Redevelopment Agency Agenda - City of Burbank

MEMORANDUM

Agenda Item - 1

November 2, 1999

Robert R. Ovrom, City Manager/Executive Director

Robert M. Tague, Assistant Executive Director; Via: Susan Evans, Asst. CDD for Redevelopment and Housing; By: Jack Lynch, Redevelopment Project Manager

Acquisition of 104-112 East Magnolia Boulevard – AMC Project

PURPOSE:

The purpose of this report is for the Agency to consider the adoption of a Resolution of Necessity to condemn two properties at 101 East Palm Avenue and 104-112 East Magnolia Boulevard. The two properties are necessary for the development of the Burbank Entertainment Village Project (AMC) located on the east side of First Street between Magnolia Boulevard and Orange Grove Avenue.

BACKGROUND:

On August 3, 1999, the Redevelopment Agency approved an Owner Participation Agreement (OPA) with Burbank Entertainment Village, LLC for the development of a mixed-use retail and entertainment village project including a 16-screen, AMC Theatre, restaurant, retail and office uses, and two public parking structures.

The project is located on a 4.1-acre site (Exhibit "A"), and is to be developed in two phases. The Phase One site is bounded by First Street, Magnolia Boulevard, Palm Avenue and the back of businesses along San Fernando Boulevard. The Phase Two site is located on the existing AMC property on the south side of Palm Avenue.

Pursuant to the terms of the OPA, the developer and the Agency are jointly responsible for assembling the site. On the Phase One site, the Agency is responsible for acquiring the Elks Lodge property, and selling the property to the developer along with the other City and Agency owned properties on the Phase One site. The developer is responsible for acquiring the remaining properties that are owned by third parties. To the extent that the developer is unable to acquire the third party parcels, the Agency is responsible to consider using the power of eminent domain to acquire the remaining third party parcels, after receiving the necessary funds from the developer to fund the acquisition of these properties. The developer is responsible for all costs associated with acquiring the remaining third party parcels.

There are five third party parcels located on the Phase One site. The developer has reached agreement with three of the property owners to acquire their properties (Hirsch, Townsend and Rediger Trust). The developer was unsuccessful in acquiring the remaining two properties (Giamela and Wonser).

The Agency sent its own offers to purchase the properties to the two owners on June 18, 1999. The property at 101 East Palm Avenue is owned by Daniel and Karen Wonser, Trustees of the Daniel and Karen Wonser Family Trust. The property is a 7,392 square foot parcel with a 4,690 square foot building. The property includes a retail business called the Fast Lane, which is owned by the Wonsers, as well as a video equipment rental business called World Wide Broadcasting. The property was appraised for $650,000.

The second property is located at 104-112 East Magnolia and is owned by Edward and Lida Giamela. The property is a 7,750 square foot parcel with a 2,340 square foot building. The property includes a gun shop called Stevenson Gun Country, a barber shop called "Mingos" Barber Shop, and a restaurant space that has been vacant due a fire. The property was appraised at $405,000.

Staff and the developer have met with the Wonsers on several occasions to try to work out an agreement for the purchase of the property and the relocation of their business. The developer and the Wonsers are still working on two possible relocation sites, yet there has not been a formal agreement reached to this date. Staff has also been in contact with Mr. Giamela, who for months has indicated that he would obtain his own appraisal of his property, but has yet to submit a counter offer to the Agency.

Initially both owners were provided notice for a hearing to consider adopting a Resolution of Necessity on July 20, 1999. This notice was subsequently cancelled, thus allowing for more time for the owners to reach a settlement for the acquisition of their property.

Since it has been four months since the Agency has first made offers to acquire the two properties, staff is recommending that the Agency take the next step in the condemnation process by conducting a hearing to consider a Resolution of Necessity to acquire the two properties. A new 15-day notice was sent to the owners on October 8, 1999 setting a hearing for the Resolution of Necessity on October 26, 1999.

ANALYSIS & CONCLUSIONS:

According to State law, the property owners are the only parties that can be heard at the Resolution of Necessity hearing. The Notice that was sent to each of the owners stated that property owner has the right to appear and be heard on the following points only:

Whether or not the public interest and necessity require the project;

Whether or not the project planned or located in the manner that will be most compatible with the greatest public good and the least private injury;

Whether or not the property sought to be acquired is necessary for the project; and

Whether or not the offer required by Government Code Sec. 7267.2 has been made to the owners of record.

The Resolution of Necessity is part of the process to acquire the property through eminent domain. If the Agency approves the Resolutions, the cases will be filed and the owners and occupants will be provided an additional 90 days to maintain possession of the property while the cases are considered by the courts. It is important to note that the Agency will continue to negotiate with the owners throughout this process.

FISCAL IMPACT:

The developer has deposited the necessary funds with the Agency for the costs associated with filing the condemnation action.

RECOMMENDATION:

It is recommended that the Agency approve the Resolution of Necessity.

EXHIBITS:

A) Map of Site