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HomeMy WebLinkAboutMin - CC - 1977.11.3048 A spectal meeti-ng of the Burlingame Ctty Council on the subj-ect of the Bayside Redevelopment Project was held on the above date in the City Hall Council Chambers. The meetinS, was called to order at 8:00 P.M. by Mayor A.C. 'rBud" Harrison. PLEDGE OF ALLEGIANCE TO TIIE FI.AG: BURLINGA},IE, CALIFORNIA November 30, L977 CALL TO ORDER Led by Jerome F. Coleman, Clty Attorney ROIL CALI COINCIL MEMBERS PRESENT: AMSTRUP, CROSBY, C0ITNCIL MEMBERS ABSEM: NONE BAYSIDE REDEVELOPMENT PROJECT HARRISON, MANGINI, MARTIN Councilman Anstrup stated be Ci out six months agotorney. Counc ilmanrton at his offlceMr. Silverton had Presentation on the s c heduLe dation had support ing November 2at this rne Mayor Harrtson, addressing audtence, stated this meetlng would be foi tnformational purposes only. The publlc meettng originally November L6, L977 had been delayed because document- been recelved by Council in ttme. Information and umentation had reached Council only Tuesday evening,977. Therefore, no vote would be expected of Council g because of lack of time for review of matertal. Mayor Ilarrison anno ProJect Manager, JeMltlican; the Ctty' counsel, Urban Schrto these presentatL effective. He askearbitrary ttme l lmtif possible. for noE doc9' 1 et in unced the pubtic wouLd hear presentatlons fromrry Coleman; the Clty Flnance Director, Davl-d s 6ond coun6el, Ken iones; and the developertselner. He asked that cLose attention be paid ons so that public dtscusston could be more d that coo[rents be brief as there would be an t set on thts eventngrs meetlng, lL:00 P.M., Councilman Martln, in compLtance wtth State Brown Act requlring disclosures of contacts wlth developers or their agentsr stated he had recelved a number of phone cattb from Mr. Stlverton rs emlssarles wanting to know hts oplnions; he had had contact wtth Davtd Keyston and Jo6n Ralser. In regard to thts project, Counc i.lman I'lartin questioned if the Cityrs return would be great enough' if- the tax- payers would want tt,'and stated he had a problem as to whether the Ctty should be tn this ktnd of busLness. In compliance wlth the State Brown Ahis only meettng with Mr. Sllvertonat whtch time he vJas accompanied by Mangini reported that he had met wit at Burlingame Hlgh School on the occ addressed a class in Amerlcan Govern Convention Center. ctt had the hM asi en abty At Silve whenith a r. on ment v', Mayor Harrison stated his Las in- the City Attorney rs office with Mr. Sllverton from time met with him at Burlingame Hig Stlverton's presentation on th Amerl-can Government CIasses. t meeting wtth Mr.this afternoon.to time, and on several occasLons h School in connection wtth Mr. e Convention Center to members of Silverton had been He had met offlc ially had the Councitman Crosby state occaslons and had met w Silverton had stopped i e had met with Mr. Sttverton oo numerous him 2-3 ttmes in hls offtce when Mr. o see hirn. dhirhnt City Attolney Jerly Coleman addressed Counctl, staff, and audtence as Project Director of the Bayside Redevelopment Project. After a brief htstory of the proJect, coveting changes in concept stnce its lnception, the feasibiltty study' and the EIR, ProJect Director showed transparencies and pointed out areas of the slte as it ls at present and with the proposed development. He explained that the p center, a nine hole gol range, a park and flv f the relocation and tmpr now tn Bayside Park. T velopers, represented b Airport HoEel and utilipubllc facilttles to pa issued by the Ctty of B purpose of constructLngairport parking faclllt ion of the faclltties bof the constructed proJ and their subleaslng to corporatlon will be run runs the othe! fac il it I bid so that theoreticalproposal on lt. ProJ ec and charts prepared by reLattonships involved oPe rat ion . ProJect Manager broke down the $17'2001000 cost of bonds as foLLows: roposal ls for a 77,000 SF conventtonf course and 50 tee, double tlered driving actllty for approxtmately 12,500 cats, and ovement of the Clty recreation facilitles he mechanlcs of the process are that de-y Mr. Silverton, vrill purchase the Sheraton 2e the profits from the hotel and they the debt servtce upon bonds whlch will be urlingame Redevelopment Agency for the the Convention Center, golf course andv. TechnicalLv thts tnvolves the construct- I the Redevelofrment Agency, the leastng back ect to the Ctty by the Redevelopment Agency, an operattng cotporation. The operat-lng .ning the Sheiaton at the same ttme as lt es.