HomeMy Public PortalAbout09-15-1998LRAJ
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LYNWOOD REDEVELOPMENT AGENCY
11330 BULLIS ROAD LYNWOOD. CALIFORNIA 90262-3845 (310)603-0220
Armando Ilea, CHAIRMAN
Arturo Reyes, VICE CHAIRMAN
.Louis Byrd, MEMBER
Paul Richards, MEMBER
Ricardo. Sanchez, MEMBER
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RE EIVED
CITY OF LYNWOOU
- CITY CLERKS OFrICE
SEP ~ 0 1998
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AGENDA r~,~,~, ~- -~-
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LYNWOOD REDEVELOPMENT AGENCY '
.SEPTEMBER 15,.1998
REGULAR MEETING
6:00 P.M.
LYNWOOD CITY HALL, 11330 BULLIS ROAD
ARMANDO REA
CHAIRMAN
ARTURO REYES LOUIS BYRD
~. VICE CHAIRMAN MEMBER
PAUL RICHARDS RICARDO SANCHEZ
MEMBER MEMBER
:INTERIM EXECUTIVE DIRECTOR AGENCY COUNSEL
RALPH DAVIS SHAN K. THEVER
OPENING CEREMONIES:
A: Call Meeting to Order.
B. Roll Call (BYRD-REYES-RICHARDS-SANCHEZ-REA)
C. Certification of Agenda Posting. by Secretary.
. PUBLIC ORAL COMMUNICATION
PUBLIC ORAL. COMMUNICATIONS
(REGARDING AGENDA ITEMS ONLY)
ITEMS FOR CONSIDERATION
1. MINUTES OF PREVIOUS MEETING
Regular Meeting of September 1, 1998
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2. A RESOLUTION OF THE LYNWOOD REDEVELOPMENT AGENCY
OF LYNWOOD, CALIFORNIA, ALLOWING AND APPROVING THE
DEMANDS AND WARRANTS THEREFOR.
. REGULAR ITEMS
3. APPROVAL OF A PROFIT PARTICIPATION AND REVENUE SHARING
SCHEDULE WITH COMSITES, USA. ~,
Purpose:
To request the approval from the Agency on a Profit Participation and
Revenue Sharing Schedule between the Lynwood Redevelopment
Agency and ComSites USA, Inc. the wireless telecommunication
consultant.
Recommendation:
Staff recommends that after consideration, the Agency approve Option
Two as the profit participation and revenue sharing schedule between the
Redevelopment Agency and.Comsites USA, Inc. and direct the Interim
City Manager to prepare and execute a Development and :Income
Participation Agreement between the Redevelopment Agency and
Comsites USA, Inc.
PUBLIC HEARING ITEMS
NONE
INFORMATION ITEM
NONE
CLOSED SESSION
ADJOURNMENT
Motion to adjourn to a Regular Meeting of the Lynwood Redevelopment Agency
to be held October 6, 1998 at 6:00 p.m. in the Council Chambers of City Hall,
11330 Bullis Road, Lynwood California
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- LYNWOOD REDEVELOPMENT AGENCY, SEPTEMBER 1,1998
The Redevelopment Agency of the City of Lynwood met in a Regular Session in the City
Hall, 11330 Bullis Road, on the above date at 6:12 p.m, ,
Chairman Rea presiding.
Member Byrd, Reyes,. Richards, Sanchez and Rea answered the roll call.
Also present were Interim Executive Director Davis, Agency Counsel Thever, Secretary
Hooper and Treasurer Pygatt.
Secretary Hooper announced the Agenda had been duly posted in accordance with The
Brown Act.
PUBLIC ORAL COMMUNICATIONS -AGENDA ITEMS ONLY
.None
PUBLIC ORALS
None
ITEMS FOR CONSIDERATION
It was moved by Member Richards, seconded by Member Byrd and carried to approve
the following minutes:
a) .Regular Meeting, August 18, 1998
It was then moved by Member Richards, seconded by Member Richards, seconded by
MemberByrd to adopt:
LRA RESOLUTION NO. 98-28 ENTITLED: "A RESOLUTION OF .THE
LYNWOOD REDEVELOPMENT AGENCY OF LYNWOOD, CALIFORNIA,
ALLOWING AND APPROVING THE DEMANDS AND WARRANTS
THEREFORE".
