet the State grant criteria or abandon the project. She cautioned against hamstringing the library project with the downtown revitalization project if it will jeopardize the ability to secure the grant. In comparing projects with the greatest good for the greatest number, Mike Huyck stated that the library is geared for all segments of the community and, therefore, an adequate library is a must. I Allie Osborne favored locating the library in the downtown area. In her opinion, it would demonstrate a commitment to revitalize downtown, and may be less expensive. She refuted the notion that the noisy, nearby railroad tracks would be detrimental. 03/06/2001 65 Mike Ashby disagreed with deferring the site selection decision warning that there is only one year to design the project and submit the grant application. He said that should the Downtown Mall site be selected, it is important to keep in mind, that there will be additional costs that the City will be obligated to fund. Kathy Jenkins, a proponent for the downtown site, stated that she did not recognize the downtown area as it was described earlier in the evening. She felt the issue of cooperative agreements with schools warranted further research because the Early Childhood Services for Schools located in the Downtown Mall, is a certified school site, as is Shasta College which has a cooperative agreement with the schools. I Fran Jenkins indicated that while she heard many compelling arguments regarding library sites this evening, she would accept either site because constructing a new library is the ultimate goal - where it is located should be secondary. City Grant Coordinator/Management Analyst II Cherpeski clarified the "proximity to school" grant criteria. He explained that on February 26, 2001, the State Library Board in Sacramento considered two criteria options regarding cooperative agreement(s): 1) The requirement of a strict use or joint use; and 2) allow cooperative agreement(s). The Board accepted the second broader option but added a priority within a priority of shared facilities, making proximity of the schools important. Because of this caveat, Mr. Cherpeski concluded that the Civic Center campus is the only viable site which could allow for this type of shared facility. Mayor McGeorge asked for more information regarding the school facilities in the Downtown Mall qualifying for designation as school sites. Mr. Cherpeski was not aware of any schools in the Mall and indicated that staff would research this further. Kathy Jenkins added that she learned there is also a lending library in the Mall and a state-certified referral center with a school accreditation number and license at that facility. I Council Member Stegall indicated that besides the issue of close proximity to schools, one of the biggest road blocks is where the Shasta County Board of Supervisors stands on the site issue. She heard the County Administrative Officer and Supervisors indicate that they do not want a library in the downtown area, but she questioned their rationale. She expressed disappointment if the downtown site is passed over only to learn later that the State recanted on the issue of proximity to schools, and that there was room for negotiation with the Board of Supervisors. Ms. Stegall believed a library in the downtown area would benefit the community in many ways, and she would regret seeing that door closed. Council Member Kight favored the Civic Center campus site for. a variety of reasons, especially cost. He said the committee which worked for years trying to find a site chose the Civic Center campus, and the grant application process favors the Civic Cent~r site. He hasn't seen anything valid for selecting the downtown site except emotion. He trusts the judgment of staff and others who have been working on this effort, not the least of which is the City's partner, the Shasta County Board of Supervisors. He thought it inappropriate to go back to those partners and say the City changed its mind. From a cost standpoint, he said it makes sense to place the new library at the Civic Center campus. For these reasons, he was prepared to make a decision this evening and not defer action any longer. I Mayor McGeorge stated his understanding that the Civic Center site would not affect the existing ball fields. City Manager Warren confirmed that the youth fields and Tiger Field would remain in tact as previously directed by the City Council. Mayor McGeorge questioned the need for a three-story library building where maintenance costs could exceed dedicated operational funds, and suggested that a reduction in the square footage be examined. Relative to concerns about the Oregon Street site, Mr. Warren said it would take a great deal of time and money to remediate contaminated soil because