- The proJect does have to 8o to public lv other hotels ln the area could make a t'l'lanager at thls point displayed diagram Flnance Director showing the complicated during both the constructton phase and the Land acqutsltlon and construction costs Funded interest Bond reserve Admtnistrattve, financtal and other costs $12 2I ,460, ooo ,750,000 , 600, 0oo 390,000 He explained these various cost items. The Proiect Manager emphastzed the competence and cooPeration he had recEived froi stafi on this proJect, partlcularly the Finance Director rs analysis of the proJect from a bu-slness st-andpoint. He noted the Ctty Treasurerls 6emo on the subject as being rather censorious, and itated he did not belleve the Ctll's -credtt v,as on the line, iince there are a multltude of securities for the bond- holders 6nd the City bullt tnto the lease and the bond transactl-on. He did not feel thal there ls any real possibillty of the bond service betng paid from the general fund of- the Cit-y. He- Part-icularly notEd'the memo from-Dtrector of Public Works outlining the pro-cesses necessary for a turnkey oPeration' notlng that through thls process the Clty wtll have control over the destgn and public bid. Project Di-rector noted the developer had stated that he wouLd oroiid" two baseball ftelds and a- soccer fteld, and that his bld bt $t2,400,000 wouLd tnclude the convent ton. Cente r, golf course ""a'p"itini iot. The addltional park facility wtll be bullt withln that figure. project Director discussed a number of matters not yet recetved by ih""ctt, whtch are of concern- Income and expense records for the sheratoir are avatlable onlv for the Last ftve months. The Clty has been lnformed that the balance of the figures for a period prtor to that have been sent to Cleveland anil cannot be obtalned irom the present owners of the hotel. The City had been told -byMr. Sllvelton that upon his purchase of the hotel being placed in escrow, he will obtaLn these flgures from the current owners. a 49 50 ALso, ftanchise of the current Sheraton Hotel has not been re-ceived. Project ldanager had receLved yesterday only a blank copy of the standa whlch ts useful onsent of the Sheratlicense and therealso has not seen oPerating c orPorat SiLverton has a current option or right to purchase the SheratonHotel. Project Manager emphasized that the C[ty has madeseveral requests to see the above documentatlon, and stated he was especiaLLy concerned wlth the apparent shortage Ln roomtaxes paid to the Clty by the Sheraton, and with the difficultyof an audlt. rdly on 1s do io form of the Sheraton license agreement,to the extent that lt indicates the con- Corporatton is necessary to transfer a no evidence that has been obtatned. City cuments which incorporate the severalns, nor any concrete evidence that Mr. Project Director directed Counctl attention to scheduLe ofactions presented by Cttyrs bond counsel, notlng, that the flrstaction the Councll can take of any offlcial consequence ts lnJanuary, 1978. He therefore suggested that there is no Legalsigniflcance to any actton taken untiL that time, and commentedthat the Ctty in fact is not legally bound to Mr. S1lvertonunttl he might become the successful btdder ln Aprll. He com- mented there are several thlngs rematning to be ilone, obtatntngpermission from BCDC, Ehe State Lands Commission, and otherorganLzations; and that these cannot be done until the Cltylegally commences the proj ec t . Flna L Lthis p pa rt lc P lannt minut eyear i p roj ecit mus not be y, Proj roj ec t ularLyng, Fins. Hesnotgtbythtbere done . ect Director noted the the tremendous staff load imposes and whlch wtll continue tn the future -in the areas of Attorney rs office, Publlc Works,ance, and on the Clerk's office in terms of official noted Finance Directorts statement that S100,000 aoing to approach the cost of time put into thtse City, and as long as the City has the present staffcognized that other work ls not being done and wllI Project Manager in concluslon stated that a great deal of baslclnformatlon ls still lacklng, that he did not have conftdence inthe assurances that the Ctty will recetve the material when thetransactlon ts closed, and this would put the Clty in an unten-able positton. He stated a serious pollcy decislon should be made, with spectflc answels to five potnts contained tn CttyManager's memo of November 23, L977, whlch he quoted: l. Are we actlng ftrst on obJecttve facts and only second on oplnion? 2. Is the project conststent with our long-term ^goaLs? 