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Home My WebLink About02/16/1982 . . . MINUTES REGULAR MEETING COMMUNITY REDEVELOPMENT AGENCY SANTA ANA, CALIFORNIA FEBRUARY 16, 1982 The Regular Meeting of the Community Redevelopment Agency of the City of Santa Ana was called to order at 5:30 P.M., in the City Council Chambers, 22 Civic Center Plaza, Santa Ana, California, after which the meeting was adjourned, due to a lack of a quorum, until 7:30 P.M., in the City Council Chambers. Chairman Bricken reconvened the meeting at 7:59 P.M. After the Pledge to the Flag and the Invocation given by Father Charles Huse, Our Lady Del pilar Church, roll was called: PRESENT ABSENT John Acosta Gordon Br icken Daniel Griset Robert Luxembourger patricia McGuigan J. Ogden Markel Al Serrato Others in Attendance: A. J. Wilson, City Manager Rex Swanson, Executive Director Edward J. Cooper, City Attorney David N. Ream, Community Development Director Thomas E. Hammill, Real Estate Officer Laura Juarez, Secretary EXECUTIVE SESSION At 8:00 P.M., the Redevelopment Agency adjourned to an executive session to discuss legal matters. The meeting was reconvened at 8:40 P.M., with the same members present. PUBLIC HEARING FOR THE PROPOSED SALE BY THE COMMUNITY REDEVELOPMENT AGENCY TO CIVIC CENTER DEVELOPMENT Chairman Bricken announced that this was the time and place for the joint public hearing of the Community Redevelopment Agency and the City Council of the City of Santa Ana for the proposed sale of property by the Community Redevelopment . . . Agency of the City of Santa Ana to Civic Center Development, bounded on the north by Eighth Street, on the west by Main Street, on the south by Civic Center Drive and on the east by Bush Street, excepting the northerly 50' of the westerly 115' thereof. Chairman Bricken requested that Staff identify the property or issues and give staff recommendation. Mr. Thomas E. Hammill, Real Estate Officer, reported that the property was identified by seven parcels. Parcel #1 - Sombrero Street Restaurant; Parcel #2 - Pal Office Equipment and Southern California Gas Company; Parcel #3 - Avco Thrift; Parcel #4 - Parking lot; Parcel #5 - Parking lot; Parcel #6 - Multi- family residence; and Parcel #7 - parking lot currently under lease to Sombrero Street Restaurant. Mr. Hammill also reported that Parcel #7 was owned by the Redevelopment Agency; Parcel #6 was owned by Mr. Smith; Parcel #'s 5 and 4 were both owned by Dr. Neal; Parcel #2 is owned by the Church; Parcel #3 is owned by Tom Cole and Geraldine C. Douglas; and Parcel #1 is owned Mr. Colman and others and is under lease to Sombrero Street Restaurant. The Chairman announced that the Agency would now like to hear from those people who desired to address the Agency on this issue. He added that if anyone desired to address the Agency, they should step forward to the podium, give their name and address and limit their comments to five minutes. Chairman Bricken requested to hear from those persons in agreement and disagreement with the proposed sale. Mr. Howard Block, 1226 N. Broadway, Attorney for Mr. Allan Fainbarg, told the Agency members that he was available to answer any questions that they might have. Tom E. Cole, 707 Rosalind Drive, Orange, CA 92669, addressed the Agency to tell them that he objected to the redevelopment of this particular project. Frederick R. Bates, 1731 Rainbow Drive, Santa Ana, CA, addressed the Agency telling them that he represents the owners of the property labeled #2, and that they were in favor of this development. Peter Des Rochers, 719 N. Main Street, Santa Ana, CA, addressed the Agency telling them that when he came to Santa Ana in 1978, there was no full service restaurant in the downtown area. The current site of Sombrero Street was a bombed out vacant building. In order to restore this building, he had to invest two hundred seventy-five thousand dollars ($275,000.00). He stated that he had attempted to acquire leasehold on the property directly behind the restaurant to be used as a parking facility. With assistance of the Community Redevelopment Agency, he was -2- . . . able to obtain a five (5) year lease, with option to purchase, on the parking area on September 17,1979. Mr. DesRochers stated that he had given the Agency a copy of his letter to Honorable Gordon Bricken, Mayor, stating his particular reasons on why he should get this parking lot. He also stated that he had attached documents prepared by the Executive Director of the Redevelopment Agency which clearly showed that the Agency (and the City Council) understood the inter-relationship of the restaurant. Also attached, is a letter from Alexander Nalle, then Chairman of the Redevelopment Commission, which speaks of appreciation for his investment and committment to the future of Santa Ana. Mr. DesRochers also stated that while the proposed redevelopment project includes his leasing of twenty-one (21) parking spaces, it also ends that lease on September 17, 1984 and totally excludes his option to purchase the property. He stated that he will have no recourse and he cannot survive without parking. Claude E. Young, 2102 N. Louise, Santa Ana, CA, addressed the Agency raising the following three questions: 1. What is the estimated value of the proposed project? What is the estimated land cost of the site? What is the sale price to Mr. Fainbarg? 2. 