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HomeMy WebLinkAbout2001-05-09 EURA MINUTES• • • ENGLEWOOD URBAN RENEWAL AUTHORITY May 9, 2001 I. CALL TO ORDER The regular meeting of the Englewood Urban Renewal Authority was called to order at 6:30 p.m. in the Community Development Conference Room, Chairperson Weddle presid- ing. Present: Absent: Roth, Woodward, Bertoluzzi, Garrett, Haraldsen , Weddle, Fish (entered late ) Simpson, Executive Director/Executive Secretary None Also present: Senior Planner Mark Graham II. NEGOTIATING AGREEMENT Mr. Simpson distributed copies of a memorandum from Michael Miller, specia l counsel for the City of Englewood, which memorandum sets forth "dea l points " suggested for inclusion in the Negotiating Agreement with The Fullerton Company. Mr. Simpson apologized that this information was not available for inclusion with the packet, but staff on ly received them earlier on this date. The negotiating agreement, when drafted, will authorize the Authority to enter into a 120-day exclusive negotiation period with The Fullerton Company. Mr. Simpson stated that if the Authority members approve the "dea l points", he asked that staff be authorized to proceed. If Authority members want changes made to the "deal points", this will be done. The Negotiating Agreement will provide the framework for a develop- ment agreement with The Fullerton Company for the GIW property. Mr. Simpson stated that the 120-day exclusive negotiating period means that the Authority cou ld talk on ly to The Fullerton Company regarding development of the GIW site for this length of time The option to extend the 120-day exclusive period was discussed. Mr. Graham stated that staff doesn't recommend inclusion of an "automatic" extension of the exclusive negotiating period in the Agreement. The negotiating team may want to continue negotiations if pro- gress has been made, but has not yet culminated in a development agreement; or, the ne - gotiating team may want to have the right to continue negotiations, but also be ab le to dis- cuss the site with other interested developers. Mr. Bertoluzzi asked why extension of the exclusive negotiation period would benefit on ly The Fullerton Company and not the Authority/City. Mr. Garrett responded that the "exclu- sive negotiating" period means that development of the GIW site can be discussed only with The Fullerton Company. He alluded to past experience with the CityCenter site rede- velopment project, and stated that negotiating processes for the GIW site and the Elati H:IGROUPIBOARDSIVRA\Minutes\Min 2001\EURA 05-09-0 1.doc • • Street site will be handled differently. He further stated that this approach might provide the City/ Authority some leverage with the development company. Mr. Haraldsen asked who determines whether progress has or has not been made, and whether the exclusive negotiating time should be extended. Mr. Simpson stated that the negotiating team would make that determination; regular reports will be made to th e Au- thority. Mr. Simpson pointed out that one step The Fullerton Company can take prior to the redevelopment agreement would include holding neighborhood meetings to present the proposal to the residents, and doing market research . Mr. Simpson reviewed the "deal points", including exclusive negotiation, option to extend the 120-day exclusive period, benchmarks, and items not included in this agreement but which may be included as part of the development agreement. It is important that The Fullerton Company have a very clear understanding of the environmental issues; they need to begin meetings with the State Health Department regarding asbestos abatement and soils remediation. Mr. Simpson commented that if The Fullerton Company has met only with the City/ Authority negotiating team, but made no effort to meet with state health offi- cials, or with the neighborhood, may not show "progress" on their part. Mr. Haraldsen asked if traffic improvements are not the responsibility of the City. Mr. Garrett stated that it is the City's responsibility to help the developer on his traffic plan. Mr. Haraldsen asked whether the developer would be given an additional 120 days if h e presented a development plan that was not acceptable. Mr. Simpson pointed out that the developer has presented a "conceptual " plan , which was acceptable to the Development Review Committee, the EURA, and to the City Council. If there are substantial c hanges to the conceptual plan, justification for the change will be required . Mr. Woodward asked about the possibility of "delays " in reaching an acceptable develop- ment agreement caused by the City/ Authority negotiating team . Mr. Simpson stated that there could be delays caused by the negotiating team. Mr. Woodward stated that in his opinion, Mr. Fullerton meets his responsibilities, but if a delay is caused by the City or EURA Mr. Fullerton should have the right to have the negotiating period extended . Mr. Graham noted that Mr. Fullerton has expressed interest in acquiring funds to assist in the environmental assessment and clean up of the site. Mr. Graham stated that he is work- ing on this request from Mr. Fullerton. He stated that the developer cannot get a loan to clean up the property until a clean-up plan is approved. He noted that no developer will want to spend