3. Wtll the provlslons of the Legal docurnents a!!ow us to avoidslgnificant conflLct with those we must work with in con-structing and operattng the project? Will we feeL sattsfted with ourselves proJ ec t ? tn golng ahead with the have pro- how much estLnlate on the cost of the and how much land was tn-cost of the land, Just under 4 5 Will the project be economically a healthy one andtections for the Ctty and its taxpayers? In short, do we get out of it? Counctlman Martin questloned if thepark tncluded the cost of the Land,volved. Project Dtrector stated the8 acres, was not tncluded. The Flnance Dlrector stated he recommend the project to theCouncil wlth certain qualtftcations. These qualifications in-volve: Obtaining an understanding wlth the developer tn terms ofhavlng sufficient security for the bond LiabtLity, Clty negotiating o 51 a rent that would reimburse the City for services, and obtaintng sufficient financtal and other dlsclosures. for disclosures: flnally Gu ide s In terms of assets securing the bond liabllttyr there ts a desirable standard among banks, savings and loans and tnsurance companies used, that Ls usual in a commercial venture-theLiability for the toan on the facillty should not be more than 70% of. the value of the assets. He 'stated that in the present sttuation the value erty security afte! subtracttng the ProPosed ftrst truit ts appioxlmately $22,900,000. 7O"L of this i To this add cash of $1r600'000 held as bond reserv a ltmitation on the amount of tndebtedness the Cit of about $I7,600,000. The proPosed bond ts $17,20the information the City has now, lt aPPears there security. One of the concerns ls that the premLse the Cttyrs worktng with now ts a potenttal one, and the lnformatlon it has now miy not be the iniormation to be acted on in the flnal btds, so he suggested to the Councll that when bids are -considered, the.City sn6Ita have a recent appraisal on the extsttng hotel, incLuding the addition, and'a firm btd from the contractor. At that time the document6d vatue of the liablllty should not be more than 7O"L of the value of the assets. One thing is clear, and he thought the developer agrees, the facllittes themselves do not geneiate enough lniome to support a bond issue of this slze. ihe parklng fEctltty ls the birly facility that is likely to be money makiig. The transactton depends on- havlng- the exlsttng hotei pledgEd as security in the transactton. without that he could not ieeommend that- the Counctl proceed. The Ctty ts deaLlng wtth infoHnatton that ls gotng to change. The debt should not be more than 70% of. the assets. Another concernlthere is also a posslbtllty that the Clty could suffer mtsmanagement of the hotel or dtshonest management.. Several safegulrds have been built tnto the Lease which reduce that to a reasonabLe risk: 1. The Ctty will collect rent tn advance. City wlll have up to 18 m6nths In order to ldenttfy problems that develop wlth the hotel very earlY. 2. The City will requtre audlted flnanctal statements and monthly financial statements, and shall have the abillty to forie the hotel to engage a hotel management consultant. The owners would be obltged to tmplement hts suggestions. 3. FtnaLIy, the proviston that the oPelattng company must Put cash aiide sirff tctent to replace the furnlture and remodel the hotet and to Pay taxes and insurance. of des$ e.ys 0rois real prop- ed of 15 ,000,000.Thls gives hould incur00. Fromsuffic lent He thought that given these provtsions written into the there sEould be sufftcient warning and funds to correct ment problems. sublease, manege - used for the usethe land Rent: As the transactton stands, the Ctty receives rent in the amount of lts debt service plus i mtntmurr of $100'000 adjusted up*"ra on 5% of the gross rlcetpts of the fac-ility to be.flnanced 'Iir determlntng what Ehe approptiate amount of rent should be, the City should c6nsider thre6- faitors: The capltal it has-tnvested ln Lhe project, servtces rendered and increqsed -costs of op-er- atlons ind-somi compensation for the fact the Ctty ls ln effect taklng a bustness rlsk. In terms of assets, there a golf course. There isof that Land. The City i is developed land that will be no rent speclfied to be paid fot s also providlng wtthout charge 52 under Bayside Park and should recetve rent. ALso, there -arethe I'one- time only costs" of relocating the. Park, improvlng the trafftc systeir, inproving water capacltles. There wilL also be the c-ost of hiiing aiidittonal pollce officers for that side of the hlghway.