HomeMy WebLinkAboutMin - CC - 1976.12.06239
BURL i N6AME, CAL I FORN I A
December 6, 1916
CALL TO ORDER
A regular meeting of the Burlingame City Council was held on the above date
in the City Hall Council Chambers. The meeting was called to order at B:05
P.M. by Mayor Victor A. Mangini.
PLEDGE OF ALLEGI ANCE TO THE FLAG:Led by Wayne M. Swan, City Planner.
ROLL CALL
Counci I
Counci I
Members Present:
Members Absent:
Amstrup, Crosby, Harrison, Mangini, Martin
None
M I NUTES
The minutes of the regular meeting of Novmeber 15, 19-76 were approved and
adopted.
Mayor Mangini introduced Mr. John Rando, director of Burlingame High School
Choir, who led the caroling group of the choir in several well received
renditions of Christmas music.
HEAR I NGS
1. CITY COUNCIL APPEAL OF PLANNING COMMISSION APPROVAL OF SPECIAL PERMIT
TO USE PORTION OF PROPERTY AT 2828 TROUSDALE DRIVE FOR CHURCH PURPOSES BY
CONGREGATION OF JEHOVAHIS WITNESSES.
Mayor Mangini requested report from the City Planner.
City Planner reviewed circumstances leading to this appeal. He stated the
Planning Commission on September 27r 1976 had approved special permit for this
congregation with two conditions: The 4*t of blacktop paralleling the
sidewalk was to be removed and replaced with planting, and all parking
spaces were to be sfriped. After Council appeal of this Planning Commission
decision, an amended site plan was received on December 1, 1976 which eliminated
proposed re-subdivision of the property. City Planner quoted letter of
November 30, 1916 from Grant Ellis, presiding leader of the BurliRgame
Congregation, confirming there would be no parcel map to re-subdivide Lots 25
and 26. City Planner stated he had been informed that the slope of the
property to the rear, permitting drainage of the parking area, would not be
as steep as pneviously proposed. ln response to Council question, he sfated
this site plan implements the two conditions of Planning Commission approval.
Councilman Amstrup referenced letter of November 11, 1976 from Wm. M. Hardy,
atforney for this church, which he felt implied the possibility that Council
appeal was because of bias. He declared there was no prejudice involved, and
that he strongly disagreed with the tenor of this letter.
Mayor Mangini opened the meeting for publ ic comment.
Mr. Grant Ellis, 1469 Bellevue Avenue, stated the church had decided at the
conclusion of the Planning CommisBion hearing that the property would not
be subdivided. He emphasized that the intention of the church was to
cooperate in all respects with the Planning Commission and neighboring residents.
He noted that the church is now the official owner of the property, since
escrow cleared on December 3, 1916.
Mr. James G. Koras, 2853 l4ariposa Drive, read from a prepared statement
which listed his concerns as: subdivision of the two lots into three, thepossibility of the church building going to high rise, the possiblilty that
development of future parking spaces on the hill behind the church would
cause a slide, and weed problems on the property with possible fire hazard.
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CHR I STN4AS PRESENTAT ION
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There were no further comments and the publicihearing was declared closed.
Councilman Martin questioned the grade of the slope behind the church. This
was estimated by the City Planner at approximately 1* to 1.
Mayor Mangini questioned if weed abatement should be a condition of
approval, but it was decided this was not necessary because of the Cityrs
yearly weed abatement program.
Councilman Amstrup raised the question of the rfNo Left'Turnff sign at the
exit of the church parking.lot and City Planner stated the church
representative had volunteered to erect such a sign.
Replying to Mr. Korasr concerns, Counci lman Martin commented any possible
high rise v'lould require Counci I approval, and engineering and proper
construction of any additional parking on the slope would be the responsibility
of the property owner. He considered this active congregation would keep
the grounds weed-free and in good order, and added his main concern had been
with the subdivision of these two lots.
Councilman Harrison moved that the action of the Planning Commission be
sustained, with the additional condition that arrNo Left Turnrrsign be
installed at the parking lot exit. Second by Councilman Crosby, all aye
roll call vote.
2. APPLICATION OF SOL AND HOPE GITTELSOHN TO RECLASSIFY A PORTION OF THE
PROPERTY AT 15OO HOWARD AVENUE FROM R-l (SINGLE.FAMILY DWELLING) TO R-3
(MULTI.FAMI LY DWELLING) DISTRICT
At the request of the Mayor, City Planner reviewed Planning Commission action
on this application which included approval of tentative parcel map and
reclassification, and passage of a resol ution recommending such reclassi fication.
Noting Council approval on November 15, 1916 of this parcel map combining the
two lots, City Planner quoted Code Section 25.12.020 (4) which provides that
when two such lots in different zoning districts are combined and developed
as a unit, the lesser restricted use applies to the whole.
City Attorney added that because of this code, section reclassification is
automatic, but formal action is being taken so that it can be a matter of
record.
There were no comments for or against this reclassification, and the public
hearing was declared closed.
Counci lman Amstrup moved that the Counci I accept Planning Commission
recommendation for reclassification. Second by Counci lman Harrison, al I
aye roll calll vote.
