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HomeMy WebLinkAboutD-2 - Block 36 Developer Presentations and SelectionSCHEDULED ITEM D-2 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER FROM: KURT E. CHRISTIANSEN, FAICP, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: MAY 2, 2016 SUBJECT: SOUTHEAST CORNER OF FOOTHILL BOULEVARD AND AZUSA AVENUE (“BLOCK 36”) DEVELOPER PRESENTATIONS AND SELECTION SUMMARY: On April 25, 2016, the City Council held a Special Meeting to receive presentations from the Charles Company and Serrano Development Group, the two (2) finalists to develop Block 36, at the corner of Foothill Boulevard and Azusa Avenue. Since it appeared both developers had modified their original proposals, the City Council voted to continue the item and directed Staff to analyze the modifications and bring back an analysis of the revised proposals to the May 2, 2016, regular City Council Meeting. RECOMMENDATION: Staff recommends that the City Council consider the following alternatives: 1)Select a developer for the Block 36 project and direct Staff to bring back an Exclusive Negotiation Agreement for City Council consideration. OR 2)Continue the item to the regular City Council Meeting of May 16, 2016 and direct Staff to obtain written term sheets from both developers, outlining their proposal and key business terms being offered, including letters of interest from potential retail tenants. DISCUSSION: On November 16, 2015, the City Council authorized Staff to release a Request for Proposals (RFP) for development of a mixed-use project on the southeast corner of Foothill Boulevard and Azusa Avenue, commonly known as Block 36. The RFP was released to interested developers on November 17, 2015 and responses were due on December 15, 2015. Seven (7) proposals were received by the due date. Staff and the City’s consultant, Kosmont Companies, reviewed the proposals and invited all seven (7) CONTINUED TO MEETING OF 5/16/2016 Block 36 Developer Selection May 2, 2016 Page 3 proposers to an interview. Two of the proposers (AMCAL and Champion Development) withdrew from the process. On February 4, 2016, the City Council selected Council Members Gonzales and Macias to serve on an Ad Hoc Committee to review the remaining proposals. The Ad Hoc Committee conducted interviews of the remaining five proposers on February 16 and 17, 2016. After reviewing the proposals and conducting the interviews, the Ad Hoc Committee narrowed the field to two (2) finalists and held a subsequent Ad Hoc Committee meeting on March 23, 2016 to discuss each proposal. The Ad Hoc Committee was unable to reach consensus on which of the two (2) finalists to recommend to the City Council. As a result, the two (2) finalists, Charles Company and Serrano Development Group, were invited to make a presentation to the City Council at the April 25, 2016, Special City Council Meeting, and to answer any questions regarding their proposal. During the presentations, it became apparent that both developers modified their proposals since the last Ad Hoc Committee meeting. Charles Company Proposal Charles Company proposed a new anchor tenant, a 20 lane bowling alley, expanding the footprint of the previous retail space. The total residential units proposed within the project are 117 and the total retail space foot is 37,870. The developer is proposing to provide 290 parking stalls. Serrano Development Group Proposal Serrano Development Group reconfigured their site plan, moving the proposed movie theater and the entrance courtyard to the west side of the project site. The total residential units proposed within the project are 108 and the total retail space foot is 43,770. The developer is proposing to provide 257 parking stalls. Staff did not received the information on the modifications until after the staff report was prepared and was unable to fully review and analyze the new proposals. While the Council expressed preferences for certain components of each project, in light of the modifications to the proposals, the City Council voted to continue the item to the May 2, 2016 regular City Council meeting and directed Staff to analyze the proposals in more detail and provide an analysis. After conference calls with both developers, Staff believes that more information is required in order to adequately analyze the modified proposals and prepare an accurate comparison. As a result, Staff is including an additional recommendation that may be considered by the City Council that would require both developers complete a written term sheet which identifies all business terms and outlines specific items being offered in their respective proposals. This term sheet should include, to the extent practicable, letters of interest from potential retail tenants which might be included in the proposed development. Such an approach could better provide the City Council with additional information to compare the benefits of both proposals. Block 36 Developer Selection May 2, 2016 Page 3 FISCAL IMPACT: There is no fiscal impact related to the project at this time. Once the process is completed, the City owned property will be sold to the successful developer. Prepared by: Reviewed and Approved: Kurt E. Christiansen, FAICP Louie F. Lacasella Economic and Community Development Director Management Analyst Reviewed and Approved: Troy L. Butzlaff, ICMA-CM City Manager