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HomeMy WebLinkAboutRDA Minutes 1987-04-08 MINUTES THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO REGULAR MEETING April 8, 1987 TIME: 7:00 p.m. PLACE: Community Room, Municipal Services Building, 33 Arroyo Drive, South San Francisco, CA 94080 CALL TO ORDER: Chairman Mark N. Addiego called the Redevelopment Agency meeting to order at 7:09 p.m. ROLL CALL: Present: Chairman Mark N. Addiego, Vice Chairman Jack Drago, Member Richard A. Haffey, Member Gus Nicolopulos, Member Roberta Cerri Teglia Also Present: Executive Director C. Walter Birkelo, Deputy Executive Director Mark Lewis ~ ~NDA Executive Director Birkelo stated that there was nothing to ~ TIEW: add the would suggest that the meeting be adjourned to next Wednesday night at 7:00 p.m. or 5:00 p.m. at your discretion. There are a number of things that will be introduced tonight that will need greater discussion and I think we need a full session. APPROVAL OF It was motioned by Member Haffey, seconded by Member BILLS: Nicolopulos, that claims as submitted for payment in the amount of $57,283.94 for April 8, 1987, be approved. Member Nicolopulos inquired as to how much longer the Agency will be needing the services of our consulting legal counsel, Kasper and Rogers. Co-Counsel Armento informed the Board that Mr. Rogers would be filing the withdrawal of the appeal in the RPC suit since it has been decided not to go forwarded with that, once that is done, he i not involved with the other redevelopment matters. Executive Director Birkelo concurred that their services should not be required in the future. The motion as made and seconded was unanimously carried. Vice Chairman Drago requested that, in the future, a short description of each "for services rendered" billing be given, similar to the general fund bills. PROVAL OF It was motioned by Member Nicolopulos, and seconded by Vice NUTES: Chairman Drago that the minutes of the regular meeting of March 11, 1987, be approved. The motion as made and seconded was unanimously carried. R OLUTION Deputy Executive Director, Mark Lewis, stated that staff is A EPTING THE recommending adoption of the resolution accepting from BRIDGE ASSIGNMENT OF the assignment of the option to purchase the property from OPTION TO the South San Francisco Unified School District located at PURCHASE Baden and Magnolia for the senior citizen housing project. PROPERTY FROM Last December Council authorized the Agency to enter into SSF UNIFIED the agreement to purchase the property. Since that time, we SCHOOL DIST. have been negotiating the terms which are outlined in the & AUTHORIZING staff report. On March 26, the School Board agreed to amend AN AMENDMENT their purchase agreement with BRIDGE to allow the Redevelop- OF THE RELATED ment Agency to purchase the property with the terms that had PURCHASE been negotiated. Additionally, per your direction, the City AGREEMENT: has negotiated a 75 year lease agreement which is attached to this resolution which allows the City to lease the property back to Bridge Housing for the development of the project. We would be happy to answer any questions you have regarding the matter. Representatives from Bridge Housing are here and I am sure they would like to address you on the matter. PUBLIC Chairman Addiego opened the public hearing at 7:16 p.m. to HEARING to receive testimony from anyone who wishes to speak in favor OPENED: of the item - No one spoke. He then invited those who wish to speak against the item. No one spoke. The public hearing was closed at 7:17 p.m. f--q~STIONS Member Nicolopulos was concerned about the 75-year lease. He t )M THE stated he would like to see a shorter lease with option of ~ ~NCY: extensions. Richard Holiday, Vice President of Bridge Housing: We suggested a 99-year lease but was told that was too long. Naturally we wanted as long as we could get. Most lenders see a minimum of 55 years. Given the nature of this project, it is unusual, it has a lot of low income in it. We have had to go through very lengthy arduous negotiations with Wells Fargo to guarantee the project and 75 years was the limit they gave us. Member Nicolopulos: I have another question on the sum of the lease payments as listed on Page 2. There are provisions of the first six years at $1.00 per year, etc. How did we derive at the first six years as being $1.00 and why? Executive Director Lewis: There were two reasons, one of them was that the cash flow in the project in its early years ran into the red and this is a result of our insistence that they provide 50% of the units for low income seniors. As a result of that, we negotiated the position which provided them the minimum lease payments up front to make up for their operating losses as a result of our requirement for low income seniors. The second reason is that the City will not have completely paid off its note on the property until the end of that period of time and after that we begin to get the cash flow. 4/8/87 Page 2 Member Nicolopulos also had questions concerning the interest rates for paying back the school. We have a schedule that projects it out to 1992. Is this interest compounded? Deputy Executive Director Lewis stated that the interest is at somewhat of an adjustable rate in that it flows with the prime interest rate and it is pegged at one-half percent above prime interest and that is capped at both ends so that it cannot rise more than 2% nor fall more than 2%. The total interest payments are more or less an estimate based on certain assumptions. The fact that it's capped at both ends, I think, protects both the City and the School District and provides basically a fair arrangement for the borrowing of money from the School District. It was motion by Member Haffey, seconded by Member Teglia that the resolution be adopted. The motion as made and seconded was unanimously carried. DISCUSSION Executive Director Birkelo stated that the Board is well REGARDING aware of the fact that the Price Club is rapidly reaching the POSSIBLE point where they are going to be opening on May 4. There has PROJECT AREA been strong interest in some of the land surrounding that 0~ $0UIH site for other types of development. It is my personal APORT BLVD.: beliefs that the Agency should at least take a little time to look at the area and see whether or not you could play a real role in the proper development of that over a longer term period. This is one of the things I thought we wanted to discuss with you next week in a great deal more detail. I would suggest that we go into closed session tonight to talk about the possible leasing of the property related to this area. Member Haffey questioned whether it was proper to discuss terms of leasing in a closed session. Co-Counsel Armento stated that the Brown Act provides that you may hold a closed session prior to the purchase, sale, exchange or lease of real property by or for the Agency to give instructions with regarding whatever you are doing, and that prior to the closed session you need to identify what the property is that you are discussing. CLOSED Closed session was called at 7:30 p.m. for the purpose of SESSION: discussing a lease with the Pyramid Holdings on Bell Air Road at the corner of Bell Air and South Airport Boulevard. RECONVENE: The Agency reconvened at 7:42 p.m. Chairman Addiego stated that information was received regarding lease negotiations on the property above mentioned. No action was taken. R~ESS: The Agency meeting was recessed at 7:43 p.m. until after the City Council meeting. 4/8/87 Page 3 Al ~URNMENT: The meeting was adjourned to Thursday, April 9, 1987 at 9:00 a.m., City Hall Conference Room. Respectfully submitted, APPROVED: C'~ Walter Birkelo ~ ~i~ Mar~k ~N. Ad ~ego, Chair n /'~ ~~ ~ ~ Redevelopment~~he Executive Director City of South San Francisco Entries of the Redevelopment Agency meeting show the action taken by the Board to dispose of an item. Oral presentations, arguments, and comments are recorded on tape. The tape and documents related to the item are on file in the office of the City Manager and are available for inspection, review and copying. 4/8/87 Page 4