- There are increased admlnistlattve costs. In additionl thl dump wlll have to close and the City wilL have to provide some alternative refuse facilities. These are some areas where the Clty will be incurring extra costs. These costs should be includLd ln the rent. FtnaLLy, the Clty ls taktng a busLness risk on the transactton, and Ehe- rental shouLd piovide some reLmbursement to the City for taktng lt. A good way to receive reimbursernent ts to tle the lent to sone er6ss rental fieures so that lent increases as the revenue in"reases. The-Ftnance Director stated that in hls opinlon if the Clty is unable to from the hotel, the Ciceived. He repeated h per year. The Counc ilmanlimit of $I7,658,000 this Flnance Dlrector reptied property security, whlch Ioan from lending tnst itu atn two years t operating lnformatton should defer actlon untll it ls re- concerns as being: esttoned if on a proposed bond uld be a normal bustness risk.t 70% of the value of the real s represents, would be the maxlmum ns on a prime project. obtty ts l. That the security ls sufflcient2. That the rent ts enough to relrnburse the ctty3. That the developer complies fully wtth dtsclosure requtre- ment s Councfi.Lnan Amstrup questloned the number of acres in the dump. Staff esttmated 43, not including the lagoon. C c ouncilman Martin asked for an estimate of fair rental on the oIf course. Flnance Director estlmated $125r000 - $175'000 qu wo tharhitio Mr. Ken Jones, City bond counsel, addressed Council brleffl after apologlztng ior the unavotdable delay in documentatlon. He conclrreE wtt6 the Project Director that tonight's meeting should be primarily an educational one so that lthatever happens in the futirre will- be based on correct tnformation. He added that no ftnal action could be taken tonlght because of the legal steps outlined in his memo. After the mining whether or not the project ls accePtab a financial analysts by the State Board of Eq a notlcldpublic heartng on the project, and a heartnf on the lease. After thls will come t orocesi and the sale of the bonds. He identi ireed to declde whether a convention centet ts interest of the Ctty, adding that conventlon and money ls not made from chem dtrectly. Th present frogram is a means whereby a conventt bbtained'foi the Ctty wlthout a direct cost t the total financlal costs are absorbed in tha payers are relieved of the burden. rocess of deter-e, there must beP 1uallzatton, then nother publlc he bid lettlnefied the counEiltsin the best centers cost moneYe structure of the on center could be o the City so that t process and tax- Counctlman Martln questioned Mr. Jones on hts schedule, with Mr. Jones remarking that even if Council takes the entire month of December for doEument review, the remalnder of the schedule can be followed. RECESS Following a short recess at 9:10 the meeting reconvened. I*lavor Harrtson commended staff for their thorough presentattons anf then called on Urban Schreiner, attorney for the developer, fo! comments. Mr. Schrelner reported that as a result of many meetings with staff and consultants there are remaining only a few open issues. Staff memo of November 21 from Ctty Attoiney had been addressed 5 53 in Mr. Schreinerrs letter of November 28, L977. He stated the me mo of Novernber 2l from Finance Director contained sound and valid points, and he concurred wtth Ftnance Director rs recommendations on Page 8 of that memo wlth the exceptLon of renegotiation of supplemental rent, stating that past Council action had estabLished $L000,000 supplemental rent. Mr. Schreiner commented that he thought as time progresses the developer could meet the obJectlons raised by the City Treasurer in hls memo of Noverirber L7, L977. With reference to the 2 yearsr mtssing records for the Sheraton, Mr. Schreiner stated it was the intention of the developers to make avatlable to the City alL of the financiat records of the hotel upon completion of the hotel transaction. He noted thatat thts point it is as far as they can go since they do not themselves have access to these records. He referred to the hotet franchtse form, a copy of whlch had been detivered to the Project Manager, and stited that spaces are btank only for the term and the rental fee. The feasibtLity report does contain a review of the franchise and the term. The option of purchase agreement - the developer reports he sti1l has an option to purchase and ls golng forwaral \,Ilth the acquisttlon of the hotel. As far as lega1 documentation setting up the Burlingame Conventlon Cente! operatton, both these cotporations were formed ftlny months ago and documentation could be furnished the Project Dlrector. Mr. Schreiner stated he had replted to aIetter irom the Cityrs bond counsel on important points, and in vlrtualLy every aspect they were in agteement. He pointed out the developer is ready to go ahead with the proJect and is under a ttme restraint because of financlng. He \,rent on to praLse the project ln terns of economic benefits to the City