HomeMy Public PortalAboutA1985-01-28 CC (2)City of
LYNWOOD
11330 BULLIS ROAD
LYNWOOD, CALIFORNIA 90262
(213) 603 -0220
A REGULAR ADJOURNED MEETING
LYNWOOD CITY COUNCIL
WILL BE HELD AT - 5:00 P.M.
MONDAY, JANUARY 28, 1985
Councilmen
E L MORRIS
JAMES E ROWE
LOUIS A THOMPSON
FOR THE PURPOSE OF CONSIDERING MATTERS AS SET FORTH BELOW
A G E N D A
1. CALL TO ORDER
2. ROLL CALL OF COUNCILMEN
Robert Henning
E. L. Morris
James E. Rowe
Louis A. Thompson
John D. Byork
SCHEDULED MATTERS
3. PUBLIC HEARING:
Comments:
Recommendation:
URBAN DEVELOPMENT ACTION GRANT (UDAG) PROJECT
HOPKINS DEVELOPMENT
Staff has requested City Council to conduct a
Public Hearing on the City's application for a UDAG
pertaining to the commonly known Hopkins Towne Center
Project. Hopkins Development Co. is reaching an
agreement with K Mart as the major tenant in this
Project. It has been agreed from the onset of this
Project that the City would apply for a UDAG.
Staff respectfully requests that Council, after re-
ceiving public testimony on the application, adopt
a Resolution entitled: "A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF LYNWOOD DIRECTING AND AU-
THORIZING THE CITY MANAGER TO FILE AN URBAN DEVELOP-
MENT ACTION GRANT APPLICATION IN AN AMOUNT OF
$1,085,000 RELATED TO A COMMUNITY SHOPPING CENTER
DEVELOPMENT IN THE CITY OF LYNWOOD."
4. DISCUSSION AND FINANCIAL COMMITMENT BY THE CITY, IF NEEDED, TO FUND
THE BALANCE THE CITY WILL NEED FOR THE CORPORATE YARD
r'nmmontc-
Recommendation:
Discussion and financial commitment by the City,
if needed, to fund the balance the City will need
for the Corporate Yard.
Staff respectfully requests the City to commit to a
financial agreement which outlines the financing of
the City Yard.
5. REQUEST FOR THE CITY AND /OR AGENCY TO CARRY A LOAN (CALLED PURCHASE
MONEY MORTGAGE) FOR THE TOWNE CENTER PROJECT. THIS REQUEST WILL
KEEP THE CITY'S UDAG APPLICATION AS COMPETITIVE AS POSSIBLE.
Recommendation: Staff respectfully requests the City Council to
commit to approving a loan to the developer (Hopkins)
for either a portion of, or the total amount of, the
request in the event the Lynwood Redevelopment
Agency has not previously agreed to commit to a
portion of, or the total amount of, the loan request.
6. ADJOURNMENT TO THE REGULARLY SCHEDULED MEETING TUESDAY, FEBRUARY 5,
1985 - 7:30 p.m., IN THE CITY HALL COUNCIL CHAMBERS.
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JOHN D BYORK, Mayor
ROBERT HENNING, Mayor Pro -Tem
DATE: January 28, 1985
TO: Honorable Mayor and City Council Members
FROM: Patrick P. Importuna, Director, Community Development
SUBJECT: UDAG PROJECT PUBLIC HEARING/
HOPKINS DEVELOPMENT
As part of a series of requirements for the approval of a
Urban Development Action Grant (UDAG), the City Council must
conduct a public hearing on the application to be submitted
to the Federal Government
Attached is a copy of a report addressed to the City Manager
that was prepared by the City's Consultant Mark Briggs &
Associates, Inc.. The letter is an outline of the application
addressing the scope of the development, financial commitment
of both the City and developer and the projected revenue from
the project.
RECOMMENDATION
Staff respectfully requests that the Council after receiving
public testimony on the application, adopt the attached
resolution directing and authorizing the City Manager to file
an UDAG application with the U.S. Department of Housing and
Urban Development on behalf of the City of Lynwood.
AGENDA ITEM
3
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VAA1 Y j9F-- I.
.
