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HomeMy WebLinkAboutMinutes - City Council - 1998-07-28 195 City Council, Special Meeting City Council Chambers 1313 California Street Redding, California July 28, 1998 5:00 p.m. Mayor Kehoe and Agency Vice Chair Kight called the special joint meeting of the Redding City Council and the Redding Redevelopment Agency to order at 5:00 p.m. with the following City Council/Agency Members in attendance: Anderson, Cibula, Kight and Kehoe. City Council Member/Agency Member McGeorge was absent. Also present were City Manager Warren, Assistant City Manager Perry, City Attorney Wingate, Electric Utility Director Feider, Public Works Director August, Development Services Director Swanson, Deputy City Manager Starman, Planning Manager Keaney, Economic Development Manager Hiller, Support Services Director Kersten, Administrative Services Director Bachman, Transportation Manager Duryee, Housing Manager Flory, Senior Planner DeMallie, Senior Planner Haddox, Associate Planner Thompson, Management Analyst Dent, Assistant City Clerk Moscatello, and Executive Secretary Rudolph. 1. PUBLIC HEARING RE ABANDONMENT APPLICATION A-7-91, BY CITY OF REDDING (Abandonment of Outer Two Lanes of Canby Road for Creation of Diagonal Parking) (A-010-100 & P-030-160) 2. USE PERMIT UP-3-98, BY MT. SHASTA MALL ASSOCIATES AT 930 DANA DRIVE AND APPROVAL OF TRANSIT FEE CREDIT (Construction of a 100,000- Square-Foot Addition to Mt. Shasta Mall for Gottschalks) (L-010-390 & M-010-400) 3. REIMBURSEMENT OF BUILDING AND DEVELOPMENT FEES FOR GOTTSCHALKS DEPARTMENT STORE AND FINDINGS REGARDING SUCH PAYMENT (R-030-050-310, F-205-600 & M-010-400) 4. PARTICIPATION AGREEMENT BETWEEN SHASTA MALL ASSOCIATES, GOTTSCHALKS, INC., THE CITY OF REDDING, AND THE REDDING REDEVELOPMENT AGENCY (R-030-050-310, F-205-600 & M-010-400) City Council/Agency Member Anderson stated that due to the close proximity of property which he owns to the proposed project, he would abstain from discussion and voting on the matters under consideration this evening. The hour of 5:00 p.m. having arrived, Mayor Kehoe opened the public hearing regarding Abandonment Application A-7-91, by the City of Redding. The following items are on file in the office of the City Clerk: Affidavit of Publication - Notice of Public Hearing Assistant City Clerk Moscatello advised that no protests were received regarding Abandonment Application A-7-91. It was determined that due to the fact that the Abandonment Application, the Use Permit, the Participation Agreement, and the reimbursement of building and development fees were interwoven, staff's presentation and the public testimony regarding all of these items would be taken simultaneously. 7/28/98 196 Mayor Kehoe stated that his position on this matter had not changed since it was first considered in December 1997. He was, however, under the impression that his position had been misrepresented by individuals within the community. He indicated that he believed that the principals to this agreement had acted in a straight-forward, ethical fashion; the project's supporters had conducted themselves in an ethical manner; and City staff had maintained the highest standard of excellence in their pursuit of this project. Assistant City Manager Perry provided an overview of the issues before the City Council and the Redding Redevelopment Agency(Agency) this evening as contained in the memorandum dated July 20, 1998, incorporated herein by reference. He noted that different members of staff would be making presentations this evening relative to their areas of expertise. Economic Development Manager Hiller discussed the retail sales leakage based on 1994 and 1996 retail sales figures. He pointed out that the only area where Redding does not exceed the Statewide average is in the area of apparel sales, where it falls to 77 percent of the State's average. He believed that this sales leakage was attributable to the fact that high-end apparel products are not available in the area. He indicated that Chico was a good example of what can be accomplished from a retail and sales tax standpoint and that Gottschalks could assist in filling an existing void and retain spending dollars in the community. Public Works Director August summarized the following traffic issues associated with the request: (1) The projected daily and evening trips due to the proposed development; (2) All area intersections would continue to operate at existing or better levels of service; (3) The proposed traffic signal at Dana Drive and Canby Road which would enhance accessibility and improve traffic operations from Level of Service (LOS) F to LOS B; (4) Traffic operations on Dana Drive would be improved through the installation of a traffic signal coordination system and double left turn lanes on Dana Drive and Churn Creek