BURBANK REDEVELOPMENT AGENCY
Tuesday, January 6, 2004
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
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5:00 CLOSED SESSION IN CITY HALL BASEMENT LUNCH ROOM/CONFERENCE ROOM:
Conference with Real Property Negotiator:
Pursuant to Govt. Code �54956.8
Agency Negotiator: Assistant Executive Director/Susan M. Georgino.
Property: 301 North San Fernando Boulevard (Former Crown Bookstore).
Parties With Whom Agency is Negotiating: Len Borden, Roberts Department Stores, 3002 Midvale Avenue, Suite 208, Los Angeles, California 90034.
Name of Contact Person: Jennifer Mack.
Terms Under Negotiation: Purchase of property.
When the Agency reconvenes in open session, the Agency may make any required disclosures regarding actions taken in Closed Session or adopt any appropriate resolutions concerning this matter.
6:30 P.M.
INVOCATION: Bethany Carpenter, First United Methodist Church.
The Courts have concluded that sectarian prayer as part of City Council
meetings is not permitted under the Constitution.
FLAG SALUTE:
ROLL CALL:
CONSENT CALENDAR: (Items 1 and 2)
The following items may be enacted by one motion. There will be no separate discussion on these items unless a Council Member so requests, in which event the item will be removed from the consent calendar and considered in its normal sequence on the agenda. A roll call vote is required for the consent calendar.
Approval of minutes for the regular meeting of December 9, 2003.
Recommendation:
Approve as submitted.
2. AGREEMENT BETWEEN THE CITY OF BURBANK AND THE PROPERTY-BASED BUSINESS IMPROVEMENT DISTRICT:
As part of the Redevelopment Agency�s (Agency) efforts to improve the Downtown, the Agency initiated the formation of a Property�Based Business Improvement District (P-BID) which is now formally called the Downtown Burbank Partnership, Inc., to fund a variety of improvements in partnership with Downtown Burbank property owners. A Management District Plan was developed, which outlines the major components of the P-BID, including: the boundaries; service plan and budget; assessment formula; and, governance of the organization. Specific items that are proposed include capital improvements such as smart parking, wayfinding signage, street/paseo upgrades and holiday decorations. Also included in the Plan are increased maintenance and security, promotions, advertising, special events and administration.
On July 22, 2003, the Council approved the P-BID and on October 28, 2003, the Council appointed the first Board of the Downtown Burbank Partnership, Inc.
The P-BID has a five-year plan, which is the maximum length that a P-BID may be established before renewal. Beginning each January, the P-BID will receive approximately $720,000 from the Los Angeles County Tax Assessor from property taxes from Downtown property owners, excluding residential and nonprofit property owners.
The proposed Agreement outlines the responsibilities for the City, Agency and Downtown Burbank Partnership, Inc. The City is responsible for the collections from Los Angeles County and forwarding the assessments of the District to the Downtown Burbank Partnership, Inc. The Agency is proposed to pay its entire five-year assessment upfront to help seed important capital projects and the P-BID�s administrative expenses. The $615,000 in funds will be held and expended by the Agency for certain projects such as the proposed wayfinding signage program (the Wayfinding program is scheduled for Agency consideration on January 20, 2004), holiday decorations (Phase I completed), and certain administrative and promotional expenses. The Burbank Downtown Partnership, Inc.�s responsibility is to carry out the Management District Plan, provide and maintain certain insurance requirements and provide an annual report to the City.
The Agreement requires the Agency to appropriate $615,000 as their estimated assessment over the first five years. The Agency�s payment includes the assessments on behalf of the City and the Burbank Unified School District. The District agrees to recognize the Agency prepayment as a credit to future assessment over the five-year period.
Recommendation:
Adoption of proposed resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING AN AGREEMENT WITH THE DOWNTOWN BURBANK PARTNERSHIP, INC. TO PREPAY CERTAIN ASSESSMENTS OF THE DOWNTOWN BURBANK PROPERTY AND BUSINESS IMPROVEMENT DISTRICT AND TO AMEND THE FISCAL YEAR 2003-2004 ANNUAL BUDGET IN THE AMOUNT OF $615,000.
END OF CONSENT CALENDAR
REPORT TO THE AGENCY:
The purpose of this report is to present a second proposal for prepayment of an outstanding Note held by Strategic Hotel Capital, Inc. (SHC) pursuant to the Fourth Implementation Agreement dated September 1988 (later amended in August 1989, and May 1991), by and between the Redevelopment Agency of the City of Burbank (Agency) and SHC as assigned (Hilton Hotel); and to receive direction from the Agency Board on said offer.
On September 16, 2003, staff presented a proposal from SHC for a lump sum payment of $3.6 million in return for complete and final release of all liabilities under the Note and the Agreement. While the offer was contingent upon the participant receiving final SHC Board approval, the offer was to pay the Agency $3.6 million within 10 business days after the necessary approvals were obtained, and the appropriate documentation evidencing the Agreement was completed. The Agency did not accept the offer, and appointed Council Members Dave Golonski and Jef Vander Borght to a Council subcommittee to discuss prepayment with SHC and Hilton representatives.
Staff received a letter on December 22, 2003 from SHC stating that after several meetings and discussions with the Council subcommittee, SHC has agreed to a pay-off amount of $6 million on the Note. Based on the previous Keyser Marston and Associates (KMA) analysis of the $3.6 million offer, KMA estimates the current balance of the Note to be $8.8 million, and the net present value of the Note to be within the range of $803,000 to $7.79 million. The prepayment offer of $6 million falls at the high-end of the range of the net present value of the Note.
Staff is recommending that the Agency adopt a resolution accepting the $6 million prepayment offer by SHC. If the Agency Board does not accept the prepayment offer, the Note will be monitored, and the participant will be required to make payments when due.
Recommendation:
Adoption of proposed resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK ACCEPTING A PREPAYMENT FOR THE PARTICIPANT REPAYMENT NOTE BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AND STRATEGIC HOTEL CAPITAL INCORPORATED (HILTON HOTEL).
RECESS to conclude the City Council meeting.
ADJOURNMENT.