hundreds of thousands of dollars on a project unless a development agree- ment has been approved and signed. Mr. Simpson noted there are a lot of "moving parts " to this project -environmental as- sessment and remediation, design impact on the neighborhood, negotiations with RTD, traf- fic impacts, parking plans, community issues, zoning -all have to be addressed , some of • them simultaneously. H:\GRO UPIB OARD S\UR A\Mi nu tes\M in 200 1\EURA 05 -09-01.doc • • • Mr. Garrett stated that once The Fullerton Company begins putting money into the project, it is a signal Mr. Fullerton is really interested in doing the project. Mr. Garrett discussed the leverage of penalties if the developer does not meet specified deadlines; if the developer cannot meet the specified deadlines because of delays caused by the City or EURA, those penalties will not be charged. Mr. Garrett pointed out that the Trammell Crow Residential project took four months of negotiation from the beginning to money coming in the door - Mr. Simpson handled these negotiations. Miller-Weingarten, CityCenter redeveloper, on the other hand, has been negotiating on the project for seven years. Mr. Fish asked if Mr. Fullerton has had any input on the proposed deal points . Mr. Simpson stated that at this time, the deal points are only those proposed by Mr. Miller, special coun- sel engaged by the City. Mr. Benedetti, EURA legal counsel, has been faxed a copy of the proposal. Mr. Graham stated that in his opinion, Mr. Fullerton is very "deliberate" in his considera- tions of any project; he has run the numbers on the GIW redevelopment project, and they work for him. Mr. Graham stated that there are specific things in the proposal Mr. Fullerton has asked for: he wants a loan to assist in the environmental remediation, and has asked for $100,000 up front to begin the environmental work. Ms. Weddle asked about the zoning for the site. Mr. Simpson stated that the zoning will be a Development Agreement issue; the zoning will have to be in place on the site before Mr. Fullerton will close on acquisition of the property. Mr. Simpson stated that staff and city consultant have been working on writing the zone regulation , and he wants an acceptable draft within the next 30 days. Mr. Graham stated that a meeting has been scheduled shortly after Memorial Day to go over the proposed zone district regulations. Mr. Simpson stated that Mr. Fullerton will be working with the staff and consultant on the zone district, but the development of the district and application of the district to the site will be a De- velopment Agreement requirement. Ms. Weddle asked if the EURA sets the guidelines, or is that a responsibility of the City. Mr. Garrett stated that this body (EURA) will do the guidelines. This is an EURA redevelopment project. Mr. Bertoluzzi asked when the 120-day negotiating period begins. Mr. Simpson stated that it will begin when the Negotiating Agreement has been finalized and is signed by all parties -The Fullerton Company and the EURA. Mr. Simpson stated that if the EURA approves the deal points this evening, Legal Counsel Miller will be notified and the Negotiating Agree- ment will be finalized. Mr. Simpson reiterated that he is asking for permission to proceed with finalization of the Negotiating Agreement if the Authority is in agreement with the deal points. Mr. Bertoluzzi asked if there is anything contained in the deal points that would be a "surprise" to Mr. Fullerton. Mr. Simpson stated that he did not think any of the issues cited in the deal points would be a surprise; he stated that there have been several meet- ings with Mr. Fullerton and many of these points have been included in their conversations . Mr. Garrett stated that both the City and Mr. Fullerton have exp e rienc e with such agree- ments, and know what they will contain. H:IGROUP\B OARDSIURA\Minutes\Min 200 1\EURA 05-09-0 1.doc • • • Mr. Woodward stated that the deal points are fine, but did question sub-points "c" and "d"; do these points make the assumption that RTD personnel will coordinate environmental clean-up with The Fullerton Company. Mr. Simpson stated that this assumption is made; it should also include City coordination with RTD and The Fullerton Company. The commit- ment for a light rail station needs to be made part of the Negotiating Agreement, even though the actual location of the station will not be on The Fullerton Company site. The location and development of the light rail station will be between the City and RTD . Mr. Woodward stated that the way points "c" and "d" are written, RTD is tied into the process. Mr. Graham updated the members on meetings with RTD. There was a meeting earlier this date between City officials and approximately 18 people from RTD and The Fullerton Company. Topics discussed included the clean-up, demolition, asbestos abatement, and drainage . Mr. Graham stated that RTD is very cooperative . If we want to accomplish the asbestos abatement at the same time that RTD is considering, we can participate. This may be something where the City may assist in the asbestos abatement on the "front end ", and add the cost of the abatement to the purchase price of the land to The Fullerton Compan y. Mr. Woodward asked if there is a possibility this could result in a clean site, or does it ad- dress