BURBANK REDEVELOPMENT AGENCY
Tuesday, June 3, 2003
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
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6:30 P.M.
INVOCATION: Reverend Roby Correa, Magnolia Park 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:
JOINT MEETINGS WITH THE CITY COUNCIL:
The purpose of this report is to provide information to the Council and Redevelopment Agency Board (Agency) to authorize: 1) the execution of a Cooperation Agreement (Co-Op) between the Agency and the City of Burbank for the reimbursement of $1,366,775 to the Agency by the City from land sale proceeds; 2) transfer of the Metropolitan Transportation Authority (MTA) grant of $632,000 to the City Centre Redevelopment Project Area (City Centre Project); and 3) making an appropriation from the Fiscal Year (FY) 2002-03 Golden State unappropriated fund balance of $237,099 to complete Phase II of the Five Points Realignment Project.
On June 13, 2000, the City and the Agency entered into a Co-Op authorizing the Agency to assist the City with Phase II and III of the Five Points Realignment Project. The Agency and the City found the design of the Five Points improvements to be of benefit to the Golden State Redevelopment Project Area, and that there was no other reasonable means of financing the City�s public improvements other than through Agency funding.
The total project costs were estimated at the time of the Co-Op to be $19,131,988 (including an estimated $3,363,869 for contingency). Funding sources for the project included Development Impact Fees, State Transportation Improvement Program (STIP) grant funding, Burbank Water and Power Undergrounding funds, and funds from the Agency�s Golden State Redevelopment Project Area. The Agency�s Golden State contribution totaled $8,279,146, inclusive of the following:
� $170,020 for the design of the public improvements (Resolution No. 25,730);
� Approximately $2,894,973 for the acquisition of the State Farm and Animal Hospital properties; and
� $5,214,153 for Phase II and III (Resolution R-1976 and Resolution No. 25,771).
On February 13, 2001, the City and Agency entered into a Co-Op authorizing the transfer of Agency land (State Farm and Animal Hospital Properties) to the City, valued at $2,894,973. The City had limited resources to pay the Agency, and will therefore transfer a $632,000 MTA grant to the Agency for the cost of the properties. The grant will be received for right-of-way acquisition and the construction of the Five Points Realignment Project. The Co-Op states that when the grant funds are received by the City, the Financial Services Director will take the necessary steps to transfer the funds to the appropriate Agency budget. Agency staff is working with MTA staff to finalize documentation necessary to receive the $632,000 grant.
Several remnant parcels were created from the Five Points Realignment Project, including property that was not necessary for the widening of the Burbank Boulevard bridge. In May 2002, the Council and Agency entered into a Co-op for the exchange of Agency and City land in order to facilitate the construction of the Caltrans State Route (SR) 134 Freeway ramp project, and to relocate and construct the Hollywood Way and Alameda Avenue distribution sub-stations. The City transferred the Five Points remnants to the Agency, and the Agency transferred the three-unit apartment building at 3510 West Alameda Avenue and the 14-unit apartment building at 3516 West Alameda Avenue to the City for the project. The West Alameda properties have a combined square footage of 25,794 square feet and were valued at approximately $1,120,000. The remnants from the Five Points project have a combined 44,435 square feet and were valued at approximately $1,741,920. The City made the conveyance in order to reduce the Agency�s prior deficit incurred for acquiring the State Farm and Animal Hospital properties for the Five Points project, and to allow future development of the remnants if possible.
After deducting the $632,000 MTA grant, and the value of the remnant properties conveyed to the Agency (a $1,741,920 value) as stated above, the total Agency contribution to the Five Points Realignment Project is reduced from $8,279,146 to $5,905,226. Furthermore, the Agency has received $1,160,480 from the MTA to reimburse construction management and construction costs, further reducing the total Agency contribution to a net contribution of $4,850,600.
In November 2000, the City entered into a Purchase and Sale Agreement with Zelman Retail Partners, Inc. (Zelman) for the sale of 52,488 square feet of remnant property to be incorporated into the Costco Wholesale Corporation (Costco) parking lot. Zelman purchased the remnant City property with the intent to assign the property rights to The Price Company. The City received the appraised value of $25 dollars per square foot for the property for a total of $1,366,775 and in December 2000, Costco took possession of the site. The Assignment and Assumption Agreement between Zelman and Costco was executed in September 2001.
