HomeMy Public PortalAboutA 1985-08-21 LRA .. ,:.. . .. .._.. ... _ . ... _._ .._._ . _..._._ _, _
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��� LYNWOOD REDEVELOPMENT AGENCY .
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� 113308UlLISROAD . LYNWOOD,CALIFORNIA90262 (213�603-0220
A G E ��?' A . �
LYtJW00D REDEVELOPMENT�.AGENCY ,
AUGUST ��, 1`�R5
ADJOURNED PIEETING �
- S:OO P.M. � -
' LYNWOOD CITY HALL, II�Z� SULLIS ROAD ' -
J. D. BYORK •
' Q�1IRD4AN
E37BEFCC F�'�IING E. L. P�IORRIS
VICE CHI�iRMAN MET�ER
JAMES E. ROWE . LOUIS A. Tf�SO^I
��g ME�7BF12
, AGENOY STAFF
��CUTIVE DIREC.Z'OR AG .�iICY: COUNS�
Q�,RI,ES G. GOMEZ . RURT YFAGER
A7ARK J. FI�'EBSCH
OPENING CII2Q70NIFS .
A. Call Meeting to Order.
B. Roll Call. (�7CrMORRIS-�Ti��SCN-BYORK)
� ITEMS FOR CONSIDERATION '
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1. PP,OPOSID .P7PERTAL/ATL1�-P7TIC SHOPPING CIIVTER. STATtJS REPORC.
2. PROPOSII� �LYNS�JOD 'Pai�.. C�PrER STATCiS REPOF2'P . .
AA7CU�7P : .
N!otion to adjousn to a Regular Pieeting of the Lyrnaood Redevelognent'Agency, to i�
held Septe�er 3, 1985, in the Council Chambers of City Hall, 11330 Bullis Road,
Lyr�od, Cal.ifornia. �
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DATE: August 21, 1985
TO: HONORABLE CHAiRM71N & ME�ERS OF Tf� AGE[JCY
FROM: Patrick P. In�ortuna, Director, Cacm�mity Develognent �
SUHJEC.T: PROPOSED IMPERIAL/ATLANPIC SHOPPING'CENPER STATUS RF�'O17P
The attached status report is divided into four sections and are
as follows:
I. Intra3uction & Background
States the intent of the project and the
history of what previausly cccurred with the :..__,.... '.
March & May plans.
II. Development Plans
Explains the details of the plan elenents, principals
and sta.ff and consultant assim�ptions.
III. Developer Negotiations
After Agency direction, staff and consultant set
out to deteanine the level of ccRmitment of the
principals in order to proceed with the proposed
project. This secticai describes in detail the
results of those meetings.
IV. Stmmaxy & Rec�ndations •
The recoinrendations provided by staff are broad in scope
and are i.ntended to generate Agency direction to staff.
In s�mmasy, due to the inability of the principals to agree•and the time
I constraints needed to obtain a UDAG, the project as originally presented dces
` not appear to be wnrkable. Staff has presented various alternatives for
Agency consideration and possible staff direction.
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' TO' Patrick M. ImPortuna, Director Community Development
' FROM: Gary G. Jones, Katz Hollis
DATE: August 16, 1985
SUBJECT: Proposed Imperial/Atlantic '
ShopPing Center Status Report
Thia memorandum is a status report on the proposed Imperial/Atlantic
Shopping Center negotiations. As you are aware, Agency staff and consultants
' acting upon the Agency's directiona proceeded with a schedule of ineatings
with the principals involved (ABCO, Lucky's and H 8c O Development) in an
effort to continue negotiations with �rie e developer s Pe T°f
Agency's concerne in deYining
awareness of the project's pubiic costs and the
development and the financial limits to which each could or would commit was
based upon a growing .
pgency's inability to fund these costs. (Reference Katz Hollis Report dated
July 1, 1985)
In order to maintain continuity in the presentation of the proposed Shopping
Center development efforts over the past Year and through the current date,
it was felt that this memorandum should be divided into four major sections
" dealing with the Pollowing: ,
I, Introduction and Background
II, Development Plane - Aasumptions and Comparisons
SII. Developer Negotiationa
I�t, SummarY & Recommendatians
resented in outline form to serve ae a dOBChsSN°
Most of :this memorandum 1 S p ency Members. Hapefully this aPP
and review format for the Ag' g& A
minimize the need to go over, in detail, that materisl and information whic
h88 a �. e8 dy been submitted and reviewed (i.e. the Mark Brigg
Studiea and the Katz Hollis July 85 Analyses).
