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CDC - Minutes 08-12-03DATE 0 ~,L e/-----) NAME YES NO ABSTAIN ABSENT MOTION SECOND ALARCON CLARK IMPERIAL TAYLOR VASQUEZ AL,enda Item No. „ Res/Ord. No. NOT OFFICIAL UNTIL APPROVE13- BY THE ROSEMEAD COMMUNITY DEVELOPMENT CORPORATION MINUTES OF THE REGULAR MEETING ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION AUGUST 12, 2003 The regular meeting of the Rosemead Community Development Commission was called to order by Chairman Vasquez 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 Commissioner Taylor. The Invocation was delivered by Commissioner Alarcon. ROLL CALL OF OFFICERS: Present: Commissioners Alarcon, Taylor, Vice-Chairman Clark, Chairman Vasquez Absent: Commissioner Imperial arrived at 7:20 p.m. APPROVAL OF MINUTES: JULY 22, 2003 - REGULAR MEETING MOTION BY COMMISSIONER TAYLOR, SECOND BY COMMISSIONER ALARCON that the Commission approve the regular minutes of July 22, 2003. Vote resulted: Aye: Alarcon, Clark, Vasquez, Taylor No: None Absent: Imperial Abstain: None The Chairman declared said motion duly carried and so ordered. 1. CDC RESOLUTION NO. 2003-16 CLAIMS AND DEMANDS The following Resolution was presented to the Agency for adoption: RESOLUTION NO. 2003-16 CLAIMS AND DEMANDS A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROSEMEAD ALLOWING CERTAIN CLAIMS AND DEMANDS IN THE SUM OF $94,890.84 AND DEMANDS NO. 7096 THROUGH 7110 MOTION BY VICE-CHAIRMAN CLARK, SECOND BY COMMISSIONER ALARCON that the Commission adopt Resolution No. 2003-16. Vote resulted: Aye: No: Absent: Alarcon, Clark, Vasquez, Taylor None Imperial CDCMINUPES:8-12-03 Page 4 1 Abstain: None The Chairman declared said motion duly carried and so ordered. Commissioner Taylor requested a copy of the annual Arbitrage Report from Munifinancial. 2. CDC RESOLUTION NO. 2003-18 CLAIMS AND DEMANDS The following Resolution was presented to the Agency for adoption: RESOLUTION NO. 2003-18 CLAIMS AND DEMANDS A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROSEMEAD ALLOWING CERTAIN CLAIMS AND DEMANDS IN THE SUM OF $10,870.72 AND DEMANDS NO. 7080 THROUGH 7095 MOTION BY VICE-CHAIRMAN CLARK, SECOND BY COMMISSIONER ALARCON that the Commission adopt Resolution No. 2003-18. Vote resulted: Aye: Alarcon, Clark, Vasquez, Taylor No: None Absent: Imperial Abstain: None The Chairman declared said motion duly carried and so ordered. Commissioner Taylor requested copy of the application fee permits for the California Department of Fish and Game in the amount of $1390.50 and from the California Regional Water Quality in the amount of $1750.00. 3. RESOLUTION NO. 2003-17 - A RESOLUTION OF THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION MAKING CERTAIN FINDINGS AND DETERMINATIONS WITH RESPECT TO COMMUNITY DEVELOPMENT COMMISSION PAYMENT FOR COSTS ASSOCIATED WITH PARK ADA (AMERICAN WITH DISABILITIES ACT) AND BALLFIELD LIGHTING IMPROVEMENTS MOTION BY COMMISSIONER AYLOR, S COND BY VICE-CHAIRMAN TAYLOR at the Commission adopt Re o. 2003-17. Vote resulted: Aye: No: Absent: Abstain: Alarcon, Clark, Vasquez, Taylor None Imperial None CDCMINUPES:8-12-03 Page a2 The Chairman declared said motion duly carried and so ordered. 4. APPROVAL OF COOPERATIVE AGREEMENT BETWEEN THE CITY AND COMMUNITY DEVELOPMENT COMMISSION FOR PARK ADA AND BALLFIELD LIGHTING IMPROVEMENTS MOTION BY COMMISSIONER TAYLOR, SECOND BY COMMISSIONER ALARCON that the Commission approve the Agreement. Vote resulted: Aye: Alarcon, Clark, Vasquez, Taylor No: None Absent: Imperial Abstain: None The Chairman declared said motion duly carried and so ordered. 5. REVIEW AND APPROVAL OF OWNER PARTICIPATION AGREEMENT FOR C.H. AUTO'S ACQUISITION OF 8352 GARVEY AVENUE Peter Wallin, Commission Attorney, presented the staff report. VERBATIM DIALOGUE FOLLOWS: COMMISSIONER TAYLOR: In reading though this, the Turner Trust gives the implication or implies that they've got a project that they're working on. PETER WALLIN, COMMISSION ATTORNEY: That is correct. They are working on one. It's an unbaked pie at this time. TAYLOR: All right. Why are we stepping in for an $800,000 purchase? What's causing a problem that it can't be done between those private owners? WALLIN: At this time... when we started working on this transaction five or six months ago, the Turner Trust thought they were all ready to go with and had actually agreed to the terms of this transaction. They would buy the property from Jimmy Wang for $775,000. TAYLOR: What happened? WALLIN: They did not get the drug store commitment at that time. They are presently trying to get a new drug store... TAYLOR: They are trying to do... to get a drugstore to come in. So they haven't got one in otherwords. WALLIN: They do not have one as far as I know. CDCMINUTES:8-12-03 