Road. He noted that these improvements are currently needed without the proposed development and the project was being asked to include the improvements as part of the mitigation measures; (5) Traffic operations on Old Alturas Road would be enhanced through the removal of speed bumps and the realignment of the intersection of Canby Road and other related improvements; (6) Accessibility to the area would be enhanced by opening the driveway on the north side of the Mt. Shasta Mall to through traffic and the removal of speed bumps; (7) The existing circulation system would provide an adequate level of service and no new roads would be necessary; (8) Canby Road would function at a satisfactory level of service as a two-lane road. Mr. August acknowledged that the project would generate additional traffic, however, the traffic would have better accessibility and the flow of traffic would be no worse and most likely would be better. He noted that the July 1998 traffic study was not available at the time the Planning Commission considered the project, however, the July 1998 study validated the 1992 report and actually refined some of the numbers. Development Services Director Swanson explained that the current site plan for the Mt. Shasta Mall contains 2,363 parking spaces. He stated that based on the square footage of uses, the City requires 2,417 parking spaces. He noted, however, that the Mt. Shasta Mall has private agreements with J. C. Penneys and Sears which leaves the Mt. Shasta Mall short by 310 and 43 parking spaces respectively. During the Planning Commission's consideration of this matter, it agreed to provide through its findings a 60-space parking credit due to the Mt. Shasta Mall's contribution toward a transit station to be located on Canby Road. This credit was based on an assumption of a five percent trip reduction and an average turnover of parking spaces at three to four times daily. He pointed out that the initial environmental study prepared by staff and circulated to the public and affected agencies received no substantive comments and consequently resulted in the preparation of a Negative Declaration which must be adopted this evening before discretionary findings can be made. He stated that following a public hearing, the Planning Commission recommended by a 4 to 0 vote that Use Permit UP-3-98 be approved. He summarized the key conditions as follows: The Mt. Shasta Mall would be required to enhance the entries on either side of the Gottschalks store; the Mt. Shasta Mall would receive a 60-space parking credit; ensure that the driveway north of the current Rite Aid store remain open during business hours; improve the Old Alturas Road extension; and make improvements to accommodate a transit station on Canby Road. He indicated that during the process of refining 7/28/98 197 the parking design on Canby Road, it was determined that the public sidewalk and landscaping could remain in that area, therefore, staff is requesting that the City Council modify Use Permit conditions numbers 8 and 22(B) accordingly. Mr. Perry estimated that the $8,000,000 facility would generate approximately $89,000 annually in new property tax revenue, of which the Agency would receive an estimated $64,000 to be utilized for public improvements in the Canby-Hilltop-Cypress (CHC) Redevelopment Project Area. He noted that Shasta County and the Mosquito Abatement District would receive an additional $24,000 per year as a result of the project. In addition, he pointed out that Gottschalks is expected to generate, based on $15 million in annual sales, $150,000 in new sales tax. The estimated net sales tax to the City is $65,500. He stressed that these figures are based solely on Gottschalks and do not include new tenants. He highlighted what the Gottschalks project is expected to generate; what redevelopment agencies can do; and what redevelopment has accomplished in the CHC Project Area. Mr. Hiller reviewed a random survey he conducted on eight cities which depicted a wide variety of economic participation by redevelopment agencies to private developments. He pointed out that compared to other projects in the State, the funding requested by the Mt. Shasta Mall, both in terms of dollars and percentage, is relatively low. Mr. Perry highlighted viewgraphs which depicted the proposal's main points. He summarized the action that both the City Council and the Agency were being requested to take as follows: (1) Ratify the project's Negative Declaration; (2) Approve Use Permit UP-3-98, subject to modifications of Conditions 8 and 22(b) as previously discussed, to expand the Mt. Shasta Mall, reconfigure parking, relocate the transit stop, and obtain a parking credit for the transit stop; (3) approve the vacation of public street interest on the outer two lanes of certain segments of Canby Road in order to