and butlt in safeguards. He volunteered to answerquestions. CounciLman Mangint questioned statement in 1.1t. Schreiner rs letter to ProJEct Dtrector, "You also exptessed concern over thi purchase of the llotel and the statuG of the Sheraton franchtse. Upon the project betng approved by the CityCouncil, aLl such informatton will be made available to you."Mr. Schreiner stated the developer constdered thts private in-formatton untll such time as the project ls approveil . At thattime purchase documents and signed franchiSe w111 be provideil . ProJect Director commented that the copy of franchise agreenentdtd not provide useable lnformation. Councllman, Amstrup questioned the advisabtltty of going ahead on a $17,000,000 project with only 5 months'records of the Sheraton project avallable. There followed constderable dts- cusston of whether some data in the National Feasibility Studyis based on these 5 mdnthst records. After confirming i.rithMr. Silverton, Mr. Schrelner reported that Nattonal Feasibllity had available to them at the tlme of the study the daily reports f.ox L975-76. He potnted out that the developer ts hiring the accounting firm of Laventhol and Ilorwath to prepare documentattonof operation statements for the hotel. This firm has the 5 months hotet records in thetr office at present. Mr. Scott Sollers of Hornblower-Weeks, et aI., confirmed thatNational Feasibility used 1975-76 daily reports in their study,Thls is a feasibillty study based on data that is two years oId. When Laventhol and Horwath look at the 5 months'receipts in terms of proJectlons there is an opportunity to test thefeasibiltty study. Councilman Martin remarked that the figures \^rere not based on an audit but on daily reports. Mr. Sollers agreed, but noted these dally reports were subjected to certainanalyses. He hrent on to explaln details of such procedures. Councilman Martin noted the remark that t:re feasibtlity study could now be tested by the Laventhol & Horwath study. Mr. Sollersconfirmed that it could only insofar as the existlng pattern is concerned rrithout the expanston and without the'Convention Center. 54 Councilman Martin questioned how much land was lnvolved in thelease from the State Lands Commission and was informed it was about an acre. He noted Mr. Schrelnelrs comments about how much money could course and questi would want to selsell it to pay of Finance Dtrector ale of land under the golfy, who nolJ ovrns this land,iner replLed the Ctty couldhat became necessary. Thethe golf coulse was not one be pr onedI ir.f thepoint oduced b why theMr. Sc bonds i ed out t yscit hrefr hatf the pend nd th he pa o a t assets the City should sell. Councilman Mattln notedlng application for a park and fly business in the areae construction of new parktng at the airport. He thoughtrktng facility might not produce a great lncome. RECESS After a short recess at 10:25 the meeting leconvened. Mayor Harrison announced that one more hour would be devoted to the meeting, with pubttc comment betng heard. One half hour would be devoted to proponents I comnents and one half hour to opponents t remarks . ' People speaking in favor of the conventton center were: Ms. Hazel F. Campbetl, 1300 Old Bayshore, addressed Council as a business owner and a member of the Burllngame Coalltion of Concerned Citizens. She thought the Convention Center wouldfill a need for a1l of San Mateo Countyr brtnglng in netr tax revenues. The County budget has escalated in the last few years with no drop'ln tax rate, increaslng burden on taxpayers, Down zoning of land and purchase for open space has removed much property from the taxrolts. The Conventlon Center would encourage office buildings and cornplexes whtch would result in increased revenue. She urged acceptance of consultantsl reports as valid, citing their prestlge and integrity. Ms. Vio1et Gotelli td a citizens I group, an presented the idea thitself an appendage o convention centers an convention center was an asset to the commupractical because of eers would not have t the Yerba Buena proJ e many years. She urge assure a good proj ec t Leland Ashby of Leland Ashby and Associates, Inc.