ORDINANCE NO. 1095 IIAN ORDINANCE AMENDING SECTION 25.12.010 OF THE BURLINGAI.4E
[4UNICIPAL CODE AND THE ZONING MAPS THEREIN INCORPORATED BY RECLASSIFYING LOT
3, BLOCK 4, BURLINGAME PARK N0. 2 FR0N4 FIRST RESIDENTIAL (R-1) DISTRICT
TO THIRD RESIDENTIAL (R.3) DISTRICTI'
was introduced for first reading by Counci lman Amstrup.
COMMUNICATIONS
.I. STATE OF CALIFORNIA DEPARTI4ENT OF TRANSPORTATION CONCERNING RELINQUISHMENT
OF PROPERTY SKYLINE BOULEVARD
Counci I had received communication from fhe State Department of Transportation
dated November 23, 1976 notifying the City that the Department is now in
position to formally relinquish rfParcel 1ff of State Highway right of way.
Parcel 1 consists of portion of Skyline frontage road between Trousdale
Drive and Rivera Drive and adjoining portion of Trousdale Drive.
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Communication included map of this parcel and copy of resolution to be
adopted formally relinquishing title at the January, 197-7 meeting of the
Hlghway Commission.
Cify Attorney informed Council the City has 90 days to respond to this
notification. lf no response is made, the State will go ahead with the
rel inquishment.
No action was considered necessary.
STA[- F MEI4ORANDA
CITY MANAGER: LIABILITY INSURANCE
City Manager memo of December 2, 1976 enclosed proposals from several
insurance companies on a City sel f-insured program for I iabi I ity insurance
and a proposal by R.L. Kautz & Company, Los Angeles, for claims adjusting
and administration of such a program. City Manager recommended proposal
of Kindler & Laucci, 50 California Street, San Francisco for this $65,000
self-insured program and the firm of R.L. Kautz & Company for its administration.
City Attorney explained ramifications of the program and the necessity for
Counci I approval of contracts.
With concurrence of Counci l, Mayor Mangini directed City Attorney to
prepare neeessary documentation for submission to Council for these two
compan i es.
Councilman Martin announced he is opposed to a self-insured program andwill probably vote ttnott.
2. CITY MANAGER - COMMISSION APPOINTMENTS
City Manager memo of December 1r 1976 transmitted applications for Council
consideration of people wishing to serve on Beautification Commission and
on Park and Recreation Commission. Memo noted'vacancy on Park and Recreation
Commission caused by one memberts moving; and that two incumbents on each
commission, whose terms are expired, are willing to serve another term.
Counci lman Harrison nominated Frank J. Pagl iaror'Jr. for the Park and
Recreation Commission fo fill vacancy caused by relocation of John 0rLeary.
Counci lman Amstrup seconded the nomination; Nominations were closed on
motion of Counci lman Harrison. Counci I agreed unanimously to the
appointment of Mr. Pagl iaro.
At this point Counci lman Martin commented he would vote against
reappointing the present incumbents on the Park and Recreation Commission
because of his position that no commissioner should serve more than
two terms.
Counci lman Harrison nominated Dennis Huajardo to replace Pol ly Hernick and
nominated incumbent Wi I I iam Buetfler for another term.
Counci lman Martin nominated Connie Schrager to replace Pol ly Herrick.
Counci lman Amstrup nominated Pol ly Herrick, Mayor Mangini seconded the
nomination. Nominations were closed on motion of Counci lman Crosby.
Counci lman Crosby nominated Wi I I iam Buettler to continue on this commission.
Counci lman Amstrup seconded the nomination. Nominations were closed on
motion of Mayor Mangini. By vote of Council majority, Mrs. Herrick and Mr.
Buettler were reappointed
Counci lman Martin wished his vote recorded against Mrs. Herrick and
Mr. Buettler for reasons previously stated.
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Mayor Mangini declared nominations open for the Beautification Commission.
Counci lman Amstrup nominated incumbents Joseph Harvey and Dale Perkins
for another term. Mayor Mangini seconded the nomination.
Councilman Martin commented he was opposed only to Mr. Perkinst nomination
because he had already served two terms. Nominations were closed. By vote
of counci I majority Mr. Harvey and Mr. Perkins were reappoint<id.
Counci lman Martin commented that notificaiion of openings on commissions
would be erroneous if incumbents were constantly reappointed.
3 CITY CLERK: EXPIRATION 0F TERMS 0F CIVIL SERVIC COMM I SS IE ONERS
City Clerkrs letter of November 15, 1976 notified of term expiration
of two members of the Civil Service Commission, Dorothea W. l-lughes and
Michael R. Nave.
Mayor Mangini directed that applications be taken for these openings until
the first Council meeting in January, 1977, and requested staff to check
with incumbents to ascertain if they wish to continue serving.
Counci lman Harrison stressed that new appl icants for these Commissions
should be informed of the need for regular attendance.
Councilman Crosby noted that one applicant for Park and Recreation, John
C. Franklin, had shown a preference for the Civil Service Commission.
Councilman Martin suggested that new applicants be given the same opportunity
at these openings as the incumbents.
7)CITY ATTORNEY: SIGN PERMIT APPLICATI0N - DICK BULLIS CHEVROL
City Attorney memo of November 24, 1976 reviewed current problems with
outsize sign painted on wall facing railroad tracks at Dick Bullis Chevrolet
Company, 100 Cal ifornia Drive. Memo noted City receipt of appl ication for
this signrwhich Planning Commission had referred to Council for decision, since
Counci I had heard original appeal on a Planning Commission decision on
December 15, 1915. City Attorney recommended hearing on this matter.