j, INTRODUCTION/BACKGROUND 4 to 6 months of
p, geginning in the latter part of 1984, following
preliminary discussions among the three principal property owners of
the 9.1 acre Imperial/Atlantic Shopping Center Site, Agency staff began
to obtain apPraisals of land and improvementsetf of rassumed tpoints8tof
Using these public cost figures and 8 g 8nd Associates prepared
agreement among the principals Mark Brig�' h,,�, ,
and submitted a Feasibility Report on the Imperial Hig
Avenue site in March of 1985.
B. Mgp Feasibility Study_.l1!�8rch Plan1
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1. Development Plan - March 1985
2. ABCO Hardware remains in proposed shopping center area by
switching sites with Luckys.
3. Luckys constructs new market on ABCO Site.
4. ABCO relocatea temporarily to Hundley {A & O Developers)
properties during market construction.
5. Hundley developa commercial retail and reataurant (faet Pood)
pads on balance oP site.
' 6. Eetimated cost to Agency of $1.6 million (leas UDAG and land
sale proceeds) eatimated net cost C�T $417,000.
C. MBA Feasibility Study (May Plan)
1. Development. Plan - May 1985
2. ABCO Hardware relocated (Off-site) Prom proposed shopping
center site
3. Luckys constructs new market on ABCO site. I
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4. Hundley developa expanded (25,000 to 35,000 sq. ft. over �
March Plan) retail and reataurant pads on balance of site. �
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5. Estimated cost to Agency $1.8 million (lesa UDAG and land �
proceeds) estimated net cost Q$508,000. �
D. Katz Hollis March Plan Analyses
1. Development Plan same as A. above. I
2. Eatimated cost to Agency of $2.1 million (less UDAG & land I
proceeds) estimated net coet @ $934,000. (
E. Katz Hollis May Plan Analyses f
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1. Development plan same as B. above. �
2. Estimated cost to Agency $2.3 million (less UDAG '& land �
proceeda) estimated net coat @$994,000. �
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II. DEVELOPMENT PLANS ASSUMPTIONS & COMPARISONS �
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A. Mark Briggs & Associates (MBA) Assumptions �
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1. It was asaumed in both the March and May Plans that the �
principals were in basic agreement.
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2. Principals (ABCO, Luckys & FI & O Development) were commit-
ted in each plan.
3. Luckys would advance land sale proceeds of $400,000 + for
parcels to be acquired by Agency and resold to developer.
4. All principals had agreed to ehare in on & ofP-site costs
(approximately 15-20% of total estimated coet of $656,000).
5. It wae assumed that ABCO was prepared to expend up to $1.8
million beyond the $1.2 million he was to receive for
acquisition of his existing site.
6. ABCO, undar March Plan, would build new office and
temporarily relocate warehouse inventory to Hundley retail
etorea for 1-1/2 to 2 years (construction period for Luckys
and relocation and eite clearance lead time).
7. ABCO, under March Plan, would rehabilitate Luckys old store
_ for warehousing. I
8. Aesumed no temporary or one time relocation costs for either i
ABCO or Luckys under either Plan. . I
9. UDAG Grant was a"Given" as a source of capital funding Por �
both Plans. I
10. Salea tax revenues under both Plana were at a higher level i
than wae supportable by historical comparables within
Lynwood market area. �
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11. Tax increment revenues reflected a realistic range oP
improvement value at full buildout oP Plan. �
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B. Katz Hollis Agency StafP_March & May_Plan _Assumptions i
I. It was assumed that no basic agreement among principals had �
been reached in either Plan. �
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2. Principals (ABCO, Luckys & H& O Development) were agreed �
in concept but not to specific economic deal points of each
Plan. �
3. Asaumed Luckys had not agreed to advance land sale �
proceeds of $400,000 + but instead would make payment to '
Agency at the time of conveyance (1 to 2 years into plans). �
4. Assumed no sharing of public costs by principals for on and �
off-site costs attendant to either Plan.