reconfigure Canby Road adjacent to the Mt. Shasta Mall from a four-lane street to a two-lane street with 108 diagonal parking spaces; (4)City Council approve a temporary 20-year easement to the Mt. Shasta Mall for 108 parking spaces in the vacated portion of Canby Road; (5) Agency approve up to $504,000 for building, plan check, and development fees for the Gottschalks Department Store in the form of a reimbursement to the.Mt. Shasta Mall after the Gottschalks Department Store is constructed and opened; (6) Agency make the necessary findings in order to approve the aforementioned expenditure; (7) City Council confirm the Agency's findings and use of funds; (8) Agency authorize the Vice Chairman to sign the Participation Agreement on behalf of the Agency; and (9) City Council authorize the Mayor to sign the Participation Agreement on behalf of the City. He concluded by reviewing what the project is expected to accomplish, the benefits anticipated in the first year, and the return on investment to the community. City Manager Warren explained that there are 400 redevelopment agencies in the State of California. He stated that all of these agencies use their money to better their communities through such things as infrastructure, land write-downs, fees, public benefit projects, etc. He indicated that Redding has historically been fairly conservative and used its redevelopment funding for infrastructure. He related, however, that the recent priority setting process has changed the City's outlook and directed its focus to partnerships and community projects. He viewed the Gottschalks' proposal as a partnership that requires a very small investment on the City/Agency's part (2.7 percent); is a very safe investment; provides a potential of 26 to 40 percent return; and potentially provides funding for identifiable needs in the General Fund, i.e., streets, fire, personnel, police personnel, swimming pool, etc. He indicated that the City has generally constructed infrastructure prior to a project being identified. This proposal allows the infrastructure to be developed in conjunction with a project, thereby allowing the City to know what it is going to get for the expended funding and its anticipated return on investment. He believed the proposal made good business sense and would provide assistance to a major contributor to our General Fund and tax increment revenue stream. He opined that not approving the proposal could be potentially detrimental to the General Fund and the CHC Redevelopment Project Area. City Attorney Wingate stated that he was satisfied that the findings as presented in the Report and resolution could be made by both the City Council and the Agency. 7/28/98 198 Council/Agency Member Cibula noted that the traditional use of redevelopment funding has been for public improvements, rather than for forgiving development fees. In response to Council/Agency Member Cibula, Mr. Warren replied that if the City/Agency opted to fund the development of public improvements, rather than pay for the development costs, the traveling public, as well as the businesses, in that area would benefit. He indicated that the traffic impact fees (TIF) received from the Mt. Shasta Mall could be used to fund some of these improvements. In response to Council/Agency Member Cibula, Mr. Wingate acknowledged that the proposed agreement meets with his approval. David Regnell, 5862 Diamond Ridge Road, related that he was a private business owner and estimated that approximately 85 percent of his clientele are in the upper economic scale. He stated that he consistently hears that there is a lack of merchandise selection in the Redding area, and consequently these individuals shop out of the area, thereby, contributing to the sales leakage. He pointed out that conversations with these individuals revealed that they also purchase merchandise, other than clothing, when they shop out of the area. He opined that Gottschalks would assist in supporting the local economy if it is given the opportunity. Mary Machado, 2797 Bechelli Lane, owner of Norell Personnel Agency, related that she was here to speak as a concerned business owner. She indicated that the City needs to make decisions which benefit the businesses, the City, and the community. She believed that the approval of the proposed project would accomplish this by bringing an upscale store to the Mt. Shasta Mall. She pointed out that the proposed project would bring shoppers back to the Mt. Shasta Mall and benefit all the Mall's tenants, create new full-time and part-time jobs, and generate additional property tax and sales tax revenue. She urged the City/Agency to approve the project, as it would provide a positive economic benefit for the community. David Spath, Platinum Mortgage, noted that after approximately two and one-half years, the property tax revenue