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HomeMy WebLinkAboutRDA Minutes 1994-03-23Chairman Joseph A. Fernekes M I N U T E S Boardmembers: Jack Drago Redevelopment Agency John R. Penna '-"'Roberta Cerri Teglia Municipal Services Building Robert Yee Community Room March 23, 1994 AGENDA ACI!Q_N TAKEN CALL TO ORDER: (Cassette No. 1) 7:10 p.m. Chairman Fernekes presiding. ROLL CALL: Boardmembers present: Drago, Penna, Yee and Fernekes. Boardmembers absent: Teglia. AGENDA REVIEW AGENDA REVIEW Executive Director Wohlenberg Requested: So ordered. Hear Item No. 4 first on the Agenda. ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS 4. Discussion of the Agency/City's participation in the Executive Director Wohlenberg recommended the San Mateo County Economic Development Plan. Agency join in the San Mateo County Economic ,5'~/~9 .~ Development Plan. San Marco County Supervisor Barrales stated the Board of supervisors was very interested in moving forward on this proposal for economic development Countywide. He stated that it was an effort between businesses, cities in this County and the County itself working in partnership on this environmental plan for the County. He stated this would not compete with the kind of efforts taking place with Chambers of Commerce, but would market and attract businesses to the County. Boardmember Penna questioned if this City's Chamber was involved in this effort. Supervisor Barrales stated he met with the Chamber Manager and President and both indicated they were supportive of the proposal and would interface. He stated that the budget is $150,000 in the first year between the partners and SAMCEDA is secur- ing businesses in the County. He stated the County committed $50,000 in the next fiscal budget and 3/23/94 Page 1 i II AGENDA ACIION TAKEN , 271 _~DMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS Discussion - Continued. were approaching the larger cities and asking them to match the $50,000. He stated that the City of San Mateo had recently approved participation in the Plan, but that was the first City to take action. He stated the Board was asking that the larger cities, San Mateo and S.S.F., for the first year funding to consider up to $15,000 to make up the $50,000. He stated, if they reached the $50,000 threshold, the $15,000 could be adjusted. Boardmember Penna felt $15,000 was a lot to ask when he saw the Chamber, business and trades, which he was sure had a lot at stake, not joining the program. Supervisor Barrales stated this would provide a regional marketing strategy for the County that no one city can match. Boardmember Penna voiced his concerns: busi- nesses leaving the County or City; other cities com- peting for S.S.F. businesses to move and there should be ground rules to protect against that. Councilman Yee voiced his concerns: what is going to happen if it doesn't work out next year, because the funding is not going to continue; the staff and the director will disappear; whether this City will see the objectives and guidelines before making financial commitments. Boardmember Drago stated there was no way he would commit to any funding until we know the pros and cons for us to participate. He stated the Plan does not say whether the 8 to 10 members would be elected or from the private sector. He was concerned that the County was only going after 2 or 3 of the larger cities and there are 20 cities. He stated he would also like to know the total cost. Chairman Fernekes stated that conceptually we are very supportive and would like to be part of that group, however, no formal action would be taken tonight. DNSENT CALENDAR CONSENT CALENDAR 1. Motion to confirm expense claims of 3/23/94. 5/~ 0 ~ Approved in the amount of $8,202.16. 3/23/94 Page 2 AGENDA _AC_TIQN TAKEN 272 _ CONSENT CALENDAR CONSENT CALENDAR Motion - Continued. M/S Penna/Yee - To approve the Consent Calendar.. Carri~xl by unanimous voice vote. ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS 2. Motion to adopt, in principle, the use of some portion Boardmember Penna stated he would not participate of Agency funds for a commercial rehabilitation and in the discussion nor vote on this item, due to a seismic retrofit loan program for the Down- potential conflict of interest. town/Central Redevelopment Project Area and ask that criteria and guidelines for such a program be M/S Drago/Yee - To adopt, in principle, the use of developed. .~tO 3 some portion of Agency funds for a commercial rehabilitation and seismic retrofit loan program for the Downtown/Central Redevelopment Project Area and ask that criteria and guidelines for such a pro- gram be developed. Carried by majority voice vote, Boardmember Penna did not participate in the vote. 3. Motion to approve conceptually a $430,000 loan of Boardmember Penna stated he would not participate __ Agency Low to Moderate Housing Funds to the in the discussion nor vote on this item due to a seismic upgrading and handicapped access for the 62 potential conflict of interest. single room occupancy units in the Metropolitan Hotel at 220 Linden Avenue. .._~t).