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RRA - 12-12-00APPROVED CITY OFF~ RO EMEAD DAT /Q~~o / RY~Q MINUTES OF THE REGULAR MEETING ROSEMEAD REDEVELOPMENT AGENCY DECEMBER 12, 2000 The regular meeting of the Rosemead Agency was called to order by Chairman Clark at 7:00 p.m. in the conference room of City Hall, 8838 E. Valley Boulevard, Rosemead, California. The Pledge to the Flag was led by Agencymember Bruesch The Invocation was led by Vice-Chairman Imperial ROLL CALL OF OFFICERS: Present: Agencymembers Bruesch, Vasquez, Taylor, Vice Chairman Imperial, and Chairman Clark Absent: None APPROVAL OF MINUTES: (NONE 1. RRA RESOLUTION NO. 2000-30 CLAIMS AND DEMANDS The following Resolution was presented to the Agency for adoption: RESOLUTION NO. 2000-30 - CLAIMS AND DEMANDS A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF ROSEMEAD ALLOWING CERTAIN CLAIMS AND DEMANDS IN THE SUM OF $58,551.35 AND DEMANDS NO. 6168 THROUGH 6182 MOTION BY AGENCYMEMBER BRUESCH, SECOND BY VICE-CHAIRMAN IMPERIAL that the Agency adopt Resolution No. 2000-03. Vote resulted: Yes: Vasquez, Bruesch, Clark, Imperial, Taylor No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. 2. RESOLUTION NO. 2000-31 - AUTHORIZING A LOAN OF FUNDS FROM THE REDEVELOPMENT PROJECT AREA NO. 1 TO REDEVELOPMENT PROJECT AREA NO. 2 The following resolution was presented to the Agency for adoption: RESOLUTION NO. 2000-31 A RESOLUTION OF THE ROSEMEAD REDEVELOPMENT AGENCY AUTHORIZING A LOAN OF FUNDS FROM REDEVELOPMENT AREA NO. TO REDEVELOPMENT PROJECT AREA NO. 2 RRAMIN:12-12-00 Page # I 0 0 MOTION BY VICE-CHAIRMAN IMPERIAL, SECOND BY AGENCYMEMBER BRUESCH that the Agency adopt Resolution No. 2000-31. Vote resulted: Yes: Vasquez, Bruesch, Clark, Imperial No: Taylor Absent: None Abstain: None The Chairman declared said moi ion duly carried and so ordered. 3. HEARING OF PROTEST AND AWARD OF BID FOR ROSEMEAD GARVEY AVENUE SENIOR HOUSING AND COMMUNITY CENTER Frank Tripepi, Executive Director, stated that the bid protest from Sinanian Development, Inc., has been withdrawn. MOTION BY AGENCYMEMBER BRUESCH, SECOND BY AGENCYMEMBER VASQUEZ that the Agency award the contract to Fassburg Construction Company and authorize the Chairman to execute the contract documents for a total amount of $11,386,918. Vote resulted: Yes: Vasquez, Bruesch, Clark, Imperial, Taylor No: None Absent: None Abstain: None The Chairman declared said motion duly carried and so ordered. 4. REPLACEMENT OF ROSEMEAD PARK IRRIGATION SYSTEM MOTION BY VICE-CHAIRMAN IMPERIAL, SECOND BY AGENCYMEMBER VASQUEZ that the Agency award the project to Summit Golf and authorize the Chairman to execute the Agreement. Vote resulted: Yes: Vasquez, Bruesch, Clark, Imperial No: Taylor Absent: None Abstain: None The Chairman declared said motion duly carried and so ordered. I Agencymember Taylor stated that he voted No as City funds should be used. 5. AUTHORIZATION TO OBTAIN APPRAISAL SERVICES FOR PROPERTIES LOCATED AT 8908 BENTEL AVENUE AND 4022 IVAR AVENUE MOTION BY VICE-CHAIRMAN IMPERIAL, SECOND BY AGENCYMEMBER BRUESCH that the Agency authorize the Executive Director to hire an appraiser to establish the fair market value of the properties located at 8908 Bentel Avenue and 4022 Ivar Avenue. Vote resulted: Yes: Vasquez, Brues ch, Clark, Imperial No: Taylor Absent: None Abstain: None The Chairman declared said motion duly carried and so ordered. Agencymember Taylor stated he voted No as he does not see a need for this at this time. RRAMIN:12-12-00 Page #2 • 6. STATUS REPORT - EATON VILLAGE PROPOSAL 7. AUTHORIZATION TO ACQUIRE MIXED USE PROPERTY AT 9734 ABILENE FOR PURCHASE PRICE OF $283,200 Items 6 and 7 were discussed jointly. Robert McCoy, developer of project, stated that there are a number of tenants expressing interest in the project. Mr. McCoy stated that Walmart indicated that they are not interested in the project. Vice-Chairman Imperial stated that the Agency has not heard anything substantial yet. Agencymember Taylor asked Mr. McCoy how many properties are involved in the project and how many are in Rosemead. Mr. McCoy replied that there are a total of 50 properties with approximately 24-30 of them in Rosemead. Agencymember Taylor asked Mr. McCoy if any of the properties have been closed in El Monte. Mr. McCoy replied that none of the four in El Monte