would go back into the community. He urged the approval of the project as it would create more jobs, thereby generating income which could be spent within the community. David Scott, 1056 River Ridge Road, stressed the importance of carefully reviewing development partnerships. He encouraged the City/Agency's approval of this project as it would provide a return on the investment, increase the tax base, and shore up the Mt. Shasta Mall which is currently declining. Patt Burris, 2797 Bechelli Lane, stated the importance of spending locally, but noted that there are items which cannot be found in the Redding area. She believed that Gottschalks would fill this void in the community. She favored the approval of the Gottschalks' project as it would be good for the community, provide employment, and retain money in the community by encouraging local shopping, as well as entice tourists to shop while in Redding. Jerry Martin explained that he owns a business in the Mt. Shasta Mall. He believed that the Gottschalks' proposal represented a win-win situation, as it not only creates jobs, but brings an additional wing to the Mall which will attract new businesses and increase traffic through the Mall. Mark Lascelles, 230 Hartnell Avenue, opined that the project would raise the community's standard of living, expand its economic base, create new jobs, and increase the tax base. It, therefore, deserved the City/Agency's support. James Famolette, Gottschalks' President and Chief Executive Officer, appreciated the City/Agency's support. He indicated that Gottschalks is interested in Redding and is committed to locating here. He urged the City/Agency's support of the project which is anticipated to benefit the community through jobs, merchandise, and tax revenue. 7/28/98 199 Jennifer Coleman-Moore, 2810 Roberts Court, owner of Shasta Naturals in the Mt. Shasta Mall, requested that the City/Agency support the Gottschalks' proposal. She concurred that the Mt. Shasta Mall is currently declining and there is a need for a strong retail anchor in order for the small merchants to expand. Brandy Murray, 1110 Shasta Street, President of the Shasta County Board of Realtors, related that the Board of Realtors respects the opinions of those business people supporting small business and are concerned about the area's unemployment rate. The Board supports the addition of Gottschalks to the Mt. Shasta Mall and the use of the redevelopment funds as proposed. She stressed the importance of retaining tax dollars in Shasta County. Frank Straz7arino, 747 Auditorium Drive, Greater Redding Chamber of Commerce's President and Chief Executive Officer, conveyed that Nit. Shasta Mall is an important amenity to the community. He viewed the proposal as an opportunity for the community and pointed out that a 2.4 year payback is an outstanding return on investment. He opined that Gottschalks is a company with integrity and is offering jobs, as well as careers in retail, for individuals within Shasta County. He explained that small businesses are best represented by small business owners and this is a project which would benefit small businesses. He indicated that during a recent radio talk show he was asked what was wrong with the project, and he honestly could not find anything wrong with the project. He urged the City/Agency to approve the project. Manny Ornellas, 5800 Airport Road, confirmed that there is sales leakage, as his wife shops out of the area. He stated that he cringes when he thinks of the City giving away money to private industry, but related that when he located in Redding, the City waived fees for him. Marge Cantrell indicated that she favored keeping tax dollars local, but she expressed concern with granting a 20-year provision for parking on Canby Road when a considerable amount of the property in the immediate and surrounding areas was still undeveloped. She suggested that the 20-year provision be reduced. She also recommended that the City/Agency change the agreement to provide reimbursement for infrastructure, rather than fees and permits. Dwight Bailey, 941 Mussel Shoal, related that the Planning Commission was not provided with the alternative to place a traffic signal at Dana Drive, but was rather told that there would be no left turn lane. He asked that the City/Agency take the following action: (1) Not approve the abandonment application as recommended. He noted that the reports to the Planning Commission indicated that the street abandonment would not have any type of impact and questioned whether this was accurate; (2) Approve the Use Permit; (3) Not approve the reimbursement of fees; and (4) Not approve the remaining recommendations. He also expressed concern regarding the agreement being considered this evening and he urged the City/Agency not to approve it until it had been reviewed