Page s3 TAYLOR: So why are we still putting ourselves in a position WALLIN: Understand, we are not buying this property. We're acquiring an option. We're not obligated to buy this property. The only time we'd ever come back to you and say buy this property is if the Turner Trust stepped in and took it over. All we're doing is buying the opportunity to buy this property. TAYLOR: Well, still, it's $25,000 that... we have the option and if they can't get tenants in, why do we need the option for one piece of property. WALLIN: We don't need the option. We could add that to the forgivable loan. But the thing is, we would like to have the opportunity to pick up that parcel if the Turner Trust can get this together. TAYLOR: For what? We've got...I'd like my comments about this in the minutes. We have approximately 990 businesses in the City. I find it hard to justify, even though it said ...I'm not questioning the business itself, I'm questioning the policy of $125,000 to one business. We've done it before. We went down the City, none of these Councilmembers were here at the time, and that's when you were hired, when the condemnation went on down at Garvey and San Gabriel for the K-Mart. We bought the property and K-Mart, of all companies, and that goes back 30 years, they folded, they couldn't make a go of it. And it had nothing to do with their business now, 30 years later. We basically subsidized that. Bought the property, condemned homes, moved people out and it fell through or didn't succeed once they built it. We did the same thing for the Nissan Motor Corporation up at the Montebello Shopping Center. We gave them $225,000 for their auto sales promotion and within 3 years it collapsed. It's easy come, easy go. No reflection on the businesses, but something ...I can't do that with taxpayers money. WALLIN: I understand that. At least on the Nissan deal, they collapsed. We didn't take back secured by a Deed of Trust. In this transaction, if he stops business, we have a note secured by a Deed of Trust to protect the money that we put into it. TAYLOR: And how do we get that money? WALLIN: Foreclose on the property. TAYLOR: Which one. On Garvey... the opposite property I guess you would call it. WALLIN: The Deed of Trust at this time is either on the Laidlaw property or some other property that has sufficient equity. TAYLOR: That's another fly in the ointment. What is some other property? Is it of equal value or where is it at? WALLIN: It could be a personal residence in Beverly Hills. It has to be property that has sufficient equity to insure that if they breach the agreement that we have the ability to get re- paid. Nobody is going to give up their home. CDCMINUTES:8-12-03 Page a4 VICE-CHAIRMAN CLARK: Who is "they"? WALLIN: "They" meaning Pro Sharp Co. TAYLOR: The other thing is and this is another sticky situation. We lost Laidlaw as far as they been directly unknowingly to us, up and moved out of the City. What is happening to the lawsuit that we are to get half of that sales tax from Laidlaw. WALLIN: The matter has been entirely briefed. The hearing is set for September 15th, and I like our chances. I will distribute to Council all of the Pleadings that were filed. Councilman Imperial arrives at this time (7:20 p.m.). TAYLOR: Well I mentioned to Mr. Crowe as far as any of this land trading business or selling it back and forth, whatever is done there, I feel it's more important to get that sales tax. What is it, a ten year period. WALLIN: Yes. We're supposed to get 50% of what they get up to a maximum of $100,000 (per year) for a period of ten years. TAYLOR: There's a potential $1 million, and you feel good about that. WALLIN: We have pursued that lawsuit. We filed it, we've got a hearing date, and we've fully briefed it and our pleadings are about that thick. TAYLOR: I'd like to be kept up to date on that. That's a $1 million that we stand to acquire because of them just up and leaving and the Redevelopment Agency (Baldwin Park) helping them out there. We didn't even know about it. It's kind of disheartening on our point. We didn't know what one of our good businesses was doing. That's all I have for now. CLARK: I want to ask about the Turner Trust. We need this to happen... WALLIN: They own substantially all the property around Pro Sharp's property. They also own one of the parcels they lease to Pro Sharp, that Pro Sharp is using to do business at present. They're trying to put together a real estate development anchored by the CVS Drugstore. I think they are going to real estate committee for CVS within the next few weeks. If they get approval from CVS, then they will be interested in assembling the rest of the block. Right now they are in the same position they were four months