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. . I . I .1 In response to a question ITom Council Member Leipzig, Mr. Drew Bradley, of The - Hillsdale Group, 1199 Howard, Burlingame said, "We are selling out of necessity. We developed the project with Aetna Insurance who was the majority owner. They put the property up for sale, which we had no control over, and we had a first right of refusal and we met the offer. We met it because we believe in the property. We are leaving money in, under terms that are less favorable than we would normally have, than if we sold the property to a reputable buyer out of Chicago, we would have walked away with all of our cash. We are leaving more than 50% of our proceeds in the property." In response to a question ITom Mayor Howard, Mr. Bradley stated that quite a few people are sent out of the community to other facilities who care for Alzheimer patients. He said Hillsdale Group operates two facilities with Alzheimer units, Palo Alto Commons and Hillsdale Manor. He said they currently send two or three people to specialty centers outside of Redwood City who suffer ITom Alzheimer or a related disorder. Mayor Howard requested Mr. Bradley to send her information about the specialty centers. Council Member Claire stated that the City had floated revenue bonds before, and a precedent had been established. He said Finance Director Ponty did an excellent job in negotiating the fees the City would receive. He said the Finance Committee composed of Vice Mayor Ruskin and himself gave Finance Director Ponty some very strict guidelines, - and the Finance Committee was also aware that if Redwood City did not do this, there were two other agencies who would, and the City would lose significant property tax revenue. Council Member Leipzig said, "I think the facility is a super facility. I have a couple of former clients who are living there. It is an expensive facility, but it is well run, and a good asset to the community. I am very concerned about this. I appreciate Council Member Claire's historical perspective. Precedence is important sometimes, but that does not always mean that they were correct decisions. I don't think we should be involved in this transaction at all. 1 would like to see the property remain as it is in Redwood City. I appreciate the addition of the Alzheimer operations. I think putting it on the open market is a great idea for the private individuals involved. I don't think putting the taxpayers at risk, whether it is a small risk or not, it is a risk. It is something we should not be involved in nearly $44 million in bonds over 30 years. The tax revenue that we will lose and supposedly gain is nearly a wash. I don't think this is something the City of Redwood City should be involved in." Council Member Hartnett said, "Council Member Leipzig's economic analysis on the tax rate loss and gain is incorrect. Secondly, with respect to the risk, as was indicated in the report and clearly restated by bond counsel, the City is not on the financial hook. If it were, I would agree with Council Member Leipzig, and I would be extremely hesitant to - REGULAR COUNCIL MEETING MINUTE BOOK NO. 56 JANUARY 26, 1998 MINUTES Page No. 189 PAGE 17