5. ABCO's financial committment in either Plan was an asaumed i
unknown.
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' 6. Same as MBA A. 6. Assumption:
7. Same as MBA A. 7. Asaumption.
8. Aasumed partial relocation coets based upon prior estimates
of relocation expenses but did not assume any one time or
temporary relocation coste for ABCO and Luckys.
9. Assumed UDAG funding but noted cost exposure to Agency of
additional $800,000 to $900,000 with potential loss oP UDAG.
10. Sales tax projections based on historical comparables and city
finance office actuals.
11. Tax increment projections and sales tas revenues were shown
annually in aggregate to reflect total cumulative revenues oP
each Plan.
C. Katz Hollis/StafY Conclusions/Recommendations �
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1. Katz Hollis/Staff concluded that there was a substantial nega- I
negative caeh flow (sales and property tax) in the first 5-7 �
years for either Plan, with the May Plan deficit extended due I
to reduction in sales tax revenue. �
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2. Agency muat look to alternative funding sources i.e., CDBG, I
Bonding, Developer participation and assistance and laans. '
3. Recommended proceeding with negotiations to determine the I
extent, if any, oP principals' economic commitment to either �
plsn.
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D. Redevelopment Agency directed staff to proceed as recommended. �
III. DEVELOPE NEGO TIATIONS �
A. Introduction/General �
1. StafP set meeting schedules with principals (ABCO, Luckys &. .
' H& O Development) to continue negotistions.
2. First meetings were set on July 16th with Gerald Goldberg oP
ABCO and John Hundley of A& O Development.
3. Meeting with Goldberg of ABCO was held on the morning of
July 16th with Agency staff, Agency counsei and Agency �
financial consultant. '
4. Staff and Consultants outlined and reviewed Katz Hollis' July
lst Analysis noting comparative cost differences with earlier
studies.
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� 5. Staff summarized previous actions taken by all parties to
effect an agreement for development under both Plans and
asked Goldberg for his understanding of the respective deals
under each Pian and hia explanation of any previous
committments on his (ABCO's) part.
B. Goldberg responded by noting the following:
1. He was familiar with both the March and May Plans.
2. Did not accept the May Plan which invoived his relocation
from the Imperisl/Atlantic site.
a. May Plan might be conaidered if he could lease "Major"
retail space of 20,000 + sq. ft. from Hundley at $.20 to $.25
- per aquare Poot] and; +
b. ABCO received, at minimum the $1.2 million previously f
offered by Hundley for existing site. I
3. StafP presented slternative sites in close proximity to the �
Imperial/Atlantic site (as previously requested by Goldberg). '
Based on size, configuration, location and estimated additional I
coata he rejected the suggested sites.
4. Goldberg stated that he wae no longer interested in being i
relocated out of Lynwood. He further stressed the impor- I
importance oP ABCO remaining in Lynwood for company iden- �
tiYication in a market area which had exiated for 35 years. �
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5. Indicated that it did not make sense in business terms for '
ABCO to expend up to estimated amounts of $1.8 million to I
effect the March Plan. i
(Additional discussion by stafP and Goldberg on this issue '
disclosed that Goldberg's calculations of cost exposure [net
costsj was $1.2 million rather than $1.8 million).
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6. Indicated that aPter consideration the $1.2 miliion in net costs �
to efPect the March Plan was not acceptable and stated the �
$500,000 wae maeimum cost thst ABCO considered reasonable. ;
7. Staff asked Goldberg's reaction to staying in present location �
and expanding to welding school site. �
8. Goldberg Indicated that such a plan might be feasible and he �
would be interested in pursuing it.
(New building would be minimal with improvements limited to �
cosmetic exterior treatment on existing building).