January 28, 1985
Mr. Charles Gomez
City Manager
City of Lynwood
11330 Bullis Road
Lynwood, California 90262
SUBJECT: UDAG Project Public Hearing
Dear Charles,
The following provides a summary of the Hopkins Development Project and the major
elements of the Urban Development Action Grant:
PROJECT
The proposed Lynwood Towne Center project is the first phase of final development of
the 25 acre Redevelopment Project Area "A" commercial site. The UDAG project
consists of the construction of a 129,146 square foot community center including a
84,146 square foot K -Mart Store, 24,000 square foot Thrifty Drug /Trac Auto store,
three restaurants (5,000 square feet, 5,000 square feet, and 4,000 square feet
respectively), and 7,000 square feet of ancillary side shops.
The "project" as referred to in this application includes the acquisition of the
remaining parcels of land not currently under Agency /City control in order to
assemble the 8.96 acres identified as the project site and sell the land at fair market
reuse value to the developer plus the related demolition and relocation costs and the
actual construction of the community center.
PRIVATE INVESTMENT
The private investment, including the $2,392,233 payment for the land, will total
$9,779,827 less the UDAG loan for a net private investment of $8,744,827.
MARK BRIGGS & ASSOCI INC
2222 Sierra Boulevard 5800 South Eastern Avenue 440 First Street N.W.
Suite B -11 Suite 340 Suite 502
Sacramento, California 95825 Los Angeles, CA 90040 Washington, D.C. 20001
(916) 920 -3461 (213) 268 -6325
(202) 223 -0426
Mr. Charles Gomez
January 28, 1985
Page 2
UDAG FUNDS USE
The $1,035,000 in UDAG funds will be used as a City loan at less than market rate to
the developer to finance a portion of his overall project costs. The remaining $50,000
will be used by the City to reimburse application costs and for administration.
DEVELOPMENT TEAM
The project developer is Hopkins Development Company, Newport Beach, California.
Hopkins Development Company has been active in commercial /retail development in
Southern California including projects in Orange, San Bernardino, San Diego, Sacra-
mento, Riverside, Ventura, and Los Angeles counties for many years. The actual
development entity will be Lynwood Associates, a limited partnership including
principals in Hopkins Development Company and possibly equity partners.
LEVERAGING RATIO
The private sector funds of $8,744,827 as compared to the UDAG request of
$1,085,000 results in a 8 to 1 leveraging ratio.
PERMANENT PRIVATE SECTOR JOBS
A total of 274 net new full time equivalent permanent jobs will be created by the
project.
COST PER JOB
The cost in UDAG funds per job created equals $3,960.
RECAPTURE
The UDAG funds will be used by the City of Lynwood as a below market loan to the
developer, fully amortized for 30 years at 6% interest. The developer will repay the
loan in annual principal and interest payments beginning in the first year of project
operations. In addition, the City will also receive an equity position in the project and
receive annually 10% of the net cash flow from the project after payment of normal
operating expenses, debt service, and a 15% preferred rate of return on developer
equity. The City will also provide the developer with a $500,000 purchase money
mortgage for a portion of the land currently owned by the City or Agency. The terms
of the purchase money mortgage will be the same as the UDAG loan. The total funds
Mr. Charles Gomez
January 28, 1985
Page 3
recaptured by the City froin the UDAG; loan and purchase money mortgage, of which
both are due and payable in the fifteenth year, is projected at $1,672,755 over the
fifteen year period.
BENEFIT TO THE CITY
In addition to the creation of new permanent jobs and the funds recaptured by the City
from the UDAG, the project complements the City's ongoing commercial revitaliza-
tion activities and represents the first major commercial center proposed for
construction in Lynwood in many years. The purchase price for the land to be paid for
by the developer will cover the City's remaining costs to assemble the UDAG site and
defray a portion of the costs to relocate the City corporation yard. The corporation
yard must be relocated because half of it is on the Phase I site and the remainder of
the corporate yard is on the site for the development of the overall 25 acre
Redevelopment Project Area commercial site. Additionally, during the first full
operating year of the center, the community center will generate approximately
$322,110 in taxes directly benefitting the City; $99,310 in property tax increment and
$222,800 in sales tax.
In addition, of the total UDAG request, $50,000 is requested of HUD on behalf of the
City of Lynwood; $30,000 for reimburseable expenses and $20,000 to cover the City's
costs to administer the UDAG.
The action by the city is to approve the resubmittal of the application through the
adoption of the attached resolution.