further. Nannette Thomas, 4333 Heather Ridge Lane, co-owner of Sierra Receivables Management, urged the City/Agency to approve the proposal as presented. She stated that growth is inevitable and it should be welcomed with open arms. She opined that Gottschalks would bring additional businesses, jobs, and enhanced sales to the area. Doug Burris, 11831 Ceramic Way, Chairman of the Greater Redding Chamber of Commerce, explained that the Chamber's Board of Directors voted unanimously to support the Gottschalks' project. He related that the City's participation in this project would stop sales leakage, improve the Mt. Shasta Mall's performance, and provide jobs to the community. He opined that the use of the Agency's funding for this purpose was both legal and appropriate and would provide an excellent return on the investment for both the City and the community. He stressed that the project should be considered on its own merit, but strongly urged that the City/Agency approve the request. Pat Bridges, 4446 Tralee, Advertising Director of the Record Searchlight, read a letter from the Record Search/igh!'s General Director, which indicated that the City is dependent on the local retail environment and Gottschalks would provide a needed catalyst to the community. 7/28/98 200 Vince Carlton, 900 Canby Avenue, expressed concern about the increased traffic on Churn Creek Road and the projected development yet to occur in the immediate and surrounding areas. He believed that it was premature to consider whether to reduce Canby Road from four lanes to two lanes in order to allow additional parking on Canby Road before additional development occurred and the traffic impacts were known. He noted that a dangerous situation exists in the vicinity of the Bella Vista Water District and questioned who was responsible for the sidewalks. He urged the City not to approve the request to abandon portions of Canby Road and encouraged the City/Agency to use the redevelopment funds for projects which had previously been projected for completion. Mr. August stated that he would look into the issue regarding the sidewalk in the area of the Bella Vista Water District and notify Mr. Carlton of his findings. Kent Dagg, Shasta Builders' Exchange, complimented staff on the report presented this evening. He explained that a project of this magnitude would involve a general contractor, as well as approximately 30 subcontractors and suppliers. It would utilize an estimated 100 to 150 workers with salaries ranging from $12 to $35 per hour. He expressed appreciation to the City and Gottschalks for their willingness to involve local contractors in the bidding process, but noted that the Agreement did not specify that there would be a public bid opening. On behalf of the Shasta Builder's Exchange and its membership, he urged the City/Agency to support the Gottschalks' project. Mark Friedman, 2002 Fox Hollow Lane, noted that the Mt. Shasta Mall is at a cross road in that it could either take major steps to make improvements or take no action and decline and ultimately fail. He stressed that Gottschalks is an important catalyst in improving the Mall and attracting other retailers. He highlighted the information contained in the Shasta Mall Associates' presentation information dated July 28, 1998, incorporated herein by reference, which outlined the work necessary to accommodate Gottschalks, the rationale for requesting public assistance, and the benefits to the City. He requested that the City/Agency approve the request before it this evening. Charles W. Alexander, 4410 Westside Road, stated that while he is in general support of the proposed project, he was concerned about utilizing public funding and questioned what safeguards were in place to ensure small owner-operated businesses would not have to bear the burden of Proposition 62. Richard Green, 3015 Pioneer Drive, Chairman of the Economic Development Council (EDC), explained that generally this type of project would not come under the auspice of the EDC, as its primary mission is industry recruitment. He stated, however, that the EDC does encourage public/private partnerships which provide a return on dollars to the community, and based on the numbers presented, this is an ideal project and should set a precedent for future public/private partnerships. Therefore, the EDC urges the City/Agency to support this public/private partnership. Randall C. Nelson 420 Redcliff Drive, attorney with the law firm of Carr, Kennedy, Peterson and Frost, stated that he represented the owner of the property currently occupied by Barnes and Noble and Office Max who is strongly opposed to the proposed closure of one of the driveways on Canby Avenue due to grade and safety issues. He noted that his client had not been involved in any discussion regarding moving this driveway until receiving