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�' 9. ABCO Summary of Position
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J a. Does not intend to be displaced from Lynwood i.e., May
Plan buyrout and relocation without lease of Hundley
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( b. Would consider participation in the March Plan if his costs
' were limited to $500,000.
c. Would consider participation in the May Plan iP he could �
lease "Major" store space (to be built by Hundley) of
20,000 sq. ft. @$.20 to �.25 per square foot.
d. Is opposed to Agency condemnation and taking oP property
through eminent domain.
e. Indicated that he had rejected Hundley's proposal for a �
buy-out oP his existing property for $1.2 miliion. '
C. Hundley/H & O Development responded by noting the following: �
1. Items A. 1 through 5, under Introduction/General were '
repeated with Hundley.
2. Hundley had sesumed deal was in place with May Plan at that
point in time.
3. In retroepect he preferred the March over the May Plan. i
4. Aundley was not optimistic about the ability of the three
principals involved to get together and reach an agreement ,
on either the March or May Plan.
5. He indicated that he had no previous committments Por !
tenants for hia proposed development under either the March !
or May Plan, but even in the absence of other tenants he i
expreased an unwillingness to lease the 20,000 sq. ft. "Major" �
store space in May Plan to ABCO.
6. He confirmed that ABCO had rejected his offer of $1.2 miilion �
for its existing site.
7. a. Staff asked Hundley iP the site still had development ;
potential iP ABCO stayed in its present location.
b. Ais response was that it might be possible depending upon I
what ABCO did to screen the area and ability of Luckys to '
work with a different site plan.
8. Hundley/H & O Development summary of position �
a. Would consider proceeding under the March Plan.
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I b. Would consider alternative commercial retail development if
� ABCO remained on existing site.
' D. Met with Luckys Market Real Eatate Repreaentative, Duane Walters
on July 25th.
1. Itema A. 1 through 5 under Introduction/General were
repeated with Walters.
2. The only site location acceptable to Luckys in terms oP new
construction is the ABCO site.
a. Present location ie not economically feasible in the long
term.
b. Would not construct new buildings on property presently
owned by Luckys or on a reconfigured site plan which re-
tained ABCO on its eJCieting site.
3. Luckys had made no Pirm committments under either the
March or May Plan but indicated that iP other principals
could reach accord they (Luckys) would be willing to nego-
tiate for cost sharing of on-site public costs.
4. Asaumin� no agreement on either the March or May Plans
Luckye would remain in present location and if sales declined
below acceptable economic levels Luckya would abandon site
for market use and convert or sell to others for conversion I
to commercial retail development (i.e. neighborhood
covenience center). . �
5. Luckys - Summary of Poaition '
a. Would conatruct a new building only on ABCO site. �
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b. If no agreement, Luckys would remain Yor short term i
and convert use of property.
IV. SUMMARY & RECOMMENDATIONS ;
A. Agency Public Cost Exposure �
1. UDAG Grant unrealistic as source of capital funds.
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a. Time contraints for filing of application (Sept 85) ;
b. Need firm developer committments from all three principals.
c. Developer needs lease agreement with major tenants !
and others, and financing committments from lenders.
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d. Final Disposition and Development Agreement with City
and Agency approval is a general requirement for appli-
cation submittal.
2. Public cost exposure now at $1.`7 million and $1.9 million
respectively for the March and May Plan.
a. Losa of UDAG Grant adds $800,000 to $900,000 to coat
exposure.
b. City/Agency has no immediate (1985-86 fiscal year)
funding replacements.
c. Some of the CDBG funds allocated for 1985-86 program
year could be reprogrammed in support oP the Project.
3. Alternative funding of public costs by issuance of tax �
allocation bonds.
a. Imperial/Atlantic site not of sufficient sise in terms of �
development value to generate revenues in support of i
bond issue to pay coeta. I
b. Project-wide (Project Area A) tax increment revenue � '
necessary for bond issuance raises funding priority �
questions. Investment in one developments' public costs �
lessens the availability oP funds for other developments i.e.
Hopkins. �
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4. Developer Assistance to meet public costs. ;
a. One oP the current principals is not willing to share !
public costs (Luckys & Hundley would negotiate) �
B. Developer Poeitions '
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1. AHCO j
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a. Would consider March.Plan '
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b. Would not expend over $500,000 on March Plan �'
c. Would consider May Plan if lease ratea in Hundley !
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commercial retail development were $.20 to $.25 per sq. �
ft. and "Major" store space was available.
d. Would consider staying in existing location and entertain �
possible expansion in the event there is no agreement on �
either Plan.
