HomeMy WebLinkAbout041805 First Implementation Agmt DDA Crevier Motors ExpansionREQUEST FOR
AGENCY ACTION
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AGENCY BOARD MEETING DATE: AGENCY SECRETARY USE ONLY:
APRIL 18, 2005
TITLE:
FIRST IMPLEMENTATION AGREEMENT TO
DISPOSITION AND DEVELOPMENT
AGREEMENT - CREVIER MOTORS, INC.
EXPANSION
RECOMMENDED ACTION
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1 � Reading
❑ Ordinance on 2ntl Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Direct the Agency General Counsel to prepare and authorize the Executive
Director to execute the First Implementation Agreement to Disposition and
Development Agreement for the Crevier Motors, Inc. expansion.
DISCUSSION
On July 19, 2004, the Community Redevelopment Agency approved a
Disposition and Development Agreement (DDA) with Crevier Motors, Inc. and
Donald J. Crevier, as Trustee of the Donald Crevier Trust, for the
expansion of the Crevier BMW dealership at the Santa Ana Auto Mall. The
DDA called for the Developer to purchase approximately 4.23 acres or
184,597 square feet of land from the Agency at $20 per square foot or
$3,691,940. The proposed facility consists of approximately 170,066
square feet of service, sales and office space and a five - level, six -
tier, approximately 730 -space parking structure. The project is proposed
to be built in three successive phases, each taking approximately one
year to complete. The construction of the Phase I parking structure on
Parcel A is underway, and the new showroom and office area will be
constructed as part of Phase II on the second parcel to be conveyed,
Parcel B. The new sales, service, parts and office addition to the
existing BMW building will be built in Phase III on Crevier's existing
property. The phasing will allow the dealership to continue its
operations without major disruption to sales and service.
Due to unforeseen circumstances, it has become necessary to make certain
modifications to the DDA. One modification is related to payment of
prevailing wage. Pursuant to Sections 411 (9) and 412 (11) of the DDA,
Crevier submitted a letter to the California Department of Industrial
Relations requesting a prevailing wage coverage determination. A
favorable determination for Crevier would have equated to a purported
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First Implementation Agreement to
Disposition and Development Agreement
April 18, 2005
Page 2
savings of $1.2 million. To date, there has been no determination and
Crevier has made a decision to proceed with the project to ensure its
timely completion. Thus, the subject sections need to be removed from
the DDA and the requirement for payment of prevailing wages needs to be
reinserted. The DDA also needs to be amended to allow for a credit
against the purchase price of Parcel B in the amount of $300,000 due to
unanticipated extraordinary costs associated with the project.
Additionally, the Schedule of Performance and appropriate DDA sections
need to be amended to provide for an earlier conveyance of Parcel B upon
issuance of a storm drain permit (July 2005) to help avoid construction
delays and accommodate the $300,000 credit.
Crevier BMW, one of four BMW dealerships in Orange County, is currently
ranked first in "New Car Sales" in the nation and holds the title of
number one in the nation for "Certified Pre -Owned Sales." The Santa Ana
dealership with 267 existing employees expects to add 200 employees upon
completion of the expansion, while creating 175 construction jobs during
build -out. Sales volumes have nearly doubled from 1993 ($45.8 million)
to 1998 ($88.1 million) and more than doubled again from 1998 to 2003
($233.3 million). Projected total sales are expected to reach $560
million by 2008.
CEQA COMPLIANCE
In accordance with the California Environmental Quality Act, the
recommended action is exempt from further review. Categorical Exemption
Environmental Review No. 2003 -111a was previously filed for this project.
FISCAL IMPACT
Proceeds from the sale of Parcel B, net of the $300,000 credit, will be
received in the South Main Tax Allocation Bond revenue account (account
no. 552 -01 -5721) and the South Main Operations revenue account (account
no. 550 -01- 5721).
Executive Director
PCW /SG /mlr
H:WCTIONS12005 CRATimthnplemAgree To DDA- CrevierExpa 4- 18- 05.doc
APPROVED AS TO FUNDS AND ACCOUNTS
Francisco Gutierrez
Executive Director
Finance & Management Services
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