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HomeMy Public PortalAboutCity Council - 03 Jan 2017 - Workshop - Agenda - Pdf Agenda City of Beaumont City Council Meeting Closed Session 4:00 PM Regular Session 6:30 PM Beaumont Financing Authority Beaumont Utility Authority Beaumont Conservation Authority Beaumont Successor Agency (formerly RDA) 550 E 6th Street, Beaumont, Ca Tuesday, January 3, 2017 Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packets are available for public inspection in the City Clerk’s office at 550 E. 6th Street during normal business hours Any Person with a disability who requires accommodations in order to participate in this meeting should telephone the City Clerk’s office at 951 769 8520, at least 48 hours prior to the meeting in order to make a request for a disability related modification or accommodation. Any one person may address the City Council on any matter not on this agenda. If you wish to speak, please fill out a “Public Comment Form” provided at the back table and give it to the City Clerk. There is a three (3) minute limit on public comments. There will be no sharing or passing of time to another person. State Law prohibits the Council from discussing or taking actions brought up by your comments. Page WORKSHOP SESSION CALL TO ORDER Mayor Lara, Mayor Pro Tem White, Council Member Condon, Council Member Knight, and Council Member Orozco PUBLIC COMMENT PERIOD (ITEMS NOT ON THE AGENDA) Any one person may address the City Council on any matter not on this agenda. If you wish to speak, please fill out a “Public Comment Form” provided at the back table and give to the City Clerk. There is a three (3) minute time limit on public comments. There will be no sharing or passing of time to another person. State Law prohibits the Council from discussing or taking actions brought up by your comments. WORKSHOP ITEMS 1. Discussion of Potrero Interchange Project and Direction to Staff Recommended Council Action(s): 1. Continue with completion of Phase 1 of the Potrero interchange and proceed with the following tasks: 1. Plans complete by the end of January 2017, 2. Right-of-way acquisition complete by the end of February 2017, 3. Funding commitment for $5 million from property owner by April 2017, 4. Project Ready to List by June 1, 2017, 5. Negotiate agreement with WRCOG for credits toward TUMF fees in the event that Beaumont rejoins the TUMF program. 3 - 51 Page 1 of 51 2. Stop all work on the Interchange Project, return grant funds allocated to the Project and delete from CIP. (No build alternative) 01-03-2016 Potrero Presentation v7 Workshop Item 1 Adjournment of the City Council Workshop of January 3, 2017 at ____ p.m. The next regular meeting of the Beaumont City Council, Beaumont Financing Authority, Beaumont Utility Authority, Beaumont Conservation Authority, and the Beaumont Successor Agency (formerly RDA), is scheduled for Tuesday, January 17, 2017, at 5:00 p.m. or thereafter as noted on the posted Agenda for Closed Session items in the City Council Board Room No. 5, followed by the regular meeting at 6:00 p.m. or thereafter as noted on the posted Agenda at City Hall. Beaumont City Hall – Online www.ci.beaumont.ca.us Page 2 of 51 Potrero Interchange Project City Council Study Session January 3, 2017 P a g e 3 o f 5 1 Potrero Interchange P a g e 4 o f 5 1 Background Extend Potrero Blvd. over SR 60 w/6-lane bridge and new freeway interchange City lead agency Interchange concept dates to early 2000s Project identified in the City’s General Plan Circulation Element Listed on Southern California Association of Governments (SCAG) 2012‐2035 Regional Transportation Plan/Sustainable Communities (RTP/SCS) Consists of 2 phases (described in the next slides) P a g e 5 o f 5 1 Background (Cont.) Phase 1 and 1A Phase 1 Construct 6-lane