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1997-06-16 Special CIC MinutesSPECIAL JOINT MEETING OF THE CITY COUNCIL HOUSING AUTHORITY BOARD OF COMMISSIONERS AND COMMUNITY IMPROVEMENT COMMISSION TUESDAY - - -JUNE 16, 1997- - -7:30 P.M. President Appezzato called the meeting to order at 7:10 p.m. Vice Mayor DeWitt led the Pledge of Allegiance. ROLL CALL MINUTES 270 PRESENT: Councilmembers/Community Improvement Commissioners/Housing Authority Board of Commissioners Daysog, Kerr, Lucas, DeWitt and Mayor/Chair Appezzato - 5. ABSENT: None. (97-016) Minutes of the Annual Community Improvement Commission Meeting of May 6, 1997. Commissioner DeWitt moved approval of the Minutes. Commissioner Lucas seconded the motion, which carried by unanimous voice vote - 5. JOINT ACTION (City Council, Housing Authority Board of Commissioners, and Community Improvement Commission) REGULAR AGENDA ITEMS Councilmember Kerr moved that the Resolution "Declaring the Creation of an Irrevocable Trust for Distribution of Payments Made by the Browman Development Company to Acquire the Real Property at 1916 Webster Street," on the Housing Authority Board of Commissioners Agenda, be addressed first. Councilmember Lucas seconded the motion. Under discussion, and in response to Vice Mayor DeWitt's inquiry, Councilmember Kerr stated the Resolution determines where the money from any sale of the Housing Authority land will go; that the proposal is for the money from the sale of the Housing Authority, approximately $650,000, be placed into rehabilitating the upper two stories of the Webster Street Hotel on the corner of Lincoln Avenue and Webster Street; the Housing Authority would be trading clear title to strategically placed commercially-zoned land for the right to pay rent on the upper two stories of the Webster Hotel for thirty years; the Housing Authority would not own the building; Special Joint Meeting City Council, Housing Authority Board of Commissioners, Community Improvement Commission June 16, 1997 27I the lease states the Housing Authority would be paying a pro rata share of taxes and insurance, and there would be real taxes of $6,500 a year added to it; the lease also states the Housing Authority would absorb pro -rated managing costs; it is suggested that the Housing Authority be allowed to raise the rent whenever the tenants' periodic lease(s)s expire; the Housing Authority cannot raise rents arbitrarily, because the Authority has HUD and market limits; and the Housing Authority would be in a situation of possibly losing money. Vice Mayor DeWitt stated that he would vote in favor of taking the Resolution out of sequence. Councilmember Daysog stated that he was not in favor of moving the item out of order. Mayor Appezzato stated the Housing Authority Board of Commissioners had not discussed the Webster Hotel, and that he will support the motion to move the Resolution forward; if the Resolution receives four votes, there will be four votes for the Project. Commissioner Kerr stated that she could not see trading the land for the right to pay rent to someone else for thirty years. Don Roberts, Alameda, stated that he was in favor of the Resolution; the Resolution simply stated that before there is distribution of payments, four affirmative votes are required to approve spending the money for low - income housing elsewhere in the City; and he urged adoption of the Resolution. Commissioner Daysog stated proceeds should be used on Webster Street; and that he is not in favor of changing procedures to require four affirmative votes, because it could hamper residential and /or commercial developments. Chair Appezzato stated changing the procedures could set a very dangerous precedent. Ed Clark, Alameda, stated that he believed Commissioner Kerr's suggestion to move the item forward was a good one. On the call for the question, the motion carried with the following voice vote: Ayes: Commissioners Kerr, Lucas, DeWitt and Mayor Appezzato - 4. Noes: Commissioner Daysog - 1. In response to Commissioner DeWitt's question regarding the necessity for four affirmative votes in favor of the Irrevocable Trust, Commissioner Kerr stated the Webster Hotel proposal was poor and should require four votes; and it was not her intent to prevent the monies from being used in any particular part of the City. Commissioner Daysog stated that he saw no reason to impose the four - affirmative -votes requirement, and believes the citizens and Special Joint Meeting City Council, Housing Authority Board of Commissioners, Community Improvement Commission June 16, 1997 Board can arrive at a rational conclusion. HOUSING AUTHORITY BOARD OF COMMISSIONERS Resolution "Declaring the Creation of an Irrevocable Trust for Distribution of Payments Made by the Browman Development Company to Acquire the Real Property at 1916 Webster Street." Adopted. Commissioner Kerr moved