ROLL CALL:
AYES: ~ MEMBER BYRD, REYES, RICHARDS, SANCHEZ, REA
NOES: NONE.
ABSENT: NONE
REGULAR ITEMS
Chairman Rea introduced the next item, Treasurer's Quarterly Investment Report.
It was moved by Member Richards, seconded by Member Byrd to:
RECEIVE AND FILE THE ATTACHED QUARTERLY INVESTMENT REPORT
FOR THE QUARTER ENDING JUNE 30,1998
ROLL CALL:
. .AYES:. MEMBER BYRD, REYES, RICHARDS, SANCHEZ,. REA
NOES: NONE
ABSENT: NONE
Chairman Rea introduced the next item,. demolition of American Motor Inn 10831 Long
Beach Boulevard.
It was moved by Member Richards, seconded by Member Byrd to:
APPROVE THE DEMOLITION OF THE FORMER AMERICAN MOTOR INN
PROPERTY LOCATED AT 10831 LONG. BEACH BOULEVARD AND
APPROVE THAT THE DEMOLITION CONTRACT BE AWARDED THROUGH
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ROLL CALL:
AYES: MEMBER BYRD, RICHARDS, REYES, SANCHEZ, REA
NOES: NONE
ABSENT: NONE
CLOSED SESSION
Chairman Rea. introduced items for closed. session, conference with real property
negotiator, property: Agency property located at 3840 Martin Luther King Boulevard.
Under negotiation: Potential acquisition. Conference with real .property negotiator,
Property: Cal Trans Air Space I-105/710 Freeway. Negotiation: Lynwood
Redevelopment Agency and Vester Development Co. Under negotiations lease and
conditions. Conference with real property negotiator, Agency and City owned properties,
Lynwood Redevelopment Agency and ComSites USA,. Inc., under negotiation, lease
terms and conditions.
It was moved by. Member Richards, seconded by Member Reyes and carried to recess at .
6:15 p.m.
Agency reconvened at 7:45 p.m.
Agency Counsel Thever stated the Agency had met in closed session and with regard. to
property at 3840. Martin Luther King Blvd. staff was direct to bring back a proposal for a
complete civic center plan complete with RFP to be discussed at a study session: With
regard to Vester Development, this item is to be brought back after a complete study of
investments and all economic effects. With regard to Comsite U.S.A., this item will be -
brought back at the next meeting.
Having no further discussion; it was moved by Member Byrd, seconded by Member
. Sanchez and carried to adjourn at 7:48 p.m.
CHAIRMAN ARMANDO REA
SECRETARY ANDREA L. HOOPER
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DATE: September 22,.1998
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE AGENCY
FROM: Ralph Davis, Interim Executive Director ,l /_
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BY: Gary Chicots, Community Development Direct r !/
SUBJECT: APPROVAL OF A PROFIT PARTICII'ATION AND REVENUE
SHARING SCHEDULE WITH COMSITES USA, INC.
Purpose:
To request the approval from the Agency on a Profit Participation and Revenue Sharing
Schedule between the Lynwood Redevelopment Agency and ComSites. USA, Inc. the wireless
telecommunication consultant..
Background:
'On April 21,1998-the Agency selected ComSites USA, Inc. as the wireless
telecommunication consultant for the City. Staff was directed by the Agency to provide
' to the consultant the necessary telecommunication sites and negotiate a equitable
revenue formula between the Agency and ComSites USA, Inc.
Staff has been working with ComSites on several sites including three of the City and
Agency's water tower locations( see attached location map). ComSites has prepared and
submitted to staff a profit participation. schedule for these three sites. ComSites has
provided-two options for tl~e Agency to review and decide which option would be
most. attractive to the Agency.
On September 1, 1998, staff presented the Agency with two options for profit
- participation and revenue sharing that was proposed by ComSites. The options were
discussed by the Agency and continued to the next scheduled meeting in order to provide
the Agency time to review the presented options.