Sincerely,
Mark E. Briggs
President
MEB /jsl
�?ESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF LYNWOOD DIRECTING AND AUTHORIZING
THE CITY MANAGER TO FILE AN URBAN DEVELOP-
MENT ACTION GRANT APPLICATION IN AN AMOUNT
OF $1,085,000 RELATED TO A COMMUNITY
SHOPPING CENTER DEVELOPMENT IN THE CITY OF
LYNWOOD
WHEREAS, the City Council authorized the preparation of
an Urban Development Action Grant (UDAG) Application to finan-
cially assist in the development of a community shopping center
in the City.
NOW, THEREFORE, the City Council of the City of Lynwood
does hereby find, determine, order and resolve as follows:
Section 1. The City Manager is hereby directed and
authorized to file an Urban Development Action Grant (UDAG) Appli-
cation, a copy of which is on file in the office of the City Clerk,
with the United States Department of Housing and Urban Development
(HUD) under Section 119, of Title I of the Housing and Community
Act of 1974, as amended, in an amount of $1,085,000, for the pur-
pose of obtaining an Urban Development Action Grant related to the
development of a community shopping center at the intersection of
Imperial Highway and Long Beach Boulevard.
Se ction 2. The City Manager is hereby authorized and
directed to take such actions as are reasonably necessary in con-
nection with meeting the terms and conditions contained in such
application, and to provide such additional information as may be
required.
PASSED, APPROVED and ADOPTED this day of
"--- , 1985.
JOHN D. BYORK, MAYOR
CITY OF LYNWOOD
ATTEST:
APPROVED AS TO CONTENT:
ANDREA L. HOOPER, CITY CLERK
CITY OF LYNWOOD
APPROVED AS TO FORM: PATRICK P. IMPORTUNA,
DIRECTOR COMMUNITY DEVELOPMENT
%00
CITY ATTORNEY
BARBARA FIKEL, ACCOUNTING DIRECTOR
DATE: January 28, 1985
TO: Honorable Mayor and City Council Members
FROM: Patrick P. Importuna, Director, Community Developmen�
SUBJECT: DISCUSSION AND FINANCIAL COMMITMENT BY THE
CITY, IF NEEDED, TO FUND THE BALANCE THE
CITY WILL NEED FOR THE CORPORATE YARD
As stated in the Mark Briggs and Associates, Inc. letter
of January 18, 1985, there is a need for the City and or
Agency to make a commitment to fund the cost of a new
corporate yard. The corporate yard is still one of the
major acquisition and relocation expenses that the Agency
will be required to make for the Towne Center.
The attached report is an analysis of the projected cost
estimates for the relocation of the yard. Relative to
funds the developer will pay for the purchase of the
land and the cost of the yard relocation, there will be
a difference that either the Agency or City will have
to fund. Mark Briggs will be explaining the financial
detials for this arrangement at the City Council and
Agency meeting.
RECOMMENDATION
Staff respectfully requests for the City Council to commit
to a financial agreement to fund the cost of the City Yard.
AGENDA ITEM
I
i
January 24, 1985
Mr. Charles Gomez
City Manager
City of Lynwood
11330 Buliis Road
Lynwood, California 90262
Dear Charles:
We have recently been heavily involved in
Center with a K -Mart store and Thrifty /Trac
the development costs, income projections,
His overall costs will be $7,241,347. He can,
loan of $4,451,406. With an equity position
would be $1.5 million.
working out the details of the Hopkins
Auto configuration. We have completed
and financing details for the developer.
based on the income stream, generate a
of about $1.25 million, the financing gap
In order to keep the UDAG request as competitive as possible, I recommend the UDAG
request be $1,085,000 ($1,035,000 loaned to the developer and $50,000 to reimburse
City application and administrative costs). To accomplish that, the City would need to
allow the developer to buy $500,000 of the property as a loan (called purchase money
mortgage). That means, of the $2,392,233 purchase price, the City would receive cash
totalling $1,892,233 and take back paper on the balance of $500,000.
The UDAG staff will want the City to use the purchase money mortgage approach both
to reduce the need to reduce the UDAG request and to ensure the City "participants"
the land it already owns to the greatest extent possible.
A major issue which needs immediate attention is the relocation of the City
Corporation Yard. If the City is successful in ac uiring the 5 acre site, which is
surplus to Caltrans' needs, and the purchase is at 4.00 per square foot, the costs
which would be involved are as follows. The cost on the left are those provided by Joe
Wang to Jack Segal on June 21, 1984, on the right, revisions based on slightly lower
costs.