Mr. Vladimir Lefterotf, 4300 Camden Avdnue, San Mateo, appeared for Dick
Bullis, and stated he would be Mr. Bullisr representative at the hearing.
However, he would not be able to attend a meeting until January 1Jr 1977.
Counci lman Amstrup emphasized that Mr. Lefteroff should be properly
authorized to make decisions on Mr. Bul I isr behalf. Mr. Lefteroff
stated he would have letter of authorizafion from Mr. Bul I is.
City Attorney protested delaying hearing to this date because of the flagrant
abuse of permit I imitations.
With Counci I concurrence, Mayor Mangini set hearing for this appl ication
on January |f, 1911.
APPLICATION FOR AMUSEMENT LICENSE
LUCKY LADY, 410 AIRPoRT BOULEVARD.
APPL I CANTS
COLLEEN JOHNSON AND RICHARD ROSSI,
Counci I received letter of November 10, 1976 from Lieutenant Quinn,
Burl ingame Pol ice Department, giving defai led information on principals and
operation proposed for this estab;l ishment. The Police off icial noted he had
requested written resume from Mr. Rossi of his business operations and associates
or partners. To date this report had not been received. The communication
advised that because of this and other complexities, the Department is not
able to make a recommendafion yef.
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Also transmitted to Council were two Fire Department reports dated OctoberB, 1976 and October 22,1976 noting deficiencies in sfructure in need of
correct i on.
Mayor Mangini questioned if there had been any change in information received
by the Police Department. The Police Chief stated that a letter from the
principals, dated December 1, 19-76, had been received in the City Clerkrs
office, which he wished to check out. The Mayor suggesfed this matter be
carried over to the next Counci I meeting.
Mr. David Keyston addressed the Council on behalf of his tenants, Mr. Rossi
and Ms. Johnson, stating they had been attempting to get on the Council
agenda for six weeks; he urged action because the principals wished to open
for young people in time for Christmas vacation.
Police Chief noted this permit had been on the November 1 r 1916 agenda.
At that time Police Department staff had requested the additional information.
Nothing had been received unti I the letter of December 1.
Councilmen Amstrup and Harrison voiced strong concerns about the number of
people to be accomodated and the fact they are in the 10-21 age group.
Mr. Robert Rossi, 238 Westview Drive, South San Francisco, emphasized that
the intention at the present time was to open the club only for the first
part of the proposed schedule, hours of 6:00 P.M. to 1:00 A.M. Security
will be furnished by Anza patrol, and all young people under the age of 18
must observe the 10:00 P.M. curfew. He added he had clearance from the
County Hea lth Department.
Councilman Crosby pointed out that this information had not been received
by the City, and Council could not act without police recommendation.
There was further Council discussion, at fhe close of which Councilman
Marfin suggested City Attorney work with Mr. Rossi to insure that all proper
information is gafhered and submitted to the City.
Hearing on this application was delayed until all information and police
recommendation are recei ved.
CONSENT CALENDAR
TENTATIVE & FINAL PARCEL MAPS RECOMMENDED BY PLANNING COMMISSION:
1. 823/832 EL CAM|NO REAL. FRANK P. DoNAHUE AND THoMAS VANNoNI, APPLICI\|)ITS
City Engineer memo of December 1, 1976 transmitted this tentative and findl ffiop,
with explanation that its purpose is for the construction of apartments at this
address. City Engineer recommended approval.
Memo of December 1, 1976 from City Engineer transmitted this tentative
parcel map, referred to Council because easements are required. Approval
was recommended. -
3. ENCROACHI4ENT PERM I T DAVID N4. KENNEY 1 330 CAST I LLO AVENUE
Assistant City Engineerrs memo of December 1, 1976 transmitted map and
explanation of this encroachment which increases backyard area at this
address. Approval was recommended.
Counci lman Harrison moved consent calendar approval. Second by Counci lman
Crosby. Al I aye rol I cal I vote.
(
2. 958 CHULA VISTA AVENUE. THON4AS MCLAUGHLIN. OWNER
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RESOLUT I ONS
1. RESOLUTION NO. 81-16 IIAFFIRMING GRANTING OF SPECIAL PERMIT 1521 CABRILLO
AVENUE, BURLINGAME|| was introduced by Counci lman Harrison who moved its
adoption. Second by Counci lman Amstrup, carried on fol lowing rol I cal I vote:
AYES: COUNC I LMEN:
NAYES: COUNC I LMAN:
AMSTRUP, CROSBY, HARRISON, MANGINI
MARTlSl (for reasons given at November 15, 1916 meeting)
2. RESOLUTION NO. 88-76 IIAUTHORIZING EXECUTION OF AGREEMENT WITH DE LEUW,
CATHER & COMPANY FOR ENVIRONN4ENTAL IMPACT REPORT FOR THE BROADWAY GRADE
SEPARATIONT| was introduced by Counci lman Crosby who moved its adoption.
Second by Counci lman Martin, al I aye rol I cal I vote.
