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HomeMy WebLinkAboutPCDC Resolution 2005-13 09/19/2005RES®LUTI®N 2005-13 PETALUi~A- C011Al~AUNITY DEVELOPNIEIVT CO~A~AISSIOiV A RESOLUTION OF THE CITY OF PETALUMA COMMUNITY DEVELOPMENT COMMISSION APPROVING THE FIRST AMENDMENT TO AN OWNER PARTICIPATION AGREEMENT WITH BASIN STREET PROPERTIES AND AUTHORIZING ADDITIONAL PROJECT FUNDING WHEREAS, the Petaluma Community Development Commission has reviewed and considered the amendment to the Owner Participation Agreement (OPA), attached hereto as Exhibit 1; and, WHEREAS, completion of the project described in the Agreement is in the public interest and is consistent with the Petaluma General Plan, the Central Petaluma Specific Plan, the Central Business District Redevelopment Plan, and is in compliance with Article 19.3 of the Petaluma Zoning Ordinance; and, WHEREAS, the Petaluma Community Development Commission further finds, with respect to the attached amendment and the public improvements described therein: It is compatible with the land uses authorized in, and the regulations prescribed for, the zone in which the real property is located. e It will be of benefit to the public health, safety and general welfare. It will promote the orderly development of property or the preservation of property values in accordance with good land use practice. • It will eliminate blight in the Central Business District Redevelopment Project Area. ® It will substantially benefit the Central Business District Redevelopment Project Area, increasing property tax increment and property values, enhancing the economic vitality of the area and creating a vibrant 24-hour use of the downtown core. o Without the amendment, the project would be financially infeasible; and, WHEREAS, it may be necessary to undertake negotiation and legal action to recover the project costs of removing, mitigating, and handling contaminated materials attributable to properties that were the source of the contamination; and, PCDC Resolution 2005-13 Page 1 WHEREAS, additional funding from PCDC and Water Resources & Conservation Funds is necessary to complete the public improvement components of the project. NOW, THEREFORE, BE IT RESOLVED that the Petaluma Community Development Commission hereby: 1. Approves the First Amendment to an Owner Participation Agreement with Basin Street Properties, provided in Exhibit 1, and authorizes the Executive Director to execute the amendment substantially in the form provided. 2. Authorizes the Executive Director to negotiate and undertake legal action as necessary to recover the project costs of removing, mitigating, and handling contaminated materials attributable to Theater District properties that were the source of the contamination. 3. Authorizes the City Manager to transfer $583,536 from Water Resources & Conservation Funds to pay the City's share for handling and removing contaminated materials in the Theater District Project (C200703). 4. Authorizes the Executive Director to: ^ Reprogram the CIP for Turning Basin Improvements (C200403) and transfer funds to finance the Theater District (C200703) for added construction costs: $1,000,000 • Delay Phase IV Depot Improvements (C200303), except design and Admin, until Taxing District is established: $ 897,648 • Delay Downtown Streetscape Phase II (C200603), except design and admin, until Taxing District is established: $2,230,000 • Allocate Undesignated Cash Balance Until Taxing District is established: $ 675,000 Total: $4,802,648 5. Authorizes the Executive Director to: • Advance $651,458 in PCDC funds to finance the cost of toxic remediation pending recovery of funds from responsible property owners. ^ Advance $3,105,000 to finance public improvement costs pending formation of a special taxing district. • Expend $1,046,190 from PCDC funds for the additional cost of public improvements in the Theater District Project (C200703). PCDC Resolution 2005-13 Page 2 Adopted this 19'h day of September 2005 by the following vote: Commissioner Aye No Absent Abstain Canevaro X Chair Glass X Vice Chair Harris X Healy X Nau X O'Brien X Torliatt X ~.. ATTEST: Claire Cooper, Recording Secretary - --- Y -. :`~ David Glass, Chair ~ ~ ~ - APPROVED AS TO FORM: ~~~' Richdrd_ . Rudnansky, Gen al ounsel PCDC Resolution 2005-13 Page 3 EXHIBIT 1 FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT WITH BASIN STREET PROPERTIES THIS FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT (this "Amendment") is entered into effective as of , 2005 ("Effective Date") by and between the Petaluma Community Development Commission ("Agency") and Basin Street Properties, a California corporation ("Participant"). Agency and Participant are hereinafter collectively referred to as the "Parties." Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the Owner Participation Agreement (defined below). RECITALS A. The Agency and Participant entered into that certain Owner Participation Agreement dated as of February 27, 2004 (the "Owner Participation Agreement") which addresses the development of both public and private improvements on certain property located within the Central Business District Redevelopment Project Area in the City of Petaluma. Section 2.6.8 of the Owner Participation Agreement provides that the Agency's maximum payment to Participant for the Public Improvements to be constructed and installed as part of the Project shall not exceed $4.8 million; provided however, among other exceptions, Participant shall not be required to pay for costs associated with the inspection; analysis, removal, remediation, monitoring or any other work concerning unforeseen conditions under the surface of the real property owned by the City of Petaluma, including but not limited to hazardous materials, archaeological resources, unknown utilities, unknown construction debris, or similar conditions. C. Section 2.6.8 of the Owner Participation Agreement further provides that if the aforementioned costs would make the total cost of the Public Improvements exceed the Agency's maximum amount, then the Participant and the City shall meet to determine whether the City will pay for such costs notwithstanding the established maximum amount, whether the scope of the Public Improvements will be modified to offset the increased cost, or whether some other course of action will be followed. PCDC Resolution 2005-13 Page 4 D. Exhibit E of the Owner Participation Agreement states that the total cost of the Public Improvements is estimated to be $7,550,000, and provides that in addition to the $4,800,000 Agency payment described in Recital B, the Agency will also pay $2,750,000 to cover the City's share of-the cost of the Public Improvements. E. Over the past two fiscal years, the PCDC and City Council have augmented funding for the Project in both the annual budget process and during the mid-year budget review. To this end, funding for the project has been augmented to $13,615,000. More recently, during the course of Project construction, a number of unforeseen conditions have arisen or have been discovered, including the presence of toxic and hazardous substances, issues related to elevation and grading, and buried impediments. The Parties have determined that as a result of such conditions, additional Project costs must be incurred in the amount of approximately $1,939,475 for remediation of hazardous materials, and approximately $1,546,190 for buried obstructions and quantity increases. The Parties have determined that completion of the Project will not be feasible without an additional Agency contribution to the cost of the Public Improvements. F. The Parties acknowledge that the Agency may attempt to recoup a portion of the Agency's additional contribution to the cost of the Public Improvements via implementation of a special taxing district pursuant to which Participant or its successors in interest may be subject to additional taxes. NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. The first sentence of Section 2.6.8 of the Owner Participation Agreement is hereby amended to read as follows: Notwithstanding anything to the contrary contained herein, Agency's maximum payment to Participant for the construction and installation of the Public Improvements shall not exceed $16,396,184 ($17,100,665 less $704,481). 2. The following sentence is hereby added to Section 2.6.8 of the Owner Participation Agreement: PCDC Resolution 2005-13 Page 5 The sum specified in the first sentence of this Section as the maximum Agency Payment is equal to the $4,800,000 Agency contribution specified in the original Owner Participation Agreement, plus $2,750,000 for City related costs as provided in Exhibit E of the OPA, plus $6,065,000 in authorized budget adjustments in FYs 2003-04 through FY 2005-Ob, plus $3,485,665 in new costs as specified in Recital E of the First Amendment to Owner Participation Agreement, less $704,481, which is the estimated share of such new costs that is allocable to, and which shall be paid by Participant. 3. All other terms and conditions of the Owner Participation Agreement shall remain unchanged and in full force and effect. 4. If any provision of this Amendment is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect. 5. This Amendment may be executed in counterparts, each of which shall be an original and all of which together shall be deemed to be one instrument. IN WITNESS WHEREOF, the Parties have executed this Amendment effective as of the date first written above. AGENCY PETALUMA COMMUNITY DEVELOPMENT COMMISSION BY: Title.: ATTEST: Recording Secretary PCDC Resolution 2005-13 Page 6