2. Hundley/H � O Development ,
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I a. PrePere March Plan over May Plan.
± b. Would' consider development of site on his own or with
+ other owners if Luckys and ABCO fall out of deal and
� � ABCO remains on site.
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I 3. Luckys
� a. Would construct s new building only on ABCO site.
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� b. IY no agreement, Luckys would remain for short term and
� phase property out to different use.
I C. Recommendations/Staff & Consultants
I As a result of increasing costs which will diminish returns to the
I Agency coupled with the potential loss oP UDAG and the inability
of the Principals involved to reach agreement, staff recommends
that the propoaed March and May Plana be eliminated and that the
Agency consider the following:
1. Leave Luckys as is.
2. Hundley/H �. O Development - Staff to work with Hundley
and other property owners to develop balance of site
exclusive of ABCO and Luckys.
3. ABCO remain and Staff work with company to determine if
expansion is feasible.
4. Agency should consider other development projects that i
hold more immediate prospect of occurring and are I
structured to give the Agency a better return on its
investment. I
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DATE: August 21, 1985
TO: HONORABLE CHAIRMAN AND NIEMBERS OF TI-TE AGE'�ilCY , n 1 �
FR�i: Patrick P. Tmportuna, Director, Camminity Developirent `� �,
' SUBJE(.Z': STATUS OF LYNNR)OD TOb9I� CE'NTE.R
' On May 22, 1985 the Agency agreed to extend the F�clusive Agreement with
Hopkins DeveloFment Cac�pany for an additional 90,days which is due to
expi.re on August 22, 1985. The total time that has been given to the
, Developer to date represents one and one-quarter years.
Since last meeting with the Agency in I��y of this year the Developer,has
suhnitted for Agency review the attached letter dated July 30, 1985, a
crost projection, proforma, revised site plan and a letter of intent from
Foods Co.
The Developer intends to be at the meeting of August 21, 1985 make a
presentatiori, disucssing the eontent of their letter and the ciirection
they wish to proceed. .
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C HOPKINS DEVELOPMENT COMPANY
July 30; 1985
HAND DELIVERED
Pat Importuna -
Director of Community Development
City of Lynwood
� 11330 Bullis Road
Lynwobd, CA 90262
Re: Lynwood Towne Center
Dear Pat:
Regarding our recent conversation; our company is now in a position
to move ahead with the development of the Lynwood Towne Center.
Of course you are aware of the status of the Zody's store and the
fact a new tenant will be locating in that store and it means we
are in a position to deliver Foods Company as our supermarket
tenant for Lynwood Towne Center. We are very excited about this
because of their knowledge of the area and operating track record.
'I'he key, of course, is. timing. Foods Company would like little
or no down time whatsoever. If there was a substantial time lag;
I believe Foods Company would simply agr,ee to be bought out of
their lease at the present location and choose not to operate a
store in Lynwood. If this were to happen (along with' a new
supermarket chain taking the Zody's location), there is a good
bet that this project will be delayed for a number of years.
We believe the best of all worlds at this time is to move ahead
with.the development which would encompass approximately 9 to 10
acres. Presently the Redevelopment Agency owns S acres. It
looks like the church site is a little under an acre (38,000 to
40,000 square feet) and it would be important to acquire this
site not only from visibility standpoint, but for layout purposes.
As per our;most recent discussion, if we can make the right kind
. of arrangement with the City Redevelopment Agency on a joint
venture basis,,our company would immediately move ahead with the
development of the project without having to purchase the church
site. I believe it may be important at a point in time to focus
k13 Corporate Plaza, Suite200 Newport Beach, California92660 (714) 640-1770
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July 30, 1985.
Page Two
on the acquisition of the church site because this may have an
impact as far as Foods Company is concerned regarding access and
visibility. We have received past in£ormation that the purchase
price of the church site could be as much as $800,000. It' is
important to keep in mind that in order to economically make this
project work, the property would have to be acquired for a much
lower price. If Foods Company would agree to the proper layout
(outlined in our most recent site plan) which we believe they
will, then we can move ahead with construction of the center. It
is also important for you and Vincente to look at the Assessor's
Map that we left to see what other property have to be purchased
to ma7ce up the 10 acres (along the west boundary of our site plan).
