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HomeMy WebLinkAbout1986-11-19 EURA MINUTES• • • • I. ENGLEWOOD URBAN ENEWAL AUTHORITY November 19, 1986 CALL TO ORDER/ROLL CALL. //{) 9 The Special Meeting of the Englewood Urban Renewal Authority was called to order at 5:40 P. M. by Acting Chairman Susan Powers. Members present: Mcintyre, Minnick, Totton, VanDyke Powers, Executive Director/Executive Secretary Members absent: Voth, Cole, Keena, Daugherty Also present: Assistant Director Hinson Legal Counsel Benedetti Director of Engineering Services Ragland EDDA Executive Director Dietrich City Manager Mccown Rick Dunn, JBC Investment Company II. JBC INVESTMENT COMPANY u Ms. Powers introduced Mr. Rick Dunn representing JBC Investment Company. JBC Investment Company has signed a Redevelopment Agreement for the old King Sooper's Block, and has been working to get financing for housing units ap- proved for a portion of the site. During this past month, Movie One has ap- proached the City looking for a site to develop, and has considered the old King Sooper's site as well as an area within the redevelopment area under con- tract to Ross Investment Group. This business is a "second run" theatre wit h six to eig ht screens, and would require approximately 3 acres to accommodate the theatre and the necessary parking. Ms. Powers discussed the problem that has arisen concerning the cost of the land. According to the agreement for redevelopment signed by JBC Investment Company, the price of the land brea ks down to $13.50/square foot. However, the theatre company does not feel that t hey can pay more than $6/square foot for the land. There may be a parking problem if they decide to try to locate on the Ross site, and the size of the parcel is such that the theatre and accompanying parking would be the only use to be realized. This results in further consideration of the JBC Site, an d t he problem on the price of the land. Ms. Powers asked that Mr. Dunn address the Authority on the efforts of JBC to secure financing and tenants on the total site. Mr . Dunn stated that they had experienced difficulties in obtaining financing for the multi-use site because lenders interested in financing the housing units would inquire about the use of the remainder of the site. When they were informed that no definite use was in mind, they were hesitant to commit to financing on the housing units. Mr . Dunn stated that the housing units will be developed on 3 .5 acres, with the remaining 3 acres uncommitted at this time, unless the movie company proposal meets with the approval of the Au- thority. Mr. Dunn stated that they had considered development of an athletic facility or a first-run theatre, and have been informed that first-run the- atres feel the Denver area has too many screens at this time and are not developing additional theatres. Athletic facilities in general are experienc- ing difficulties, and this use is no t being actively considered. Mr. Dunn - 1 - stated that if they had a signed lease from the theatre company, they could get financing for the total project. There are lenders very interested in the • interim financing for the housing development. Mr. Dunn discussed the financing/rental proposal for the theatre, and stated that applying these figures to the total site, it would make the purchase price closer to $2.8 million rather than the $3.8 million which JBC had agreed to pay. Mr. Dunn stated that Ms. Powers had prepared a memorandum to the Au- thority setting forth the estimated tax revenue from the theatre and housing development. Mr. Dunn stated that the only way the theatre development could come about is if the Authority would be willing to reconsider the overall pur- chase price of the site. Ms. Powers discussed the financial ramifications of decreasing the sale price of the site. She stated that Laventhol & Horwath will be asked to do their usual investigation on the ability of the company to perform, and the parking situation needs to be worked on further. Mr. Tatton asked if the movies to be shown at the proposed theatre would be X- rated. Mr. Dunn stated that they are not X-rated films; they are second run films for which the admission is $1/person. Mr. Dunn stated that Movie One has developed some theatres in the El Paso area, and suggested that he would be happy to accompany a representative of the Authority on a trip to view the type of establishment that is proposed. Mr. Dunn also pointed out that Movie One is merging with an eastern company that has over 400 screens across the country. This increases the purchasing power of the company, and he is of the opinion this will be a positive factor on the quality of films that will be shown. Mr. Mcintyre asked how many housing units were proposed. Mr. Dunn stated that 200 units are proposed in Phase I, 160 units will be for congregate care, and 40 units will be assisted living units. Monarch Management