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HomeMy WebLinkAboutMin - CC - 1977.02.15February 15, 1977 B:00 p.m MANGINI,COUNCILMEN PRESENT: STAFF PRESENT: AMSTRUP, CROSBY, HARRISON, MARTIN HILL, COLEMAN, MILLICAN SWAN, WAGNER SCHI^IALM, KI RKUP , Mayor Mangini announced that this was a Special Meeting of the City Council called for the purpose of reviwing the convention center project. There is concern about Staff questions. He asked if there were any resolutions to questions raised by Staff memoranda. Councilman Crosby suggested that each member of the, Staff be asked to comment. Mr. Millican said he felt the points raised in his memorandum have been answered as was discussed at the February 2nd study meeting. The primary concern was that'National Feasibility had not taken into account debt service on a purchase money mortgage on the existing hotel . A subsequent report v,/as issued which showed that even with a $l ,375,000 deduction the project wouid be feasible enough to justify going to the second phase. He was concerned because the study was not organized and'presented as he would have anticipated. He reviewed the figures for the operating ratio and compared operating figures he couid obtain. Basically the figures projected are within reasonabie limits. A substantial 1y higher occupancy rate than normal to the State of Cal ifornia was used. That was attributed to location and type of management. The operating cost figures for hotel rooms was Iower than the national average. [,,lithout detail information it is difficult to understand why the hotel is expected to operate at Iower than the national averagecost, National Feasibility numbers are reasonable and positive and the final report should show why this hotel is expected to operate at better than national averages for similar hotels, Councilman Martin raised some questions that afternoon. He asked for the effect on ratio if room rents do not increase as contemplated by the feasibiiity report. The result of computations with no increase in rates was a reduction of $900,000, or a bond coverage of l.l5 instead of 1.65. If it is assumed rates will increase as projected but occupancy will be at 70% rather than 90%, the the profit reduc- tion would be $700,000, and the bond coverage would be 1.2. In the worst situation Councilman Martin presented (no room rate increase and 70% occupancy)the reduction would be $l ,500,000, which is only .80, or below the amount needed for debt service. Councilman Crosby asked if an investigation of the hotel's books had been rnade. Mr. Mil'l ican indicated that hotel books can show anything one wants them to show; a creditable check would necessarily involve the same time required for a full audi t. Mayor Mangini asked Mr. Millican Mr. Millican said that basical)y costs, but they will be resoived if his questions and concerns had there are some questions regarding in Phase IL been resol ved. construct ion Mr. Swan said he had difficulty resolving discrepancies between numbers; that those reported in the project description don't agree with information that precedes it. EIR discusses 316 room hotel , and our reports talk about a 326 room hotel ' which includes l0 rooms on the first floor used for sieeping rooms, -l - SPECIAL MEETING OF BURLINGAME CITY COUNCIL but also as meeting rooms. EIR land is reported as 5.4 acres; this report as4.6 acres. He said it is difficult to keep up with changes anO sources ofinformation, and it seemed tohimthere is hot a precise [tan, but an idea inconcept. Mayql Mangini asked if Phase II will resolve his questions. Mr. Swan suggested directing-the course of Phase II and developinj an informationsystem whereby there would be clear communication between lhe-designers and ihe Ci ty. Mr..Kirkup suggested that we need a market study to show where people wiil becgming flo-*,which would be included in the second phase of the reaitbilitystudy. If all of Anza is developed it'is going to have a serious impact." He commented on the concept versus plan d'iscuision Uy saying the City cin be asspecific as it wants on the bid package, depending on-CoIncil decision. He hadquestions on area and what is to be included, but they have been answered to someextent and there won't be further answers untjl the sLcond phase. Mr. Coleman commented that there had been a meeting of members of the Staff withMr. Silverton and many of the questions he had hav6 been explained, but he felt many points would have to be pinned down. Mr. Silverton commented that the fjgures ryith respect to number of rooms, etc., can be changed;.that the basis for theidea that the project is conceptual is that at thii polnt we don't know the exact .s.hap9:_ Mayor Mangini asked if the figures with regaia to parking are correct.Mr. Silverton replied that they may have to be expinded, dependiig on the EIR. Councilman Harrison referred to the board disp'lay'and aifea'if, a[ this stage,there should be a concern about leaving anything in the plan, such as the tieit-ment p1ant, baseball diamond, park, etc. Mr. Coleman responded that the waste-water treatment P.lanf is permanant, but as a matter of po'licy Council may makedecisions as to the baseball field, the soccer field ani wheifrer they arl to beincluded. Councilmen Harrison and Amstrup voiced the concern that tixpayeri mightobject to excluding the park recreation facilities which had cost so miny thousandsof dollars. They are part of the City and this project should have nothing to dowith them Mr. Kirkup called attention to the study area which includes all the hearingsbefore the Planning Comm'ission and the irroblem of whether liabiiity wou'ld b6incurred by including City property. Councilman Martin said he would like to haveall City property excluded from the project. The City park facil'ity should staythat way and be kept out of the project. counciman Harrisson agreLd Counci'lman Amstrup questioned whether Mr. Kirkup had pursued the possibility ofthe creation of a fresh water lagoon which he had introducted at ihe study meet'ing. Il.