have closed. Agencymember Taylor stated that he is becoming apprehensive of the project as escrow has failed to close on the property at 9734 Abilene and there are 50 parcels in the project. Mr. Taylor asked if it is Mr. McCoy's intent to acquire those parcels or have Rosemead and El Monte acquire them for him. Mr. McCoy replied that it is his intent to acquire those parcels. Agencymember Taylor replied that Mr. McCoy is having problems acquiring just one house. Mr. McCoy replied that he is trying to finance them as a package and that this is a large project and fairly complex from a financial standpoint. Mr. McCoy continued that they are moving forward and close to acquiring those four parcels. Agencymember Taylor referred to the staff report which states that Ms. Quercio is desirous of closing and asked the Agency to bail her out of the situation, and that Mr. McCoy's attorney will consent to have the Agency acquire the property as his nominee. Mr. Taylor asked what does "nominee" mean in this case? Peter Wallin, Agency Counsel, responded that when a party is in escrow as a buyer, often the escrow instructions provide that someone else can be nominated to complete the sale. In this case, Mr. McCoy would designate the Redevelopment Agency as the alternate buyer. Agencymember Taylor asked if the Agency will then be an agent for Mr. McCoy? Mr. Wallin responded that the Agency would be a successor. Agencymember Taylor continued that the staff report states that the original escrow instructions and an unsigned amendment are enclosed, and if the Agency acquires as "nominee" then why is the word "nominee" in there at all. Mr. Wallin replied that the escrow is set up between the buyer (Mr. McCoy) and seller (Ms. Quercio). Mr. Wallin continued that it is a technical term that allows the designated nominee to step in in place of the buyers. RRAM1N:12-12-00 Page a3 a 0 Agencymember Taylor stated that if the Agency acquires the property, it would acquire it free and clear of any rights or claims from Mr. McCoy. The Agency is not buying it as his nominee. Mr. Taylor asked if Mr. McCoy was aware of this transaction. Mr. Wallin stated that the Agency could enter into a separate escrow with the seller and start from the beginning, but a transaction is already set up allowing the Agency to step in in the "shoes" of the buyer. Agencymember Taylor stated that he does not want any technicality giving Mr. McCoy any rights to any property. He is welcome to buy the property himself, but he does not like the Agency financing the property, and if Mr. McCoy cannot obtain financing, then the Agency winds up with the property and will have to either sell or condemn it. Mr. Taylor stated that this is nothing personal against Mr. McCoy, but this is not a good business practice. Mr. McCoy stated that he did not ask for this. Mr. Wallin stated that as of tonight, Mr. McCoy may no longer be willing to designate the Agency as nominee. Mr. Wallin continued that when he talked with Mr. McCoy's attorney this morning, they still wanted to enter into this transaction. Mr. McCoy stated that it was discussed earlier that the Agency may want to take over and close escrow on this property in order to help the seller close sooner. Mr. McCoy stated that he does not think this is a good idea from his standpoint or from the Agency's. Agencymember Taylor stated that he agrees. That once the Agency engages in purchasing properties it may mushroom to where the Agency ends up with 50 properties. Agencymember Taylor stated that the Agency should not enter into this transaction until there is something more positive as to what will be developed at that site. Bernadette Quercio, 9734 Abilene, owner of the property, and Ron Ramos, R & R Mortgage Banking, were seated at the conference table. Ms. Quercio, stated that Mr. Ramos helped her finance the loan on her new property. Ms. Quercio stated that in dealing with Mr. McCoy, she signed loan documents twice and twice they fell through escrow. Agencymember Imperial asked if there is any guarantee that this project is moving forward. Agencymember Taylor confirmed that the Agency has no liability in this project. Mr. Taylor asked what will happen if Mr. McCoy is unable to close escrow? Mr. McCoy responded that there are three properties that they are about to