adoption of the Resolution. Commissioner Lucas seconded the motion, which carried by the following voice vote: Ayes: Commissioners DeWitt, Kerr, Lucas, and Chair Appezzato - 4. Noes: Commissioner Daysog - 1. (CIC 97-017; CC 97-310) Public Hearing to Consider Proposed Disposition and Development Agreement with Browman Development Company, amended to incorporate Planning Board Resolution No. PB- 97-43, for the Sale and Development of Certain Real Property at Webster Street and Atlantic Avenue. Mayor Appezzato opened the public portion of the Hearing. Proponents Phillip Regan, Alameda Reverend Donald Alexander *** Tim Kelley, Keyser Marston Assoc., Inc., San Francisco, stated he was available to answer questions. In response to Councilmember Lucas's inquiries, Mr. Kelley stated there was a mix of recommendations in the Keyser Marston Report regarding the economic revitalization of Webster Street, including recommendations to include locally-owned businesses along Webster Street and consideration of well-financed tenants to support new developments; and the report also indicates that Payless Drugs might be endangered by Walgreens locating on the proposed site. Don Roberts, Alameda, objected to the process; he stated a better anchor tenant could have been selected, and hoped it would be a successful development. In response to Mr. Roberts' inquiry regarding the Appraisals, the City Attorney stated members of the audience were not restricted from referring to contents of the Appraisal reports during the Public Hearing. Proponents (continued) Dick Lyons, Alameda. Darryl Browman, Browman Development Corporation (BDC), stated that Special Joint Meeting City Council, Housing Authority Board of Commissioners, Community Improvement Commission June 16, 1997 27 he believes Webster Street needs the project for revitalization, BDC expended close to $100,000 in bringing the Project forward, and the Project is the jump start that Webster Street needs to move ahead. Marcelline Mahern, City of Campbell, Director of Real Estate at TOGO's Eatery. Charles Ward, Alameda Anna McDonald, Alameda Kiran Patel, Days Inn Bill Garvine, Chamber of Commerce Del Blaylock, Greater Alameda Business Assn. Michael Torres, Alameda Steven Ishino, Real Estate Manager, Starbucks Coffee Company. Opponents Tim McMuldren, Alameda Ed Clark, Alameda. Mayor Appezzato closed the public portion of the Hearing. Councilmember Daysog stated it is clear that any development must satisfy two requirements: 1) meet established laws and regulations, and 2) meet the standards set by the community; the Browman Project has satisfied all requirements; the Browman Project has been redesigned to take into account key elements of Alameda; the Project will revitalize all of Alameda; Council needs to turn to alternative sources of revenue; and the City needs to maintain a positive business climate. Councilmember Kerr addressed the price of the property; she stated that the Planning Board defined the saleable parcel as being south of the existing sidewalk, and that the final survey used said boundary; subsequent to the survey, the Community Development Department let out a contract to appraise the City -owned parcel which is the triangular parcel bounded by Constitution and Atlantic Avenues; the appraisal shows a thirty -five foot setback from the southern edge of the sidewalk, and most of the usable land in the City -owned parcel was eliminated; the City should not be taking 16,000 square feet of usable land and selling it as if it had only 6,200 square feet of usable space; and it is a serious problem which must be resolved. In response to Councilmember Lucas's comments regarding the City's Appraisal, Joyce Diaz, an independent appraiser, stated she was requested by the Community Development Department to look at the appraisals; that the Property Sciences Group's (PSG) Appraisal did not make a deduction for the green belt, however, [PSG) deducted approximately 45% of the property area that, in their estimation, was not usable due to its shape; the Bailey Appraisal deducted the full width of the greenway, which she believes was an error on the Special Joint Meeting City Council, Housing Authority Board of Commissioners, Community Improvement Commission June 16, 1997 274 Appraiser's part; if the Council and the Developer can agree on the size of the parcel, she would propose the average appraised price be calculated on a per-square-foot basis; both appraisals give a dollar-per-square-foot value, and it might be more accurate to apply that average per-square-foot value to the true parcel size; and an averaging of the appraisals was contemplated in the Agreement and applied to an accurate size. Mr. Browman, Developer, stated in response to Councilmember Kerr, that he believed the reason for different values was the usability issue and the value of the property on the open