~ Boardmember Yee asked that the item be postponed and heard with Item No. 5 on the Council agenda, because he had questions on both. RECESS: Chairman Fernekes recessed the meeting at 7:51 p.m., and stated Item No. 3 would be heard with the Council Item No. 5. REDEVELOPMENT AGENCY MEETING RECON- Chairman Fernekes reconvened the meeting at 8:53 VENED IN THE CITY COUNCIL MEETING: p.m. during the Council discussion of Item No. 5. REDEVELOPMENT AGENCY ITEM 3 - CONTIN- City Manager Wohlenberg related: City entered UED. into a joint effort with the owners of the Metropolitan Hotel to upgrade that property; CITY COUNCIL ITEM initial work focused on the first floor retail; various grants and loans were made to do the 5. Resolution allocating $430,000 of 1993-94 HOME facade renovations and some seismic work on the funding from the San Marco County HOME Censor- ground floor area; the upper two floors, of low to tium to complete seismic retrofitting and accessibility moderate rental units, must also be upgraded for requirements for the Metropolitan Hotel's 62 single seismic corrections; City and owner had engineering ....room occupancy units and authorizing necessary , O.fl work done to identify costs; it was time to finish the construction contracts. ~' ,,4 work on the upper two floors and there were Feder- al HOME funds available for half of the work; what A RESOLUTION AUTHORIZING APPROVAL OF was suggested was a loan for the other half, from USE OF SAN MATEO COUNTY HOME CENSOR- the Redevelopment Agency, similar to the loan for 3/23/94 Page 3 II AGENDA ACTION TAKEN -ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS ontinuation of City Council Item No. 5 and the downstairs area. Redevelopment Agency Item No. 3. He stated it was important to remember that, due to a prior out of Court settlement, the City must be a TIUM FUNDS FOR SEISMIC RETROFITIING party to maintaining low to moderate income hous- AND DISABILITY ACCESS AND AUTHORIZING ing in that area. He stated if, for any reason, these RESULTANT CONTRACTS FOR THE METRO- units were discontinued, we would have to take a POLITAN HOTEL leadership role in replacing them in other areas - so the cost of renovations to make these units in eom- plianee with seismic and access requirements is the cheapest way to maintain these units. CDBG Coordinator Fragoso stated that the HOME funding, unlike many Federal programs, is free money and without strings to cities. She stated 1992-93 funds were set aside in the amount of $230,000 for the Metropolitan Hotel and there is $200,000 now available in 1993-94 funds for an affordable housing project. Boardmember Yee stated that $486,000 had already been spent on this project, we plan to spend $810,000 more and now intend to spend money for a commercial store. He stated that now we are talking about $1.3 million and more, the owner only contributed $200,000 and questioned if the City would own part of the building when it was fin- ished. He questioned if any other properties were getting the HOME funds, noted this was a low income housing loan - $430,000, without interest, and ques- tioned if they pay back the City. CDBG Coordinator Fragoso replied: in up front money, it was true the owner only spent $200,000; no, the City would not own the building; the only restriction placed on the owner was to maintain the affordable housing for the 40 year period; the loan would be paid back to the Agency; the loan would be secured by a deed of trust; only one property qualifies; the terms of the loan do not require inter- est, but they could have interest; U.S. Escrow has been handling these loans, they charge a hefty ad- ministrative fee, which the owner now pays, and that is why no interest is proposed; there had been discussions about the City handling and collecting the fees. 3/23/94 Page 4 AGENDA ACTION TAKEN Z74 ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS ontinuation of City Council Item No. 5 and Boardmember Yee stated that forty years is a long, Kedevelopment Agency Item No. 3. long term and suggested the City collect the funds monthly and charge interest. He stated he had problems with the loan concept because, when you get it back, you are supposed to use the money for some other project and questioned why the loan period was not shorter. Discussion followed: why didn't the hotel get a loan, because the property will be worth $2 million when the project is done; the CDBG loan is $100,000 for 15 years, at zero interest, with 7% administrative fee; the 40 years go beyond the life of the redevelopment district - then what happens to the loan; Boardmember Drago agreed, the City should collect money for the redevelopment loan - perhaps 1%; the payment is $2,000 a month, for