-Kirl<up. reported that it might be a good idea if there were no objectibns by BCDC and the Water Qua'lity Control Board. There are two areas where the wateicouldbe diked - at the end of the golf course and the other at the channel leading out tothe Bay. He said a consultant is looking into using reclaimed water for th6 golf course and he will look into'it and give us a report later in the week. Councilman Amstrup commented that if we are going to run a pipe across, we should th'ink aboutit early because 'it would change the project a bit. Iuyof Mangini invited other comments by Staff. Mr. Swan reported that the Planning Commission has been briefed and brought up to date as to where we are today so the! know that in a short time there will be before them the matter of defining-rede- velopment boundaries. -?- Councilman Martin.emphasized that it was necessary to get awayfrom the concept ide_a- and determine minimu* sq..rr6 fooEagel nimUerof rooms and size of building because the feasibility refort relates . to figures and, if those figures -are not definite, the flasibiliiyreport is no good. He conrnented that the letter from Mr. I,rlasserstromof December ^, 1976, agrees that he will construet a uuirai;;-i;,6 million dollars, but excludes land costs, financing cosEs, surveys,soil.engineeling, architecr fees. The figures of $4,lso,ooo-i",parking laeilities does not specify how muEh is 1and cost and howm}ch is fol nhlsical developmbnt. -Mr. Schwalm requested the informa-tion from Mr. Silverton ovei a week ago. Another'problem is that th".letter quotes $52 per_square footl urs comments o"-SOO-p"i--"qrr"r.toot and Mr. swan says $-65 per square foot. He said the figures'were to presented to each councilman last week. Mr. Schwalm-remindedMr. Silverton that he had received the letter request and i teiepfronerequest.Mr.KirkupsaidtheConventionCenterSquarefootage was app-rg1ilately correct, and commented that when -the proj ecl isput to bid figures can be defined specifically. .He feft r6e figurescould be worked out. rf the bid comes in und.Lr $13,500,000 it I;feasible; if it comes in over that it won't be feasiUf". So we arebasing everything on this $L3,475,000 to derermine ii ir is-r"."iur.or not. Councilman Martin expressed the strong conviction thatfigures sh_ould be tied down betause he felt Couicil is ready to -move, even though he would rather wait Mr. Jones said it was evident that the first phase of both reportsnecessarily was based on assumptions; and it is clear that tha secondphase is_ going to have to firm- up those assumptions. He believedthe development people,_ worklng witfr Staff anb Council can designa;ea. specific project on which Phase II can proceed and he said he"feltPhase II could proceed with the necessary definition of square footage.In answer to Councilman Harrison's question about the degree ofspecificity required to authorize Phase II, Mr. Jones said there isgoing to have to be formal notice to both consultants with certainLimitations specifically defined. In drafting the notices "qrr.i"f_ootage, numbLr of roomi and other specif ics Ean be Lied down sothe two firms can proceed on that ba-sis. Councilman Amstrup cormnented that he thought the proeedure had beengood; that, having gotten response from SEaff, Council should moveforward. In his opinion Staff feels it is time Lo go on with thes-econd phase of the study. Mayor Mangini questionEd procedure.Mr. Jones explained that technicalamendments have to bb made becauseof specifics, so, if directed pf Coungil,he would come to the regularCouncil meeting on Tuesday, February 23rd with formal notices inciudinginstructions to the extent necessary. There would. be formal amend-ments to the agreement with Mr. Silverton regarding financing, andwith National Feasibility and HKS, all of which haie incongriitieswith -respect to timing and scope of projects. In answer to Council-man Martin's question-about the notices-Mr. Jones said the amendmentsare going to,be specific; the HKS amendment is going to ad.just theprice - to ref lect changes made a few meetings ago, aid the imend.mentsCouncil and Mr. Silverton agreed to orally-thaE night will be beforeCouncil. In addition the amendments Lo the agreem6nts will include -3- l a Specific statement of what the proiect is as now perce'ived and wili make an effort to na'il down the specifics discussed at this meeting. Councilman Harrison recalled that at a previous meeting there had been discussion of eliminating two potential directors to be named by the lending agenc'ies. He said he felt it wouid be advantageous to have nine directors'instead of seven. Mr. Dinkelspiel said it would be fine, 'if there were a right of refusal. Councilman Harrison stated that he felt that Council should designate a proiect director - a member of Staff. He suggested the City Attorney' Jerry Coleman, be designated as such proiect d'irector. Councilman Ham'ison moved that Phase II of the Convent'ion Center Proiect be in all respects authorized to proceed, and that Jerry Coleman be designated as Project Di rector. The motion was seconded by Councilman Amstrup. Mayor Mangini asked if there were any discussion. Councjlman Martin responded th;t this project has been a long time coming, and observed that he was the.one who kept il aiive, but that it now appears that he is the one who is deterring it. HL said he thinks information has not been forthcoming as it should have been, and he does not think at this stage Council has enough informatjon or that consultants have enough'information. He said he'is not opposed to the project but would vote against the nrotion for these reasons. He wants maximum benetit and maximum protection for the citizens of Burlingame. The motion carried on the following voice vote: Ayes: Councilmen Mangini, Amstrup, Crosby and Harrison Noes: Counci lman Martin Mr. Keyston sajd he had tried to he'lp Mr. Silverton get as much informat'ion to Councii as possible. He asked if he might have a copy of .Mr. Martin's quest'ions to Staff because if he didn't have the questions he couldn't give the answers. Mr. Silverton apo'logized for not g'iving'a precise answer to Mr. Schwalm's letter. He thought that the majority of tie questions were answered in the jndex or table oi contents del'ivered-last week, and he said he felt that now that there ii a-pio:ect director communication will be better. Mr. Dinkelspie'l conmented that from the standpo.int of Phase II the letter soliciting proposals and responses of each consultant witt probably answer some questions. He was confident Phase il reports woulJ u*a commented tfrat if they come 'in at $l ,500,000 instead of gi,Sgb,OO0, w. won't have a project; so actually if something in the two reports is-91arjng, rlational Feasibil ity can be asked to put it in. The meeting was adiourned at 9:15 p'm. 4 N0TES : A. Keat'ing