bridge w/center median and bicycle lanes Extend Potrero Boulevard over SR 60 Construct ramp on Western Knolls to Potrero Boulevard north of SR 60 Widen SR 60 at Western Knolls (north and south sides) Widen SR 60 at Potrero Bridge location (a few hundred feet east and west of the new bridge) P a g e 6 o f 5 1 PHASE I Background (Cont.) P a g e 7 o f 5 1 Phase 1A Construct acceleration and deceleration lanes Construct median barriers on SR 60 Constructed via Caltrans Permit Process (streamlined process for minor improvements on Caltrans right-of- way) Construction estimate of $2.23 million. Permit originally obtained for Phase 1A expired in 2015 (work not completed) Background (Cont.) P a g e 8 o f 5 1 Phase 2 Construct partial cloverleaf interchange and ramps providing full freeway access (ingress and egress both directions) Realignment of Western Knolls Avenue Provide increased safety on SR 60 and Western Knolls Avenue Access to the existing properties adjacent to the Potrero Bridge location Background (Cont.) P a g e 9 o f 5 1 Freeway Interchanges are a way to create economic activity, jobs and tax revenues by providing access to adjacent properties Interchange has been identified as a traffic mitigation measure in several of the environmental documents for area development(s) Benefits approximately 2,000 acres Access to industrial and commercial areas to diversify Beaumont’s local economy Key component of City’s Workout Plan to Sustainability discussed during the August 11, 2016, special meeting Project Benefits P a g e 1 0 o f 5 1 Grant Funds Funding Source Amount DEMO-SAFTEA-LU $1,440,000 Section 125- Surface Transportation $855,000 Section 129- Surface Transportation $1,470,000 STP Local $8,928,000 STP Progmatic $750,000 Total $13,443,000 Funding P a g e 1 1 o f 5 1 Revised Project Cost Estimates Item Phase I Phase II PS&E Phase $600,000 $1,100,000 Roadway and structure $15,000,000 $15,500,000 Right-of-Way / Utilities $100,000 $0 Contingencies $3,000,000 $3,000,000 Subtotal $18,700,000 $19,400,000 Capital Outlay Support $2,160,000 $2,220,000 Environmental Mitigation $100,000 $1,500,000 Totals $20,960,000 $23,120,000 Grant Funds Available $13,444,000 $0 Developer Contribution $5,000,000 $0 City Contribution (Impact Fees) $2,516,000 $23,120,000 Expenditures to date * $13,000,000 $0 Grand Total $33,960,000 $23,120,000 Funding (Cont.) P a g e 1 2 o f 5 1 Funding source for $1.44 Million DEMO-SAFTEA-LU funds has been replaced by future federal surface transportation funds by RCTC. (letter dated July 8, 2016) City received RCTC letter July 21, 2016, indicating RCTC’s intention of de-programing $8.929 million in STP Local funding due to their perception of lack of progress on the Interchange Project Phase 1A will cost approximately $2 million Local funding for Phase 1 is estimated to be $7.5 million Phase 2 estimated costs are $23 million Funding (Cont.) P a g e 1 3 o f 5 1 Options for funding local share Local Traffic Impact Fees CFD Funds Enhanced Infrastructure Finance District Agreement from adjacent property owners to advance funds Additional Grant Funds Funding (Cont.) P a g e 1 4 o f 5 1 Phase 1 Phase 1 have been resubmitted to Caltrans for review Environment revalidation submitted to Caltrans It appears that Environmental Permit # 1602 was obtained but other permits may also be required Caltrans has combined the Right-of-Way requirement map for both Potrero Phases 1 & 2 (EA # 34141 & 34142) Right of way acquisition is on going, three remaining properties. Two for Phase 1 and one for Phase 2. Acquisition must be completed by end of February to keep the Project on schedule Construction Management RFP has been circulated Project Status P a g e 1 5 o f 5 1 Phase 1 (Cont.) Other tasks that need to be completed: Update 95% PS&E package to comply with the 2015 Standards