market. Ms. Diaz stated that the instructions to the appraisers were that the properties were to be appraised without consideration of any entitlements; the developer was not to be required to pay an additional amount for the property by virtue of the work that he had put into it to obtain approvals and entitlements; the Bailey Appraiser stated that he was under the impression, totally disregarding any approvals that Mr. Browman had obtained, that the value was not to be influenced by a synergy of putting parcels together; and that the City's triangular piece was independent of the Housing Authority parcel. In response to Councilmember Kerr's inquiry regarding Mr. Browman's opinion of the price, Mr. Browman stated that he believed the price was somewhere between the two appraisals; if the City said it would go with the PSG appraisal and average the other appraisal, he would approve; the two independent appraisals were very close in terms of appraisal process--a recognized method for coming up with value; and he would like to resolve the issue tonight. Councilmember Kerr stated that her resolution would be to take the average per square foot and multiply by the usable square foot; according to the Phillippi Engineering Survey, it is 16,500 square feet; and the average price is $10 per square foot, and adjacent uncomplicated parcels are $19 per square foot. Mr. Browman stated that the Belt Line is $7.53, which is a private fair market transaction. Mayor Appezzato stated that he was prepared to go with an average price between the two appraisers. Vice Mayor DeWitt commented it would be fair to both the developer and the City. In response to Mayor Appezzato's inquiry, Ms. Diaz stated if the size could be reconciled, the average price per square foot should be examined. In response to Councilmember Lucas's inquiry regarding the parcels appraised separately, the Community Development Director stated the parcels had to be appraised unassembled; if the proposal failed, no Special Joint Meeting City Council, Housing Authority Hoard of Commissioners, Community Improvement Commission June 16, 1997 2'7 developer could buy the parcels assembled. Councilmember Lucas stated that she did not understand why the standards for the appraisal were set at the lowest possible value for the City. The Community Development Director stated that the focus was to use the results of a Request for Qualifications to pick qualified appraisers, it is the customary procurement [process]; and based on the certifications, credentials, and prior experience, individual appraisers were sought. Mr. Browman explained the reason why an assemblage value could not be used is Brownian Development Company is a private party with a private contract to purchase the property directly situated in the middle between the City and the Housing Authority parcel; BDC intends to close on, that property within 60 or 90 days; and it cannot be assumed there is an assemblage from a City -owned perspective. In response to Councilmember Daysog, Mr. Browman stated that he would be willing to live with the higher value on the property; the appropriate method is to look at it on a gross basis; however, if the Council believes it is more appropriate to look at it on a square- footage basis, he would be willing to look at some other alternative. Councilmember Daysog stated that he believes the City is making a great investment, and Council should move forward with Mr. Browman's recommendation [higher value]. In response to Councilmember Kerr, Mr. Browman stated BDC is willing to pay fair market value at this point, and he is willing to move forward and pay the higher of the two appraised values. Councilmember Kerr stated that the Bailey Appraisal should never have seen the light of day; she apologizes for any last minute trauma to Mr. Browman; and the appraisals should have been available a couple of months ago. Mr. Browman noted that the net square footage that is constantly looked at is a result of his project entitlements; if a new project came in, it would have to go through a whole new set of hurdles; he believes it is part of the uncertainty that the appraisers had to take into mind: an assemblage of an adjacent piece of property that the Browman Development Company has privately under Contract; without that, there is absolutely no way there would be anything near that net square footage; and he understands that the appraisers were not to include the $100,000 BDC spent on the entitlements and the two years worth of time. Dick Rudloff, Public Works Coordinator, explained how the parcel size of approximately 6,200 square feet was determined. Special Joint Meeting City Council, Housing Authority Board of Commissioners, Community Improvement Commission June 16, 1997 276 Councilmember Kerr stated everyone seems to agree on the square footage; the only issue appears that Bailey