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2001-09-04 Special CIC MinutesMINUTES OF THE SPECIAL COMMUNITY IMPROVEMENT COMMISSION MEETING TUESDAY - - SEPTEMBER 4, 2001 - - 7:31 P.M. Chair Appezzato convened the Special Meeting at 8:20 p.m. ROLL CALL - Present: Commissioners Daysog, DeWitt, Johnson, Kerr, and Chair Appezzato - 5. Absent: None. MTT\TTTTF,.q (01 -25) Minutes of the Special Community Improvement Commission (CIC) Meeting of July 17, 2001, the Special CIC Meeting (Closed Session) of August 21, 2001, and the Special Joint City Council, CIC and Alameda Public Financing Authority Meeting of August 21, 2001. Approved. Commissioner Johnson moved approval of the minutes. Commissioner Daysog seconded the motion, which carried by unanimous voice vote - 5. AGENDA ITEMS (01 -26) Recommendation to begin discussions with Foothill Partners to enter into an Exclusive Negotiating Agreement for the redevelopment of the Bridgeside Shopping Center Site. Carl Pines, IRES California, Inc. [Property owner], stated two decisions are being appealed: 1) a ruling by the Planning Department that the application to redevelop the site as a phased office park in combination with retail stores is incomplete; and 2) the Economic Development Commission's (EDC's) recommendation that the Community Improvement Commission approve entering into an Exclusive Negotiating Agreement with Foothill Partners to acquire the property, which is a condemnation or expropriation action; IRES purchased the property about 10 years ago; Lucky Stores was to remodel its store as part of a planned redevelopment of the shopping center, which Lucky Stores later denied; next, Lucky Stores posted a sign in the window that the store was going to close; the Economic Development Commission and Economic Development Department did not contact IRES California prior to designating the site as blighted; blighted properties cannot be refinanced or sold; IRES developed two economically viable plans to change the shopping center: 1) 85 homes, sponsored in conjunction with Ryland Homes, which was rejected by staff; and 2) retail stores on the ground floor of a three - building, phased office park; IRES was not consulted about the property initially and was not treated fairly; Special Meeting Community Improvement Commission 1 September 4, 2001 outlined history of negotiations with Doug Wiele, Foothill Partners; further stated a restrictive covenant on the land states Lucky must agree before any other food store can be located on the site; the City will have to condemn the lease to remove said restrictive covenant; Lucky could be awarded between $500,000 and $1,000,000; the City would also have to condemn the Rite -Aid lease and pay us about $6.5 million for the property; the cost could be between $9 Million and $9.5 Million; at a July Meeting, the EDC Chair went on record stating: "The City does not want to and does not have the money to run property;" staff is trying to play developer when the City has neither the money nor the resources; IRES will not deal with Foothill Partners; the City has not shown due diligence on Foothill Partner's proposal, in particular, on costs; the only tenant identified by IRES and Lucky was a twenty - four -hour fitness place which did not have the financial statement to support desired expensive capital expenditures; the trade area for the center is not large enough to support a food store anymore; IRES has two new proposals: 1) Home Depot made an offer to acquire the site; and 2) a major food store is willing to locate on the site; requested 90 days to commission an economic study; IRES would work with the City and Albertson's to eliminate the restrictive covenant; IRES is ready, willing and able to pursue a project which conforms to all General Plan, zoning, and specific plan criteria; the Economic Development Department designated the property as blighted without consultation and warning; the Planning Department has taken the position that IRES application is not complete and requires General Plan amendment; that he did complete a full submission to the Planning Department, when another arm of government [Economic Development] was threatening to take the property away; IRES does not want a fight with Alameda; all parties are striving for the same things; the alternative is a protracted, expensive legal fight; urged the CIC to request staff to work with IRES for a period of 90 days to resolve issues; within the 90 days, IRES will try to submit a plan which conforms with the City's zoning and General Plan requirements. Chair Appezzato stated the matter is not about condemnation; inquired whether the City could continue to work with the City regardless of the decision tonight. The Executive Director stated if the recommendation is approved tonight; the City will be entering into an Agreement to negotiate exclusively; during the 90 -day period, the City would not have the ability to negotiate with anyone other than the party selected. Legal Counsel Korade stated the Brown Act requires actions be limited to that on the agenda; the CIC action is merely to begin discussions with Foothill Partners to enter into an Exclusive Special Meeting Community Improvement Commission 2 September 4, 2001 Negotiating Agreement for the redevelopment of Bridgeside Shopping Center site; if it results in a Disposition and Development Agreement, it would be brought back; this is only the planning stage; there