3. Mr. Young stated that their might be possible litigation between Mr. DesRochers and the City for the taking of this lease. The following DesRochers: in spoke favor of Mr. Peter persons Joe Gilmaker, 308 W. 4th Street, Santa Ana, CA David L. Brandt, 2422 S. Rita Way, Santa Ana, CA Harry Greenberg, 116 N. Sycamore, Santa Ana, CA Billy Greenberg, 117 N. Broadway, Santa Ana, CA Manuel Pena, 631 S. Fairview Street, Santa Ana, CA Zika Djokovich, 211 N. Main Street, Santa Ana, CA Terry M. Moshenko, Attorney at Law, 18952 MacArthur Boulevard, Douglas Plaza, Suite 102, Irvine, California stated that he wished to have his letter of January 15,1982 entered into the minutes (a copy is attached). A motion was made by Mr. Luxembourger, seconded by Mrs. McGuigan and carried unanimously to receive and file the letter dated January 15, 1982, from Moshenko, Russ & Associates to Edward Cooper, City Attorney, City of Santa Ana, and Mr. Cooper's response (copy attached) to said firm dated January 29,1982. -3- . . . Mr. Moshenko raised the following questions: l. 2. What is the price of the acquisition? What is the value of the property proposed to be taken? What is the land price to the developer? 3. Mr. Rex Swanson responded with the following answers: 1. 2. 3. Acquisition for the Agency - $973,000.00. Value of the property - $3,000,00O.00i\L\\",~'~~~::~:b ,\ "" Land pr ice to the Developer - Developer has 'agreed" to pay $785,000.00. Mr. Moshenko requested that Mr. DesRocher's letter of Febuary 15,1982 be entered into the record (copy attached). A motion was made by Mrs. McGuigan, seconded by Mr. Luxembourger and carried unanimously to receive and file the letter from Peter DesRochers to Mayor Bricken dated February 15, 1982. Mr. Howard Block addressed the Agency advising them that he was prepared to proceed with the proposal that was before them, but if it was going to be a problem they would have an alternative proposal. RECESS At 10:00 P.M., the Chairman recessed the meeting. At 10:18 P.M., the meeting was reconvened with the same members present. After lengthy discussion, a motion was made by Mr. Markel, seconded by Mr. Serrato and carried unanimously to continue consideration of this matter to March 16, 1982. AUJOURNMENT After closing the public hearing, Council considered their regular agenda at 1:38 A.M., therefore, there being no further business before the Community Redevelopment Agency, the meeting was adjourned at. 1:38 A.M. to March 16, 1982 at 5:30 P.M. ~o Rex Swanson, Executive Director -4- MOSHENKO, RUSS & ASSOCIATES ATTORNEYI AT LAW TERRY M. MOSHEHKO A ,.......1..,.1 Low C........... . (714) 752.9.51 (714) 752..O7 JAMES P. RUSS A "oI...ioNl Low Co"",o"on 18952 Ma.A,th.... BouIev.nI Daugla, PI..... Sui.. 102 1",lno, Callfo,nla 92715 . . . January 15, 1982, Edward Cooper, Esq. City Attorney City of Santa Ana Santa Ana, CA Dear Mr. Cooper: In the December meeting of the Redevelopment Agency, I was asked to present to you a summary of our contentions concerning the proposed Redevelopment Project affecting the parking lot behind Sombrero Street, Inc. It is our basic belief and contention that where the Agency has previously taken and committed the property to Sombrero Street for the purpose of causing Peter Des Rochers to invest large sums of money toward his redevelopment project, it should not disavow or breach its agreements and commitments for the purpose of causing a second redevelopment project. This principle involves not only matters of law, but also raises issues concerning the integrity of the Agency. The Agency staff is not just proposing to remove a valuable property right, but is also callously disregarding and destroying the "opportunities and expectations" previously used, i.e., "sold" Sombrero Street for Sombrero Street's commitments (and full performance thereof) to their earlier redevelopment project. The suggestion that fair compensation will be paid and equivalent parking rights or benefits will be granted cannot be evaluated since the particulars of what will be provided have never been shown. How can the Agency be asked to approve a contract with A. Fainberg which includes a taking of the rights of Sombrero Street, unless the terms of the taking have been disclosed? Obviously, more information should be demanded by the Agency first before it considers the proposed project. Further, no apparent consideration is being given to the value of taking "opportunity" (to own property in perpetuity), to the damage Sombrero Street is guaranteed to suffer during construction, to alternative methods of accomplishing the same ends (without the full taking of Sombrero Stree's interest), and to certain procedural and legal deficiencies in the process to date. Some of those points include the following: ó , .' . . . Mr. Cooper -2- January 15,1982 1. The failure to specify the terms of the taking has been referred to above. -2. 'Sombrero Stree is 'not totally adverse.to the pro- posed development. It simply clãIms the right to full compensa- tion for all property taken, as well as losses suffered. The best measure of "full compensation" for all property taken is the market value of the property to be taken. (This, incidentally, is the same measure applied by courts in any condemnation pro- ceeding). Yet the process to date has never allowed negotiations between Fainberg and Sombrero Street to establish the market value. Similarly, no one has shown any interest in the potential for damage to Sombrero Street during construction. 