preliminary drawings approximately one week ago. He questioned the City's legal right to take this driveway and related that there may be potential legal activity if a satisfactory alternative could not be reached. Mr. Perry explained that the proposal is to shift the driveway in front of Office Max approximately 30 to 40 feet. Shawn Means, 1085 De Moll Drive, General Manager of.Deb's Hallmark and President of the Mt. Shasta Mall Merchants Association, stated that the Mt. Shasta Mall Merchants Association backs the proposed project 100 percent. She indicated that it would provide the necessary incentive to shop locally, as well as create additional jobs and tax revenue and attract other retailers to the area. She urged the City/Agency to vote "yes" on Gottschalks. 7/28/98 201 Joe Levy, P.O. Box 865, Palo Cedro, opined that providing taxpayer money to a private enterprise, such as the Mt. Shasta Mall, was not a premise he supported. In summary, he supported the approval of the Use Permit; opposed the closure of any lanes on Canby Road; and opposed items 3 through 7 from the standpoint of both a taxpayer and a business owner with competing projects. He noted that none of the organizations speaking this evening had taken a sealed ballot vote from their memberships to ascertain the support for Gottschalks. He opined that the Mt. Shasta Mall is failing due to its excessive rent and most tenants are renting on a month-to-month basis. He stated that redevelopment in general has a history of making bad decisions and causing the taxpayers billions of dollars in mistakes. He stressed that the Mt. Shasta Mall is not blighted, it is merely mismanaged. He opposed the use of redevelopment funding as proposed as it represented corporate welfare. Harry Barker related that he had been a resident of Redding for over 31 years and owned one of the first businesses at Hilltop Drive and Cypress Avenue. He expressed disappointment that only 60 percent of the City Council/Agency were represented this evening. He stated that while he hopes the Mall is successful in attracting Gottschalks, he is adamantly opposed to closing Canby Road to facilitate parking requirements the Mall has with its anchor tenants. Mayor Kehoe determined that there was no one else present wishing to speak on these matters and closed the City Council's public hearing. Council/Agency Vice Chair Kight questioned whether the driveway issue at the Office Max site was being addressed. Mr. Perry explained that the proposal is only to shift the driveway, not close it. The City was advised that the property owners would not make a decision on the proposal until the City had made a determination on the Gottschalks' project. Mr. Swanson interjected that Condition 12 in the draft conditions of approval allows the Public Works Director to make the determination relative to the driveway after consultation with the property owners. Council/Agency Vice Chair Kight asked Mr. Famolette whether a public bid opening process would be acceptable to Gottschalks. Mr. Famolette acknowledged the concerns of the construction industry regarding a public bid opening and indicated that Gottschalks would make every attempt to involve Mr. Dagg and the Builder's Exchange as much as possible. Council/Agency Vice Chair Kight stressed the importance of local people working on local projects and urged Gottschalks to consider utilizing a public bid opening process, thereby allowing individuals to know the low bidders and subcontractors. Mr. Famolette noted that Gottschalks prides itself on being the hometown store and will do its best to live up to that reputation in the Redding area. In response to Council/Agency Member Cibula, Mr. Warren acknowledged that if the Agency approved funding $375,000 in public improvements and forgave $100,000 in fees, but still required the project to pay the Traffic Impact Fees, the project could proceed. CounciUAgency Members Cibula and Kight favored spending redevelopment funding on traditional uses, such as public infrastructure improvements. In response to Mayor/Agency Member Kehoe, Mr. Hiller reviewed the sales tax estimates and the associated sales tax revenue. After visiting a Gottschalks store that carried similar merchandise to the one proposed in Redding, staff concluded that approximately one-half of the merchandise would be new to Redding. Therefore, staff estimated that approximately $6.5 million in sales tax would be siphoned from other retailers with the addition of Gottschalks. In response to Council/Agency Vice Chair Kight,Mr. Warren stated that the City of Redding's share of additional sales tax generated by the Gottschalks' project would go directly back to the General Fund. 7/28/98 202 Council/Agency Vice Chair Kight explained that the City has an obligation to its citizens to provide services, i.e., police, fire, etc., much