RDA Min 1994-12-05 - Laserfiche WebLink

Browse Search

. 1 II step in and stay and fund the money. They advanced the funds to buy the land to the extent that that money did not go to what we consider, what was a fair payment for Safeway to pay for the land became a loan that's repaid ttom the tax increments and sales tax produèed by the project. I would - have to say, I've been in this business for 20 years, I'm very proud to have worked on this project. It was one of the most challenging most difficult. I think most developers would say this project would never happen. And I realize it may be controversial today that some tenants may have moved ttom downtown or ttom some other place on the El Camino, but this is really quite an accomplishment in and of itself that this project was built. And it was very unique in the way it was done because of Safeway willing to finance it and they financed it in the middle of a very severe real estate depression, I would call it anyway, and a lot of developers would not pursue this at all. And it was with that background we made the agreement that we made to put back in the tax increments generated by the projects and a certain amount of sales tax with a cap on it overtime, depending upon how much it produces it does repay the loan and if it doesn't produce that amount of tax increments and sales tax it doesn't repay the loan. At this point I guess it would be fair to say that it probably will repay the loan, but at that point in time nobody I think actually knew whether or not it was going to happen or not. With that Mike I'll give it back to you. Michael Church: Just in summary, Tim covered a lot of ground there real quickly. The Agency contribution, let me back up for a second. The Agency received a $4.3 million level of credit from redevelopment to finance the acquisition of these parcels here and these two here. That money was used both for the straight acquisition of the property as well as to cover relocation costs, and good will costs, fixtures and equipment, costs of litigation, court costs involved in combination and so - forth. There was a detailed budget that was agreed to between the Agency and the developer. I didn't bring copies of that tonight but if any of you are interested in seeing it as historical document, that's available. The Agency's obligation was to acquire the parcels and then convey them to the developer. That conveyance of property was done by, I think the last piece was November or December of last year. The deadline for doing it was around January of '94. Our acquisition, in terms of the budget the Agency had from the developer was done ahead of schedule, by March and under budget in terms of the overall costs. We finished our process within the terms of the letter of credit that were provided ttom the developer. The DDA talked to the contribution from the Agency to the developer of up to $300,000 a year for 15 years. Originally when the DDA was first signed, that commitment was contingent upon the economic success in the out years in the 10th or 11th year of the project. There was a provision that cut off the subsidy at that time if the project met certain economic performance criteria which I will not try to explain at this time because I'm not sure I could. At some point about 2 years ago, there was discussion and an agreement to renegotiate some of the terms of the DDA including that provision. Instead of having the subsidy terminable at some point in time within the 15 year period, the developer, in terms of trying to rmance the project it became much more rmanceable if, if it was for a set period. The agency was loathe to make that kind of change. The Board was loathe to make that sort of change without some quid pro quo, and in that case the quid pro quo was the commitment that the Developer would have a bookstore included in the project which was something that the Agency and the Council wanted very badly and had wanted for some time. And one restaurant that had at least $850,000 in tenant improvements. The final product as you know incorporates Barnes and Nobles which met the - bookstore requirement and there are a number of restaurants that contribute to the total tenant Redevelopment Agency Joint Study Session Minutes MINUTE BOOK NO. 52 December 5,1994 Page No. 233 Page 8