ago when they first started negotiating this. They said Yes, we want to buy that property. They were negotiating directly with Jimmy Wang.. Then they said No, we're backing off, we didn't get the drugstore. So now they are back to where they are almost ready to start talking about buying it. Again, all we're doing is giving them the opportunity to buy it. We're not buying it for them. All we're doing is taking the same portion of the money we're providing for a down payment. Essentially is applicable to an option. That option will enable them to come in a take it over from us and that facilitate their development if that development goes through. If not, the option will be dropped. CDCMINUTES:8-12-03 Page #5 CLARK: If it doesn't go forward, if CVS turns them down and we didn't do this tonight, what would happen. WALLIN: If CVS didn't go forward? CLARK: Yes. What we do tonight is contingent... is CVS contingent upon that? WALLIN: It would be very difficult for them to put together a development with Pro Sharp's property right in the middle. They would have to acquire it from Pro Sharp. TAYLOR: Excuse me, Maggie. But, there seems to be... they're doing a pretty good job trying to get something going - between the two owners, Turner Trust and whomever the shopping center might be. That's another cautious situation. We had two good sized developments that were proposed down on Temple City Boulevard and Valley. They came in with pretty glorious plans, you might say, whether it be theatre, ice cream store, and they couldn't put it together. I hate to see the hinging of the drugstore on this. I don't know what else they've got proposed in there. It's between the two owners right now. The Turner Trust is trying to get, evidentaly, a key party being the drugstore. That's the only thing we've heard about going in there is the drugstore. So, the basis is that everything is on that drugstore. Mrs. Clark's comment about what happens if they don't go through... there's not a whole lot we can do if somebody is not going to go through with the project other than all of a sudden we're tempted to buy an $800,000 property under the Option. WALLIN: We're not tempted to. I don't think that we would. TAYLOR: I sure hope we wouldn't. All we're doing is providing the option to buy. IMPERIAL: Can I be brought up to date so I can understand what's happening. WALLIN: All I've done is explain what the essentials of the Agreement are. The Commission gets an option to acquire Pro Sharps existing facility for $800,000. The only purpose of that is to be able to provide that option to the Turner Trust if they wish to use it. The Agreement provides that if it's not exercised within 4 months, then Jimmy Wang can give us the $25,000 back. CLARK: If what isn't "exercised"? WALLIN: If the option isn't. Essentially we are giving Turner Trust a 4 month window in which to exercise the option. We have the option, but the reason we have the option is to assist the assembly by the Turner Trust, if they're going to go forward with the development. If not, the option would be relinquished. We have no intention, the Commission has no intention of buying Pro Sharp's property. The only reason we would do that is to turn it over to the Turner Trust. CLARK: Then why can't Turner Trust buy it directly? WALLIN: They could. But what we do here is we guarantee that they could buy it CDCMINUTES:8-12-03 Page a6 TAYLOR: For $25,000 to give them the guarantee to buy it WALLIN: I have no idea what the end negotiations might be. Pro Sharp may sell it to somebody else tomorrow if we didn't have the option. IMPERIAL: We're talking about that property that he's going to move into and make it a much nicer place down there and get rid of some of the junk. That's what it's all about. I don't understand this, but if it costs $25,000 to help somebody get into a piece of property that's going to work and it's a dump right now and you're not going to clean it up unless something like that goes in, I don't know what the problem is. TAYLOR: He's already got a deal with the owner for $1,700,000 to buy it. Why are we there? IMPERIAL: He needed some help to get it apparently. I look at this like the First Time Home Buyers Program. You want to clean up an area and you want some people to come in, you do something about it. TAYLOR: This is $125,000, not $25,000 IMPERIAL: I'm aware of that. As for what is happening all over, it's a clean deal. What's the problem. TAYLOR: It's happening with the state government, it's happening with the federal government. IMPERIAL: Also, Hawaii Supermarket went in there and tried to offset this. What they wanted to do.... TAYLOR: Hawaii market went in where? IMPERIAL: Into that piece of property and wanted to go in there. You