. As you knbw, we also have interest from not only Thrifty Drug and
Trak Auto, but also a department store, clothing store and most
recently Home Depot. Since Home Depot. is 100,000 square feet,
obviously they would not be able to fit on the 10 acre site. Our
thinking would be to move ahead with the development of the
shopping center on the 10 acre site (again to accommodate Foods
Company timing) and then continue to nlan for the expansion of
the center to hopefully accommodate Home Depot.
I have also taken the liberty to include two additional copies of
the cost projection we left with you on Friday and an economic
proforma. As you can see; the cost projection is very specific
with respect to building costs on a per square foot basis. As
far as the economic proforma is concerned; . it summarizes all' of
the income and expenses right down to the proposed spendable
income. Keep in mind that this proposed income would be for the i
initial year only. The income would increase as we increase our I
rents over the years.
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With respect to the joint venture, I have also taken the liberty �
of including a copy of our "blank" joint venture agreement that i
we have used in the past. In summary; the joint venture arrange-
ment would work as follows: A partnership would be formed and i
the City Redevelopment Agencv would contribute the S acres to the
partnership on a free and clear basis. If additional prooerty i
had to be acquired this could be accomplished by the City Redevel-_
opment Agency or the partnership could loan the money to the City '
Redevelopment Agency to acquire those properties. The intent of
the partnership would be to develop the property and hold a3 an j
'investment. Our company would act as the arms, legs and brains" i
to develop the property to its highest and use. An agreement
would be reached with respect to arriving at a land value for the '
initial 8 acres. Upon sale of the project, the land valuation i
would come back to the City on a preferred basis.
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In other words, prior to any distribution of profits, the land �
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' Pat Importuna
July 23, 1985
Page Three
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I valuation comes back to the City Redevelopment Agency. '
I Again our interest (and maybe the best alternative) would be to
enter into a joint venture arrangement with the City. We would
I also keep the door open with.respect to a straight land �acquisi-
� tion (again this would'definitely depend on the price of the
' property). Since inajor tenants pay subsidy-type rents, it is
I very important that land value be priced accordingly.
If we are able to put together a joint venture, we would arrive
at a. negotiable land value and ownership interest. As I stated
in our meeting, there are a number of cities that have worked
along these lines. At the present time we are working with the
City of Needles on a very similar situation and also working on a
participation venture arrangement for the City. of Lakewood. At
the proper time I can forward to you the documentation of these
transactions. Also, we are aware. of other developers who are
putting together projects with City Redevelopment Agencies along
theae lines (the most recent I believe is in the City of Los
Angeles in Watts).
The timing at this point in time is critical and we need to move
' as.quickly as poasible because of the Foods/Zody's situation. We
will also be receiving an up-to-date commitment letter from
Thrifty which we will forward to you. I think time is of the
essence and we need to finalize an arrangement as quickly as
possible so we can move ahead to the development. After you look
everything.over; if you have any questions or comments; please I
let me know. �
Sincerely yours, ;
INS DEVELOPMENT COMPANY i
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S ephen C. Hopkins '
President �
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Enclosures
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, cc: John Quinton ;
Jeff Armour . '
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' COST PROJECTION
FOR ' '
. LYNia00D TOWNE CENTER
. (10 ACRES)
I. Land Acquisition for 10 Acres � _
II. Building Cost .
Foods Company (60,000 SF @$26.00 PSF) $ 1,560,000
` Thrifty Drug (19,120 SF @ 30.00 PSF) 573,600
Trak Auto (7,500 SF @'$35.00 PSF) 262,500
Retail Snops (13,800 SF @$30.00 PSF) 414,000
, Fast Eood Restaurant (ground lease) _p_
Fast Food Restaurant 125,000
Pad (3,000.SF) 120,000
Total Buildtng Cost $ 3,055,100
III. Site Cost (10 acres @2.35 PSF) $ 950,000
Demolition Cost 50,000
Total Site Cost $ 1,000,000
• IV. Indirect Costs
` Architectural & Engineering $ 125,000
Construction Interest � 300,000
' Financing Points 150 000
Miscellaneous Category: (Insurance, taxes, �
development supervision) 250,000
Tota1 Indirect Costs .825,000
V. Total Project Cost * $ 4,880,100
*without land cost .
