BURBANK REDEVELOPMENT AGENCY

Tuesday, April 26, 2005

AGENDA

CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE

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6:30 P.M.

INVOCATION:                      

The Courts have concluded that sectarian prayer as part of City Council meetings is not permitted under the Constitution.

FLAG SALUTE:

ROLL CALL:

REPORT TO THE REDEVELOPMENT AGENCY BOARD:

1.      REQUEST FOR ASSISTANCE UNDER THE DOWNTOWN TENANT ASSISTANCE PROGRAM FOR 308 NORTH SAN FERNANDO BOULEVARD (FORMER BOOK CITY):

Part of the Redevelopment Agency's (Agency) comprehensive strategy to revitalize Downtown emphasizes the importance of attracting quality tenants to fill existing vacancies.  The Downtown Tenant Assistance Program was developed to help meet this need.  The purpose of the Downtown Tenant Assistance Program is to provide financial assistance for structural and tenant improvements for underutilized and vacant properties Downtown. The program provides forgivable loans as financial incentives to attract quality retail tenants to locate in the Downtown.  In December 2002, the Agency Board approved its first loan under the Downtown Tenant Assistance Program by providing $675,000 in assistance to attract Urban Outfitters to Downtown. 

The former Book City building is located at 308 North San Fernando Boulevard in the Downtown Village District and has been vacant for over 18 months. The building is approximately 8,725 square feet and is owned by Palm Avenue Associates. On November 8, 2004, staff received a proposal from Maynard Retail Company, Inc., as a franchisee of EQ3 Franchise Holdings (EQ3), requesting $515,570 in financial assistance for building and tenant improvements under the Downtown Tenant Assistance Program. Maynard Retail Company, Inc. is in negotiations with Palm Avenue Associates to lease this building to open an EQ3 furniture and home accessories store.  

EQ3 markets itself as a modern, trendsetting furniture and home accessories retailer combining international design with quality service and affordable value. Palliser Furniture, Ltd., EQ3�s parent company, is one of Canada�s largest furniture manufacturers with over 50 years of manufacturing wholesale experience.

Based on an analysis of the proposal by Keyser Marston Associates, EQ3 is eligible to receive $257,800 (50 percent of eligible development costs) in assistance under the program.  The execution of a ten-year lease with Palm Avenue Associates is subject to EQ3 receiving assistance under the Downtown Tenant Assistance Program to make building and tenant improvements.

Under the Downtown Tenant Assistance Program, EQ3/Palliser would enter into a Commercial Rehabilitation Agreement with the Agency.  Under the Agreement, the Agency would provide a forgivable loan of $257,800 for base building and tenant improvements.  The term of the loan would be ten years at a fixed interest rate of prime plus 2 percent (currently about 7.75 percent). 

EQ3 would complement the current mix of businesses in the Downtown.  Furthermore, their presence would help Burbank continue to fulfill its revitalization efforts Downtown as well as provide opportunities for increased economic growth.  Based on $1.5 million in projected annual retail sales, $15,000 in Sales Tax revenue would be generated for the City's General Fund each year.  Funds for the Downtown Tenant Assistance Program have been previously budgeted from tax increment funds.

Recommendation:

Adoption of proposed resolution entitled:

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING A COMMERCIAL REHABILITATION AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND PALLISER FURNITURE LTD. FOR THE REHABILITATION AND IMPROVEMENT OF A COMMERCIAL BUILDING LOCATED AT 308 NORTH SAN FERNANDO BOULEVARD.

RECESS to conclude the City Council meeting.

ADJOURNMENT.