Analyses:
Staff has evaluated the two profit participation options presented by Comsites. following below
is a brief analyses of the two:
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Option ] is based on base lease payments of $1,000. per month or a 50/50 profit participation of
the net cash flow less direct site expenses (including tenant improvements amortized over 10
years at a .10% interest rate).. The total payment to the City of Lynwood shall be the greater of
the base lease payments or 50% of the net cash flow.
Direct site expenses include the direct site lease expense payable to Lynwood, a 5% management
fee, amortization of tenant improvements and other expenses (estimated at 5% of the gross to
include actual phone, utilities, maintenance and .personal property taxes)...A budget for tenant
improvements will be prepared for Agency approval
What this means is the Agency would receive a.minimum of $12,000. per year from each water
tank site ($1,000 per month lease payment) until the net cash flow available to the City of-
Lynwood (describe above) exceed the monthly base lease payments. According to the pro-forma
income analysis dated September 1, 1998, during the first two years the City of Lynwood will
receive the base lease payments. At year three, it is estimated that the 50% of the net available
cash flow will exceed the base lease payment payable to the Agency. Therefore, the Agency
would receive 50% of the net available cash flows.
Over 1 l years the total payment to Lynwood would be $571,688.
OptiolT 2
Option 2 is based on base lease payments of $1,000. per month or a 35/65 participation of the net
cash flows less direct site expenses (excluding tenant improvements). The total payment to the
City of Lynwood shall be the greater of the base lease payments or 35% of the net cash flow.
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Direct site expenses include the direct site lease expense payable to Lynwood's, a 5%
management fee and other expenses (estimated at 5% of the gross to include actual phone,
utilities, maintenance and personal property taxes). Tenant improvements are not a part of the
direct site expenses in this Option.
What this means is the City of Lynwood would receive a minimum of $12,000 per year from
each water-tank site ($1,000 per month lease .payment) until. the net cash flow available to the
City of Lynwood (describe above) exceed the monthly base lease payments. According to the
pro-forma income analysis dated September 1, 1998, during the first two years the City of
Lynwood. will receive the base lease payments. At year three, it is estimated that the 35% of the
net available cash flow will exceed the base lease payment payable to the City of Lynwood.
Therefore, the City of Lynwood would receive 35% of the net available cash flows.
Over 11 years the total payment to Lynwood would be $543,325.
After review, staff has determined that the two options are similar in the bottom line revenue
payment to the Agency, Option One yields a higher dollar value of $28,363. over the 1 l year
projection but also involves a riskier amortization schedule and more exposure for the City
during the lease period. Option One essentially has the agency reimbursing ComSites for the
installed equipment. Option Two is slightly less. profitable however, is considerably less risky for
the Agency. Option Two involves less activity on the Agency's part and doesn't have the
Agency providing a reimbursement or credit toward the installation or construction of the
equipment. This option reflects more of the original intent of the Agency when ComSites was
selected as the Agency's wireless telecommunications consultant. Therefore stiff is
recommending option two as the profit participation and revenue sharing .schedule for the
Agency .
Recommendation:
Staff recommends that after consideration, the Agency approve Option Two (the 35/65
participation split) as the profit participation and revenue sharing schedule. between the
Redevelopment Agency and ComSites USA, Inc. and direct the Interim Executive Director to
prepare and execute a Development and Income Participation Agreement between the Lynwood
Redevelopment Agency and ComSites USA, Inc.
Attachments:
1. Draft Development And Income Participation Agreement
2. Resolution
3. Site Map
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RESOLUTION NO .
A RESOLUTION OF THE LYNWOOD REDEVELOPMENT AGENCY APPROVING A
PROFIT PARTICIPATION AND REVENUE SHARING SCHEDULE BETWEEN THE
LYNWOOD REDEVELOPMENT AGENCY AND COMSITES USA, INC.