know what they wanted to do with that. TAYLOR: Which property? IMPERIAL: The property we're talking about, the one he wants to move into (Laidlaw Property). If they would have gone in there, it would be a storage place. If you've ever gone down Del Mar Avenue and seen what their storage places looks like, you'd be happy to have something like this. TAYLOR: Another item I need to know about. What is inverse eminent domain clause? That this property is being acquired under the threat of eminent domain. That is not in a project area. For us to use eminent domain to condemn a private businesses and a car shop... when did the law change that we have the authority to condemn private businesses that are not in a project area. CDCMINUrES:8-12-03 Page 47 WALLIN: The City has the power to implement its economic element of its General Plan. The Redevelopment Agency doesn't have the power of eminent domain on that property, the City does. TAYLOR: How does the City have the authority to go in and condemn a commercial business that is independent on its own because... and is it true in here that it's under the threat of eminent domain. WALLIN: The City has the power to acquire property under the threat of eminent domain. TAYLOR: I'd like the clarification, my understanding is they could do it for highways, schools, fire departments, libraries, for a public purpose. WALLIN: How about this case? The City of Oakland condemned the Oakland Raiders as a business. TAYLOR: They did it in Lake Elsinore. They condemned property and build a baseball stadium down there and now it's gone bankrupt. $250 million and nobody comes to it. Just because they did it doesn't make it right. WALLIN: The Supreme Court ruled they could do it. IMPERIAL: Isn't that for a higher use, Peter. If we decide that we don't want to do anything for the next 25 years, we're not going to do anything, for instance, for 10 furniture shops in one block on Valley Boulevard. If we would have sat there and done nothing, they never would have widened Rosemead and Valley Boulevard. TAYLOR: What happened to the Nissan dealer at the Montebello Mall. You were on the Council then. IMPERIAL: Absolutely. He went up there and he did not properly take care of business. TAYLOR: How much did we give him? $250,000. What did we give K-Mart? You weren't on that two years when we condemned that property, kicked people out of their homes. What happened to that multi-million dollar project. IMPERIAL: What happened? TAYLOR: We gave them money to build it by acquisition of the land and subsidizing it when we sold it at a loss. I'm trying to tell you it's easy come, easy go when we're using taxpayers money and... WALLIN: We're not spending general fund money here, we're not spending Redevelopment Agency money. We're spending Community Development Block Grant Money, which is intended for the purpose of providing assistance to businesses to provide jobs and to revitalize CDCMINUTES:8-12-03 Page a8 target areas. This is both a target area and we're getting jobs out of it. That's what CDBG money is there for. DON WAGNER, ASSISTANT CITY MANAGER: Part of the agreement is that Mr. Wang has to create four additional jobs, correct Lisa? LISA BAKER, CDBG COORDINATOR: He has to create four jobs over and above his current number. Community Development Block Grant funds are also able to be used for business retention activity and with a loss of the lease on C.H. Auto, he could not operate his business at the current level so it could also be an employment reduction. We see this as an opportunity for both business retention as well as business augmentation in this difficult business time. WAGNER: I was here for the Freeway Nissan... it was business retention because the dealer, if everyone recalls, Nissan Corporation told Barry Daniels that if he didn't move on a freeway site, he would lose his franchise. IMPERIAL: We moved him in to a freeway site that the City had. If this guy decides to go over and play games over in England when he is supposed to be taking care of business, we can't help that. CLARK: I don't have any problem with doing this. The only thing that makes me wonder - if the drugstore doesn't want to come in and I hate to say it, but we have a lot of drugstores coming in it seems like. That's the only thing that worries me. What kind of liability are we taking on if that falls through? WALLIN: None. We have no obligation to purchase the property. We have an option to purchase. In other words, what we are doing is taking CDBG money and providing assistance to get the Laidlaw building purchased and get that business relocated. That's our primary goal. Kind of as a bonus, we getting an option on that property which we can or won't use. I could have called