of which is funded by the City's General Fund. He noted that when he was campaigning for the office of City Council, one of the issues which was discussed was the need to do the right projects first. He said it is important to recognize that each of these projects has a cost and the only way to generate funding for these projects is to increase sales tax revenue. He addressed the importance of creating jobs, while at the same time attracting manufacturers to the area. He viewed the Mt. Shasta Mall as a tremendous asset to the community and a major source of income to the City which cannot be allowed to deteriorate. He indicated that redevelopment funding allows the City to make infrastructure improvements, which in turn will allow the Mt. Shasta Mall to expand and increase the City's tax revenues. He favored moving forward with the Gottschalks' project in terms of providing funding for infrastructure improvements. Mayor/Agency Member Kehoe explained that after studying the material provided and listening to the testimony this evening, his position on the project had not changed. He believed the City Council/Agency's action in this area was premature. He opined that comprehensive planning and reasoning would determine the community's destiny. He stated that an outstanding speaker at a luncheon today related that retail business dilutes the economic base and does not generate high- paying jobs. He believed that an economic development element should be included in the City's General Plan with established goals and objectives, performance standards, a community vision, and substantial public participation. He indicated that without seeing the Mt. Shasta Mall's financial records, their ability to not provide the requested funding is merely speculation. In addition, the relationship between the Mt. Shasta Mall and J.C. Penney's has not been addressed. He stated that it is difficult to believe that 2.7 percent, or $504,000, of an $18 million project would be a deal breaker. He noted that this would equate to a $21,913 investment by each of the 23 owners of the Mt. Shasta Mall. He related that the City's economic analysis was too narrow in scope and application by only focusing on the Mt. Shasta Mall and Gottschalks. He explained that the community has told him that the majority of businesses and employment in the City of Redding is comprised of small businesses, yet historically the City has not done much to assist them, yet it offers assistance to out-of-town business owners. He indicated that through creative management, the Agency has been able to dedicate, primarily through the public needs assessment, $20 million to community improvements. He pointed out that the City has increased electric utility rates by 23 percent and is now being asked to provide $504,000 to the Mt. Shasta Mall; yet, the residents are not able to understand why the City is not able to maintain streets and increase personnel within the Police and Fire Departments. While there are logical explanations for most of these issues, the public perception is that the City/Agency is "giving away the farm" and not doing anything to improve the community's quality of life. Council/Agency Member Cibula thanked members of the community who had taken the time to contact him regarding this matter and to those who were present this evening. He opined that the City of Redding needs to remain competitive and send a signal that it has a good business environment. He expressed concern regarding the retail sales leakage and the expenditure of public funds. After reviewing the issues, he believed that the Gottschalks proposal made good business sense, as the funds would be paid back in a relatively short time period. He viewed it as a positive investment in the community. He favored changing the nature of the agreement and using the majority of the proposed funding for public improvements, which is a traditional use of Agency funds. He shared Mayor/Agency Member Kehoe's concerns relative to small businesses and also believed that the City should begin forming a sound economic policy which focuses on bringing manufacturing jobs to the area. He recommended that the Agency provide $375,000 to be used for public improvements and authorize the forgiveness of $100,000 in fees, with the City paying for the proposed traffic signal improvements from the estimated $400,000 in Traffic Impact Fees to be received from the project. 