did not pay attention to the Planning Board's decisions. Mr. Rudloff commented that the Planning Board basically states to sell the land to the Browman Development Company, and that public improvements will be required of the Developer. Councilmember Kerr stated that the square footage is known, and no one is any longer talking about anything in the Atlantic Avenue Right of Way or north of the southern edge of the sidewalk. Mr. Rudloff inquired whether what was being discussed was selling land south of Atlantic Avenue, to which Councilmember Kerr responded south of the sidewalk. Mr. Rudloff inquired whether the land would not be buildable and be required for public improvements, to which Councilmember Kerr responded approximately 4,000 - 6,000 square feet would be required for the greenway and 16,500 square feet was usable land; and 21,000 was the total area of the saleable parcel. Mr. Rudloff stated that he did not believe there was argument at the onset with the square footage behind the sidewalk, it seemed to be from there on, and he would need to meet with Browman's engineer to figure it out. Councilmember Kerr stated Phillippi Engineering and the Developer's Architect agree on 21,000 plus square feet, and substraction of the two Easements; that the Developer's drawing/projection of the required greenway within the saleable parcel is exactly the same as Phillippi Engineering's survey; the question is whether to sell it at $10 a square foot for 6,000 square feet, at $10 a square foot for 16,000 square feet, or at $7.50 for 16,000 square feet; and that is the issue. Vice Mayor DeWitt inquired whether the Developer would agree to $7.56 per square foot, to which Mr. Browman responded if it would resolve the issue. Councilmember Kerr moved approval of 16,586 square feet: the total area defined by Phillippi Engineering for the saleable City parcel, minus two Bike Path Easements as surveyed--the total City-owned parcel minus Easements D and E at the Railroad price,--(and the Agreement]. Vice Mayor DeWitt seconded the motion. In response to Mayor Appezzato, the Acting Public Works Director Jim Sanderson stated the price comes to $125,390. In response to Mayor Appezzato's inquiry whether Mr. Browman would be able to do the Project, Mr. Browman stated BDC, at this point, Special Joint Meeting City Council, Housing Authority Hoard of Commissioners, Community Improvement Commission June 16, 1997 would get it done. On the call for the question, the motion carried by the following voice vote: Ayes: Councilmembers Daysog, DeWitt, Kerr and President Appezzato - 4. Noes: Councilmember Lucas - 1. Housing Authority Board of Commissioners Report from Housing Development Manager Recommending Disposition of 1916 Webster Street, [Either by an Exchange for the Webster Hotel or the Acceptance of a Payment to be Used to Directly assist a Housing Project for Low - Income Persons] and Execution of Cooperation and Payment Agreement between the Housing Authority and the Community Improvement Commission. Don Roberts, Alameda, urged acceptance of the money for low - income persons [project]. Commissioner DeWitt stated that he is interested in cleaning up Webster Street; and although the Webster Hotel is a part of Webster Street, he does not want to hold the Project up because of it. Chair Appezzato stated that he does not have enough information to vote on the Webster Hotel. Commissioner Lucas moved to continue the matter to an indefinite time. Commissioner Daysog seconded the motion. Under discussion, Chair Appezzato stated that it makes sense to continue the matter until there is more information, although he will be favoring to use the money in the West End for whatever project will be deemed appropriate. On the call for the question, the motion carried by unanimous voice vote - 5. COMMUNITY IMPROVEMENT COMMISSION (97 -018) Report Recommending Execution of Cooperation and Payment Agreement between the City and the Community Improvement Commission, and Execution of Cooperation and Payment Agreement between the Housing Authority and the Community Improvement Commission. Commissioner Daysog moved approval of the staff recommendation. Commissioner DeWitt seconded the motion, which carried by the following voice vote: Ayes: Commissioners Daysog, DeWitt, Kerr and Chair Appezzato - 4. Noes: Commissioner Lucas - 1. Special Joint Meeting City Council, Housing Authority Hoard of Commis -iOne s, Community Improvement Commission June 16, 1997 278 SPECIAL MEETING OF THE CITY COUNCIL (97-311) Report Recommending Execution of Cooperation and Payment Agreement between the City and Community Improvement Commission. Vice Mayor DeWitt moved approval of the staff recommendation. Councilmember Daysog seconded the motion, which carried by the following voice vote: Ayes: Councilmembers Daysog, DeWitt, Kerr and Mayor Appezzato - 4. Noes: Councilmember Lucas - 1. (97-312) Introduction of Ordinance Authorizing Transfer By Grant Deed of Certain City-Owned Real Property (along Atlantic Avenue) to the Community Improvement Commission. Introduced. Ed Clark, Alameda, stated the City Council is letting down the community because it is telling Trader Joe's that it does not want them. Shiela McElroy, Alameda Executive Director, West Alameda Business Association, stated the Brownian Project will bring new business, increased investment and faith in the democratic system. Michael DeHart, Alameda, Co-President, West Alameda Business Association, stated the purpose of Council is to represent the popular voice of the people, and Council's vote should be in support of the Project. Councilmember Kerr stated there has been a tremendous outpouring on both sides of the issue, and each Councilmember is voting for what he or she believes is best for Alameda. Councilmember Lucas stated she has received a large number of telephone calls from citizens stating that another drug store is not needed in that location or, in fact, in the City; she believes if everyone was honest, they would agree; and she will be voting against the Project. Mayor Appezzato stated if the property was not owned by the City, the market would dictate who would go there; it is not an easy project, and Council has gone forward with the interests of the community at heart. Councilmember Kerr stated the majority of Council lives in the West End and is not ignoring that area; that the Ad Hoc Committee held the matter up for six months; and the design of gateway projects is extremely important. Vice Mayor DeWitt moved approval of a transfer of the real property to the Community Improvement Commission. Councilmember Daysog seconded the motion, which carried by the following voice vote: Ayes: Councilmembers Daysog, DeWitt, Kerr Special Joint Meeting City Council, Housing Authority Hoard of Commissioners, Community Improvement Commission June 16, 1997 279 and Mayor Appezzato - 4. Noes: Councilmember Lucas - 1. Mayor Appezzato stated that previous Councils did a good job; Marina Village is a nationwide example of a project done well; Independence Plaza was done well; the project of 106 homes [at the former Alameda Drive -In Site], appears to be going well; and that there is a lot of attention given to the West End. 1-HOUSING AUTHORITY BOARD OF COMMISSIONERS Resolution "Authorizing the Disposition of Real Property at 1916 Webster Street to the Community Improvement Commission of the City of Alameda and Use of the Disposition Consideration to Directly Assist a Housing Project for Low - Income Persons." Adopted. Commissioner Kerr moved adoption of the Resolution. Commissioner DeWitt seconded the motion. Under discussion, Commissioner Daysog stated that the wording "... and use of the disposition consideration to directly assist a housing project for low - income persons" in the Resolution should be deleted. The Board, by consensus, agreed to amend the motion and revise the Resolution by deleting ". . .and use of the disposition consideration to directly assist a housing project for low - income persons." On the call for the question, the motion carried by unanimous voice vote - 5. The Chair called a recess at 9:50 p.m. and reconvened the meeting at 9:53 p.m. Commissioner Lucas stated that the City Attorney advised Board Members that the Resolution should be clarified, and Lucas read Alternative 2 of the Resolution into the record: "Upon the close of Escrow, the funds exchanged for the disposition of the property shall be deposited in a segregated fund or trust, to be used within a reasonable time to directly assist housing for persons of low income as authorized by Health and Safety Code Sections 34312 and 34312.3." In response to Commissioner Daysog's inquiry regarding the necessity for the aforementioned action, the Chair stated it was required by State law. The City Attorney explained that the action of the Board -- approval of Alternative No. 2 - -was consistent with its prior action: setting funds aside; the Health and Safety Code has certain State law requirements; and that a requirement in the Resolution is that you directly assist housing for persons of low income; and when Special Joint Meeting City Council, Housing Authority Hoard of Commissioners, Community Improvement Commission June 16, 1997 280 . . .and Use of the Disposition Consideration to Directly Assist a Housing Project for Low-Income Persons" was struck from the Resolution, that State law requirement should not be omitted. The City Attorney further stated that she understood the Council's continuing direction is to provide homeownership if at all possible. Commissioner Kerr stated the Board is not limited to putting the money into just one housing project. The City Attorney stated it would be on a four to one vote to dispose of the funds now held in the