-, Soutlr San Francisco, told Council his firm is currently working with a maior hotel chain which seeks to develop a 350 room hotel on thE Bayfront. The developer is enthusiastic about the Convention Center and feeis it will make hls proJect a viable one. Counctlman Amstrup questtoned lf Mr. Ashby meant the deveLopment of this hot6l -woutd be conttngent upon the approval of the'Conventlon Center. Mr. Ashby said thls was correct. ified herself as president of A.W.A.R.E., resident of San Mateo CountY. She San Mateo County had too long consideled an Francisco tn-sofar as development of oteLs is concerned. She thought a long overdue for this area and would be nltv-and the whole countv. It would be lts'proximtty to the Air-port, ,conventton-o trivel to San Franclsco, and in addition, ct did not show signs of progresslon for d that Council work wlth the developers to , and that there be no delay ln approval . Mrs. Charlotte Johnson, 12l Channing Road, appeared before L-ou""il . I'layor Harris6n rerolttE audtence that Mrs. Johnson had ""i""a the City tong and lreTl i.n her previous offictal capaclties. Mrs. Johnson stated she was in favot of thls project and outlined h", re.sorrs. Among them: At the beginning o-f pioject consLderation "ttu tra posed numeious questions- co the developer and they were answered' to her satisfaCtion. ALso, she pointed- out, she. came to ti1" r""iirrtton that the various consultairts uorklng on this project were exDerts. Not only that, the City had experts on its staff who ;;;;;;Iki;E'on-itit, lnd sh6 pralsed-staff piesentations at this evening"s meeting. entda atfsdh ,) 55 Mrs. Johnson declared her opttmlsm that thls would be abeneftclal project for the Clty. At the same time, shercallzed that the responsibiltty for a declston of ihistype places a heavy burden on the Councll. It ls a con-troversial matter and requtres courage ln their conviction.However, she affirmed hei faith tn this Council rs effortsand remlnded them of another bttter controversy about tenyears ago - the Downtown Parklng Distftct - in-whlch theCouncil took an optlmtstic and flrm stand and which hasproved successful. She reafftrmed her confidence inCouncil , staff ,_ and developers and her opttmtsm that thtswould be a good project foi the Clty norr- and ln the future. Mr. Henry Bostwick addressethe Executive Committee ofAssociation. Mr. Bostwlckthis project because tt wtl uncil as representative of San Mateo County Developmentthis committee is support inglfil1 an economic neeil in the dCo the saidlfu County. - He spoke of ristng costs of Governrnent and highLevel of unemployment tn tEe County: and that thts oroTectwiLl encourage mbre business and f66ter employment.' Councllman-Martln guesttoned what hls committee thought aboutthe ftnanctng of thts proJect. Mr. Bostvrlck stated Ehts wasa very compllcated sub have sufftctent knowle knowledge was directed response to question f consLdered the Conventthe hotel occupancy rafrom the goLf course. ect and his board felt they dtd notge to comnent on that aspect. Theirtoward the employment faitor. In om Councilman Amstrup, Mr. Bostwtckon Center would probibly add 25% toe. He also potnted out the income j d r l-t Harry Graham, L555 Alturas, sp He was convLnced lt would be bhave questlons on some of thethe corporation, afte! 10 yearruptcy tf the hotel ts not makdo to the Cityrs interest? Hemtght have changed tn this tntmtght not be able to survtve.hotel owner rdent tnot Chapterit would stop_any proceedings second deed of trust. Mr. Grapossible to write the lease soChapter 11. Mr. Jones repliedhave the ansvrer. Frank Burroughs, past Mayor and City Councllman, stated henot thtnk there would be much difftculty in arrtving at acensus that a Convention Center ln this- Location wilh tts presentatlons form a basis for quest He was confident that answers couldabilitles of people involved. He sucounseL and developer meet with thegetting ansleers and worklng out thiseconomic basis that is fair to both Mr. Frank cLstulltr.1544 Lassen yqy, r member of the planntng Comolssion, stated he approved thtS- proJect for economicreasons. He quoted stattsttcs obtatned from the Conventtonand Visltors Bureau which tndicate that the average con eniiorr-eer stays an avelage of four days and spends abou[ $127.50 oerday.-'He pointed out that a man brlnging his wife f6r con-vention and vacatton could well spend $I,0OO ln 5-6 days. Heloted hls Iength_ of-service on thi.pLanning Commission'and thefact that when the first hotel was proposel on the Bayfrontthey r^rere alL -d-oubtful. -However, this- ',hotel strlpl is .,o,prosperlng and brtngtng Ln much revenue. He stateit that as acttlzen.and_a taxpayer.he was wholeheartedly in favor of theConventton Center. oke tn favor of the project.eneficial to the Ciry but diddetails. For exampLe, woulds, be able to go tnto bank-tng money? What would thts commented that ltving styleserlm so that this type of- hotel Ken Jones replied that if the11 bankruptcy after ten yearsby the Ctty to forecLose- the ham questtoned if it.would bethat the owner could not claimthat at thls time he did not did c on- proximity to the^Airport and other facttltles would