3 RESOLUTION NO 89-16 IIAUTHORIZING AGREEMENT WITH COUNTY OF SAN MATEO FOR
PART IC I PAT ION I N THE PUBL IC SERV ICE EI4PLOYMENT PROGRAM.II
There was Council comment that this resolution and attached material had
not been received in sufficient time for thorough investigation. City
manager explained this routine documentation had just been received today
and must be returned to County by December 15, 1976.
RESOLUTI0N N0. 89-76 was introduced b y Counci lman Crosby,
adopt i on,
ORD I NANCES
second by Counci lman Harrison, al I aye rol I cal
who moved its
I vote.
Second Reading Hearing
1 . ORD I NANCE NO. 1 092 IIORD I NANCE AN4END I NG SECT I ON 25 .12.020 OF THE
BURLINGAME MUNICIPAL CODE REGARDING ZONING DISTRICT BOUNDARlESil was given
its second reading.
Mayor Mangini declared the hearing open. There were no comments from the
floor and the hearing was declared closed. On motion of Councilman Harrison,
second by Councilman Crosby, the ordinance passed its second reading and
was unanimously adopfed on rol I cal I vote.
2. ORDI NANCE NO 1093 'IORDINANCE ADDING CHAPTER 4.14 TO THE BURLINGAME
MUNICIPAL CODE TO ESTABLISH RESERVE FUND FOR WORKERSI COMPENSATION CLAIMSII
was given its second reading.
Mayor Mangini declared the hearing open. There were no comments from the
floor and the hearing was declared closed. On mofion of Councilman Harrison,
second by Councilman Crosby the ordinance passed its second reading and was
unan imous I y adopted on rol I ca I I vote.
3 ORDINANCE NO 4 IIAN ORDINANCE AMENDING THE PROVISIONS OF CHAPTER 9.04
OF THE BURLINGAME MUNICIPAL CODE RELATING TO DOG LICENSING AND IMPOUND ING
FEESTT was given its second reading.
Mr. Richard F. Ward, General Manager of the Peninsula Humane Society,
announced his avai labi I ity for questions.
Mayor Mangini declared the hearing open. There were no comments from the
floor and the hearing lvas declared closed.
Counci lman Martin had several objections to this ordinance. He considered
the impound fees, particularly $60.00 for the fourth offense, excessive; and
that they amounted to a trial by agency with no recourse in a court of law.
He suggested that an increase in license fee dright be difficult for senior
citizens who have watchdogs.
He particularly objected to the house fo house investigation by Humane Society
staff to see if animals are in the household. He commented on the personal
experience of being sent a notice to get a dog license because of their
observance of a cat dish.
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To these sfatements Mr. Ward replied that the Humane Society is presenting to
the County for implementation as soon as possible a senior citizen license
and impound fee schedule; and that the people who were responsible for the
house to house program are no longer with.the Society. The program is being
redeve I oped.
Councilman Harrison approved of increased license fees so that the Society
could perform more adequate service, but disapproved of increased impound fees.
Mayor Mangini approved the fee increase in both licensin$ and impounding,citing large number of dogs running loose, particularly on the school campus
and their possible danger to the community.
Councilman Amstrup suggested the ordinance be amended to increase license fees
but not impound fees.
Councilman Martin emphasized his objection was not the amount of impound
fee but the apparent effort to impose a fine. He suggested Council wait
on ordinance unti I senior citizensr fees are proposed.
Mr. Ward replied impound fees were raised because of repeated of,fenders,
and noted fee schedule is in effect for orily one year after which it will
be reviewed
Counci lman Harrison moved Ordinance 1094 be adopted with the substitution
of current impound fees of $10.00 for first offense, $20.00 for second
offense, $10.00 for each occurrence thereafJer. Second
by Counci lman Amstrup. Ordinance passed its secono reading and was
adopted on the fol lowing rol I cal I vote:
AYES: COUNCI LMEN: AMSTRUP,
NAYES: COUNCI LMEN: MANGINI,
cRosBY, HARRtSoN
MART I N
UNFINISHED BUSINESS
BOCCE BALL COURTS - WASH I
Mayor Mangini questioned the status of these courts. He was informed by the
City Manager that this was a [-ionrs Club project and the status of completion
was not known. He noted fhat equipment for their use is available at the
Recreation Deparfment, and stated he would check on this project with a
report to Counci l.
LIGHTS - WASHINGTON PARK BALL FIELD
Mayor Mangini questioned if these I iglrlstandards, considered unsafe, had
come down, as agreed af Council study meeting. City Manager informed him
this would be accomplished. .
BUSINESS LICENSE - D. C. MILEY JR. - 2531 POPPY DRIVE
Counci lman Harrison questioned status of investigation on this matter.
City Atforney repl ied information is sti I I being gathered. A home
occupation business license is apparently being used for a trucking business
and a possible revocation of business license may be in order.
BOARD OF SUPERV I SORS
Counci lman Harrison announced Board of Supervisors meeting on dissolution of
harbor district at 2:00 P.M. on December 7.
BART
Counci lman Amstrup noted recenf newspaper publ icity concerning Peninsula
Transit Alternatives Project Committee and its-representation before the
Metropol itan Transportation Commission. He noted Counci I rs stand on BART
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and questioned if MTC had been informed of the Cityrs attitude. City Manager
replied letter of objection had been written after receipt of Final Summary
Report for San Mateo County Transit Development Project. He assumed this
letter had been turned over to MTC. At Councilman Amstruprs request, he
stated he would again communicate the Cityrs objections to BART to the MTC.