At the time of the Co-Op in June 2000, one of the findings made was that there was no other reasonable way of funding the project. Since the Co-Op, the City has received $1,366,775 from the sale of remnant property to Zelman. The remaining remnant parcels have been transferred to the Agency for reimbursement for the Agency�s contribution to acquire the State Farm and Animal Hospital properties (Co-Op approved in May 2002); however, there still remains an Agency net contribution of $4,850,600 for the project.
Staff recommends that the City reimburse the Agency the $1,366,775 received in land sale proceeds to help off-set the remaining Agency net contribution of $4,850,600. The recommended reimbursement will reduce the Agency�s net contribution to the project to $3,483,825. The Agency further recommends the City transfer $1,366,775 to the City Centre Project Fund which currently does not have funds other than those to repay ongoing debt obligations. To further assist the City Centre Project, Agency staff also recommends the $632,000 MTA grant be deposited to the City Centre Project Fund instead of the Golden State Redevelopment Project Area Fund which is the Agency�s funding source for the Five Points Realignment Project.
Finally, a final invoice for Phase II relating to aid-in-construction activities for water service was received in the amount of $237,099. Staff recommends the Council/Agency approve the budget amendment/appropriation of $237,099 from the Golden State Redevelopment Project Area to pay this invoice, and close out Phase II of the Five Points Realignment Project. The appropriation would be made from FY 2002-03 Golden State unappropriated fund balance.
Recommendation:
1. Adoption of proposed City Council resolution entitled:
(4/5 vote required)
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING THE TERMS AND PROVISIONS OF A COOPERATION AGREEMENT BETWEEN THE CITY AND THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK RELATING TO THE FIVE POINTS REALIGNMENT PROJECT AND AMENDING THE FISCAL YEAR 2002-2003 ANNUAL BUDGET IN THE AMOUNT OF $1,366,775.
2. Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING A COOPERATION AGREEMENT BETWEEN THE AGENCY AND THE CITY OF BURBANK RELATING TO THE FIVE POINTS REALIGNMENT PROJECT AND AMENDING THE FISCAL YEAR 2002-2003 ANNUAL BUDGET IN THE AMOUNT OF $1,366,775.
3. Adoption of proposed City Council resolution entitled:
(4/5 vote required)
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING THE AGENCY PAYMENT OF CERTAIN PUBLIC IMPROVEMENTS TO BE OWNED AND OPERATED BY THE CITY AND AMENDING FISCAL YEAR 2002-2003 ANNUAL BUDGET IN THE AMOUNT OF $237,099. (Phase II of Five Points Project).
4. Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING THE AGENCY PAYMENT OF CERTAIN PUBLIC IMPROVEMENTS TO BE OWNED AND OPERATED BY THE CITY AND AMENDING FISCAL YEAR 2002-2003 ANNUAL BUDGET IN THE AMOUNT OF $237,099. (Phase II of Five Points Project).
2. Property-Based Business Improvement District (PBID) � Downtown Burbank:
The purpose of this agenda item is for the City of Burbank to accept the submission of a petition from downtown property owners, and authorize the initiation of proceedings to form a Property-Based Business Improvement District (PBID).
In August 2002, the Redevelopment Agency (Agency) conducted a Study Session to review a comprehensive strategy for the revitalization of Downtown Burbank. The strategy included marketing efforts, a leasing strategy and a Downtown Tenant Assistance Program to attract quality tenants to fill existing vacancies. Infrastructure improvements were also recommended such as the installation of �Smart Parking� technology, and a Wayfinding/Signage Program to direct motorists and pedestrian to and around the downtown. Finally, the strategy outlined a reformatted Business Improvement District that includes a substantially expanded program and broader participation from downtown businesses and property owners.
The successful implementation of this strategy requires a broad level of support including a dedicated funding source and staffing. The existing tenant-based Business Improvement District (BID) generates revenues of approximately $70,000 annually. This level of funding cannot support the activities and improvements necessary to maximize the potential of Burbank�s downtown. Also, while the current BID is comprised of core downtown businesses, it excludes major regional draws such as IKEA and the Media City Center.
Staff has received suggestions from members of the existing BID to consider the formation of a new Property-based Business Improvement District (PBID). Staff had further meetings with local business leaders regarding the feasibility of transitioning from a tenant-based to a property-based BID in order to expand participation and increase funding. As a result, in September 2002, the Agency approved the funding for a contract with Downtown Resources, a firm that has successfully developed PBIDs throughout California.