be a highLydesirable operation. He pointed out that staff and counsel-Ll for anshrers.in vlew of theCity, staff, ons that cae suppliedgested that L b I P p urpose of asking questions,project on a feas iblearties. He added the time a 56 elemenE ls important in view of increastng costs of development' and suggested that the City take advantage of v'rhat seemed to be a fine buslness propos 1E ion . After 5 short recess at 10:30 the meetlng reconvened. Opponeirts of the project were given an opportunlty to speak. r. Jofrn Blackmer was agalnst the project, stating it was a oliricaI and economic issue; there were many misconcepttons; urlineameis financlal situatlon is r,reaker than lt was five "rr" Eso: this oroiect would affect the Citvrs Low tax rate e"ause] wntf" it w6uld bring in revenues, there would be dditlonal costs in City services. M p B v b Herbelt Sommerr Citfully covered by ht issue was not wheth y Treasurer, touched briefly on points _more3 memo of November L7, L977. He stated the er there would be a conventlon center. The issue was a particular pLan Presented by a certatn develoPer who woutd get benefits lar gieater than the -City -would. - There lrere no ot6er orooosals or plans. He stated he disputed the Project Managei I s^ statement' that the Cityrs, credit was not on the Line becluse of built-tn safeguards. The only safeguards, he stated, !{ere a rental reserve of L}- years and a second mort- grg" ,trf"h he considered worthless. ThL- securlty can-onty be ["[".r o.rer if the hotel falls. He questloned if the City- *."tea to be tn the hotel or real estate bustness. The- Ctty ii""iu""t stated this was a bustness propostttor-r that should be a"ieitf""a based on a down-to-earth eionom!" pS-lll-of vlew' He "oi"iea out severaL obvious errors on the feasibiLtty report [[iii[-iri""ti-iti credtbility, and closed bv saving,he thought iiii" ii-rn ,.,""rt"it commerciiL deal and he- personal[y felt the ai;t i; wasttng tts ttme and should took for another proposal' Miss Vickle Jacobs, 2965 Axg the effects of the Conventlo areas, one of which was the Broadway area. She thought the effect of this project o the County. She suggested t brought to public vote. uello Boulevard, vras concerned with n Center ln severat environmental increased traffic burden in the the Councll should be concerned with n the Clty rather than its effect on hat the Cilnvention Center project be James Koras, 2853 MariPosa Drlve, stated he was not against the oroiect but'had certaiir concerns with thts proposal - for example th""st"t"."nt that the City would get certaln lnformatton when the deal was consumrnaEed. He thought the- Clty should g,et, the facts ftrst and look at the project in a businesslike tashlon. Frank J. Pagliaro, L337 Drake Avenue, Potnted out legal tssues t.-Iiioritt-Etouia'u" settled b9{o1e iny actlon is t'aken' First' ;h"-ii;;iih .r,a srf"ty code prohibits airy members of a council from servtnq on any ""g"n"y.' Another, hL was concerned about the ;;ii"iai;; 6r ulie[,t.- He'dld not think this was accurate when aoolied to this aiea, and pointed out that there are laws which "I[titit-""-"e"n"v fiom acling wi.th pubttc funds when private f;;;;-;;"-t-"-ii"a'to get rid 6r bright. Mr. Pagliaro pointed out i;-tl;"i;; in the Natt6nal FeasibillEy study and criticized the fii for not resolving potential traffic problems ' He t-eared ti"fii" le""t"t"a wo[1h *andate a Broad\",3Y oterpass' He,cr,iti- cized thE movlng of the park and added that the City.t'ould be i"ii"g-"-"[ancl"wrth 807.'of the annual tax take in the city if tt. "ioi""t failed. He said the Ctty dld not know who they ;;.'a;;ti;g-riit in the corporation!, did not know what the iianchtse a[reement was, dld'-not know many of lle f3ctsl--H: ;;i;-th; citv had betiei find out this iniormation because if iti" ili:J"i""ni inio ta"tr"prcy- taxes would have ro be increased Uy-aOi.. -He "otoented he was ip"iki.,g speciflcally to Councl1man q 57 Manginl because tn hls oplnion the majority o had decided their stand, but this Councilmanquestions. Speaking to the Council, he state wrong, the Lord will forgtve you, because nob BurLingame will." f thedid hd, "Iody e Counc i I ave somef you are Lse in ntere st ing rlingame to. He thought werete eapttal, urlingame andhat lf theyh and every Councilman Martin verbal request or uestloned if Mr. Pagltaro had receivedetter fron anyone emphasiztng. the points q 1 he had made. Ik. Pagliaro said he had not. Mr. Bruce McCarr, 2344 EaLe, stated he found ithat the rest of the County was looking towardbail them out of thelr probtems with thls proj a Convention Center could be a good concept if developed by a private firm