CHOPE COMMUNITY HOSPITAL
Councilman Amstrup stated the County Board of Supervisors would be considering
Dr. George Pickettrs recommendation that this institution be turned into
a psychiatric hospital rather than a general use faci I ity. The Counci lman
considered Chope should be renovated and brought up to date, keeping its
present use. He suggested Council go on record as supporting this purpose.
Counci I concurred. City Manager was directed to send a letter supporting
the present use of Chope.
NORTH SAN N4ATEO COUNTY COUNC I L OF CITIES
Counci lman Amstrup brought up the subject of the spring conference
organization, and its proposed location at Quai I Lodge at Carmel.
his objecfions for this seminar location, since it could be held i
Mateo County.
B. Minutes: Beautification Commission, November 4;
16; Planning Commission, November B and 22; fraftic,
11, 1976.
this
repeated
an
Park & Recreation, November
Safety, Parking, November
of
He
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"t,
J Councilman Martin, reporting as a member of the program committee for this
organization, stated that a recent vote had insured this conference would
be held in San Mateo Countyl ,
ACKNOWLEDGMENTS
1. City Manager report of December 1, 1976 on communication from lbrahim
J. Kaileh, 948 Howard Avenue concerning storm drain construction on Myrtle Avenue.
2. City Manager report of December 1, 1976 on Burlingame Arts Council.
3. City Manager report of December 2, 1976 on request of M. Behravesh for
walkway easement from Alvarado to Hi I lside. City Engineer told Counci I that
granting of this easement would cause inconvenience to people walking to
different locations. City Manager to so inform Mr. Behravesh, 1475 Alvarado Avenue.
4. Memo of November 22, 1976 from Director of Recreation explaining
Special Needs Program.
5. Treasurerrs Report of 0ctober 31, 1916.
6. Letters of commendation for City Fire Department from Elsa Carlson and
Mr. and Mrs. E. Mishler, 1621 Albermarle Way; Transport Workers Union of
America, 1521 Rollins Road; S.M. County Regional Qccupational Program, 1845
Rol I ins Road.
Letter of commendation for City Pol ice Department, San Mateo County Counci I
Boy Scouts of America, 728 Crossway Road.
7.
of
Mayor Mangini announced adjournment of present meeting to study meeting of
November B, 1916 to consider Capital lmprovement Budget and appointment of
Finance Director; and to Saturday, December 11 at 9:00 A.M. in Conference
Room B, City Hal l, concerning Convention Center Projecf.
RECESS
3.
After brief recess at 10:00 P.M. Counci I meeting reconvened.
247
CONVENTION CENTER PROJECT
1. AGREEMENT REGARDING FEASIBILITY STUDY AND DRAFT ENVIRONMENTAL IMPACT
REPORT.2. A RESOLUTION AUTHORIZING EXECUTION OF AGREEMENT REGARDING FEASIBILITY
STUDY AND DRAFT ENVIRONMENTAL IMPACT REPORT.3. PRESENTATION OF AGREEMENT FOR PROVIDING ECONOMIC FEASIBILITY STUDY4. A RESOI-UTION AUTHORIZING EXECUTION OF AGREEMENT FOR PROVIDING ECONOMIC
FEASIBILITY STUDY
Mr. Kenneth Jones of trVilson, Jones, Morton and Lynch explained to Council
detai I s of documenfation I i sted above. He emphasized particular care
should be taken at thi's point, since consideration is being given to entering
into contractual relations with third parties. His presentation fol lows:
An agreement has been prepared with Mr. Barry Silverton as a preliminary to
presenting other agreements involving the City or Redevelopment Agency inthird party relationships. This agreement is to provide the City with meansof f inancing the'f irst phases of two reports. Tlfe f irst report is an
economic feasi bi I ity study, by an agreement with Nationa I Feasibi I ity
Corporation. The second is an environmental impact report by agreement with
HKS. Both of these actions are proposed to be provided in two stages under
the agreements.
Direction to National Feasibility is to carry feasibility study to a
prel iminary determination.' Two tests are involved in this. The first
relates solely to the continued operation of the Sheraton Hotel, of primary
concern fo Silverton and his group as their source of backup. That test is
'to determine if the holel will continue to produce in the f irst f ive years
of operation the net profit of some $1,600,000 per year before faxes, insurance,
interest, etc. The second test is of primary concern to the City, and must
assure that the combined operation of the existing Sheraton Hotel and the
convenf ion center facility 'i,ill produce in the next f ive years an average
net income each year to 1.6 times bond service, with nef income defined to
include all cost of operation, including any purchase money owed on the hotel.
That test is derived from the municipal bond market. These are revenue bonds,
sole security for which will be the income from the lease. ln a facility where
the City has control in the form of police power, utility services, coveragetest is 1.3 or 1.5 times bond service. ln a more speculative type of revenue
test - golf course, recreational faci lities- the test goes up to '1.5.
Feasibi I ify study wi I I use 1.6 as a conservative measure.