only asbestos abatement. Mr. Graham stated that the discussion wasn 't pushed this far; he would guess it might include issues associated with the building demolition, but did not think it would apply to "in the ground". He stated in his opinion, the asbestos abate- ment and building demolition could be addressed at the same time. Mr. Fullerton's ap- proach is to build out the project in five phases, and do the clean-up of each phase as it comes up; this way, he would not have to carry the cost of the total clean-up over the years until the final phase is completed . Mr. Graham stated that one issue of contention is a two acre site right where Elati Street "bends"; RTD engineers have allowed for a drainage pond at this point, and Mr. Fullerton was rather disturbed when he found this out. Mr. Graham stated he felt it is in our interest to keep this two acre site in the redevelopment project. Mr. Simpson asked if the Authority members felt comfortable with the "deal points", and giving authorization to proceed with the development of the Negotiating Agreement. Mr. Haraldsen asked if reference to the "station" was the old Depot. Mr. Simpson stated that "station " is a new light rail station, which will be a City/RTD project, and will not be part of The Fullerton Company project. Mr. Fish stated that, as he understood, the Authority is approving the deal points, which will be used to develop the Negotiating Agreement. Mr. Simpson stated this is correct; if there are serious changes to the deal points, staff will bring the information back to the Authority. Haraldsen moved: Woodward seconded: The Englewood Urban Renewal Authority accept the deal points set forth by Special Counsel Michael Miller as the basis H:\G RO UP\B O ARD S\URA\Mi nutes\Min 2001\EURA 05 -09-0 I .doc • • • AYES: NAYS: ABSTAIN: ABSENT: of the Negotiating Agreement between the EURA and Th e Fullerton Company. Roth, Woodward, Bertoluzzi, Garrett, Haraldsen, Fish, Weddle None None None The motion carried . Ill. ACTIVITY UPDATE Mr. Garrett stated that the corporate offices of Gart's Sporting Goods have expressed in- terest in relocating to the site of the Home Base store, which is closing very soon. Gart's Sporting Goods will bring 250 to 260 jobs to this site to begin with, and expect job growth once they have settled. These jobs are in the $50,000 range. Mr. Garrett stated that the City of Englewood, at the present time, realizes only about $50,000 per year revenue from the Home Base site; any revenues over the base amount goes to the Tax Increment bonds, and the TIF District expires in 2005 . If Gart's does relocate to this site, we will lose sales tax revenues from the site but employees of Gart's would be frequenting local restaurants and doing some shopping in Englewood, and some of them may choose to live in Englewood. Mr. Garrett stated that the Home Base and Office Depot sites are owned by the same company, and Gart's representatives want some voice in determining the redevelopment of the Office Depot site (Office Depot is moving into the CityCenter development). Mr. Garrett noted that one of Gart's representatives had reason to be in th e Civic Center, and was very impressed with the remodeling and re-use of a former department store; as a re- sult, Gart's is very interested in bringing their corporate offices to Englewood. Gart's would make some physical changes to the Home Base building if they do actually relocate to that site. Mr. Garrett stated that it is impressive that Gart's is even considering Englewood; be- cause of the CityCenter project, other people are becoming interested in Englewood . Mr. Simpson stated that the interest Gart's is showing in the site is a good influence, and can bring positive results for the remainder of the property. Mr. Simpson stated that there are least five alternatives under consideration for use of the north portion of the property. Mr. Haraldsen asked if Englewood residents will have any place in the City to purchase lumber and other home improvement supplies. Mr. Simpson advised that we need to de- termine what the market will support; the private sector has identified a number of possibi li - ties for reuse of the Office Depot site , and that he will be attending th e International Con- ference of Shopping Centers convention in Las Vegas later this month, and will be meeting with company and business representatives. Mr. Bertoluzzi stated that the financial discussion on the Home Base vs . Gart's Sporting Goods is interesting, but how much revenue will go to the bondholders in the TIF District. What incentives is Gart's looking for. He pointed out that if the Gart's deal does come to fruition, there may be a revenue shortfall for bondholders. Mr. Garrett stated that Gart's H:\GROUPIBOARDS\URA\Minut es\Mi n 200 1\EU RA OS.09-0 1.doc • • • wants the site rezoned -it is now 1-1, Light Industrial; they want to assure that whatever may go into the Office Depot site will not negatively impact their office usage . Mr. Garrett reiterated that the average job with Cart's is $56,000 per annum -above the metro area average. The relocation of the corporate headquarters will bring approximately 300 high paying jobs to Englewood, and these employees will generate tax revenues for Englewood. If the Office Depot property is reused for a retail purpose, there