has been no action nor stated intention to do any condemnation. Chair Appezzato inquired is there still time for the City and Mr. Pines to negotiate until the Agreement is executed. Legal Counsel responded in the negative; stated the property still belongs to Mr. Pines; he could lease it, negotiate, or come up with a proposal to the City; if the negotiations with Foothill Partners are not productive, the CIC would entertain any other planning proposals. Chair Appezzato stated there is not an Exclusive Negotiation Agreement with Foothill Partners yet; inquired whether the City is entering into the Agreement tonight and whether there is time for Mr. Pines to bring a proposal to staff. Legal Counsel responded Mr. Pines could make any proposals to staff; however, the direction would be to pursue the redevelopment planning process with Foothill Partners. Commissioner Daysog stated if the staff recommendation is accepted, the City could not enter into discussions with Mr. Pines for the next 90 days, because the City would be in exclusive discussion with Foothill Partners during said time; if the Commission accepts the recommendation to enter into discussion, then there could not be any discussion with Mr. Pines until December 6th. Commissioner Kerr stated the recommendation is that the City begin discussions about an ENA with Foothill Partners; the ENA is not being adopted tonight; inquired why there should be any restrictions until the ENA is signed; further stated the City is not operating under an ENA with Foothill Partners or anybody; inquired why the City would be restricted from talking to anybody until an ENA is signed. Legal Counsel responded Mr. Pines could submit proposals, as he has done in the past, which could be considered; however, the purpose here is to take steps towards achieving an ENA with Foothill Partners, which Foothill Partners needs to rely upon in order to pursue plans; however, Mr. Pines, as the property owner, has the opportunity to submit proposals. Commissioner Johnson stated specific direction could be given either way; until an ENA is reached, discussions with Mr. Pines could continue. Special Meeting Community Improvement Commission 3 September 4, 2001 Legal Counsel stated the City would not actually be able to consider and entitle any other development proposal during the 90- day period; Mr. Pines can make and submit proposals; however, the CIC cannot entitle the property or take any actions inconsistent with moving forward with Foothill Partners. Commissioner Johnson inquired whether the 90 -day period was the ENA period; and whether staff could be directed either way; and whether staff could provide input if there is an impact on negotiations. Chair Appezzato stated if the CIC votes to move forward with staff entering into an ENA, it will not be signed tomorrow; inquired whether from tonight, until the ENA is signed, could Mr. Pines work with staff to provide proposals. Legal Counsel stated the CIC is considering proposals and directing staff to work exclusively with Foothill Partners; Mr. Pines can continue to submit any proposals, the CIC simply cannot take any action on his [Mr. Pines] proposals for 90 days. Chair Appezzato stated until the agreement is signed, there is no agreement. Mr. Pines can submit anything he wants for the CIC to consider. Legal Counsel stated Mr. Pines may submit back -up proposals or may market or lease property. Commissioner Daysog inquired whether Mr. Pines would have sufficient time to put together a proposal once the 90 -day period commences; stated if Mr. Pines requires more time, the whole ENA would be put off and there would have to be another ENA. Chair Appezzato stated if the CIC votes to enter into an exclusive negotiating agreement tonight, negotiations will go on for 90 days when the agreement is signed; prior to that execution of the Agreement, anything can be done. The Executive Director stated the Staff Report includes next steps; if the CIC directs staff to proceed with Foothill Partners tonight, ENA discussions would begin with Foothill Partners; the terms of the Agreement would be finalized; the draft ENA would be brought back for CIC consideration; presuming the CIC approves the ENA, the effective date would be for 90 days; if staff has not negotiated a Dispositions and Development Agreement at the end of said time, the ENA would lapse and the City would be open to further proposals and relationships with Mr. Pines on the property. Special Meeting Community Improvement Commission 4 September 4, 2001 Chair Appezzato stated Mr. Pines should be treated absolutely fairly; there could be a threat of litigation. Brian Schumacher, Alameda, stated that he informally represents the East End neighbors; said group wants a grocery store, not an office tower or more houses; the site has gone downhill, especially in the last 10 years, which is when Mr. Pines' organization took over; the City should begin the first steps; if negotiations do not pan out in the time allotted, Mr. Pines will have time to submit the proposals he outlined tonight. Janet Waring, Alameda, stated that she attended the meeting when three presentations were made for redevelopment of the site; the only viable proposal was that of the Foothill Partners; owners should maintain property; two businesses at the site have gone out of business because the property owners informed them that they could not continue their businesses