Loading...
HomeMy WebLinkAboutMinutes - City Council - 2009-11-16 - Special Meeting 269 City Council, Special Meeting Council Chambers 777 Cypress A venue Redding, California November 16, 2009 5:15 p.m. The meeting was called to order by Mayor Bosetti with the following Council Members present: Dickerson, Jones, McArthur, and Stegall. I Also present were City Manager Starman, City Attorney Duvernay, Assistant City Manager Tippin, Assistant to City Manager Clark, Development Services Director Hamilton, Housing Manager Buckley, Redevelopment Manager Thompson, Senior Redevelopment Project Coordinator Haddox, Associate Redevelopment Project Coordinator Bade, Assistant Redevelopment Project Coordinator Rudolph, Housing Specialist Christ, Deputy City Clerk Mize, and Executive Assistant Tipton. At the hour of6:00 p.m., Mayor Bosetti convened the Special Meeting of the Redding City Council for a joint meeting with the Redding Redevelopment Agency. CONSIDERATION OF THE FUTURE DIRECTION WITH REGARD TO THE CONSTRUCTION OF THE NECESSARY INFRASTRUCTURE REQUIRED BY THE OASIS ROAD SPECIFIC PLAN AND AS IDENTIFIED IN RECENT PROPOSALS FROM LD&C, INC. [G-030-110/R-030-030] Assistant City Manager Tippin provided an overview of the Report to City Council and Redding Redevelopment Agency (Agency) dated November 4,2009, incorporated herein by reference, relative to the construction of the necessary infrastructure as contemplated by the Oasis Road Specific Plan (ORSP) and as identified in recent proposals from LD&C, Inc. (LDC). I Mr. Tippin recalled that on February 21, 2006, and again on October 17, 2006, LDC presented a proposal to the City Council and the Agency's Board of Directors (Board) to generate $30 million of private construction financing for offsite infrastructure costs. The main points of the agreement required the City and the Agency to issue bonds secured by special taxes imposed on the project. The proceeds of the bonds would be used to reimburse LDC. The presumption with this proposal was that "new" sales tax and property tax increment would be generated by the project in sufficient amounts to pay the debt service, as well as additional costs to the City such as Police and Fire Protection services. The City Council provided direction to staff to enter into negotiations with LDC relative to its proposal utilizing broad negotiating parameters set forth in the Report to City Council dated October 17, 2006, incorporated herein by reference. Mr. Tippin explained that after several meetings between staff and LDC, the proposal was withdrawn due to the need to wait for the development of the ORSP financing plan. Mr. Tippin stated that the development of the Oasis Road area at its intersection with Interstate 5 has long been a priority goal of the City of Redding and the Agency, and LDC has been pursuing development of the Oasis Road corridor just east of Interstate 5 in parallel with the City's efforts. I Mr. Tippin recalled that in February 2008, the City received a revised proposal from LDC which contemplated the City and the Agency funding the off-site improvements through the issuance of bonds secured with gas tax revenue certificates and property tax increment, respectively. Additionally, the proposal focused only on a portion ofthe entitled development referred to as Phase la. This development included approximately 160,000-square-feet of commercial development and had significantly less off-site infrastructure requirements. Specifically, the Phase la development required partial improvements to the existing interchange consisting of a loop on-ramp for the southbound traffic and signalization at the northbound off-ramp and other associated improvements. This proposal did not gain any momentum as the use of the City's funding source for streets maintenance as a source for debt service presented many barriers to approval. Mr. Tippin explained that more recently, efforts have turned toward utilizing and securing additional funding available through the American Recovery and Reinvestment Act (ARRA) and Transportation Infrastructure Generating Economic Recovery (TIGER) funds. He 11/16/2009 270 recalled that in the spring of this year, the City Council and the Board approved a Non- Binding Letter of Intent which stated that LDC, the City, and the Agency would work together to: 1) develop and consummate an Owner Participation Agreement within six months; 2) secure additional ARRA funds for the Oasis Road/Interstate 5 interchange, if possible; 3) process the entitlements and permits that will be needed for Phase two of the proposed Oasis Towne Center project; and 4) develop a viable plan to construct and finance the infrastructure that will be needed to facilitate the Oasis Towne Center and other development in the area. Additionally, Mr. Tippin stated that, based on direction from the City Council, the City entered into agreements with LDC for funding and completion of the Project Study Report for the interchange project as required by the California Department of Transportation (Caltrans) and to complete the necessary plans and specifications for construction of the interchange improvements as needed to support the Phase Ia development. He noted that funding for the interchange work is a combination of Citywide Traffic Impact Fee and ARRA funds. I Mr. Tippin further explained that LDC submitted a draft Development Agreement and an Owner Participation Agreement to the City relative to the full interchange improvements which centered around the City and the Agency taking full responsibility for the funding and construction ofthe infrastructure through the use of bonds secured by property tax increment and sales tax. He noted that the following questions needed to be addressed by the City Council and the Board prior to pursuing additional negotiations: (1) Is the completion ofthe Oasis Road Interchange beyond the Phase Ia improvements the highest priority for use of General Fund Obligation Bonds as proposed by LDC; (2) Are the City Council and Board interested in pursuing agreements with LDC at this time, or should further discussion be postponed until announcements have been made relative to the City's TIGER grant application, which is expected in February 2010; and (3) With the completion ofthe Phase Ia improvements (loop, on-ramp, etc.), significant development could occur generating momentum and potentially improving