BURBANK REDEVELOPMENT AGENCY
Tuesday, May 9, 2006
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
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6:30 P.M.
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JOINT MEETINGS WITH THE CITY COUNCIL:
The purpose of this report is to provide information to the Council for consideration of a lease of City property located at 401 North Buena Vista Street to the Burbank Housing Corporation (BHC) for the operation and management of the Buena Vista Family Center.
On August 23, 2005, the Council and Redevelopment Agency (Agency) Board approved the re-use of the former Buena Vista Library as a childcare and family resource center. Included in that approval was a Cooperation Agreement between the City and Agency that authorized the Agency to fund and complete the rehabilitation of the site as a childcare and family resource center. The authorization also included the approval of contract documents and bid award to TLD Construction, Inc. for Bid Schedule No. R-1190, and the approval of Alley Vacation V-370.
As background, the approved project includes the rehabilitation of the existing 7,900 square foot former library building to be utilized as a childcare center for 84 to 88 children. An additional 640 square feet has been added to the building along Buena Vista Street to be the family resource center. The project includes the undergrounding and rerouting of overhead electrical lines (in the alley, parallel to Buena Vista Street; adjacent to the building). In addition, a portion of the north/south alley with access from Verdugo Avenue has been vacated to create a contiguous site and a safe play yard area.
As recommended when the project was approved in August 2005, staff is proposing that the City enter into a long-term, real property lease with the BHC to provide exclusive management responsibilities of the childcare and family resource center. The management and operations of the Buena Vista Center are proposed to be structured similar to the management structure of the Children�s Center located on Ontario Street, in which BHC owns the center and Knowledge Learning Center (KLC) operates the center. The proposed cost of the lease would be $1 per year to the BHC. As a condition of the lease, the BHC will agree to enter into an initial five-year agreement with the KLC for the operation of the childcare center.
Comparable to the Children�s Center structure, BHC would pay KLC a �flat� annual management fee of $55,000 (with annual increases of five percent) to operate the childcare center. This management fee model would require BHC to maintain financial responsibility for the center while the KLC assumes all operational management and liability. In addition, BHC will maintain control over the tuition rates for both market and subsidized spaces, an important factor in managing the gap between market and affordable rates. BHC is required to pay all start-up and pre-opening expenses (furniture, equipment, hiring and associated initial opening expenses) estimated at $305,000. Funding for the first year�s management fee along with the start-up costs (and an initial $10,000 allowance for the family resources component) is proposed to be provided by BHC. All expenses, except for the annual management fee, are one-time costs. It is estimated that after the first year of operation, the profits generated from the Center will offset the management fee. Any profit generated from the center after compensating the management fee will then be reinvested to provide deeper subsidy levels for the affordable spaces. As part of the approved BHC debt restructuring, an annual allowance of $65,000 per year has been incorporated to cover the operating costs of the facility.
In order to sustain BHC�s housing activities, operation of the family resource centers, childcare center and their administrative costs, staff is recommending a forgivable loan in the amount of $370,000, over ten-years of operating the center; as outlined in the Loan Agreement. In addition to the proposed forgivable loan, staff proposes to transmit the $75,000 play yard allowance approved in the Fiscal Year 2005-06 project budget to BHC for the purchase and installation of play yard equipment. This will allow BHC to work with KLC in selecting the preferred play yard equipment.
Finally, the proposed lease between the City and BHC will require BHC to oversee the successful operation of the family resource center component. As it does with other BHC centers within the focus neighborhoods, City staff will assist with this task through a collaborative effort among a variety of non-profit service providers. There are available Agency funds to fund these necessary expenses.
Recommendation:
Adoption of proposed Council resolution entitled:
(4/5)
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING THE LEASE AGREEMENT BETWEEN THE CITY OF BURBANK AND BURBANK HOUSING CORPORATION (BUENA VISTA FAMILY CENTER).
Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING A LOAN AGREEMENT BETWEEN THE AGENCY AND BURBANK HOUSING CORPORATION AND AMENDING THE AGENCY FISCAL YEAR 2005-2006 ANNUAL BUDGET TO APPROPRIATE $370,000.
2. PROPOSED REAL PROPERTY ACQUISITION - 2721 WEST Burbank BOULEVARD (APN: 2438-001-026)
The purpose of this report is to provide the information necessary for the: 1) Council to consider the proposed acquisition of real property located at 2721 West Burbank Boulevard (and related documents); and, 2) Redevelopment Agency (Agency) Board to consider a budget amendment to the Fiscal Year (FY) 2005-06 annual budget (and related documents).
The Council has historically shown its ongoing commitment to and support of the non-profit service providers in Burbank. More specifically, in FYs 2004-05 and 2005-06, Community Development Block Grant funding totaling $1,034,900, was awarded to assist in the expansion and rehabilitation of the Burbank Temporary Aid Center facilities; and, since 1994, the City has leased the former Fire Station 13 to the Boys and Girls Club to further its mission in serving Burbank�s youth. Similarly, the Council has established a goal of helping the Family Service Agency find a suitable new location from which they can continue and expand operations.
The proposed acquisition price is $1.95 million (or $283 per square foot of gross building area). The City�s appraiser, Otis Hackett and Associates, found the property to be listed within the fair market value range of $1.895 to $1.965 million ($275 to $285 per gross square foot). Staff also reported that based on a preliminary walk-through of the building, City building inspectors found the building to be structurally sound.
Should the Council approve the proposed purchase and sale agreement for the subject property, the next step will be to determine the specifics of how the property will be used. Staff recommends the City retain ownership of the property and negotiate a lease agreement with the Family Service Agency.
Due to the aggressive timeframe in closing the proposed escrow, staff proposes to return to the Council at a later date with a lease agreement between the City and the Family Service Agency. Staff also recommends that a Project Oversight Committee be formed (including two Members of the Council, City Manager, Community Development Director and other key staff members) to negotiate the lease.
As mentioned, the acquisition price is $1,950,000. In addition, there are escrow fees totaling $1,500 which will be shared equally between the City and seller, resulting in a total expenditure of $1,950,750. Staff recommends that the City utilize debt reimbursement funds from the Agency to acquire the subject property. More specifically, staff proposes the Agency repay a portion of its City Centre Project Area Loan for the sole purpose of funding the proposed acquisition.
Recommendation:
1. Staff recommends that the Council select two Members to serve on a Project Oversight Committee to negotiate the proposed lease with the Family Service Agency.
2. Adoption of proposed Council resolutions entitled:
(4/5 vote required)
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 2005-2006 ANNUAL BUDGET, APPROPRIATING FUNDS IN THE AMOUNT OF $1,950,000.00 AND APPROVING A COOPERATION AGREEMENT WITH THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK.
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING THE PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS BETWEEN THE CITY OF BURBANK AND THE BURNETT TRUST (2721 West Burbank Boulevard).
3. Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 2005-2006 ANNUAL BUDGET IN THE AMOUNT OF $1,950,000 AND APPROVING A COOPERATION AGREEMENT WITH THE CITY OF BURBANK.
RECESS to conclude the City Council meeting.
ADJOURNMENT.