from St. Louis has been selected to manage the complex. Mr. Dunn further discussed the concepts of congregate care vs. the assisted living area. An additional 100 units are proposed in Phase II, 80 units which will be for congregate care, and 20 units for assisted living. Mr. Dunn discussed the ultimate development of the site, with the west half of the site to be developed for housing units and the eastern half of the site would be used by the theatre; the theatre developers are desirous of the visibility from U.S. 285 which they would have on the eastern portion of the site. Ms. VanDyke asked if JBC had considered working with a hospital to develop an athletic center which could be used for rehabilitation purposes by patients. Ms. VanDyke stated that she envisioned local hospitals sending patients to this athletic rehab center if one were to be developed. Mr. Dunn indicated that they have had meetings with representatives of Swedish Medical Center, and have also talked to HUD on financing. Mr. Dunn stated that the develop- ment of the Swedish-Corona Cooperative housing complex has created problems for both the Medical Center and HUD, and that the hospital is reluctant to become involved in additional projects right now. He stated that other inner city hospitals are anxious to expand to the southern metro area. • Ms. VanDyke stated that she had a problem with the movie theatre proposal on • this site; she felt that there would be traffic problems, the longevity of the - 2 - • • • theatre could be a problem, and that it might be a deterrent to residents of the housing units . Mr. Tatton asked what kind of lease would JBC have with the theatre. Mr. Dunn stated that it would probably be for a 10 year period, with a five-year option thereafter. Mr. Dunn stated that this information came from the broker they are dealing with. Mr. Dunn further pointed out that JBC would develop only the "shell" of the building, and that the tenant, if it is a movie theatre, would spend approximately $700,000 in interior finish. Mr. Dunn stated that he could not address the concern on longevity, and it is a problem whenever a building is constructed for a specific purpose. Mr. Tatton stated that he could envision that the theatre could close down, still pay the rental to JBC, but bring in no tax revenue to the City. Ms. VanDyke stated that she is very excited about the housing aspect of .the development. Ms. Powers asked members of the Authority if they were interested enough in the proposal for the movie theatre for JBC to pursue further discussions and report back in two weeks. It was the consensus that there should be further discussions, with JBC reporting back to the Authority at their meeting of De- cember 3, 1986. III. TITLE INSURANCE COMPANY. Mr. Hinson brought the Authority up-to-date on the negotiations with Land Ti- tle Guarantee. They were not willing to compromise on their latest billing proposal, and the staff met with a number of other title companies to discuss the needs of the Authority and their billing procedures. Two proposals were received following the briefing session on November 12, one from First Ameri- can Heritage and one from Lawyers Title of Central Colorado. The proposal from First American Heritage is very similar in billing procedure to that pro- posed by Land Title Guarantee, which was not acceptable to the Authority. The proposal submitted by Lawyers Title indicated a desire to work with the Au- thority, and indicates that they can and will meet the requirements of the Authority in the title work to be done. Mr. Hinson stated that billing pro- cedure is also acceptable, and recommends that Lawyers Title of Central Colorado be approved to do work for the Authority. Tatton moved: VanDyke seconded: The Urban Renewal Authority authorize the Executive Direc- tor of the Englewood Urban Renewal Authority to engage Lawyers Title of Central Colorado to do the title insurance work for the Authority. AYES: NAYS: ABSENT: ABSTAIN: Minnick, Tatton, VanDyke, Mcintyre None Voth, Cole, Keena None The motion carried . -3 - IV. ASSIGNMENT AND ASSUMPTION AGREEMENT Osprey Development Company/Pennant Properties, Inc. Ms. Powers introduced Mr. Eric Holsapple and Mr. Peter Martin of Pennant Prop- erties, Inc. Ms. Powers stated that Mr. Benedetti has prepared an Amendment to the Assign- ment and Assumption Agreement be t ween Osprey Development Corporation and the Urban Renewal Authority, which will now assign all interests of Osprey to Pen~ nant Properties, Inc. in the development of the Buyer's Club/Home Club site. Mr. Holsapple addressed the Authority, and stated that Pennant Properties, Inc. is an Australian firm which has been doing work in the United States for approximately one year. Mr . Holsapple discussed the relationship between Pen- nant Properties, Inc. and Osprey, and noted that at the present time Pennant Properties does not own any stock in