and current Highway Design Manual (HDM) Review the approved Design Exception Fact Sheet to verify if any new design exception would be needed due to update to the HDM  Americans Disability Act (ADA) certification For Caltrans to perform the Advertising, Awarding and Administering (AAA), the current coop agreement will need to be amended Project Status (Cont.) P a g e 1 6 o f 5 1 Phase 1A These improvements will be completed as a Project separate from the Interchange Project. The scope of the Streamlined Oversight Project (EA 34143) consists of construction of the following at the Western Knoll Avenue intersection/access point: Construct a deceleration & acceleration lane along WB SR-60 Install temporary concrete barrier (Type K) along the median of SR-60 Widen and reconfigure the access point Associated drainage, signing and striping modifications The final cost estimate for this phase of the Project as of August 2013 is $2,230,000. A permit was issued to City on February 2014 that expired on February 2015 (Staff is working on obtaining a new permit) Project Status (Cont.) P a g e 1 7 o f 5 1 Expenditures Task Encumbered to date Anticipated additional expenditures Total Completion of Design $110,000 $100,000 $210,000 Environmental Revalidation $18,600 $10,000 $28,600 Surveying $10,000 $10,000 $20,000 Project Management $120,000 $30,000 $150,000 Right of Way acquisition $25,300 $50,000 $75,300 Total $283,900 $200,000 $483,900 Project Status (Cont.) P a g e 1 8 o f 5 1 Right -of-Way Project Status (Cont.) P a g e 1 9 o f 5 1 Phase 2 The work required for this phase of the project includes: Completion of plans (currently at 65%) Secure Funding for Phase 2 Most of the tasks identified in Phase 1 Project Status (Cont.) P a g e 2 0 o f 5 1 Project Schedule (Phase 1) P a g e 2 1 o f 5 1 A.Continue with completion of Phase 1 of the Potrero Interchange and proceed with the following tasks: •1. Plans complete by end of January 2017, •2. Right of way acquisition complete by end of February 2017, •3. Funding commitment for $5 million from property owner by April 2017, and •4. Project Ready to List by June 1, 2017. B.Stop all work on the Interchange Project, return grant funds allocated to the Project and delete from CIP. (No Build Alternative) Alternatives P a g e 2 2 o f 5 1 Construction / Funding Questions? P a g e 2 3 o f 5 1 Potrero Interchange Project Land Use and Market Demand P a g e 2 4 o f 5 1 Overview & Purpose Analyze financial feasibility to fund infrastructure and evaluate the City’s return on investment of public tax dollars Kosmont fiscal impact analysis (“FIA”) projects future revenues and costs to City based on 20-year buildout horizon UFI/HdL to evaluate FIA assumptions and projected return on public investment P a g e 2 5 o f 5 1 FIA Review Project revenues/costs are based on land use assumptions for study area P a g e 2 6 o f 5 1 FIA Review (Cont.) UFI/HdL preliminary review of FIA focused on land use assumptions •Feasibility and intensity of future land uses drive one-time and recurring revenues/costs FIA’s proposed land uses in 32 planning site areas include retail, office, industrial, residential, and hotel Planning areas include unincorporated county territory and recently annexed properties P a g e 2 7 o f 5 1 FIA Review (Cont.) Developer land use assumptions vs. City-approved land use entitlements Developer land use assumptions vs. Market-viable land uses Kosmont FIA assumes maximum buildout and therefore maximum City revenues P a g e 2 8 o f 5 1 Land Use Assumptions Comparative Evaluation of FIA Buildout Projections and Approved City Entitlements P a g e 2 9 o f 5 1 Land Use Review Developer land use assumptions vs. City-approved land use Project Site1 No. Owner Location Aprox. Acreage City Approved Land Use Developer Land Use Assumptions Entitlement