SCH:mr
7/18/85
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ECONOMIC PROFORMA
' FOR
LYNWOOD TOWNE CENTER
. (10 ACRES)'
I. Income
Major Tenants (Market, Drug) $ 445,090
Free Standing Pad Tenants 123,000
Retail Shops (13,800 SF) 207,000
Vacancy (Retail Shops) <10,350>
Effective Gross Income $ 764,740
II. Expenses
Management (4$) $ <30,590>
Reserves (1� of EGI) � <7,647>
Miscellaneous (Security, etc. - 1� of EGI) <7,647>
Total Expenses $ <45,884>
; III. Net Operating Income $ 718,856
IV. Debt Service ($5,000,000 x 12$) $ 600,000
V. Spendable Income* $ 118,856
, *First year only
SCH:mr
7/22/85 .
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GENERAL OFFICES • 2211 DAVIE AVENUE, COMMERCE, CALIFORNIA 90040 • PHONE (213) 725-1500
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Hopkins Development Co.
Mr. Stephen C. Hopkins, President
#13 Corporate Plaza, Suite 200
Newport Beach, Cal. 92660 July 11, 19g5
Dear Mr. Hopkins
Foods Co. Markets� Inc: is desirous of leasing a 60,000
� foot building on an 8 acre site at Imperial Highway and
Long Beach Boulevard on the following conditions.
The rent shall be �275,000.00 a year.. If a market opens
on the present site of the Foods Co.-Zody location on
Imperial Highway within a 3� year period, after'the
ing of this lease, then the minimum rent shall be
�240�000.00 a year. If the Hopkins Development Co. '
"Lessor'.is able to increase the site from the 8 acres to
22 acres, the minimum rent shall be �250,000.00 a year
Foods Co.�'shall pay no percentage rent on this project.
There shall be a C,O.L. clause in the lease granting the
Lessor the right to increase the minimum rent by 50% of
the C.O.L. at the end of each 5 year period, for the
following 5 year period. The term of the lease shall be
15 years, with the Lessee to have the option to extend the
lease £or two 5 year periods. There shall be no rent in-
crease in the option pEriod, although the C.O.L. sha11
be applicable.
Lessee shall have the right at any time during the lease
or the option period to release the premises, but only to �
retail outlet. Beside the 60,000 foot building the Lessor I
sha11 have installed cement pads on which the Lessee will
be able to place his refrigerated coolers, These pads are
to insulated in the cement.
There sha11 be no occupancy clause in the lease. Lessee
may close the store, at its discretion, at any time during
the lease or option period, but shall' continue to pay the
rent.
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GENERAL OFFICES • 2211 DAVIE AVENUE, COMMERCE, CALIFORNIA 90040 • PHONE (213) 725-1500
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The building sha11 be built by the Hopkins Development Co.,
and be paid in its entirety by them. All site work is to
be furnished by the Hopkins Development Co., at their cost. �
Lessor may after the preliminary estimates of costs for the
building, refuse to build the building if the costs are
, greater then their projected costs. The lease shall be a
triple net deal. Lessee shall pay a proportiriate share o£
the common area maintenance.
Foods Co, would insist�on a plan and program for the
security of the property. The security should be furnished
by the Lessor, City of Lynwood, and the tenants on the
project. '
After the approval of the plat plan, Lessor warrants that
there shall be no further building on the site. There shall
be a co-tenancy clause in the lease. The City or Lessor
shall furnish proper signals, lighting and adequate signing
on the property.
This proposal is being made with the understanding that the
Foods Co. Markets� Inc, board of directors must approve
the lease to make the lease valid. Foods Co. would also
have to approve the plat plan, preliminary drawings of plans,
and all other phases of the project to make it valid.
These items are a preliminary outline of the lease. There
would be an expanded drawing of a lease at a later date.
I
Sincerely yours, I
� ��..�j' ,��C<i ;
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Foods Co. Markets, Inc.
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