WHEREAS, The Lynwood Redevelopment Agency has selected ComSites USA, Inc. as
the wireless telecommunication consultant for the City; and
. WHEREAS, .The Agency directed ' staff to provide the necessary .potential
telecommunication sites and negotiate a equitable :revenue formula between the Agency and
ComSites USA, Inc.; and
WHEREAS, ComSites has identified three potential telecommunication sites located at
three separate City and Agency owned water towers and has proposed two separate revenue
.sharing schedules for these sites; and
WHEREAS, The Agency has reviewed the two options and has selected the 35/65
participation split as the revenue sharing schedule; and
NOW, THEREFORE the Redevelopment Agency does hereby resolve as follows
Section. 1. That. the Redevelopment Agency approves the terms and conditions of the profit
participation and revenue sharing schedule and direct the Interim Executive Director to prepare
and, execute a Development and Income Participation Agreement Between the City of Lynwood
Redevelopment Agency and ComSites USA, Inc.
Section 2 . This Resolution shall go into effect immediately upon its adoption.
PASSED, APPROVED and ADOPTED this 22nd day of September, 1998
. Armando Rea ,Chairman
ATTEST
Andrea L. Hooper, Secretary
Ralph Davis, Interim Executive Director
APPROVED AS TO FORM
Shan K. Thever, Esq
Agency Special Councel
APPROVED AS TO CONTENT
Gary Chicots, Community Development Director
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'DEVELOPMENT AND INCOME PARTICIPATION AGREEMENT
This ,Development. and Income Participation. Agreement
-. .(Agreement) is made by and between the Lynwood Redevelopment Agency ,
("Lessor") and ComSites USA, Inc. ("Lessee'!).
COVENANTS
Whereas the City of Lynwood and the Lynwood Redevelopment.
- Agency each own properties available for master lease to antenna -
site facility developers for location of radio telecommunications
iacilsties.(collectively "property" or "properties"); and
Whereas., Lessee has deemed such properties potentially
suitable for the location of commercial radio telecommunications
fiacilities; the parties hereto covenant and agree:
TF'.RMS AND CONDITIONS
1. pROPERTV A_Nn SCHEDULES. Lessor hereby leases to Lessee
.certain properties owned by the Lessor, or by the City .of Lynwood,
on the terms set forth in that telecommunication lease agreement
-{roaster Ground Lease) in the form of Exhibit A. The parties shall
execute separate Schedules for~each of the leased.propertes in-the
form of Attachment 1.
2. TE~I The term of this .Development and Income
Participation Agreement (D.I.P.) shall be .for five (5) years,
beginning on 1998 and ending on 2003. This
J.I.P. may be terminated in accordance with the provisions of
paragraph 9 below and the. terms contained in Exhibit A hereto (the
telecommunication lease agreement).
- a. QPTION TO RENEW. Lessee may renew this D.I.P, on
the same terms and conditions herein for additional
periods, upon approval of the Lessor, after written
.notice to Lessor of Lessee's intent to do so at
least 180 days prior to the expiration of the
current term; such notice shall be deemed given
" upon the mailing of such notice to Lessor. If
Lessee is permitted to renew the Lease, Lessor and
" Lessee shall immediately execute an extension. to
this D.I.P.
3 : D .y . ,o M .NT. The Property shall be .~ used, for . any lawful -
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activity consistent with the redevelopment plan and general plan
for Lynwood in connection with the provision of radio communication
services, .including the construction, maintenance and operation. of
related communication facilities. Lessor agrees, at no expense to
Lessor, to cooperate with Lessee in .making application .for and
obtaining all licenses, permits, and any and all other necessary
approvals that may be required for Lessee's intended use of the
Property consistent with the Lynwood redevelopment plan and general
plan, as approved by the Lessor. Lessee's use of the Property
shall comply with all applicable laws, ordinances and regulations.
4. BASE RENT. The base annual minimum.-.rent shall be that as
outlined in the Schedule of Leased Property, (Attachment 1) for each
of the specific leased properties.
5. PRO TT ARTT.T ATTnN. Lessee, on a property by property
.basis, shall pay Lessor the greater of Base Rent or percent
(_%) Gross receipts is defined as total Gross Revenue less
utility casts, Base Rents paid to Lessor amortization of direct.
site development costs (per section 7) and asset management fees
(,per section 8) The Net Profit shall then be available for
distribution, % to Lessor and % to Lessee.