and funded with pr but it is going to be funded by the citizens o the risk ls not proportionate. He told CouncL voted to accept thts, the citizens would hold one of them accountable. ti Bu ecttr rvafBIr eac Mayor Harrison noted that no action would be taken at this meeting; that there would be a public heartng in January, 1978. Mrs. Dorothy Custck, 1716 Ralston, consLdered the main dis- advantage of the project as the fact that the City is respon-sible for payments of 1.5 million dollars a year for 30 years, for a total of 48 mtllion dollars. There is always risk due to unforseen circumstances - mismanagement, labor problems,airline strikes, drought. Any sertous problem might causefailure of the hotel and the Ctty would be left to pay off thebonds. She questtoned, wtll tterebe an increase in City staff needed? How much wtlI lt cost? What will it cost for trafftccontrol? Will the Clty need an overpass? Who will pay for it? What are the other hidden costs of this project? Another dLs- advantage - whlle the City lslt owns, the City ts golng tofor the next 45 years. The C the hotel, and the Anza parki aining a golf course on the land ose control of the golf coursey wlIl own the Convention Center,in the year 2022. Is it worth e Lit ng taklng the risks f.or 45 years? Lfter other questlons, Mrs. Cusick stated that thls project involves $48,000,000 and itreally should go to a vote of the citlzens. A resldent of Capuchtno- Avenue sald that San Francisco hadtourtst attractions, BurLlngame dld not. Therefore conventions would always want to bu I L o to San Francisco. Burlingame would beldtng. Even if the project vrere a success,left wtth an empt Burlingame would v b ecome a municipality with trafflc jams. Alan K. Browne, 2101 Davls Drive, buslness consultant, stated he had inteiided to ratse a Ltst of questtons whtch would hetp Councll, staff, and parttcularly the voters of the Ctty to understand the various aspects of this project. However, in vlew of time limttatlons he would at a later date present to theCity Clerk a list of questlons for the publtc record. (City Clerk's office received letter of December 7, L977 from Mr. Browne listing 23 salient poLnts whtch should be clarified, andhis ratlonale for each based on ftnancLal management standpoint.) Mr. Joseph Ashe, 1480 Alvarado, was against the ConventLon Center, and sald the Councll had no right to dectde on it wtthout golng to the taxpayers. He was also against more hotels in the Clty. CouncLLman Amstrup pointed out that the Convention Cente Lssue of more hotels are two different matters. He note amount of City tncome generated by hotels and the fact thelps tn lowering the tax rate. radt hat nd the heir Mrs. Gloria Barton, 734 Winchester Drlve,excellent Job in presenting the facts on p h raised staff for ane Conventlon Center.t 58 In her opinLon the City had no right to take a risk such as this with taxpayers money. She asked Council to stop the project. Nathaniel Flynn, 2805 Adeline, compared ftgureg which demon- strated that- a bond issue of this stze in Burlingame would be four ttmes the cost per cttizen of a stmilar project tn San Francisco. Another Burlingame resident stated the Council must determtne what the citizens want, and that this tssue must be taken to vote of the people. Councilman Amstrup addressed audience on several points of the tssue. Among- them: he stated he had thoroughly perused the feasibtlity report and had many questtons on it. He quoted Convention and Vtsitors Bureau figures which show that hotets in Burlingame presently have an 807" occuPancy rate, - -and stated that one hotet whith had a large meeting room would Itke to eliminate it for Lack of use. The Ai.rport Marina now has the Largest meeting room on the Peninsula. He pointed out that the bureau has not taken a stand on the Convention Center because they feel that they can get conventions with or without it. Howevel, they would l1ke to have more hotels in the area. Mayor Harrison acknowledged letter oppostng the Convention Cehter from C. H. Voytaro, L248 Capuchtno Avenue. Councilman Martin questioned when Council would be abl vote this matter, pointing out this should be done at noticed publlc meeting. After Council discussion lt w mined thi.s should be done after the first of January, Councllman Amstrup raised the question of havtng Council and staff meet and di-scuss before this publi.c meeting. Counctl concurred this could be done at a study or sPecial meeting. Idayor Harrison thanked audience for its interest in thts issue. etoa properly as deter- 1978. ADJOURNMENT Meettng regularly adjourned at Ll:30 P.M. Respectfully submitted, #rdw(,{y/City Clerk rl