A Downtown Burbank PBID Steering Committee was subsequently formed to work with Downtown Resources on the development of a Downtown Burbank Management District Plan (Plan). The Steering Committee held monthly meetings to develop the Plan. In addition, there were numerous meetings with key stakeholders throughout Downtown. In April 2003, the Steering Committee and Downtown Resources presented a draft Plan to property owners to receive their final feedback. Downtown Resources then made final refinements to the Plan to reflect many of the property owners� comments and suggestions.
A final Plan was made available and property owners representing 51 percent of the proposed assessment have signed a petition to initiate the special assessment proceedings. State law requires public agencies to participate in the PBID, if approved, including the payment of assessments. If the Agency and City are included, the total percentage of petitioners would represent 66.33 percent of the entire district.
If the City approves the initiation of proceedings, ballots will be sent out to all property owners within the proposed District to vote on whether to approve the formation of the PBID. The City will also be authorizing the setting of a noticed hearing on the proposed PBID on July 22, 2003. At that time, the Council will accept the ballots and consider the final approval of the PBID.
The Plan outlines major components of the PBID including: the proposed boundaries; service plan and budget; the proposed assessment formula (engineer�s report); and, the proposed governance of the organization. The proposed boundaries include all of Downtown as generally described as Burbank Boulevard to the north, Glenoaks Boulevard to the east, Verdugo Avenue to the south and the Interstate 5 freeway to the west. In addition, it includes the area known as the Downtown Burbank Station (formerly the Regional Intermodal Transportation Center, or RITC).
The Plan also proposes a number of capital improvements as well as service programs such as maintenance, promotions, administration and a five-year budget, which is the maximum length that a PBID may be established, before re-establishment. The following summarizes the budget on an annual basis:
CAPITAL IMPROVEMENTS
Smart Parking $ 60,000
Wayfinding $ 60,000
Street/Paseo Upgrades & Holiday Decorations $120,000
MAINTENANCE/SECURITY $110,000
PROMOTIONS, ADVERTISING, EVENTS, ETC. $250,000
ADMINISTRATION $ 95,000
CONTINGENCY RESERVE $ 25,000
TOTAL ANNUAL BUDGET $720,000
The proposed assessment is $.16 per square foot of land per year, and $2.00 per linear front footage along San Fernando Boulevard south of Magnolia Boulevard. For example, an owner with a 10,000 square foot parcel and 50 feet of front footage on San Fernando Boulevard would pay $1,600 (land), and $100 front footage, for a total of $1,700 per year.
It was also recognized that certain land uses should pay a lesser rate, and others should be exempted all together. The Plan therefore proposes that industrial uses only pay 50 percent of the above assessment, and that residential uses and non-profits such as the YMCA and Salvation Army be exempted.
Finally, it is important to note that governments are not exempted from paying the assessments. Therefore, the City, Agency and other government jurisdictions will be assessed at the same $.16 formula. However, it is recommended that the Agency fund the assessment costs for both the City and the Burbank Unified School District. The City�s annual assessment is estimated to be $81,100, and the School District�s assessment is approximately $6,700 per year. With the Agency�s assessment of $35,200, the total annual cost to the Agency would therefore be approximately $123,000. In other words, the Agency would pay a total of $615,000 over five years, while the private property owners would raise $2,985,000 over the same time. As part of the City and Agency�s actions, it is recommended that the City Manager and Executive Director be directed to sign the proposed petition. Should the owners at the end of the five-year Plan no longer want to participate in the PBID, the district would automatically dissolve, unless a majority wished to continue.
Recommendation:
It is recommended that the Council and Agency take the following actions:
1. By motion, authorize the City Manager and Executive Director to sign the proposed petition on behalf of the City and Redevelopment Agency.
2. Direct the preparation of agreements for the Agency to pay the annual assessments on behalf of the City and School District.
3. Adoption of proposed City Council resolution entitled:
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK TO FORM A BUSINESS IMPROVEMENT DISTRICT PURSUANT TO THE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994.
4. Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AUTHORIZING THE EXECUTIVE DIRECTOR TO VOTE IN FAVOR OF A BUSINESS IMPROVEMENT DISTRICT PURSUANT TO THE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994.
CONSENT CALENDAR: (Item 1)
The following item may be enacted by one motion. There will be no separate discussion on this item unless a 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.
3. MINUTES:
Approval of minutes for the regular meeting of March 18, 2003.
Recommendation:
Approve as submitted.
END OF CONSENT CALENDAR
RECESS to conclude the City Council meeting.
ADJOURNMENT.