3. Everyone seems to presume that the only way the Fainberg development can occur is by a full taking (cancellation) of Sombrero Street's rights under the prior agreement. Considera- tion should be given to cooperative use of the property not requir- ing total destruction of Sombrero Street's right to purchase the property during the original lease period. This has never occurred. 4. Consideration should also be given to taking less than the "whole" of the property for the Fainberg project. To my knowledge, this has never been evaluated. Has the Agency decided it must simply take the "whole" because Fainberg considers it necessary? The law prohibits the taking of more property or property rights than that which is necessary for the purpose of the condemner. Another alternative deserves study. 5. The closing of 3th Street east of Main (only approximately two blocks long) and transferring Sombrero Street's lease thereto, could solve two problems presented. First, it would provide immediate substitute property for Sombrero Street's parking during construction, immediately adjacent to Sombrero Street. Next, it would provide equivalent "expectations and opportunity" to acquire, use and own the lease-hold property. 6. If to the above items 3,4 and 5, the response is "we have considered these alternatives", this points out a further deficiency. Quite reasonably, consideration should include par- ticipation by Sombrero Street. This has never occurred. One must therefore conclude that any such consideration is suspect and deficient. " ., . . . Mr. Cooper -3- January 15, 19B2 7. The Redevelopment Plan. enacted origina:1tly in 1973 requires "citizen participation. . .to insure that the Santa Ana Redevelopment Project is a success". It provides that "legitimate citizen interest and participation" be invited and used. These mandates of the Plan cannot be met by the process that has taken place. B. The Plan (and condemnation law) not only mandates a'greater showing of "necessity" to take the property than has been evidenced, it also requires a showing that ". . . it cannot be acquired by other means". Yet, to date, no specific offer has been made to Sombrero Street for its interest. It cannot be said the property cannot be acquired by other means. 9. A further deficiency of the process in which we are involved relates to the nature of the proposed project. As originally conceived and as approved by the Agency, it envisioned a more modest 18,000 sq. ft. structure. This project did not require the interests of Sombrero Street be taken. By what means has the project now blossomed to emcompass the entire city block? It appears that the Agency's previous approval has been disregarded or changed without public or Agency involvement. I conclude, procedural safeguards have been by-passed in expanding the scope of project. ' 10. The prior approvals and "exclusive right to nego- tiate" was originally given to Alan Fainberg for a six month period. That period expired without reaching any agreement. Nonetheless, we are informed, more than a month later, without public hearing or involvement, a new six month exclusive right was improperly given. That period has now expired with no contract being agreed upon. Yet negotiations continue, exclusively with the developer and without opportunity for other developers to be heard. 11. In fact, a totally different entity (other than Fainberg) is now the developer. By what provision can the original developer, without Agency involvement or public hearing, transfer expired rights to a separate person or entity and thereby claim the legal and procedural legitimacy necessary to justify prejudicing not only the valuable rights of Sombrero Street, but also those of the public, to offer alternative proposals and projects for the location. , '..' .' . . . , ¡ i I Mr. cooper -4- January 15,1982 ,., 12. The Agency should also be aware that the.proposal as apparently envisioned (though we cannot be sure because we do not know the specifics) violates the mandate of the Redevelop- ment Plan regarding off-street parking which requires, . Parking facilities shall be located on the same lot or site or on a lot or site contiguous thereto. Any property used for required parking shall be under the same ownership as the uses served or shall be restricted in such a manner as to prevent the severance of the parking facilities and use by sale, trade, lease or any other conveyance." In summary, I suggest that I and my client would be more than willing to work with the Agency, Agency staff and Mr. Fainberg directly, to see if progress can be made toward satis- fying the interests of all involved. I believe a number of things are yet to be done before the Agency can act on a proposal such as the one now presented. It is, in my opinion, clearly premature. I want to thank you in advance for your cooperation. I hope you and the Agency will keep in mind that Peter Des Rochers and Sombrero Street are not just strangers to the Agency and its goals of redeveloping Santa Ana. They represent early and strong supporters (with private and substantial investments) of and for the benefit of redeveloping the City of Santa Ana. I feel the least they deserve is what the law requires. Very truly yours, MOSHENKO, RUSS & ASSOCIATES Terry M. Moshenko TMM:lb 1 L ¡ I ¡ :~:¡~'" ,~ . .. ",¡' :.~; .. ,..,,' .~ ~.... 1 ¡'r'l Your l~tter of Januin'y 15, l!):~~ ~Allün FÐlhbbr~ Ptojcct) 'rx:..r ;,;r. };oshr-..¡;I~(): " ""., '/. 