fund and close escrow. The funds are in a trust account and they are waiting for the last person to give their approval. Mr. McCoy continued that the last person is out of the country and they are trying to reach him to get his approval so that they can release the funds. Ms. Quercio stated that she has found a replacement property, but failure to close this escrow has cost her an additional $10,000. Mr. Romo stated that he is trying to help Mr. McCoy with the project by contacting an investment firm. Mr. McCoy stated that he meets regularly with seven equity partners, and that two of them are ready to provide funding. Ms. Quercio explained her situation. She stated that the owners she wanted to buy from had their own property to purchase so they kept taking money from her escrow, trying to close it. Escrow kept getting extended resulting in the price of that property increasing. The house is now in escrow for the third time and is scheduled to close on December 28th. After that, the owners of that property will take all the money out of her escrow. Ms. Quercio stated that she started RRAMIN:12-12-00 Page n4 • 0 looking for property last February and that it took her 4-5 months to find this property that was correctly zoned for dog kennels. Agencymember Bruesch asked what is the percentage rate of the lessees? Mr. McCoy stated that he has signed letters of intent from Ralphs, Marshalls for a total of 80,000 square feet, and he is negotiating with Sports Chalet for 42,000 square feet, Nordstroms Rack for 30,000, a restaurant for 30,000, SavOn Drug Store for 15,000 and is again talking with Best Buy and possibly Michael's for 30,000. Agencymember Bruesch asked if those commitments change if Walmart comes in. Mr. McCoy stated that if Walmart is part of the center, then they are not interested. Mayor Clark stated that the Agency will most likely meet next Tuesday and for Mr. McCoy to return with Ms. Quercio's problem resolved. It was the consensus of the Agency to defer this item to December 19a'. Ms. Quercio requested that the Agency move as quickly as they can. Mr. Ramos stated that the escrow deadline is today. Mr. Ramos stated that the sellers have backup buyers for that property and it is imperative that this escrow close soon. Agencymember Bruesch asked Mr. McCoy if there was a possibility that he can take care of Ms. Quercio's escrow within the next few days. Mr. McCoy responded that Ms. Quercio's money along with two others is in a trust account waiting for the authorization from one of the owners to proceed. Mr. McCoy could not confirm when that individual could be reached as he is out of the country. Mr. Wallin stated that the Agency has several options. One option is to discuss the sale of the property in a closed session. The Agency has the power to make hardship acquisitions, as there is an escrow already set up and that the Agency will be a nominee, or the Agency can enter into a separate escrow. The Mayor recessed the Agency meeting to a closed session at 7:40 p.m. and was reconvened at 7:50 p.m. in open session. Mr. Wallin proposed that the Agency authorize the Executive Director to purchase Ms. Quercio's property as presently set forth in the escrow instructions between her and Mr. McCoy. MOTION BY VICE-CHAIRMAN IMPERIAL, SECOND BY AGENCYMEMBER BRUESCH that the Agency authorize the Executive Director to purchase the property at 9734 Abilene as presently set forth in the escrow instructions between Ms. Quercio, the present owner and Mr. McCoy, the developer. Before vote could result, more discussion ensued. Agencymember Taylor confirmed that purchase of this property by the Agency is an independent motion for the Agency to purchase the property outright and not as a nominee of Mr. McCoy. Vote resulted: Yes: Vasquez, Bruesch, Clark, Imperial No: Taylor Absent: None Abstain: None The Chairman declared said motion duly carried and so ordered. RRAMM:12-12-00 Page #5 • • 8. MATTERS FROM OFFICIALS - None 9. ORAL COMMUNICATIONS FROM THE AUDIENCE ON REDEVELOPMENT AGENCY MATTERS - None 10. ADJOURNMENT There being no further action to be taken at this time, the meeting was adjourned at 8:00 p.m. The next regular meeting will be held on December 26, 2000, at 7:00 p.m. Respectfully submitted: Agency Secretary APPROVED: 2v~~ C&g- CH AN RRAMM:12-12-00 Page a6