it is not known exactly what is in the ground other than the fact that diesel was dumped in the area by Southern Pacific. MOTION: Made by Council Member Kight, seconded by Council Member Stegall to approve staff's recommendation to select the old Fire Administration building site on the Civic Center campus for construction of a new library with the caveat that should the California Department of Forestry (CDF) site become available within the prescribed grant application time line, that it be the designated site; and directed staff to plan for library 03/06/2001 66 operating costs to come from existing General Fund expenditures in the current 1 O-year Plan by 2004. The Vote: Ayes: Noes: Absent: Abstained: Council Members - Kight, Stegall and McGeorge Council Members - None Council Members - Pohlmeyer Council Members - Cibula Council Member Stegall clarified that her support for the motion selecting the Civic Center site is because she wants to see the new library become a reality. She requested that staff come back within the next two months with a report on redevelopment funds earmarked for refurbishing the Downtown Mall as well as some reassurance that the Downtown Revitalization Plan is moving forward. I At the hour of 9:25 p.m., Mayor McGeorge recessed the meeting. JOINT MEETING OF THE CITY COUNCIL AND REDDING REDEVELOPMENT AGENCY At the hour of 9:35 p.m., Chair Kight convened the Special Meeting of the Redding Redevelopment Agency for ajoint meeting with the Redding City Council. ACQUISITION AND REHABILITATION OF THE REDDING HOTEL - BY CHRISTIAN CHURCH HOMES OF NORTHERN CALIFORNIA, INC. (R-030-145-350) Deputy City Manager Starman highlighted the Report to City Council and Redding Redevelopment Agency (Agency) dated March 2,2001, incorporated herein by reference, regarding Christian Church Homes of Northern California's (CCH) proposed acquisition and rehabilitation of the Redding Hotel (Hotel). He recalled that on February 22, 2000, the Agency agreed to provide a pre-development grant of up to $76,000 to CCH to analyze the possibility of acquiring the Hotel. He explained that the work elements outlined in the pre- development grant agreement had been completed and are on file in the Agency's office. Last August, CCH and its consultants concluded that it was not financially practical to rehabilitate the existing building and were considering a proposal to demolish the existing structure and construct a new, four-story building. Due to concerns expressed by the public, CCH agreed to reassess the possibility of rehabilitating the structure. It was subsequently concluded that it would be possible to rehabilitate the existing building. At the same time, however, CCH and other nonprofit housing providers were informed that the scoring system associated with California's Affordable Housing Tax Credit Program would be revised in 2001 and that the Redding Hotel project would not score as well under the new system, therefore, ,CCH opted not to proceed. It was recently learned that several of the proposed changes to the scoring system would not be implemented this calendar year, and CCH now believes that the Redding Hotel would be a strong candidate for the Tax Credit Program. Mr. Starman indicated that the Tax Credit Applications are due on or before June 15,2001, therefore, time is of the essence. I Mr. Starman recalled that when the Agency approved the pre-development grant, it was noted that CCH might request up to $2.5 million in additional grants and loans from the City/Agency to facilitate the project. Based on the information that CCH and its consultants assembled during the due diligence period, CCH indicated that it would now need approximately $2.6 million from the City/Agency. He stated that staff reviewed the proposed increase of $100,000 and concluded that it was justified. I Mr. Starman pointed out that the total project was estimated to cost approximately $6.6 million. In addition to the $2.6 million from the City/Agency, Mr. Starman related that CCH intended to utilize tax credits ($3.8 million) and an Affordable Housing Program grant ($175,000) to finance the project. The new facility would contain 40 one-bedroom senior units, as opposed to the previous proposal of 66 units. He explained that the cost per unit was extremely high at approximately $165,000 per unit, but was due primarily to high acquisition ($1.2 million) and relocation costs ($0.6 million). He indicated that construction- related expenses were budgeted at $76 per square foot. Mr. Starman conveyed that the City/Agency had been concerned about the Hotel for a 03/0612001 67 number of years, as it generated an excessive number of calls for police and fire services, and had been the subject of ongoing code enforcement activities for some time. He pointed out that