Requirements City RivCo 5 Potrero 40 X 143 Commercial Industrial Overlay Industrial & Retail 60,000 Retail 6 Ricker, David X 40 SFR Industrial & Retail 330,600 Industrial 17,400 Retail 112 Hall, Carmen; Hall C X 12 Rural Residential Industrial & Retail 95,000 sf Industrial 5,000 Retail 12 ASM Beaumont Inv X 35 General Commercial Industrial & Retail 187,000 sf Industrial 13 - 29 Denley Investments (Trinity Partners) X 279 Urban Village Overlay Industrial NOT allowed Urban Village Overlay with Industrial Specific Plan 24 - 30 Various X 75 Urban Village Specific Plan 32 LV Heartland LLC X 417 App’d Tract Map 27971 Heartland Specific Plan 126,000 Retail 1 All PS areas meet housing element 2 Pending Annexation P a g e 3 0 o f 5 1 Buildout Projections FIA Buildout projections @ 2036 FIA net revenue projections @2036 Total Acreage No. Owners Industrial SF Retail SF Office SF Hotel Rooms Res. DUs 1,365 Ac 17 8,970,160 SF 520,250 SF 209,300 SF 249 Rooms 3,283 DU Estimated Annual Fiscal Revenues/Expenditures Revenues (Stabilized Year 2036) $27,442,800 Year 1 – 20 Annual Average $16,131,115 Expenditures (Stabilized Year 2036) 17, 192,100 Year 1 – 20 Annual Average $6,588,225 Estimated Annual Net Fiscal Impact (Stabilized Year 2036) $10,250,700 Year 1 – 20 Annual Average $9,542,890 P a g e 3 1 o f 5 1 Market Demand in the Inland Empire Research and Findings P a g e 3 2 o f 5 1 Industrial Demand 97.9 million square feet of new industrial development forecasted for the IE •2017 – 2021 •Based on future demand, traffic forecast from Ports, change in retailers business models Projecting annual growth for Beaumont Potrero Project area at 3.5% or 3.43 million square feet P a g e 3 3 o f 5 1 Retail & Office Demand Limited ground up retail development returning •Projects are smaller in scale Regional shopping center •Ideal regional market location is at I-10/Highland Springs to serve Beaumont/Banning area •Potrero not a regional shopping area Office Vacancy is at 22.3% (1st Q 2016) •Still considerable space available in Riverside, Corona etc. •Potrero not an office area P a g e 3 4 o f 5 1 Hotel CBRE/PKF •Suggest no new hotel development in the short to mid- term until additional residential and employment generators come online Hotel Development in IE – Ont/Rancho & Riverside/SB •2017 Projects planned include – Residence Inn (112 rooms), Holiday Inn Express (104 rooms), Marriott Fairfield Inn (106 rooms) all in MoVal and a Marriott Fairfield Inn (106 rooms) in Riverside. P a g e 3 5 o f 5 1 Sales Tax Potential Allocation Guidelines for Allocation of Local Tax – Online and In-Store Place of Sale Location of Goods When Sold How Goods Are Received Allocation of Taxes* Online California Fulfillment Center Shipped to California Customer Local tax is allocated to the jurisdiction in which the fulfillment center is located. Online Out of State Fulfillment Center Shipped to California Customer Local tax is allocated to the countywide pool based on point of delivery. Online Out of State Fulfillment Center Picked up in Store (Click & Collect) Local tax is allocated to the countywide pool based on point of delivery. Online California Fulfillment Center Owned and Operated by a Third-Party Vendor “Drop-shipped” to California Customer** Local tax is allocated to the countywide pool based on point of delivery. Online In-Store (Goods withdrawn from store inventory) Shipped to California Customer Local tax is allocated to the jurisdiction in which the store is located. Online In-Store (Goods withdrawn from store inventory) Pick-up in-store (Click & Collect) Local tax is allocated to the jurisdiction in which the store is located. In-Store In-Store (Goods withdrawn from store inventory) Over the Counter Local tax is allocated to the jurisdiction in which the store is located. *District tax for online