Deposit of $51000 is required f rom Silverton for the f irst ph'ase of feasibi lity
study. Deposit of $31000 is requir:ed from Silverton for the first phase of
ElR, bringing it to the point where major impacts are identified. lf the
feasibility sfudy does not show affirmative feasibilityr'the project will stop.
lf the EIR identif ies impacts so neg;ative and unfavora'ble fhat it will not
be an asset to the Cityr'the project:will stop. A third safeguard is the
agreement with Mr. Silverton which provides that he is to submit to the
Council on or before the date both preliminary reports are due, data and
information which will identify the people who will be acting as principals,
and their financial responsibi I ity.
lf the City determines these three reports are satisfactory, it must then
take on the direct cash responsibility of $171000 to complete the economic
feasibi I ity study. A feasibi I ity report total ly financed by the entrepreneur
is worthless.
lf the project is not ulfimately successful, there are two ways the City
can be reimbursed for the $171000: 1. lf bonds have been issued and sold,
the City can recover $17,000 from bond proceeds. 2. lf bonds are not issued,
since the plan contains proviSion for tax allocation from the project area,
proceeds of this allocation would be used to pay costs to the City and
entrepreneur. This provision would have a fixed fee - $17,000 by the City,
$14,000 by Mr. Si lverton.
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Tax allocation: At this point there would be an approved project area and
a redevelopment plan. lf bonds fai l, that plan would sf il I exist. The
Sheraton Hotel would still exist, and would have been accruing in assessed
evaluation. The tax al location would get the difference between the
assessed evaluation of that facility as it now stands and assessed evaluation
as it accrues year by year. The tax proceeds will derive from the increment
in the assessed evaluation of the hotel. lf bond proceedings are successful,
the plan can be changed fo delefe the provision for reimbursement.
Fol lowing Mr. Jonesr presentation, Counci I discussed Agreement Regarding
Feasibi I ify Study and Draft Environmental lmpact Report.
Councilman Harrison questioned Paragraph b) Page 3,tt.. the sub-lessee will
agree to pay rental in an amount at least equal to debt service on the bonds
plus $100r000 per year..I He'considered previous discussions had indicated
at least $100,000 with the possibility of even more. Mr. Jones stated this
would be oreof the elements in the conipetitive bidding for the whole package.
Councilman Harrison questioned the derivation of the figure of $2,3001000 for
the sublease extension. Mr. Jones stated the source was Mr. Si lvertonis
lawyers and he had not yet analyzed it. Councilman Harrison questioned if
it would be possible to haveamutual agreement on the sublease figure based
on what might be reasonable at the time the bonds are paid off, and Mr. Jones
again replied that would be an item in the bid package.
Mr. Cyrus McMi I lan introduced himself as attorney for Mr. Si lverton. He
stated he had a copy of the agreement signed by Mr. Silverton, and two
cashierrs checks from him in the amounts of $31000'and $5r000. He explained
that if there is to be a mortgage on the hotel, the lender would require
that the lease extend well beyond the term of the mortgage. lf amortization
of the mortgage requires 50 years, a 25 year sublease would be preferred,
a I fhough the term i s negot i ab I e.
Councilman Amstrup restated this as meaning the City would have to turn over
control of the whole project tor 25 more years, and questioned how long the
lease might be specif ically.
Mr. McMillan stated he was sure Mr. Silverton would agree to 15 years. The
City would get titl'e at the end of the bond period, but the lender would
require this option to extend on this l.easehold mortgage.
Mayor Mangini questioned if there were any indication of what the IRS
ruling might be on fhe project. Mr. McMillan deferred to Mr. Jonesr
opinion on this.
Councilman Amstrup questioned the subleasing of rrparking areasrt as noted in
Paragraph d) Page 3. He noted that some of that parking belongs to the
presenf City Park. Mr. Jones replied that the existing parki0g, either for
the City or the Sheraton, is not part of the project. The parking referred
to is the possibility of the additional Anza parking on the south side and
whatever additional parking is required for the convention center itself.
Mr. Jones referred Council to map identifying the survey area, which includes
a segment of Anza property located south-east of Bayside Park to be acquired
as supp I ementa I parki ng.
Councilman Harrison noted the survey area includes 1B parcels of land and
questioned what the actual expansion of area had been from original proposal
City Engineer stated the original proposal included about 4 acrds. Present
proposal with these 1B lots envisions about 17 acres.
Mr. Jones gave rationale for fhis additional area: Overf low parking would be
needed for large conventionsi the site as it had existed would put some
constraints on the design of the golf course; operation of these expanded
faci I ities would produce flow of cash.
Mr. McMillan amplified fhat the amount of Anza land acquired would be
approximately four acres next to fhe golf course for putting in a complete
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BID SUMMARY
CITT SIbLWILK H.LPAIE. PROC,{RAM 1976.t 977
Auo"eoCo..rIr R.otrr.W. Scozr Rosr, 0.VAus,rrr.'e qe.,ts,qi.cnltrst ruc.