Land (5 acres /217,800 s.f. @ $6.00 p.s.f.)
Architectural and Engineering
Water Division Office Building (7,000 s.f.)
with Water Well Telemetric System
Street Maintenance Offices and Covered
Parking (12,250 s.f.) and Trash Transfer
$1,306,800 @ $4.00 p.s.f. $871,200
70,000 $ 70,000
187,000 187,000
MARK BRIGGS & ASSOCIATES, INC
2222 Sierra Boulevard 5800 South Eastern Avenue 440 First Street N.W.
Suite B -I l Suite 340 Suite 502
Sacramento, California 95825 Los Angeles, CA 90040 Washington, D.C. 20001
(916) 920 -3461 (213) 268 -6325
(202) 223 -0426
Mr. Charles Gomez
January 24, 1985
Page 2
Station
275,000
275,000
Garage Structure (7,000 s.f.) with built -in
equipment and fuel island
Contingency (15 %)
TOTAL:
412,000
412,000
131,100 (10 %) 87,400
$2,381,900 $1,902,600
There will be a limited amount of funds surplus to the City's needs when the developer
purchases the site for use for the Corporation Yard. The estimates of costs are as
follows related to the land acquisition
Land acquisition 390,250 s.f. @ $6.13
$
2,392,233
Less purchase money mortgage
500,000
$
1,892,233
City's remaining costs:
Acquisition
$ 829,380
Relocation
82,500
Demolition
50,000
Off -sites
300,000
$
1,261,880
Amount available for corporate yard:
$
630,353
With the corporation year costs estimates at $1,902,600 and the $630,353 available,
the balance the City will need for the corporation yard is $1,272,247. That amount
would change if the off -site costs, which is now only a fill in number, are lower based
on engineering work now being done by the developer.
The UDAG application needs to have a commitment of funds by the City or Agency to
cover the costs for the corporation yard.
Sincerely,
Mark E. Briggs
President
MEB /jsl
DATE: January 28, 1985
TO: Honorable Mayor and City Council Members
FROM: Patrick P. Importuna, Director, Community Development
SUBJECT: REQUEST FOR THE CITY AND OR AGENCY TO CARRY A
NOTE IN THE AMOUNT OF $500,000 FOR THE TOWNE
CENTER PROJECT
Attached is a letter received from the City's Consultant,
Mark Briggs and Associates, Inc. in regards to the need
for either the City and or the Agency to agree for the
developer (Hopkins) to buy $500,000 of the Towne Center
Property as a loan (called purchase money mortgage).
The purpose of this request is to keep the City's UDAG
request as competitive as possible by reducing the need
to request for an excessive grant of funds. Mark Briggs
will be explaining the transaction in greater detail at
the scheduled meeting of both the Agency and City Council.
RECOMMENDATION
Staff respectfully requests the City Council to commit to
approving a loan to the developer (Hopkins) for either a
portion of or the total amount of the proposed $500,000
request, in the event the Lynwood Redevelopment Agency
has not previously agreed to commit to a portion of or
total amount of the loan request.
- 1'
January 24, 1985
Mr. Charles Gomez
City Manager
City of Lynwood
11330 Bullis Road
Lynwood, California 90262
Dear Charles:
We have recently been heavily involved in working out the details of the Hopkins
Center with a K -Mart store and Thrifty /Trac Auto configuration. We have completed
the development costs, income projections, and financing details for the developer.
His overall costs will be $7,241,347. He can, based on the income stream, generate a
loan of $4,451,406. With an equity position of about $1.25 million, the financing gap
would be $1.5 million.
In order to keep the UDAG request as competitive as possible, I recommend the UDAG
request be $1,085,000 ($1,035,000 loaned to the developer and $50,000 to reimburse
City application and administrative costs). To accomplish that, the City would need to
allow the developer to buy $500,000 of the property as a loan (called purchase money
mortgage). That means, of the $2,392,233 purchase price, the City would receive cash
totalling $1,892,233 and take back paper on the balance of $500,000.
The UDAG staff will want the City to use the purchase money mortgage approach both
to reduce the need to reduce the UDAG request and to ensure the City "participants"
the land it already owns to the greatest extent possible.
A major issue which needs immediate attention is the relocation of the City
Corporation Yard. If the City is successful in acquiring the 5 acre site, which is
surplus to Caltrans' needs, and the purchase is at $4.00 per square foot, the costs
which would be involved are as follows. The cost on the left are those provided by Joe
Wang to Jack Segal on June 21, 1984, on the right, revisions based on slightly lower
costs.