'C, , .. ,'¡'haIiKYOU torprovlàing tilo vrittcl1 infor~atlon «I> requested hy .the Co~munlty ~edcvel0pmcnt hgency. Your letlf"rrbisc:: f;cvcrel qucat1onn \Òich~"~ uill attf:m1,t. t.o ;.nr.w~r liB f()11(>\I5: . :11 t::c s(;conù lJarðg'rc.¡:li:, :,'cu :-.,t:ntion OJ "ri:ðcv<:lo;- ¡:-.C'.nt proj"ct" DY Mr. P-=ter Daó :~c¡l:rl>. ;.c: úre nflt aw..rl'.oi: ¡;roy hue¡ "n:d'.,v\-lo¡>mcl\t project" .", tictinea :'}' ¡:",alt." <'I\d, :..c.i.:ty Code:: 3:>úl0, nor of: co;;¡d !:tin'J (\11:' <,ro,:,('rti to !;ucìí " :)co'j'~ct tor U!C pur;,o:..: 01 C~\J~ill~; hi:', to itwcr.t 1ur'Jc :.U'~ of nolw:'. Fnctuall:f, So'..brc'r.. 5tl"L':,l, ¡¡,C., W.I!.. e..:",r- ..tin',! .. rc!>t,.tln,nt iOn:. rc<;u....~.t(i~.j "',;l~:-.CY ..:cs1~tincC in pro- vl!.iinrj Fijr¡~in']. '¡'his ðCfJit.till1CC Ci'Jc,(: in lhe form of :;. lc-z,ac ;"Jr.-..",,!'.::\; .:¡...t"J Scpta:tIJt:r 17, l~ï~', w!:urcIJY tilt; ¡"lcncy Ic_mud ,,'1:c,;.::rt 1 "",'f".=' ¡ !"i it to t;omlJr<'l'o ;;tr,", t, lac. (or i,.¡rki:.", :'ur,}'):":c~' . You t!.:1'.1'" r"ir.ed 5c\'er:.l l.:>~ucr. of purport,d "[ro- c:'>h:r;¡l ..nd ,h..:;",l jc!icicnct.::!",. "hieL \/<. \~ill rc!!~'c:~(: to e::l ; ""in!: by ¡,oint i",,!:.i¡;. ~ . ~ ~ ~ i . ,",' ¡;"'. .. Hr.""'Hoshenko JanUAry ;9,1902 pI")" t\olO 1. If Sombrt1ro Gtrct:t, . roperty1nterCl.U~:""~ ';~¡"r~~~"~;~ ðre: acquired by excrc1ul'. of ep1in~nt ðof4a1t1 (Code of Civil ~rocÐðurc 55 1230.017ct ~c~.)~ 'the action ~i11 be by , adoption çí a resolutlor. of necel:ilòity at; re'Ju1rcd by eCl> 5 1;'>015.220 (:t ccq., which haF, not occurred. '"'bus, to date, there hEW uetlfl no 1(":1,,1 rl,quire:nent 01 &peciiyi:l-j the "terllll> of the t;l!<;ln':!.- 2. Þ.rtic1c I, Chapter 9, 'Utle VII ot the Coda of Civil ?roc:cdure-, 55 1263.010 ~t soq., provi(jcf:. LlJd.t the rnea5ure of compem;ðtion is the fllir I"'-Arkct value ot the property taken. If the property were to be ta;.;cn by the: exorcise of the power of eminent do=ain, your client woul~ be co~pensat~û as required ùy lðw. The "~~rkct v~lue. vould be 8ßtnblishcd by an expert appraiser, not by ne~otiation& l>etween Mr. f'ainbarq and your client. 3. With respect to the issue of "cooperAtive use," or the requirement-of a "Cull takin9'. we reco~end that the is&ul;: b~ raised during l:Iny public hcilrlng which may be helt1 pursuant to Uc;,lth LInd Safety Code y 33433 or CCP t; 1245.235. :'-1 I " /I. Likewi!¡e, the is-sue regl1rd ing w:,c ther ..l1i property is "ncce:lu;ary" for the proj't'ct I>hou1r. l,c /Jddrccscù t\t. any ì!<",,1t~1 ¡, :.>afety Code ~ 33433 hearing, or at the tiThe ~T1ct p1;¡cc Eel 1.0r hearin'~ un any rer;oll.1tlor: of neces¡;ity as reQuired by CCP 5 1245.235. 5. Vacation of Eighth Stn:;(-'l as i! policy './Jttcr ....ill not t.e IIrldrcs¡¡ed by this office, but it nÌ'lould be noted thi'.t íí tight¡' Strí:!et it; ViOcdted, tr,c, unJcrl:¡in'J ice will ve::Jt in tho ¡.òjoining l¡m~ o;.:ncrs. he r,,:>te that t;rJmbrero ~~rect, Inc. dOE::> IIOt. Owl1 the tee tv ðn:¡ of t~,c lIdjoinin<J property. in order to Frovidc p",r):ir<! for :':o:,~~reru Street, Inc., it ~oul~ DO nccecE~ry to acyuire th~ u"derl~in9 foe trOt~ O\;f)er:s Oil ¡.aU, Bide::; oJ: the t>trcet. , "';'" ,5"J'Øft~ 6. ~ombrero :.;trcet, Inc. is entitled to particl':'""',,~,<}'i' pate in diftcuG::;!onc rcyarding alternatlveA if a HcRlth' ' Safety CodE" 5 331.33 pl:~)lic hearin-J il: bt;lú. 7. heóllth C, ~;[¡ret;{ Code!. 33B3 IJrovidc-r-, tor "citizen p,u:ticip¡"tion" in the l,ublic hear!n,:; l'roc"st'-. furthcr¡.¡orr:, tl,(; :.<jency pútï~its o'.mer i'l1rticip3tion p;¡rSuènt to ¡¡oaith L ~¡3fcty Code ~ 333f;O. /0 . ~ ~ ~ v . . ~ ."agc lhl"!;¡ú t:r. . il(',¡;hulI}~O Jðnuary ~9, 1962 .. 8. Contrary to your ,ab5~rtlon thAt conde~natlon , law löléAndøtes II showing thi\t proVl:rty "CAnnot be acquired 'by.. other ::-,riéJr:~. before exerch:e of the powtor.. of eminent: domain, ~cr 5 12~O.O30 provides io part~ .~hether the property oec()l1;.:2ry for pu!J11c ur;e 1.. t-ú be Cl.cquit'eð by purchClae or other ¡:m;>m. or by c:uinent ùo:¡\~in iö a decinion left to the (:i[¡crctitlf} of tb.. person ¡¡¡uthoriz~ù to acquire the property.. ""'o£> r"öEicn ,.0 t'ipecific offal' hd£. been cacte for tnl:: ::>O/¡¡brOro :;lreet, Inc. interest is t.e"..lJ1i'~ no d1spositiQn ¡¡roc! òcvclop- \,ent !\jre<.:::>cnt bas been entered lIalhori::ing such acquisItion. !i. ?he Agency, to ó" te, haf. not op,.-,rovt:J any ~rojcct on the :situ. Any ap?rovéil will req111rC i'1 public hearing in accordance with J-.!" ., Code S 33433, whicb has not yet ,occurred. Your client will receive notice of any such pu!.i1ic bearing. 10. We do not understand your Assertion that exclusive negotiations are being conducted .without opportun- ity for other developers to be heard,. since YO are not aWare of nny other developer who dcsirc~ to be heard. n" s Code ~S 33339,' 33345 and 33380 provide for owner partici~a- tion, and to tI,e búfJt of our J-.nowledge the rules 3rc being fúl1o~"'ü. PIe..5., {..jvisc if you (..we contrarY'(",cts. 11. We arc not aware of any other owner, partici- pnntr\ who (;esire to offer alternativE: proposaln or projects [or the loeotion. If Ii propoGcJ developer h.ll' not !>e~n givon excluaive rights to n~yolióte, any other riaveloper ~ay r...qucst !;uch ri9t1tl> fro:1l tho h.:¡cncy. 1:1. Th(! 1&sue rai!icð undo!:' F:'Iint 12 fOhould be reF,..!:vcJ tOI c""",id"ret1on ..t any Ii t 5 Cc,ü.., r 33,,33 hearil1Y. 13. For your intern,ation, the Project r"re¡l Com- ."itt,"'" was dÜ;b:Hided by uction ot the ¡"JCHCj', because it h8d 5erv'~- th;:; FlIr;,o&e,; requ1rN1 by i' .. S Code ~ 3:>3r;6 ¿HId ,,¡;¡¡ 1;0 lon,;(>r ne<.:dc..!. On f'ebruary 6, 1geO, the H..c1evclop",ent À,:!cncy n~ceivej b proposal froll> :~r. Allan" E'ainbllrg to redev~lo¡J th, l;crthoò!1st corner of Civic Center Drive and !