the Hotel fronts on the City's demonstration block and is an important part of the City's plan to revitalize the Downtown area. He noted that the rehabilitation of the Hotel was identified as an important historic resource for the community. In addition, the project would dramatically improve the quality of the Hotel's housing units. I It was the recommendation of staff that the City Council! Agency agree, in concept, to loan/grant CCH $2.6 million to acquire and rehabilitate the Hotel into a 40-unit senior housing project. It was further recommended that the City Council! Agency direct staff to negotiate a development agreement with CCH for the City Council' s/ Agency's consideration at a subsequent meeting and prepare a Replacement Housing Plan. In response to Council! Agency Member Cibula, Mr. Starman related that if the proposal was approved in concept, staff would negotiate a contract and bring it back for consideration and approval in approximately four weeks. In the meantime, CCH would begin working on preconstruction work, but CCH did not want to incur any costs ifthere was some doubt that the City/Agency would approve the contract. Council! Agency Member Cibula questioned whether there would still be funding for the neighborhood revitalization projects if the City/Agency proceeded with funding the Hotel project. Mr. Starman replied that the Hotel was in one of the three target neighborhoods - Downtown. He indicated that staff determined that there were ample resources to proceed with the Hotel project without adversely impacting the Parkview or Martin Luther King, Jr. Neighborhood Revitalization Projects. I Council/Agency Member Cibula complimented staff and CCH on finding a way to save the structure. He favored conceptual approval of the project, but hoped that the draft contract would provide the City with some quality control. He requested that, if possible, CCH attempt to save as many of the Hotel's antique features as possible. He noted that the Hotel's commercial component was critical to the redeveloped Downtown and expressed concern that nothing was going to be done to refurbish that component. He questioned whether CCH would actually own the commercial portion of the Hotel and be responsible for leasing/rental of the property. Mr. Starman clarified that the commercial space was currently functional and did not require significant improvements. He explained that CCH would own and manage the entire building, including the commercial space. He pointed out that it may be necessary to segregate the commercial area for tax credit purposes. He stated that CCH wanted to ensure that the commercial space was viable and healthy, and he was confident that it would be a successful part of the project. He related that staff had discussed with CCH the City/Agency's ability to address architectural renderings and CCH supported this concept. To the extent possible, he believed CCH would look at saving antique features, but noted that the building had been altered over the years and many of the features may no longer exist. I In response to Mayor/Agency Member McGeorge, Mr. Starman confirmed that the Hotel was not on the Historical Register. He indicated that CCH's consultant which performed the historical assessment concluded that the Hotel did not qualify for the Historical Register. He added, however, that, in this instance, that the City at the local level would note the Hotel's historical significant to the community, thereby permitting the use of the previous version of the Uniform Building Code. Mayor/Agency Member McGeorge questioned the proposed project price to completely demolish the Hotel and rebuild it. Mr. Starman did not recall the exact figure, but believed it was in the range of $13 million. Don McCreary, representing CCH, noted that the construction portion alone for the previous proposal was $8.8 million, however, he too did not have the total price readily available this evenmg. 03/06/2001 68 Council Member/Chair Kight supported trying to retain as much of the Hotel intact as possible, but indicated that $165,000 for a one-bedroom apartment was excessive. Mr. Starman replied that it came down to being a policy decision on the part of the City Council! Agency on how to spend the housing funds. He noted that the actual raw construction costs were estimated at $76 per square foot, but concurred that on a per unit basis, the project was expensive. He added that the Hotel was not a project which would be economically feasible for the private sector to undertake and that it could become more of a problem for the City/Agency in the future. Mayor/Agency Member McGeorge questioned whether the commercial businesses would remain open during the remodeling. To the extent practical, Mr. Starman stated that it was intended