will be sales tax generated as well as the property tax revenues. Mr. Bertoluzzi pointed out that the Home Base /Office Depot property is still in the domain of the EURA tax increment district; if the zoning is changed and tax revenue is lost, this may not be in the best interest of the EURA. Mr. Simpson stated that it is difficult right now to say what may happen on the site, but the same revenue amount could remain and be strengthened if a good retail user is located on the northern site. Mr. Woodward asked about obligations the Authority may have to protect the revenue in- terest of the bondholders. Mr. Garrett stated that it is a good question, and suggested that it might be better answered by legal counsel. He pointed out that the EURA does not con- trol the property. Mr. Bertoluzzi stated that the EURA may not have control of the prop- erty, but suggested that the EURA could take a stand with City Council and ask that signifi- cant financial incentives not be provided for a tenant that does not provide sales tax reve - nue . Mr. Haraldsen asked if a business such as Home Depot wanted to relocate to Englewood, where could they locate . Mr. Simpson stated that the north portion of the existing site is not large enough to accommodate such use. It might require an assemblage of property to accommodate such a use. Mr. Haraldsen asked about redevelopment of the 3400 South Elati Street property. Mr. Simpson stated that five companies expressed interest by responding to the RFQ process. These companies were advised they needed to prepare a Development Proposal, and that the proposal should contain a significant building. These proposals were due on May 211 d by 1 p.m.; three proposals were received. A review committee has been established and will begin meeting within the next couple of weeks. Based on those meetings, this devel- opment review committee will make a recommendation for a development company. Mr. Simpson asked Mr. Bertoluzzi what staff can do to provide information regarding the Home Base property. Mr. Bertoluzzi stated inasmuch as the property is included in the TIF District, in his opinion the Authority should have an interest in the use of the property. He is happy to see that Cart's is interested, but is concerned about loss of tax revenue. Mr. Fish stated that with the light rail station in such close proximity, it's a great site; how- ever, he did not feel that the City and Authority should "give the store away" in providing incentives . Mr. Simpson stated that the total site is approximately 12 acres; both uses on the site - Home Base and Office Depot -are "going dark"; the site is zoned 1-1, Industrial, and is H:IGROU P\B OARDS IURA\Minutes\M in 200 1\EU RA 05 -09 -01.doc • • • equidistant from the Oxford light rail station and the Hampden Station. The property is within the tax increment financing district. Gart's Sporting Goods approached the City re- garding relocation to the site. Mr. Simpson stated that it is appropriate to note concern on loss of a revenue generator. Mr. Simpson stated that the transit station provides value to residential, office, and governmental uses, but is of less value to retailers. They are more interested in sites that allow pedestrian and vehicular access and traffic. Staff is trying to look at the entire site, and weigh what is suggested against what is being requested -what is the direct value versus the indirect value of a proposal. Mr. Haraldsen asked if there would be a light rail station on the site. Mr. Simpson stated there would not be. Mr. Fish stated he would encourage City representatives to look at alternatives for use of the site -a hotel with good access to a light rail station might work on the site . Mr. Simp- son stated that a lot of possibilities for use of the northern part of the site have been con- sidered. Mr. Woodward suggested a sporting clothes close -out store might work well on the north half of the property. IV. APPROVAL OF MINUTES April 18, 2001 Ms. Weddle stated that the Minutes of April 18 were to be considered for approval. Mr. Woodward noted on page 8 that a date was incorrect: it should read "2001" rather than "201 ". The correction was noted. Bertoluzzi moved: Roth seconded: The Minutes of April 18, 2001 are approved as amended . AYES: NAYS: ABSTAIN: ABSENT: Woodward, Bertoluzzi, Fish, Haraldsen, Roth , Weddle None Garrett None The motion carried V. DIRECTOR'S CHOICE Revenue Report The revenue report was briefly discussed. Mr. Bertoluzzi asked that the revenue report be part of every monthly meeting packet delivered to the Authority . H:IG RO UP\B OARD SI URA\Min utes\M in 200 1\E UR A 05-09-0 I .doc ' • • • VI. LEGAL COUNSEL CHOICE No l ega l counsel was present. VII. COMMISSIONER'S CHOICE Mr. Fish stated that he had some flexibility in his work schedule, and would like to sit in on some of the negotiation meetings between staff and RTD and The Fullerton Company. He asked if there is a schedule of upcoming meetings. Mr. Fish stated he cannot attend all the meetings, but might be able to attend some . Mr. Graham suggested that Mr. Fish call him regarding a schedule of meetings. There was no further business brought before the Authority. The meeting was declared ad- journed. Gertrude G. Welty, Recording S H:IG RO UPIB O ARDSIURA\Mi nut es\M in 200 1\EURA 05-09-01 .doc