~,,-in ~trect. .', ï-¡¡inh¡,rq rl:qu€::;U,(] À')oncy assi!Jtance in acqu1rin'j ti", 11i~C(-"f;¡¡r;r \>nt"celc to provide fer the col1l;t.ruct1on of [j tÌ!rc'.'- ctory ofii~CDuildln9 of approximat~ly 20,973 ~raBE 6qu~r~ feet tø bl! built OVCt' O:1C flocI' of encloEcu, ¡,uríãcc p.,r;;- in,. 'l'hí5 i'ropo¡;n1 involved the .~cfJuisitíon c¡ ¡out- i",rcro!c;, II .' . . . ~ (Œ ~ i . N¡:. Moshenko ",', January 2~, 1~8~' page four \ . ," 0' ,." "' '~:~:.;~~,;~;~~~:>t~r" , <,,' , .' <:~i~~~fi~2, .' inclu>:!i11'J 1.~::;Ç~,,>v.' lL:.IL.;;:::Jby lho A'Jencyto"""'~" lIre l'eter ;,<:Þ"û(~II..t'I!S forth. pur~i!C o! ¡,rcvidln9 parking :' for the So:>".!,:..:::<) Etroet Restaurant. StÐff informed ,Mr.' , rainbðr<j ti,ut it could not eupport th" uti11~:.tion of 'A. P. ,-011-0::' ¡" >t'-'.'()~":":. VII d,Utl.>cU:¡ ¿9, 1980, tIre l..ÜniJury bubmitt.:d «I reviGed cite, 1,1;.)) involving only the IIc:-¡uicition of Aßl1õeBøor Pc.rc~lß 9-011-12, 1::; ðr.d O~. This reVi6f'l1 plar, did not involve ;\.1'. ~-!Jll-O5 (tho l)er>!tochcrs 1~i1ft:ho1J). À I!:ap d~picting tlHH'e i-¡¡rcf,ls is alta,Chel for }'our lI\formiition. '11¡/;: ;{,"d(:\iëlopmcnt Agency, at i\.6 ...eet!n!] of April 21. 1980, gr.:mlcó 1-\1'. l'olnbarg ö1 .:1" month exclusive ri'JlIt to negotiate, bii~od on hiG revised proposal And site plAn. During this &i;: :wTlth period, ¡¡taft had the property appra1seð, and had ~r. Fainuar9's development propo&al ðnnly~cd by the Agency's indep~néent cconoœist, Keyser Marston AE60ciates. On ~ov~mber 17, l;ôO, ~tðf( preeentcd ~eys~r Marston'. analyeb to the RedCyclop!!:cnt ^9I:mcy, wi th a recomõ1:cndation that the ;:..gency direct stðËt to prepare a OiGp()[;i tion and ùcvclo!>ment II.green'cnt tilth i'!r . Fðinbarg. 'I'hc kJencr di- rected staff to prepare the developl'Ient ëlgrec::¡cnt ;;1 th ~¡r. fainbarg. However, thC:y also ln5truett"J staff to .;ork \.'i th !"or. Falnbarg to èGvelop a larger buildin~¡, utilizing the l'emaining portion of th() bloc!:, with the cICcéption of Son¡brero Street P.e:-ot.:luJ:'ant. In cdtTjiw] out the "":lonc}":::. dircct.ion~, :>taíf had l<!H;C&!Jor ParcelF. 9-011-11, 0; ¡m1 n~. 3p"rai¡¡cJ. '¡'he IIpprftisal on pð'rc<:tl !J-Ol1-()~ "'¡t.:lilt. \:iitb only ,\r. iJ¡;~?,oc:;o::n; lcaf.~hold interest. Mr. Fainbarg had h serieo of architcctur~l ¡¡olu- tions applied to the tlite. in ;m lIttc:n¡Jt to con!:'tl'uct. éI Inrgcr buil~ing utilizin~ parcels 09 ani 11. but not OS. ^ftcr r~vicwing U.e various ftltcrnatives, it ~as .vident ti:òt any laracr cf:velop~ent would rcquin: structured parking' l\ush Street I,ctwcen Civic C"-ntor Driv~ an". l:i~ht "", /2- I . ., "" . , . ~ ~ ~ ìJ . ~~,~.. ,,' ".,"" , " }:r. ¡'¡oshenko ~il!lnul"IrY 29, 19C2 pa(jo five I In eonclu!Jion, we Ull!nÌi. you for your letter iOI' Jl!nu/lt:y 15, 19C2, an,. for giving us the oppo¡tun1ty to rcvit'v our proccdut"cc;. It 1s our opinion th&t the prlJ- ct""ut"ee t:equircd by };:\".1 I1r£l being, And will continue to be, tcllowed to !nt;ure ti", legal integrit~. of our rcùcvclop¡1tcnl t!ífortr;. Very truly your~, EDWARD J. COOP~R Agency Legal Counsel EJCzAr eci Chairman and Me~ber8 of the Community Nedevelópment Agency A. J. Wilson, City nAnager ", /3 - )006 KATELLA AVE" STANTON '-. KNOTT AT KATELLA (LUCKY MKT CENTER) 894-3542 ,7.19 I'O. NlAIN ST, SANTA ANA CORNER OF 8TH & MAIN ST (BLOCK 50 OF BUFFUM51 , 547.0921 . . . RESTAURANT I CANTINA GREAT MEXICAN FOOD. GREAT COCKTAI COU OIL ACTION February 15, 1982 Honorable Gordon Bricken. Mayor City of Santa Ana 20 Civic Center Plaza Santa Ana CA 92702 Dear Mayor Bricken: On Tuesday, February 16.1982, the City Council will hold a public hearing pursuant to the Allan Fainbarg R~development Project. This project is bounded on the ~orth by Eighth Strfet. on the West by Main Street, on the South by Civic Center Drive, and on the East by Bush Street. 1hese boundaries include Assessor Parcel 9-011-05 which is currently leased by me to provide parking for my business. Sombrero Street Restaurant. When I came to Santa Ana in 1978. there was no full service restaurant in tha downtown area. The current site of Sombrero Street was a bombed out vacant building. In order to> restore this building, I invested Two Hundred Seventy Five Thousand Dollars ($275,000.00) a~d Fourteen (14) months to meet all of the code requirements, inspections, etc. This far exceeded original estimates but. because I was personaily committed to this project, I persisted. In concurrent action, I attempted to acquire leasehold on the property directly behind the restaurant to be used as a parking facility. With the assistance of the Conmunity Redevelòpment Agency, I was ãble to obtain a 5 year lease, w'lth option to purchase. on the parking area on September 17, 1979. Attached are documents prepared by the Executive Director of the RedevelopmEnt Agency which clearly show that the Agency (and the City Council) understood the inter-relationship of the restaura~t and an available parking area. In the Executive Director's own words, "The sur'viva! of the restaurant is directly related to his need of patron parking". Also attached, is a letter trom Alexander Nalle, then Chaiman of the Redevelopment Colil11ission which speaks of appreciãtion for my investment and commi ttment