Irrevocable Trust. In response to Commissioner Daysog's inquiry regarding State law requirements, the City Attorney reaffirmed that the State law requirement was necessary because of Housing Authority property and low-income housing responsibility. Commissioner Daysog stated that he would bet the intent of the State law was to lock-in housing money that is earned for housing purposes; that the monies gained from the sale of 1916 Webster Street is not housing monies, because 1916 Webster Street is not a residential property. The City Attorney responded that 1916 Webster Street is considered an asset of the Housing Authority; if the Board does not follow the specific State law requirement, the property would be offered pursuant to the Surplus Property Act. On the call for the question, the motion carried by unanimous voice vote - 5. Report from Housing Development Manager transmitting Linoaks Senior Housing Feasibility Study. Don Roberts, Alameda, stated senior housing is a very appropriate use of the Linoaks. Marilyn Ashcraft, Alameda, Co-Chair of Library 2000, stated Library 2000 was a grass roots organization working to bring a new library to Alameda, and is opposed to any proposal that the City sell the Linoaks property to the Housing Authority to it convert to low- income senior housing. Dave Plummer, Alameda, stated that he did not think there was a better site for senior citizen housing in Alameda than the Linoaks site. Chair Appezzato stated that the voters did not support a new library; the Carnegie will require expansion and additional funds, which means going to the voters; there is no money for a new library--either the Carnegie or a new library--or for Senior Special Joint Meeting City Council, Housing Authority Hoard of Commissioners, Community Improvement Commission June 16, 1997 2,81 Housing, and questioned Mr. Plummer on where he believes the money will come from. Mr. Plummer stated citizens would be willing to be taxed on a project giving the most bang for the buck; the estimates [for the Carnegie] are below $8 Million for expansion and the rehab of 35,000 square feet; and when compared with a project which would cost over $20 Million and provide only 10,000 more square feet, there is no doubt which choice the voters would make. Frank Matarrese, Library 2000, stated that he wanted to urge the Board's support of the conclusion stated in the report; the Linoaks site has been designated in many documents as the site of a future library, including 1991 General Plan and the 1994 Business and Waterfront Improvement Plan. Commissioner Daysog stated the best option for the Linoaks is to keep it as a site dedicated for a library. Commissioner Lucas stated expansion of the Carnegie would be a reasonable project, and using the Linoaks for senior housing may be feasible in the future. In response to Commissioner Lucas, Mike Pucci, Executive Director of the Housing Authority, stated that there is are 800 on the waiting list for housing, and there an year wait. Commissioner Lucas stated the City has a higher percentage of seniors than other communities, and there is a need to plan for them. Commissioner Kerr stated that she supports Option 4, or selling the Linoaks site as soon as possible and placing the money into [Carnegie] expansion. Chair Appezzato stated maybe the question of the Linoaks site should be placed on the Ballot. Commissioner DeWitt stated there is no money to do any of the proposals presented; the timing is not correct to choose one of the options; and he moved acceptance of the report. Commissioner Daysog seconded the motion. Under discussion, Commissioner Daysog stated that he believes it is still worth dreaming about having a new library and working on it. Chair Appezzato stated that the citizens do not want to pay for a can new library; citizens think they are paying too many taxes; het that support a senior center to offset the shortages, however, would cost money; agrees the time is not right; he believes expansion of the Carnegie will cost a lot more than $7- or $8 Special Joint Meeting City Council, Housing Authority Hoard of Commissioners, Community Improvement Commission June 16, 1997 Million; he wants proof that the citizens want the Carnegie instead of the Linoaks; and perhaps the matter can be placed on the ballot in November, 1998. On the call for the question, the motion carried by the following voice vote: Ayes: Commissioners Daysog, DeWitt, Lucas and Chair Appezzato - 4. Noes: Commissioner Kerr - 1. ADJOURNMENT Mayor Appezzato adjourned the Joint Meeting at 10:40 p.m. Respectfully submitted, a4fe /-11Z Di ne B. Felsch, CMC City Clerk Secretary, Community Improvement Commission The agenda for this meeting was posted in accordance with the Brown Act. Special Joint Meeting City Council, Housing Authority Board of Commissioners, Community Improvement Commission June 16, 1997