ITEM
NO.0ESCRtPTr0lr ESTIMATEO
QUANTITY AMOUNT UN IT
PR ICE
UNIT
PRICE AMOUNT U NIT
PR ICE A MOU NT UN IT
PR ICE AhOUNT UNIT
PR ICE AiTOUfl T A ilOUilT
UNI T
PRIC F
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?-DA.IVE \A/AT I o oo5.q 2.cS 3.?.b 3.30 33oo eg 3.ooz:96,6eazcsoe2.96
=.c.UR-B lgd LF.6.00 | tOSO €7.oG t??o&(,50 ttzoe 700 ?.ootzLoE
I
I4SEPARATE qUTIER I oo s.n a.0s 263e 70L2e C.oo Las 5.ao 5@2L L,U7.0L
E c-rrRB E (+u'?.rER.I+O LJ:9.oo I Z66qL B.5L t tgEe 9.oo tz(,0e l0.so t+7os l0.ao
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9.9t5'oatIl'7 ZoTY lts*V s t9,e1s8 z?,3ts"!rrr
BIO OPENING OATE ' OCTOBL ZG,1976, z.'oo Pr.,\JOB NO. : 76 -Zo
II1
AMOUNT
ll
249
golf course and about 10 additional acres for parking.
Mayor Mangini questioned how an internal transportation system would be
set up.
Mr. McMillan stated that the use of Anza airport shuttle buses was contemplated
and that part of the plan was to move the airport parking in that direction
so that it would service the center.
Mayor Mangini brought up the question of the garbage disposal area. Mr. Jones
replied the plan had considered the acquisition of additional lands beyond
the parking to serve as a transfer station. However, this was decided to be
not feasible, and all references to transfer station in the documents should
be de I eted
Councilman Harrison questioned if anyfhing in the additional acreage to be
acquired would require relocation. Mr. David Keyston repl ied there was not.
Mr. Silverton had made an offer to buy the present parking, and all facilities
such as gates and fences would be relocated and the area repaved out of the
proceeds of the sale.
Counci lman Harrison requested confirmation that no other agency could
participate in the tax increment of the difference between present assessments
and future evaluations. Mr. Jones stated they could not, up to the limit of
$31r000 necessary to reimburse the City and Mr. Si lverton.
Councilman Amstrup questioned the present cost of the plan as opposed to
the original proposal of $13r000,000. Mr. Jones $ave a figure of $1619001000.
The Councilman objected to the fluctuation in plans, stating he preferred
a definite, orderly proposal. Mr. Jones sympathized, but stated that a project
in the conceptual stage such as this, is subjected to a certdin amount of
brainstorming ideas. He emphasized that the present consideration of
feasibility and EIR is a first stage preliminary to identifying a project area
and specific redevelopment plan.
Mr. McMillan stated that Mr. Silverton will prove good faith by putting up
money and signing an agreement. He emphasized that the City has to find
economic feasibi I ity, environmental impacts , and identity responsibi I ity
of the entrepreneurs acceptable before they have the liability of the $171000.
Also, there are provisions for recapfure of that amount.
Councilman Crosby stated his understanding of this, and suggested the present
position was whether to take thi's first step or to forget the project.
Councilman Harrison pointed out that this might be a good project, but
fhe City must have answers. He questioned if something could be done about
the negotiable point of the sublease in terms of years or money.
Mr. Jones repeated that the sublease, payments and extension, would be
components of the bidding, but agreed that Council should discuss if it
i s not acceptab I e.
Councilman Harrison stated he would agree with the 15 years, but wanted a
safeguard on the financial terms
Mayor Mangini commented he could concur up to the point of the $171000, but
was concerned about deciding on the rest of the proposal at this meeting.
City Attorney noted the'language of the agreement sfates the rental shall be
$100r000. He suggested substifriltion of rr... ert least $100r000...rr
At this point, Mr. McMillan announced that Mr. Silverton would concede the
term of the sublease option to be 15 years and the amount of rental, Page 4,
line 5, of agreement, to show rf... at least $1001000...fr This met with
Counci I agreement.
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250
City Attorney questioned description in first paragraph of the agreement
defining convention center in terms of proposals of October 20, 1976. He
noted project has changed since then. Mr. Jones considered it communicated
the basic structure of the project.
Councilman Martin questioned why part of Bearint lndustrial Park is included
in area on the map. Mr. Jones referred to City staff, since they prepared map.
City Engineer pointed out that this is a survey area and the project area
will be developed at a later date within this boundary. Map was designed
to give the greafest latitude possible, and includes freeway interchanges.
Councilman Martin quesfioned if the tax increment applies to every parcel in
the survey area. Mr. Jones stated fhis survey area is shrunk down to the
project area which produces the money and he did not know whether these
Bearint Park parcels would be included.
Councilman Martin commented that the $51,000 would be financed by a tax increase,
and it didnrt seem a clean deal fo have the money come out of the taxes.
Mr. Jones amplified that the increase money would come out at the ratio that
the Cityrs tax rate bears to the total tax rate. Couniilman Martin estimated
the Cityrs rate at about 11% of the total, and requested verification that
other agencies, such as school districts, could not participate in this increment.
Mr. Jones verified this, but noted that an amendment to the State redevelopment
law required the impotinding of 20% of all fax incremerit values in fhe project
area to apply to low and moderate income housing.
Councilman Martin stated he had several concerns. He considered that in any
bidding the bidder in confrol of the Shejraton would be the most likely to be
successful. He insisted on revision of the contract to provide an escalation
clause before he would agree to it. Also,'he thought it was time for
Si lvertonrs disclosure. ln addifion, he stated he was almost adamant against
the 15 year extension. He repeated he would not agree to the agreement as it
is now written. Mr. Jones stated that the essence of the undertaking, which
they are wanting to extract from the sublease, is the guarantee on the bonds.