7/28/98 203 The following action was taken by City Council: MOTION: Made by Council Member Kight, seconded by Council Member Cibula, to make the following findings regarding Use Permit UP-3-98 and Abandonment Application A-7-91: 1. The project is compatible with the Redding General Plan; 2. The project will not significantly alter existing land form; 3. The project is compatible with surrounding land use; 4. The project is compatible with the code of the City of Redding, California; and approve the Negative Declarations authorized by the Development Services Department on June 1, 1998. Voting was as follows: Ayes: Council Members - Cibula and Kight Noes: Council Members - Kehoe Absent: Council Members - McGeorge Abstain:: Council Members - Anderson MOTION: Made by Council Member Kight, seconded by Council Member Cibula, to approve Use Permit UP-3-98 by the Mt. Shasta Mall Associates with the following changes to the Conditions of Approval: Condition Nos. 8 and 22(b) to be amended to eliminate reference to the removal of a public sidewalk on the west side of Canby Road and require tree planting and other landscape improvements to be installed between the back of the sidewalk and parking lot. Voting was as follows: Ayes: Council Members - Cibula, Kight, and Kehoe • Noes: Council Members - None Absent: Council Members - McGeorge Abstain: Council Members - Anderson MOTION: Made by Council Member Kight, seconded Council Member Cibula, that Resolution No. 98-108 be adopted, a resolution of the City Council of the City of Redding ordering the vacation of portions of that segment of the Canby Road right-of-way located north of Dana Drive and east of the Mt. Shasta Mall (A-7-91). Voting was as follows: Ayes: Council Members - Cibula and Kight Noes: Council Members - Kehoe Absent: Council Members - McGeorge Abstain: Council Members - Anderson Resolution No. 98-108 is on file in the office of the City Clerk. The following action was taken by the Redevelopment Agency: MOTION: Made by Agency Member Cibula, seconded by Agency Member Kehoe, to authorize the expenditure of up to $375,000 to the Mt. Shasta Mall (developer) for reimbursement of costs associated with public improvements as set forth in the Participation Agreement and authorize the waiver of $100,000 in development fees, with the City paying for the proposed traffic signal improvements from the estimated $400,000 in Traffic Impact Fees to be received from the project. Voting was as follows: Ayes: Agency Members - Cibula and Kight Noes: Agency Members - Kehoe Absent: Agency Members - McGeorge Abstain: Agency Members - Anderson MOTION: Made by Agency Member Cibula, seconded by Agency Member Kehoe, to adopt Resolution No. 98-007, a resolution of the Board of Directors of the Redding Redevelopment Agency authorizing the execution of a Participation Agreement, as amended, between the Redding Redevelopment Agency, the City of Redding, the owners of the Mt. Shasta Mall, and Gottschalks, and making the findings with respect thereto. 7/28/98 204 Voting was as follows: Ayes: Agency Members - Cibula and Kight Noes: Agency Members - Kehoe Absent: Agency Members - McGeorge Abstain: Agency Members - Anderson Redding Redevelopment Agency Resolution No. 98-007 is on file in the office of the Redevelopment Agency. The following action was taken by City Council: MOTION: Made by Council Member Kight, seconded by Council Member Cibula, that Resolution No. 98-109 be adopted, a resolution of the City Council of the City of Redding authorizing the execution of a Participation Agreement, as amended, between the Redding Redevelopment Agency, the City of Redding, the owners of the Mt. Shasta Mall, and Gottschalks, and confirming the findings with respect thereto. Voting was as follows: Ayes: Council Members - Cibula and Kight Noes: Council Members - Kehoe Absent: Council Members - McGeorge Abstain: Council Members - Anderson Resolution No. 98-109 is on file in the office of the City Clerk. The following action was taken by the Redevelopment Agency: MOTION: Made by Agency Member Cibula, seconded by Agency Member Kehoe, to authorize the Agency's Vice Chairman to sign the Participation Agreement, as amended, between the Redding Redevelopment Agency, the City of Redding, the owners of the Mt. Shasta Mall, and Gottschalks. Voting was as follows: Ayes: Agency Members - Cibula and Kight Noes: Agency Members - Kehoe Absent: Agency Members - McGeorge Abstain: Agency Members - Anderson The following action was taken by City Council: MOTION: Made by Council Member Kight, seconded by Council Member Cibula, to approve a 20- year easement to the Mt. Shasta Mall for 108 parking spaces in the vacated portion of Canby Road and authorize the Mayor to sign the Participation Agreement, as amended, between the Redding Redevelopment Agency, the City of Redding, the owners of the Mt. Shasta Mall, and Gottschalks. Voting was as follows: Ayes: Council Members - Cibula and Kight Noes: Council Members - Kehoe Absent: Council Members - McGeorge Abstain: Council Members - Anderson 7/28/98 205 ADJOURNMENT There being no further business, at the hour of 7:56 p.m., Mayor Kehoe and Agency Vice Chairman Kight declared the meeting adjourned. APPROVED: Mayor ATTEST: • / &AA* MA Assistant City Cler 7/28/98