opportunities for obtaining both private and public financing for additional infrastructure construction. Does the City Council prefer to allow the current plans to be completed and take further action at a later date? Mr. Tippin related that should the City Council and the Board be interested in pursuing agreements at this time, it is recommended that staff be so directed and the negotiating parameters as set forth in October 2006 be affirmed or modified. Additionally, it was recommended that the City Council and Board authorize the City Manager and the Executive Director to retain the services of various experts, as required, to assist in the negotiations. I Sandra Jarosz, Redding resident, opined that, due to the state oflocal finances, it was not a good time to commit funding for this project, as there was no guarantee as to when the anticipated increase in property and/or sales taxes would actually occur. She further opposed the development of additional big box stores and/or fast food restaurants. Mary Machado, Executive Director of Shasta Voices, noted the project's importance to the entire area and expressed frustration over the lack of any new development since the LOI was signed in May 2009. She urged the City to proceed with negotiations and reach an agreement as soon as possible. In response to Council! Agency Member McArthur, Mr. Tippin explained that since the LOI was signed in May 2009, the draft Owner Participation Agreement was completed; time delays were encountered due to the amount of time required to obtain the ARRA funding; and no applications for entitlements or permits necessary for Phase Two had been received. Council Member/Chair Jones acknowledged the difficulties surrounding this project due to the global recession and the need for a good working relationship between the developer and the City in order for this project to move forward. He noted the project's significance due to its proximity to Interstate 5 and the resulting sales tax potential. He opined that in order for the project to proceed, it may be necessary for the City to become creative relative to the use of sales tax revenue, as it cannot afford to lose additional large retailers. He indicated that work on this 40-year-old, City interchange has been continually delayed, but believed that any work completed would pay dividends for years to come. He expressed appreciation for the developer's long-term commitment to this project and believed that others, such as the City of Shasta Lake, would also benefit from the project proceeding. I 11/16/2009 271 Council Member/Chair Jones viewed this project as being both the City Council's and Agency's number one priority, not just in terms of ARRA funding. He reiterated that this is possibly the last major shopping center to be developed in the City-limits, and its development may require the City to be creative relative to its sales tax revenue. He opined that the interchange will remain a continual problem until it is made a number one priority. He, therefore, made a motion that the Oasis Road Interchange be designated as the City's first priority and staffbe directed to hire consultants to assist with negotiations to move the project forward, to continue to work with the developer, and to look for creative funding methods to finance the project. I Mayor/Agency Member Bosetti affirmed that this project has always been his number one priority. He noted that the City could not count on the receipt of the TIGER funding, and, therefore, favored moving forward in earnest with negotiations with the developer, keeping the City's best interest in mind. In response to Agency/Council Members McArthur and Stegall, Council Member/Chair J ones noted that due to the confusion surrounding exactly which project the City Council had designated its number one priority at its last priority session, he had requested that this matter be brought forward for consideration. Council! Agency Member Stegall favored the project being the number one priority in relation to ARRA and federal funding, however, she did not support it being the City Council's overall number one priority. She opined that staff should not move forward until funding was available, as she was not willing to risk General Fund or tax monies to fund the project. She stressed that it was an important project when the time was right, however, she could not support it if ARRA or TIGER monies were not available and, therefore, opposed the motion. I Council/Agency Member Dickerson did not want to delay negotiations until February 201 0 and opined that, until funding was actually determined, the project's priority was not relevant. He further explained that he supported the project, but not the motion as presented. Mayor/Agency Member Bosetti favored proceeding with financial negotiations and filtering out non-viable issues before it was determined whether TIGER monies were available. Council/Agency Member McArthur did not oppose the designation of this project as the number one priority, however, she cautioned she did not want the developer to think this action translated to a blank check. A MOTION WAS MADE by Agency Chair Jones, seconded by Agency Member Bosetti, to designate the Oasis Road Interchange as the Agency's first priority, direct staff to hire consultants as required to assist with negotiations to move the project forward, to continue to work with the developer, LD&C, Inc., and to look for creative funding methods to finance the project. The vote: Ayes: Agency Members - Bosetti, McArthur, and Jones Noes: Agency Members - Stegall and Dickerson Abstain: Agency Members - None Absent: Agency Members - None I A MOTION WAS MADE by Council Member Jones, seconded by Mayor Bosetti, to designate the Oasis Road Interchange as the City's first priority, direct staff to hire consultants as required to assist with negotiations to move the project forward, to continue to work with the developer, LD&C, Inc., and to look for creative funding methods to finance the project. The Vote: Ayes: Council Members - Jones, McArthur, and Bosetti Noes: Council Members - Stegall and Dickerson Abstain: Council Members - None Absent: Council Members - None 11/16/2009 272 ADJOURNMENT There being no further business, at the hour of6:4 7 p.m., Mayor Bosetti declared the meeting adjourned. APPROVED: ~~13~ Mayor I ATTEST: rVamJ ~ Deputy City Clerk \ I I 11/16/2009