the two loans; the improvements were mandated by ADA requirements; HOME funds can only be used for affordable housing loans or rehabilitation of rental rehab projects; the rents at the Metro Hotel cannot exceed $450.00 a month; because the funds were set aside a year ago, they must be allocated or will go back to the County; Boardmember Yee suggested moving ahead on the HOME funds, because they are free, but had a concern on who was going to admin- ister the loans; etc. Mr. Alan Askar asked the Council to invite himself and other URM property owners to work on compi- lation of the staff reports for any proposals regard- ing URMs in the future. He felt himself and other property owners could answer some of the questions brought up tonight with regards to this funding. He stated he realized there were few URM buildings that were residential, because most were commer- cial, and felt the Council should look at whether the URM property could support a 40 year loan. He stated that retrofitting would not save the building in the event of a major earthquake and, if the building was demolished, what happens to the loan. Councilman Drago commended Mr. Askar for his ... previous work with staff and his knowledge of the subject, which had brought us to this point of cre- ative financing - rather than having to demolish buildings. He suggested putting off the vote on redevelopment funds until there was a report on the 3/23/94 Page 5 II AGENDA _ACIION TAKE~75 ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS ontinuation of City Council Item No. 5 and eligibility of buildings. ~edevelopment Agency Item No. 3. City Manager Wohlenberg stated, he was not sure this could be separated because, if it took $800,000 to do two floors - what if you decided to give the Federal HOME money and not the loan, then the project would be unable to proceed. Councilman Yee stated his comment about the seis- mic retrofit for the downtown buildings was to use HOME funds, and they are saying there are no other buildings that qualify. He stated, if there were no other buildings, we should hold that item back - no, on redevelopment. He felt it was okay to approve the redevelopment funds even if the terms are differ- ent than presented here in the resolution, which should have different terms, positions and should add interest. He questioned if the motion should be to adopt the resolution with the exception that the interest, the term of the loan (number of years) shall be less than 40 years and the interest rate will be more than zero. City Manager Wohlenberg stated, they could ap- prove it, subject to staff getting out the details, bringing them back and Council approving the con- cept of a loan - maybe 30 years, with some reason- able rate of interest with the City processing it. He stated the Council action was on the HOME grant, with the Agency approving conceptually a loan and stipulating what terms would be appropriate. CITY COUNCIL ACTION: M/S Yee/Drago - To adopt the resolution allocating $430,000 of 1993-94 HOME funding from the San Mateo County HOME Consortium to complete seis- mic retrofitting and accessibility requirements for the Metropolitan Hotel's 62 single room occupancy units and authorizing necessary construction contracts. RESOLUTION NO. 34-94 Carried by majority voice vote, Councilman Penna did not participate in the discussion nor vote. EDEVELOPMENT AGENCY ACTION: M/S Yee/Drago - To approve, in concept the loan of the redevelopment funds - subject to staff being able to negotiate an interest rate on the loan and a term 3/23/94 Page 6 II~ AGENDA ACTION TAKEN ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS edevelopment Agency Action - Continued for their payment of the loan, which is acceptable to the loan holder and to the Council. Carried by majority voice vote, Boardmember Penna did not participate in the discussion nor vote. 4. Discussion of the Agency/City's participation in the Heard earlier on the Agenda. San Mate(} County Economic Development Plan. GOOD AND WELFARE GOOD AND WELFARE No one chose to speak. CLOSED SESSION CLOSED SESSION 5. Closed Session for the purpose of the discussion of The Agency chose not to hold a Closed Session. personnel matters, labor relations, property negotia- tions and litigation. M/S Penna/Drago - To adjourn the meeting. .... Carried by unanimous voice vote. DJOURNMENT: Time of adjournment was 9:30 p.m. RESPECTFULLY SUBMITTED, APPROVED. Barbara A. Battaya, Clerk Redevelo-Fernekes' Cha'rmanpmentAgeney Redevelopment Agency City of South San Francisco City of South San Francisco The entries of this Agency meeting show the action taken by the Redevelopment Agency to dispose of an item. Oral communications, arguments and comments are recorded on tape. The tape and documents related to the' items are on file in the Office of the City Clerk and are available for inspection, review and copying. 3/23/94 Page 7 II