Osprey and is taking over several of Osprey's projects, such as the one in Englewood and a similar development in Arvada. Denver will be the home base for Pennant Properties in the United States. They do have a construction company based in California that builds bridges, and brings in approximately $1 hundred million in revenue per year. Mr. Holsapple stated that Pennant Properties has put approximately $3.5 mil- lion into the Buyer's Club site in Englewood to this point in time, and has hired several of the Osprey personnel such as Peter Martin and Loren Snyder to continue the development of the site for the Home Club. Ms. Powers stated that the City Council will be considering an IDB resolution • at the next meeting for the Buyer's Club, and this will be in the name of Pen-• nant Properties, Inc. The security for the !DB's will be a Letter of Credit that they will post with E. F. Hutton. Ms. Powers stated that she has discussed the Assignment Agreement with Mr. Bell, and he has verbally indicated that Pennant Properties does have the financial capabilities to do the project. Mr. Benedetti stated that he is confident that Pennant Properties, Inc. is capable of completing the project, and pointed out that they are working on getting building permits for the construction of the Home Club store at the present time. The Buyer's Club store has been completed, and the risk to the Authority has been reduced by completion of that phase of the project. Mr. Benedetti stated that one question which has arisen is whether the assign - ment from Osprey to Pennant Properties should be amendment #1 to the Agreement for Assignment and Disposition dated June 4, 1986, and whether the amendments previously approved for the con s tru ction of the Silo Store and Rocky Rococo restaurant should be renumbered. Discussion ensued. Ms. Daugherty entered the meeting at 6 :55 P. M. Mr. Benedetti suggested tha t the Authority could approve Resolution #17, Series of 1986 subject to some provisions which he would enumerate. Ms. Powers stated that the Authority will be closing on the sale of the prop- erty to Silo and Rocky Rococo on November 25, 1986 . -4 - • • Ms. Powers then discussed another amendment to the License Agreement with Osprey Development Corporation, which was last amended on October 31. The name will be changed to Pennant Properties, Inc., and would grant permission for further construction on the Home Club portion of the site. Ms. Powers discussed the financial deposits which have been required by the License Agreements with Osprey, which payments have in actuality been made by Pennant Properties. Ms. Powers stated that the Authority is drawing on the $300,000 deposit in the amount of $800/day until the date of closing on the sale of the property. In response to a query, Mr. Martin stated that at least one-half to two-thirds of the foundation for Home Club is in, and they would like to get as much work done as possible during the period of nice weather. Ms. Powers asked if members of the Authority had any problems with further amendment of the License Agreement as outlined previously. Totton moved: Minnick seconded: The Urban Renewal Authority approve amendment of the License Agreement to allow construction on the Home Club structure, with the provision that an additional $500,000 shall be posted by Pennant Properties, Inc. AYES: NAYS: ABSENT: ABSTAIN: Totton, VanDyke, Mcintyre, Minnick None Voth, Cole, Keena None • The motion carried. • Mcintyre moved: Minnick seconded: The Urban Renewal Authority approve Resolution #17, Series of 1986, A RESOLUTION OF THE ENGLEWOOD URBAN RENEWAL AU- THORITY APPROVING AMENDMENT #1 TO THE ASSIGNMENT AND AS- SUMPTION AGREEMENT BETWEEN PENNANT PROPERTIES, OSPREY DEVELOPMENT CORPORATION, AND THE ENGLEWOOD URBAN RENEWAL AUTHORITY, subject to the following: 1. Receipt of written approval from the Authority's financial consultant confirming the financial ability of Pennant Properties, Inc. to carry out the Re- development Agreement with Osprey. 2. The Executive Director and legal counsel are au- thorized to confirm and coordinate the previously ap- proved amendments, Numbers 1 and 2, with Pennant Prop- erties, Inc., to be sure they are consistent with Amendment #3, and to approve a different order in the amendments provided they are not changed substantially. 3. Legal Counsel approves in writing the entire transac- tion and assures compliance with the Authority's trust indenture . -5 - AYES: NAYS: VanDyke, Mcintyre, Minnick, Totten None ABSENT: ABSTAIN: Voth, Cole, Keena None The motion carried. V. SITE PLANS. Ms. Powers displayed the site plans for Rocky Rococo and Silo. She discussed the proposed sharing of a curb cut by Silo and Burger King to provide truck access to the Silo site. This has not been resolved, but she stated that she felt it could be worked out. The meeting adjourned at 7:15 P.M. rude G. Welty cording Secretary - 6 - • • •