the $25,000 instead of an option on the property, I could have called it additional assistance to the business to move into the Laidlaw property. That would be a legitimate use of CDBG money. Whyjust do that? Why don't we take an option so that we will have an opportunity to do something. We don't have to seize that opportunity, but we will have that opportunity. CLARK: Would that option give us any kind of leverage as far as... if we thought there were too many drugstores. That we could encourage something else. WALLIN: We don't have to exercise the option, we could just say CLARK: I know. But, does it buy us any leverage? IMPERIAL: They've got a Walgreen going in across the street. Have you been down to that corner, they've got a sandwich shop going in, they've got the Baskin Robbins Ice Cream.... CLARK: That's down on Garvey... CDCMINUTES:8-12-03 Page n9 IMPERIAL: We're talking about clearing that area... you go through right now, I'm afraid of having my family go down there by the bus stop. That's what I'm saying. We're trying to do something about it. WAGNER: I think Jay's point is that we're trying to rehabilitate that corner on Del Mar and Garvey. I've worked for the City for 20 years and it doesn't look any better now than it did 20 years ago. TAYLOR: Nobody's against the improvement... WAGNER: I understand that Gary, I just think this is a good opportunity, both staff and the City Manager have been working on this for quite a while. It's a good opportunity. CLARK: What I'm asking is does this actually help us with what goes into that block. WALLIN: Yes. Because we have control over the property, our relinquishing control over the property and giving it to Turner Trust gives us some say in what Turner Trust does. Although frankly, our zoning powers are probably greater. TAYLOR: Maggie, as far as giving us a win, win situation, it only comes with the $800,000 price tag. We don't have control over that property until we pay the $800,000. We have an option to buy it. WALLIN: We can assign that to the Turner Trust. TAYLOR: Well, yes, if they want to take it. But, if we don't really control what is going in, the Turner Trust is the one trying to put this project together. CLARK: We're not obligated to $800,000. WALLIN: That is correct. TAYLOR: No, we're not obligated, but then we have no control over it WALLIN: We just have the option to buy it for.... TAYLOR: This is one of the worst things I've seen happen with redevelopment project areas. We go in and buy the property, the other agencies have done this, and they're embarrassed that they can't sell the project. Then how do they get out of the hole? They sell it at a loss. CLARK: Right. But, we're not obligating anything. We're merely assisting the move... TAYLOR: I'm not disputing that. The $800,000... to have control of that property... VASQUEZ: Peter, can you fill in Jay about the drugstore, CVS. CDCMINUTES:8-12-03 Page 410 IMPERIAL: I had a doctors appointment, that's the reason I'm late. You'll have to excuse me but I want to know what's happening. WALLIN: The last time I talked to the representatives of Turner Trust, about a week and a half ago, they indicated that CVS was going to committee this month. They would have an answer then. They were very hopeful that it was going to be approved. We have not heard from them since. VERBATIM DIALOGUE ENDS. MOTION BY VICE-CHAIRMAN CLARK, SECOND BY COMMISSIONER IMPERIAL that the Commission authorize the Chairman to execute the Owner Participation and Option Agreement and authorize the Executive Director to take steps to implement the Agreement, including the execution of documents and agreements. Vote resulted: Aye: Alarcon, Clark, Vasquez, Imperial No: Taylor Absent: None Abstain: None The Chairman declared said motion duly carried and so ordered. Commissioner Taylor stated that he opposes this item as discussed above and that this is not any reflection on Mr. Wang or C.H. Auto, but on how the City takes and spends money. Commissioner Alarcon stated that as a resident he approve previous Council's efforts in prudent fiscal management of "taxpayers" money. Commissioner Imperial stated for the record that in all his years as a Commissioner, he has been very proud of the fact that the City has never been in the newspaper like other most cities around us have. Mr. Imperial continued that that is because the City has had proper management in handling City concerns. 6. MATTERS FROM OFFICIALS - None 7. ORAL COMMUNICATIONS FROM THE AUDIENCE ON COMMUNITY DEVELOPMENT COMMISSION MATTERS -None 8. ADJOURNMENT There being no further action to be taken at this time, the meeting was adjourned at 7:45 p. M. Respectfully submitted: Commission Secretary APPROVED: CHAIRMAN CDCMINUTES:8-12-03 Page 4 11