t() the future of Santa Ana - - - a future of lnitiative, progress, spirit and pride. /1 7~ . . . , '. (. [') . February 15, 1982 Hon. Gordon Bricken - Page 2 Since the,opening of Sombrero Street, I have worked very hard to provide a first rate restaurant and a positive atmosphere for our downtown area. Past problems in the downtown area have made it difficult to build an evening and weekend trade. Through membership in various community organizations, sponsorship of youth activities, the winning of two (2) Silver Awards from the Southern California Restaurant Writers, and other positive activities;r have been able to overcome past problems and build a positive image for Sombrero Street and our downtown area. Additionally, r have followed closely the efforts of the Redevelopment Agency to create a positive business climate in the downtown area and have personally encouraged other business owners to participate in the future of this area. This effort and committment was due to my faith in our future based on the past practice of the City. Today that faith is considerably shaken. Upon learning of the proposed redevelopment project that would void the leasehold/purchase option on my parking area, I attempted to discuss the effects on my business with Agency Staff and the City Manager. To date, they have not been interested in my problems. r have written to the City Attorney and his response, in essence, was to let me know that the city can terminate my option by the exercising of "eminent domain" and that I may present my comments at the public hearing. Mr. Cooper also reassures me that the Agency has not approved any project on this site and a public hearing will be held prior to approval. I somehow do not find this very reassuring in view of the fact that prior to any public hearing, the Agency staff has already recommended APPROVAL of the proposed ~. (See attached copy of Agenda for February 16, 1982 meeting.) ~ I am wrong, but logically it would seem that a public hearing should be held, the points raised should be considered and then the recommendation developed. How else is the input from the public to be given any real consideration? The comments that r will make at the public hearing will focus on two important areas: Sombrero Street Specific As the Agency and City Council kno~l, the avail abi 1 ity of suffi ci ent convenient parking is critical to the existence of my business. The current lease with option to purchase the parking area assures me of the necessary parking to support my current level of business and the possibility for future expansion. --- IS- (¡ ,J . February 15,1982 Hon. Gordon Bricken - Page 3 . No business remains static. It must have the opportunity to increase, and a restaurant cannot expand beyond it's parking availability. The only reason that the option to purchase was requested at the time of the lease was because of my hope to increase the parking area as my business grew. While the proposed redevelopment project includes my leasing of 21 parking spaces, it also ends that lease on September 17,1984 and totally excludes ~~yO~~~O~t;~e~u~~~~~~gt~~l\r~~e~iYtheT~~~a~~~~s(~~~tt:~~) ~~P~~~b~~i~~~r~:84 I will have no recourse. This puts my business (and investment) in a most precar&ous position. I cannot survive without parking and certainly no one would purchase my business without parking. . Additiona11y, the construction period of the proposed project will create adverse business conditions (noise, dust, etc.) and the inclusion of the parking area will leave little, if any, parking for patrons. By the time construction is finished and I can again build my business, the parking lease will expire and I will have no parking for customers. Another matter of concern is the property line of the parking area and the existing Sombrero Street building. The property line of the parking area extends to the outer wall of the building. Portions of the parking area are currently used to store outside refuse containers and beverage tanks. If, in fact, this parking area is taken, I will have no place to locate these service areas, and as you know, they are integral to the operation of a restaurant. Redeve~opment of Business Climate in Santa Ana The proposed action by the Redevelopment Agency and the City Council have caused all of the business owners in Santa Ana to take a long, hard look at their own future. What happens to me today can happen to them tomorrow. . When people invest their dollars, time and heart to open/operate a business, they take risks. We all understand that. The economy, product/service and other factors affect our ability to succeed. One of the things we put faith in is legal agreements with respectable entities. I consider the City of Santa Ana a respectable entity. The Council speaks publicly of improving and renovating Downtown Santa Ana. The Council that encourages private investment into the future of Santa Ana. The Council comprised of business people who supposedly understand the need for honesty and fair practices. Members of this Council who propose to run for re- election to the Council and to higher office because of their desire f~r "good government". I~ . . . ". í \, , ) February 15, 1982 Hon. Gordon Bricken - Page 4 How can this Council allow its very integrity to be suspect over this project? How can business owners ever again have faith in the words of this Councilor in their intentions? To terminate an agreement that was entered