6. R,NTAT~ AYM NT4 A11 rental payments shall be made payable to
the Lynwood Redevelopment. Agency, and shall be mailed to 11330.
Bullis Road, Lynwood, CA 90262.
7. -DTR T D V TO MFNT ~nST~ Lessee shall submit for approval by
the Lessor, complete set(s) of plans for the improvement and/or
,.modification of each property. In addition, a 'Development Budget!
shall also be prepared for the Lessor's approval. The elements of
'.the approved budget shall. be the amount subject to amortization:
The amortization of the Direct Development Cost shall be over a
period of years. To the extent there is, in 'any given year,
insufficient gross revenues net of Base Rents and utility costs,
then the deficiency shall be carried over to the following year;
until such time as actual site revenues cover said deficiency..
o. ASS T ANA MFNT S The Lessee shall be able to deduct
from Gross Revenues an'asset management fee.. This fee shall be
earned for Lessee's efforts in managing the site including
marketing,. accounting, -and onsite management. The fee for said
management services shall be _% of gross revenues less utility
expenses. -
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5. MTNATTON. This Agreement may be terminated on or more of
the leased properties, without further liability, on 30 days'. prior
t-~ritten notice as follows:
(i) By either party upon a default of any covenant,
condition, or term hereof by the other party, which default is
not cured within~_60-days of receipt of written notice of
default;
(ii) Due to ruling or directive of the FCC or other
governmental or regulatory agency, including but not limited
to, the take-back of channels or frequencies;
(iii) During the first year of this Lease, by Lessee on 60
days' prior written notice if the parties determine that the
one or more of the leased properties are not appropriate for
the intended operation, based on economic, environmental or
technological reasons, including, without himitation, signal
strength or interference;
(iv) By either party as to a specific site upon default of any
covenant, condition or term within the Master Ground Lease;
(v) In the event the Lease is terminated by either party, as
to any specific- leased property, upon a .default of any
covenant, condition or term within said telecommunication
lease agreement (Master Ground Lease), receipts will then be
allocated between Lessor and Lessee.
lo. A~ .MFN'r Lessee shall not assign this Agreement without the
prior written consent of Lessor, which consent shall not
unreasonably be withheld or delayed.
" 11. WAIVER. The waiver by Lessor or Lessee of any breach of any
term, covenant, condition or provision, hereinafter referred to as
Terms, contained herein, shall not be deemed to be a waiver of such
,'Terms of any subsequent breach of the same or any other Terms,
contained herein.
~12. ATTO N~ ~~~ The prevailing party in any action brought
by either-party hereto, based on any claim arising under this
lease, shall be entitled to reasonable attorneys' fees.
13. NOTT_ ,~ ~n DFMANT~9 Notices. and demands required to be given
herein shall be made by certified or registered mail, fax, return
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receipt requested, or reliable overnight mail to the address of the
respective parties set forth below. Lessor and Lessee may from
time to time designate any other address for this purpose by
written notice to the other party.
14. AUDIT. Lessor. shall have the right to audit the books and
records of Lessee's operations on the site to verify gross
revenues, utility consumption, and other related expenses. All of
the. other information obtained through the Lessor's audit with
respect to financial matters, and .any other matters pertaining to
the Lessee, as well as any compromise, settlement, or adjustment
reached between Lessor and Lessee relative to the results of the
audit, shall be held in strict confidence by the Lessor and its
officers, agents, and employees, and~Lessor shall cause its auditor
and any of its officers, agents, and employees to be similarly
bound.
Lessor's Mailing Address:
11330 Bullis Road
Lynwood, CA 90262
Date:
LYNWOOD REDEVELOPMENT AGENCY (Lessor)
By:
Lessee's Mailing Address:
16885 West Bernardo Drive, Suite 100
San Diego, CA 92127
Date:
COMSITES USA, INC. (Lessee)
By:
Ronald E. Douglas, President
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