purchases is allocated based on the point of delivery **Drop-shipping by a third-party vendor is becoming a common tool for online retailers. Here, the manufacturer or wholesaler maintains the inventory and ships the goods directly to the customer for the retailer who takes the order. If the retailer collects the tax when the order is taken, the tax is allocated via the county pools. If the drop-shipper collects the tax as a part of the service, the tax goes to the jurisdiction where the stock of goods is held. P a g e 3 6 o f 5 1 Land Use Review Buildout Projections and Market-Viable Land Uses Use Type 2021 2026 2031 2036 Developer Consultants Developer Consultants Developer Consultants Developer Consultants Industrial – Proposed Bldg. SF 5,717,210 3,430,000 7,343,685 6,430,000 8,970,160 9,237,960 8,970,160 9,237,960 Retail - Proposed Bldg. SF 173,417 20,000 346,833 242,000 520,250 362,000 Office - Proposed Bldg. SF 69,767 139,533 209,300 69,000 Hotel - Proposed Bldg. SF 100,000 190,000 190,000 60,000 190,000 120,000 Total Bldg. SF 5,817,210 3,430,000 7,776,869 6,450,000 9,646,527 9,539,960 9,889,710 9,788,960 P a g e 3 7 o f 5 1 Revenue Projections Total Revenue Projections (Sales Tax & TOT) @ 2036 Buildout Project Planning Area Annual Sales Tax Revenue 2036 2036 Present Value 1.8% 2.5% Denley Investments $590,280 $1,294,077 $1,749,476 USAA $336,000 $736,616 $995,839 Brooks Street $172,033 $377,149 $509,871 LV Heartland Llc $250,000 $548,077 $740,952 Misc. County Land $628,929 $1,378,808 $1,864,024 Denley & USAA Adjacent $373,095 $817,939 $1,105,780 Total $2,330,337 $5,108,820 $6,906,666 P a g e 3 8 o f 5 1 Building Valuations Annual Escalation – Building Valuation (Commercial & Industrial) Use Type 2021 2026 2036 Developer Consultants Developer Consultants Developer Consultants Industrial $377,654,938 $730,937,674 $486,640,828 $771,600,000 $594,959,592 $2,649,505,839 Retail $35,246,703 $5,327,534 $106,029,016 $122,609,726 Office $12,761,983 $38,390,554 $32,323,078 Hotel $20,000,000 $38,768,163 $38,775,510 $70,267,562 Total $418,654,938 $730,937,674 $573,417,676 $1,943,564,020 $778,154,672 $2,801,800,025 2% Escalation P a g e 3 9 o f 5 1 Preliminary Conclusions Return on Public Investment P a g e 4 0 o f 5 1 Preliminary Conclusions Interchange has been identified as a traffic mitigation measure in several of the environmental documents for area development(s) benefiting approximately 2,000 acres Requires a $5 million contribution from developers (down from $8M) to fund phase 1 of the project Phase 2 of the project doesn’t have a funding plan established as of today, although we believe Phase 1 presents mobility and economic value to the City Development would create a diverse revenue profile as a key component of City’s Workout Plan to Sustainability discussed during the August 11, 2016 Special Meeting  P a g e 4 1 o f 5 1 Preliminary Conclusions The consultant team of HdL and UFI is projecting growth for the Beaumont Potrero development at 3.5% or 3.43 million square feet annually for the next five-year period (2017 – 2021), Based on location and market conditions the Potrero area doesn’t seem to be a prime area for new office development. The idea of regional shopping centers as part of the Urban Village Specific Plan is not market relevant. New retail projects for the Potrero Project Area should be focused on neighborhood shopping centers serving new residential projects and small scale retail focused on SR60 convenience uses. No new hotels are likely needed for this marketplace for the short to midterm – at least until residential picks up significantly and the industrial development is occupied. The two hotels proposed for the Potrero project area should be reduced to 100 rooms. P a g e 4 2 o f 5 1 Questions? 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