into with supposed good faith, knowing full well the effect it will have on my business will produce a chilling effect on all future business investments within this city. Each new project will begin under the black cloud of mistrust and suspicion of any agreements with the Redevelopment Agency and City Council. Business people will have to ask themselves, "Will they terminate my agreement? Will another project come along that looks better after I make my investment?" This will produce more of a negative business climate than any other problem in Santa Ana. The decision made here tonight goes far beyond the parking area of Sombrero Street. It will reach out to every business, existing or planned, in every corner of our city. It will be remembered by banks, investors and voters as the public policy statement of this city. Never again will this Council enjoy the respect and credibility that it has worked so hard to attain. I am committed to the future of Santa Ana. . . I have proven this through my investment. I ask this Council tonight to reaffirm their commitment to Santa Ana's future by continuing their committment to honesty and integrity. Sincerely, Peter des Rochers, President Sombrero Street, Inc. 17 " " . . . (; .. ) . ',J " August 8,1978 ~~. Pater De Rocher, President Sombrero Street, Inc. 719 North ~1ain Street Santa Ana, California 92701 ~~ar Mr.'De Roeher: The Redevelopment commission of the City of Santa Ana extends to you its sincere appreciation for your participation in the revitalization of downtown. Redevelopment is by design and necessity a cooperative effort between the private and public sectors. The refurbishment of your property represents more than a private investment in property. It represents support of the public efforts of the Redevelopment Agency and, more ir:Iportantly, a coIl1t:\itment to the future of Santa Ana--a future of initiative, progress, spirit and pride. We salute you and invite your continued participation and sup- ¡)ort. Sincerely, Alexander Nallc, Chai~~n Redevelopment Co~~ission jl Ir ., . -,' ~~I-'" 1, ...i'r"lí." ;:-.:.líJ\.: .~{; REQü[Sl FOR AGENCY ACTION . Richard E. Goblirsch filEr ¡,en> 1\V Executive Director ¡IAT!:' OF AGENCY ACTION D/,TE SUBJECT 11-14-78 PilON!: .-ill!- APPROVED ACQUISITION OF PROPIIR'l'Y AT THE SOU'l'IIWEST CORNER OP ¡!IGIITILAND BUSH STREETS lAP NO. 009-011-05) Fõi- SOMBRERO STREE'l' RESTAURANT niüãÑG , -"'" ~~ /ci~GER RECOMMENDED ACTION Authorize staff to acquire property and negotiate lease and purchase option agreement with Sombrero Street Restaurant. COMMISSION RECOMMENDATION: . Acquire the property and ther~after present details of lease and option to buy agreement with the Sombrero Street Restaurant to the commission for recom- mendation. BACKGROUND: The property proposed to be acquired has a depth of 125 feet along Eighth Street and a frontage of 75 feet along Bush Street. It is current~x vacanr and avap- able for rchase. The Sombrero Street Restaurant is in nee of th s proPI!¡;:ty for ar es. Mr. Peter De Rocher, owner of the Sombrero street Res- aurant, had originally attempted to negotiate for the purchase of this pro- perty, but a form of agreement with the owner of the vacant lot could never be reached. n excess of in S an architecture n an oys full time an part time employees. !he surv va ~ dir"ctlv related +n hi. need of catron park~. . The owner of the Sombrero Street Restaurant property was contacted to determine his interest in acquiring the vacant parcel. lie indicated that he did not have the financial capacity ,to do so at this time. He further stated that if he were to acquire the property, he would expect a financial return upon his investment, which would be substantiallY in excess of what Sombrero Street Restaurant could afford at this time. Staff is now requesting authority to acquire the subject property for the sum of somewhere between $70-$80,000 which amount will be verified through an ap- propriate appraisal. The Agency would enter into a lease with Mr. De Rocher for a period of five years with monthly rental as follOWS: $175 Per month during the first year, $225 per month during the second year, $300 per month thereafter. The purpose of the reduced rental is to provide Mr. De Roeher time to amortize his investment covering the improvement of the vacant lot to parking lot standards, which cost we presently estimate to be in the area of $10,000. The present lease that Mr. De Rocher has covering the restaurant operation provides him with an option to buy the building and a right of first refusal. Mr. De Rocher has indicated that he intends to exercise this option within the next five years. Staf is also recommendi a . D cher b vided" option wi -n he ease to purchase the parkina ìot. The opt on to purc ase ,,'ould e structured ~ J.t coula onJ.Y De exercued qn the event that Mr. De Rocher exercised his option to acquire the present restaurant lease-hold property. The consideration for the parking lot property at the time of exercise of option would be based on tho then market value for the use intended. If the Agency "ets favorably UpOIl this request to purchase, we will ultimately be bringing before you for approval the lease and the option agreement referred to above. /1 -53 613 I . ! t ~, ) ~he Commission requested Staff to discuss the acquisition of the parking lot with the owner of the underlying fee of the Sombrero Street Restaurant ~roperty. One of the owners, a Mr. John