He noted that, of course, is 100% covered, and stated the $1001000 is really
in there as a kicker.
Councilman Martin declared fhat the original deal was proposed asa money maker
for the City but has now become a revenue bond issue on which the City is
getting $1001000 a year for 30 years, with a golf course on which the lessee
gains all the revenue. He poinfed ouf thaf hotel rates will raise but the
City will still get $100,000. 0riginally Mr. Silverton had said the $100,000
would I'ast only a few years and escalation had been discussed.
Mr. Jones reported he had drafted the agreement on the basis of what he thought
were the negotiations with the Cify, and referred Council to Mr. McMillan for
further discussion of terms.
Mr. McMillan told Council the amount of the mortgage would be fixed, the
amount of the bonds would be fixed, payments of $100r000 and the $2,300,000
could be negotiated on cost of living increase with a feasible limit. He
emphasized fhat the 15 year sublease was essential for mortgage purposes and
that Mr. Silverton could not make disclosure until he had an agreement with
the City. He pointed out that Mr. Silvertori must take action soon.
Counci lman Harrison commented that before Mr. Si lverton had approached the
City all that was considered was a driving range and golf course wifh an
income of $601000 a year and no large capital outlay. He thought fhis looked
like a good package but agreed with Councilman Martin that escalation was
i mportant
Mr. Silverton addressed the Council. The main points he stressed were that
a sublease was essential, but that 15 years would be satisfactory. 0n this
sublease $2r3O0,000 wou[d be for the first'!dar with an escalation after that.
He suggested an escalafion based on the cost of living not to exceed 3f, per
year, this increase to be evaluated every five years. He confirmed that
/2,
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251
wording in the agreement could beffat leastrr$100,000 and the $1001000 could
be escalated at 3/' a year. Mr. Silverton commented that he was taking the
risk at this point, not the City; and if he showed a financial statement of
$25,000,000, they had nothing to fear. He stated that the area of the project
had been increased to make fhe bond'issue stronger, and noted he had been
informed several hotel chains would bid. He commented that if the City wantedto put the transfer statlon back in, he would be agreeable; and urged
immediate Counci I action on fhe agreement.
Mayor Mangini commdnted that initially it was stated the City would own the
hotel in 30 years. Mr. Silverton pointed out this was still true; there
would merely be a lease for another 15 years.
Councilman Harrison questioned it 3% escalation could be considered the norm.
Mr. McMillan reported that it was extremely di-ffi.cult to reference rate in direct
proportion to the cost of living, and most lenders will not accept actual costof living because their profit does not go up that fast. They need some maximum.
Counci lman Harrison remarked that 5% seemed reasonable.
At this point Councilman Amstrup pointed out that the Council had not actually
had a chance to discuss this proposal as a group and most discussion had been
at presentations. He suggested ful I Counci I discussion before decision. There
followed some discussion of a special meeting with Mr. Silverton urging
immediate action because he had brought staff from National Feasibility from
out of state to start work on the feasibi I ity study.
Councilman Martin stated he did not like the 3% escalation because there was
no way of knowing what inflation could rise to. He suggested a clause
representing a percentage of gross income or gross profit, which would protect
both the entrepreneur and the City. He pointed out that when this agreement
is modified, it will be the basis for the bids. Mr. McMillan agreed to
negotiate, but considered that agreement could not be reached tonight on exactterms. He thought the agreement as now modified would allow for exact determination
at a later date.
Counci lman Martin did not agree.
Mr. Silverton suggested that 3% be used initially, with a future determinationof 60% of the annual cost of I iving increase.
Councilman Harrison suggested the $1001000 and the $2r3001000 be subject to
negotiations. Mr. Jones agreed this could be done.
Councilman Martin stated he did not consider the contract in shape to negotiateat this meeting and he would approve none of it.
Council agreed to special meefing to be set for Saturday morning, December 11.
Mr, Silverton declared he would not agree to a sublease of less than 15 years,
and questioned what could be worked out at a special meeting that was not
before the Counci I now.
Councilman Martin suggested Mr. Silverton confer with his advisors and bring to
the meeting suggestions on ways of effecting an escalation clause. He suggested
that the period of the bonds could be reduced so that the lease extension would
not be so long. He also suggested some method of providing a surplus, so
that if the operation fails the City would not be placed in the position of
forced sale. One method would be to have the corporation deClare no dividends
for a certain period of time.
Mr. Silverton indicated he would appear at the special meeting, but declared
there are certain I imitations on guarantees. He noted that the National
Feasibility company had been chosen by the City, not by him; and all of these
points would be covered by fheif report.
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252
RECONVENE
After a short recess at 12:05 A.M., the meeting reconvened.
Mr. Jones reviewed accepted amendments to the agreement as: insertrrat leastrr
before $1001000 on Page 3; reduce term of sublease trom 25 years to 15 years;
and insert rraf leastrr before $213001000 on Page 4. He considered that whatever
final determinations are made they would not be contained in this document; and
these amendments to it would serve the purpose.
Mayor Mangini announced adjournment of this meeting to the.study meeting of
December B, 1976, and the adjour:nment of that meeting to the special meeting
of December 1'l , 19'16.
Meeting adjourned at 12:15 A.M.
Respectfu I I y submitted,
z.i r,, ,- Z/ ZllC
"Evetyn/H. Hill
City 9lerk
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