that the businesses would remain open. I Scott Swendiman, representing the Wesley Neighborhood nonprofit corporation, indicated that the Wesley Neighborhood had undertaken the rehabilitation of blighted housing near the Methodist Church in the Garden Tract area. He noted that the area's rehabilitation was being completed in phases, with the City approving Phase 1 in August 2000. He noted that Phase 1 was almost complete and tenants were already in six of the eight residences. He indicated that they are in the process of preparing their application for Phase 2, however, it appeared that the Hotel project might be draining the funds available for the future Wesley Neighborhood projects. He stated that there are a number of property owners waiting for Phase 2 to fund. He related that they are in the process of acquiring 11 residences and estimated that it would cost less than $700,000 to acquire and rehabilitate them. Phase 3 would entail the acquisition of the apartment building. He stressed that the Wesley Neighborhood is committed to taking on future projects in other areas as part of their partnership with the City and requested that the City/Agency consider their needs when considering their decision this evening. He emphasized that the Wesley Neighborhood supports CCH's proposed project and does not want to compete with them, however, there is a need to keep the momentum in the Garden Tract area. In response to Council! Agency Member Stegall, Mr. Starman related that he is aware that the Wesley Neighborhood is working on Phase 2, but he had not seen a project description or the estimated funding needs. I Mr. Swendiman explained that it is not part of the Wesley Neighborhood's due diligence to determine the project costs. He related that the City evaluated the property, determined the needs, and provided a cost estimate. He recalled that the initial proposal performed last week indicated it would cost approximately $325,000 to acquire the 11 residences and $312,000 to rehabilitate them. Mr. Starman concurred that the housing resources are reaching a point where projects would begin competing for available funds. He believed, however, that there are sufficient funds for the Hotel project and planned activities in both the Parkview and Martin Luther King, Jr. Neighborhoods, with. approximately $2.2 million remaining for such projects as proposed by the Wesley Neighborhood. In response to Mayor/Agency Member McGeorge, Mr. Starman explained that there are provisions for historical buildings that enable contractors to utilize the previous version of the Uniform Building Code (UBC). Furthermore, contractors are only required to comply with 75% of the requirements in that version. These provisions are in place because it is generally recognized that it is difficult, if not impossible, to require a historical building to comply with the current version of the UBC. Council/Agency Member Cibula viewed CCH's proposal as an opportunity to do. an important housing project Downtown and could potentially avoid issues for the City/Agency at a later date. I Mayor/Agency Member McGeorge expressed concern with the high per-unit costs and use of previous Uniform Building Codes. He opined that utilizing a previous Building Code dodged issues that were put into place for the community's safety. 03/06/2001 69 MOTION: Made by Council Member Cibula, seconded by Council Member Stegall, to conceptually approve to loan/grant CCH $2.6 million to acquire and rehabilitate the Redding Hotel into a 40-unit senior housing project and direct staff to negotiate a development Agreement with CCH for the City Council' s/ Agency's consideration at a subsequent meeting and prepare a Replacement Housing Plan. Voting was as follows: Ayes: Noes: Abstain: Absent: Council Members: Cibula, Kight, and Stegall Council Members: McGeorge Council Members: None Council Members: Pohlmeyer I MOTION: Made by Agency Member Cibula, seconded by Agency Member Stegall, to conceptually approve to loan/grant CCH $2.6 million to acquire and rehabilitate the Redding Hotel into a 40-unit senior housing project and direct staff to negotiate a development Agreement with CCH for the City Council' s/ Agency's consideration at a subsequent meeting and prepare a Replacement Housing Plan. Voting was as follows: Ayes: Noes: Abstain: Absent: Agency Members: Cibula, Kight, and Stegall Agency Members: McGeorge Agency Members: None Agency Members: Pohlmeyer At the hour of 10:06 p.m., Chair Kight adjourned the Special Meeting of the Redding Redevelopment Agency Meeting. At the hour of 10:07, Mayor McGeorge reconvened the City Council meeting to regular seSSIOn. I ADJOURNMENT There being no further business, at the hour of 10:07 p.m., Mayor McGeorge declared the meeting adjourned. ApPROVED ATTEST: I 03/06/2001