Coleman, was contacted and ex- pressed an interest in its acquisition but did not feel he had the finan- cial capacity to do so at this time. He further stated that if he were to acquire the property, he would necessarily expect a return upon his investment, which judging from his statements would be substantially in excess of what Sombrero Street Restaurant could afford. The price to be paid for the parking lot property by Mr. De Rocher pur- suant to his option would be the same as the price paid by the Agency, ~r an amount equal to its reuse value for the purposes intended at the ~ime of exercise of option. The option could be structured so as to reflect these types of conditions. ~he details as to the lease and the manner in which the option would be exercised would be brought before the Commission for decision if the commission, and subsequently the Agency, act favorably upon this proposal. ?£Z/ ~ Richard E. Go~lirsch REG/TH/jl . 2. ~~ 4B 20 . . . . . MEMORANDUM ( " j,' i' [I (,. I 'J ~../.., .,,'. .~- ' Redeve.: - ' April 18, 1979 From: Ci ty Attorney To: Dale: Executive Director, PREPARATION OF LEASE AGREEMENT WITH SOMBRERO STREET, INC. Subjecl: Will you please prepare an appropriate lease agreement between Sombrero Street, Inc. 719 North Main Street, Santa Ana 92701, and the Community Redevelopment Agency of the City of Santa Ana pursuant to the following terms and conditions: 1. Effective date of lease shall be date of acceptance by Agency; Lease term to be for a period of five (5) years; 2. 3. Rental at the rate of $175 per month during the first year¡ 4. Rental at the rate of $225 per month during the second year; , 5. Rental at the rate of $350 per month for the third, fourth, and fifth years; 6. Lessee a rees to im rov W1t 1t an ar s or aso thee so s 1cient c u o~ 10ft n~ 1o_""r; e ro ert crance n e of ilure to do erminate ease a 7. Lessee shall have an option to purchase the lease prem ses a an t1me u erm e ease at a ue. e eterI1U.na 10n va e that value assigned to the subject property by a competent, dependable, professional appraiser hired by the Agency¡ 8. The above option cannot be exercised, however, until the lessee has acquired title to the property immediate- ly westerly of the lease site and presently leased by and operated as the Sombrero Street Restaurant; The legal description of the lease premises is as follows: 9. That certain parcel of real property in the City of Santa Ana, County of Orange, State of California, described as Lot 6 and the North half of Lot 7, Block A of the Price and Stella Fruit Addition to Santa Ana in the City of Santa Ana as shown on a map thereof recorded in Book 28, Page 5, Miscellaneous Records of Los Angeles County, 2./ . .. . . . , . ./ ,\ ¿:.?/iJ./ r'J , f'y" ¡ \.,,!.I. ""-~." ' ":,,¡ f:~(;~EST FOR ~.íi[ii[Y (,CnON r:;Erhl\EIJ EY Executive Director Redeve lopment 9-11-79 PHONE ~ I1ATE OF ÄGENCY ACTION 9-/7- 19 ¡?II)' k (/& oAh~4.7ý:'.? (('. (S:Ä'J lJj,TE 5UßJECT CONTINUATION OF SOMBRERO STREET LEASE AGREEMENT APPROVED ~~- ~~ RECOMMENDED ACTION Adoption of Resolution 79-26: A RESOLUTION OF THE COMI-IUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AUTHORIZING THE CHAllUIAN OF SAID AGENCY TO EXECUTE A LEASE AGREElIENT BETWEEN SAID AGENCY AND SOMBRERO STREET, INC., FOR PARKING PURPOSES. COMMISSION RECOMMENDATION Not Applicable. BACKGROUND s meet' 9 8 d at t e southwest corner of E1 ht and h Streets a ease W1 SO rero Street, Inc., W1t op on to the lease ~erm. The property has been acquired and the City Attorney's office has now prepared an ap:,ropriate lease with Sombrero Street, Inc" whl...h will rovide them with sufficient arking to e ure the continued erati n 0 e restauran. e U1 ng r y exlSte as ou , vacant: DU1l01ng until Sombrero Street entered into a lease agreement to restore the spanish architecture of the building and to create a first- class, full service restaurant. The 0 ening was dela ed several months because of e re uirements ins ect1on ' . 0 rero treet, Inc., as vlSed Sta a e 0 a COS 0 re ilitating the building and creating the restaurant was Two Hundred Seventy Five Thousand Dollars ($275,000), which was far in excess of the original estimate. They presently employ Fifth Five (55) full-time and part-time employees including management personnel, of which 25% are minority. The monthly "ales tax produced by the restaurant is apprximately Twenty Two Hundred !>ollars ($2,200.00). :he Agency at its meeting of May 29, 1979 considered the adoption of the o'esolution to authorize the execution of the lease. Upon hearing testimony rom the adjoining property owner, who was represente':] by Attorney mest J. Schag, Jr., relative to access to the parking area in rear of I heir buildings, the Agency requested that we qet the parties together ," arrange a solution to the problem. The parties have now entered into cross license agreement whereby Sombrero Street will provide vehic'llar . 'cess across the westerly 16.00 feet of the leased property to reach '", parking area of the adjoining property. The adjoining property in "'" has authorized Sombrero street to make use of a portion of northerly '. ÐO feet of their property for the purpose of providing Sombrero Street 'cesS to their storage 10:>P1 and providing access to trash containers and :,er equipment owned by Sombrero Street. ~"? Ù>dicating the lease premises and the are"s of the cross license agreerœnt is \~ched. The lease provides s""stantially as follows: "2.~ n^ - tt