due to other plans for the site; the site has became a blight as more businesses left; retail in Central Alameda and the East End is very minimal; urged the City to support Foothill Partners' proposal. John Abrate, Chair, Economic Development Commission, stated the CIC supported the EDC's recommendation to call the Bridgeside Center site a blight area last year; on July 12th, citizens heard proposals from Foothill Partners, IRES, and Ryland Homes; an unofficial survey of 120 people indicated 85% to 90% wanted Foothill Partners, because they want a retail center; office space does not make sense; currently, Harbor Bay and Marina Village have empty square footage [office space] waiting to be rented; the EDC supports the staff recommendation to negotiate with Foothill Partners. Charles Ward, Economic Development Commission, stated it took calling the site blighted to get Mr. Pines to submit a proposal; Mr. Pines representative had the opportunity to present a shopping center to the EDC at several meetings; developers had a chance to hear comments from the EDC and provide other options; the property owner was given the opportunity to make a stronger proposal and returned with the same office building proposal; citizens stated that they do not want an office building, rather they want retail; urged the CIC to move forward with Foothill Partners. Bill Garvine, Alameda, stated that he misses the retail center; he used to do his grocery shopping, dry- cleaning, and banking at the Bridgeside Center; now, it is a ghost town as a result of Mr. Pines lack of attention to Alameda; urge the Commission to support Foothill Partners' proposal; stated Mr. Wiele [of Foothill Partners] proved that he has a finger on the pulse of Alameda; Mr. Special Meeting Community Improvement Commission 5 September 4, 2001 Pines' company has been neglectful with the property and presented a pie -in- the -sky proposal, which is inconsistent with the General Plan. Russ Grant, Alameda, urged the CIC to proceed ahead with the game plan that has been presented [by staff] and move forward with Foothill Partners. Lowell Schneider, Alameda, stated that he wants grocery shopping at the site; the Lease with Lucky needs to be broken and something needs to change; urged the CIC to select Foothill Partners. Marianne Kelly, Alameda, stated the site has been a blight for too long; something should happen quickly. Frank Matarrese, Alameda, stated if the EDC, staff and CIC did not take action, an empty shopping center would remain for years; the community has spoken and wants retail; urge the CIC to keep on the pressure. Doug Wiele, Foothill Partners, stated that he was available to answer questions. Chair Appezzato stated the recommendation is to begin discussions with Foothill Partners to enter into an Exclusive Negotiating Agreement for the redevelopment of the Bridgeside Shopping Center. Commissioner Johnson requested staff to address the new ideas presented by the owner, e.g. Home Depot and retail, and whether the new ideas change the staff recommendation. The Development Services Director stated Mr. Pines proposals tonight do not change on the [staff] recommendation; staff and Mr. Pines have had significant discussions over the last four - and -half to five years regarding development of the center, leasing and tenancy; the action presented tonight is a good first planning step towards moving forward with redevelopment of the center; the staff recommendation is to continue forward as presented. Commissioner DeWitt stated Mr. Pines alleged: 1) that he was not consulted; 2) that the property was considered a blight without warning; 3) that he was treated unfairly by staff; 4) that he was not consulted by the EDC; requested the Development Services Director to confirm that staff has been discussing the matter with Mr. Pines for the last four years. The Development Services Director responded in the affirmative. Special Meeting Community Improvement Commission 6 September 4, 2001 Commissioner DeWitt inquired whether staff could verify discussions, e.g. dates, topics. The Executive Director stated staff has documentation going back to January, 1997, which indicates the City has been in regular communication with Mr. Pines or his representatives over said period of time; staff could provide said documentation to the CIC; the documentation could be reviewed in chronology. Commissioner DeWitt stated that he wanted to assure the audience the matter was not thought up last week. Commissioner Daysog stated Mr. Pines would like more time; inquired how much time Mr. Pines would need. The Development Services Director stated Mr. Pines indicated that he would need ninety days to prepare proposals; however, the CIC should move forward. Commissioner Kerr stated there have been extensive discussions between Mr. Pines and staff over the past four years; if an ENA is signed, it only has a life of 90 days; Mr. Pines is not prevented from doing anything he desires. Commissioner Kerr moved approval of the staff recommendation. Commissioner Johnson seconded the motion, which carried by unanimous voice vote - 5. ADJOURNMENT There being no further business, Chair Appezzato adjourned the Special Meeting at 9:15 p.m. Respectfully submitted, Lara Weisiger Secretary, Community Improvement Commission The agenda for this meeting was posted in accordance with the Brown Act. Special Meeting Community Improvement Commission 7 September 4, 2001