Land (5 acres /217,800 s.f. @ $6.00 p.s.f.)
Architectural and Engineering
Water Division Office Building (7,000 s.f.)
with Water Well Telemetric System
Street Maintenance Offices and Covered
Parking (12,250 s.f.) and Trash Transfer
$1,306,800 @ $4.00 p.s.f. $871,200
70,000 $ 70,000
187,000 187,000
MARK BRIGGS & ASSOCIATES, INC
2222 Sierra Boulevard
Suite B -I1
Sacramento, California 95825
(916) 920 -3461
5800 South Eastern Avenue
Suite 340
Los Angeles, CA 90040
(213) 268 -6325
440 First Street N.W.
Suite 502
Washington, D.C. 20001
(202) 223 -0426
D
0
January 24, 1985
Mr. Charles Gomez
City Manager
City of Lynwood
11330 Bullis Road
Lynwood, California 90262
Dear Charles:
We have recently been heavily involved in working out the details of the Hopkins
Center with a K -Mart store and Thrifty /Trac Auto configuration. We have completed
the development costs, income projections, and financing details for the developer.
His overall costs will be $7,241,347. He can, based on the income stream, generate a
loan of $4,451,406. With an equity position of about $1.25 million, the financing gap
would be $1.5 million.
In order to keep the UDAG request as competitive as possible, I recommend the UDAG
request be $1,085,000 ($1,035,000 loaned to the developer and $50,000 to reimburse
City application and administrative costs). To accomplish that, the City would need to
allow the developer to buy $500,000 of the property as a loan (called purchase money
mortgage). That means, of the $2,392,233 purchase price, the City would receive cash
totalling $1,892,233 and take back paper on the balance of $500,000.
The UDAG staff will want the City to use the purchase money mortgage approach both
to reduce the need to reduce the UDAG request and to ensure the City "participants"
the land it already owns to the greatest extent possible.
A major issue which needs immediate attention is the relocation of the City
Corporation Yard. If the City is successful in acquiring the 5 acre site, which is
surplus to Caltrans' needs, and the purchase is at $4.00 per square foot, the costs
which would be involved are as follows. The cost on the left are those provided by Joe
Wang to Jack Segal on June 21, 1984, on the right, revisions based on slightly lower
costs.
Land (5 acres /217,800 s.f. @ $6.00 p.s.f.)
Architectural and Engineering
Water Division Office Building (7,000 s.f.)
with Water Well Telemetric System
Street Maintenance Offices and Covered
Parking (12,250 s.f.) and Trash Transfer
$1,306,800 @ $4.00 p.s.f. $871,200
70,000 $ 70,000
187,000 187,000
MARK BRIGGS & ASSOCIATES, INC
2222 Sierra Boulevard
Suite B -I1
Sacramento, California 95825
(916) 920 -3461
5800 South Eastern Avenue
Suite 340
Los Angeles, CA 90040
(213) 268 -6325
440 First Street N.W.
Suite 502
Washington, D.C. 20001
(202) 223 -0426
Mr. Charles Gomez
January 24, 1985
Page 2
Station
Garage Structure (7,000 s.f.) with built -in
equipment and fuel island
Contingency (15 %)
TOTAL:
275,000
275,000
412,000
412,000
131,100
(10%) 87,400
$2,381,900
$1,902,600
There will be a limited amount of funds surplus to the City's needs when the developer
purchases the site for use for the Corporation Yard. The estimates of costs are as
follows related to the land acquisition
Land acquisition 390,250 s.f. @ $6.13
Less purchase money mortgage
City's remaining costs:
Acquisition
$ 829,380
Relocation
82,500
Demolition
50,000
Off -sites
300,000
Amount available for corporate yard:
$ 2,392,233
500,000
$ 1,892,233
$ 1,261,880
$ 630,353
With the corporation year costs estimates at $1,902,600 and the $630,353 available,
the balance the City will need for the corporation yard is $1,272,247. That amount
would change if the off -site costs, which is now only a fill in number, are lower based
on engineering work now being done by the developer.
The UDAG application needs to have a commitment of funds by the City or Agency to
cover the costs for the corporation yard.
Sincerely,
Mark E. Briggs
President
MEB/ jsl