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Res 10-058RESOLUTION NO. 10 -058 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA AUTHORIZING EXECUTION BY THE POWAY REDEVELOPMENT AGENCY OF SPECIFIED AGREEMENTS AND MAKING REQUIRED STATUTORY FINDINGS AND APPROVALS IN CONNECTION WITH THE REDEVELOPMENT OF CERTAIN REAL PROPERTY LOCATED WITHIN THE PAGUAY REDEVELOPMENT PROJECT AREA WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seg.; the 'Redevelopment Law "), the City Council (the "City Council ") of the City of Poway (the "City ") has adopted, and the Poway Redevelopment Agency (the "Agency ") is responsible for implementing, the Amended and Restated Redevelopment Plan for the Paguay Redevelopment Project Area (the "Project Area ") adopted by the City Council by Ordinance No. 117 on January 12, 1984, as amended by Ordinance No. 414 on July 14, 1993, as amended by Ordinance No. 439 on January 13, 1995, as amended by Ordinance No. 593 on January 1, 2004, as amended by Ordinance No. 605 on September 16, 2004, as amended by Ordinance No. 611 on November 25, 2004, as amended by Ordinance No. 641 on August 17, 2006, and as further amended by Ordinance No. 657 on July 12, 2007 (as amended from time to time, the "Redevelopment Plan "); and WHEREAS, to assist in implementing the Redevelopment Plan, the Agency on December 15, 2009 adopted a five -year implementation plan (the "Implementation Plan ") pursuant to Section 33490 of the Redevelopment Law; WHEREAS, under Section III of the Implementation Plan, the Agency has identified business attraction and the provision of financial assistance to attract and retain businesses within the Project Area, including auto dealer reuse, and the attraction of commercial uses as a goal and objective of the Plan; WHEREAS, Pinnacle Realty of Louisiana, L.L.C., a Louisiana limited liability company ( "PRL ") owns and operates the Toyota of Poway auto dealership located at 13760 Poway Road, Poway, California; WHEREAS, PRL, through its California affiliate, Pinnacle Realty of California, LLC, a California limited liability company ('Pinnacle "), desires to relocate the existing Toyota of Poway facilities in order to expand and renovate its automotive dealership and auto body and service facilities, and, to that effect, PRL is under contract to purchase two adjoining parcels of real property located on 13611 and 13631 Poway Road, Poway, California (the "Midland Site "); WHEREAS, in accordance with Sections 33391(a) of the Redevelopment Law, the Agency intends to acquire, pursuant to the terms of that certain Assignment and Assumption Agreement by and between PRL and the Agency, dated as of July 29, 2010 (the "Assignment Agreement'), that certain real property located at 13655 Poway Road, Poway, California together with the improvements located thereon (collectively the 'Property "), as more particularly described in the attached Exhibit A . The Agency Board Resolution No. 10 -058 Page 2 at its regularly held meeting held on July 6, 2010 approved the execution of the Assignment Agreement by Resolution No. R- 10 -09; WHEREAS, in furtherance of the Paguay Redevelopment Plan, the Implementation Plan, and the City General Plan, the Agency desires to cause redevelopment and rehabilitation of the Property. Pinnacle desire to jointly redevelop the Property and the Midland Site (hereinafter collectively referred to as the "New Toyota Site "). The redevelopment of the New Toyota Site shall include the rehabilitation of approximately 45,000 square feet of existing buildings, landscaping and other site improvements, include an upgrade of up to 10,000 square feet of new building area that may be added, in order to reestablish a first -class automobile sales and full service auto repair facility (which may include auto body repair pending City reivew and approval) on the New Toyota Site (the "Project "); WHEREAS, in accordance with Section 33431 and 33433 of the Redevelopment Law, the Agency desires to enter into a Disposition and Development Agreement (the "Disposition and Development Agreement ") and accompanying Ground Lease (the "Ground Lease ") with Pinnacle, substantially in the forms on file with the City Clerk and the Agency Secretary, pursuant to which, among other matters: 1. The Agency will lease the Property to Pinnacle pursuant to the terms, covenants, and conditions of the Disposition and Development Agreement and Ground Lease; 2. The Agency and Pinnacle will enter into an Operating Covenant to be recorded against the New Toyota Site that will restrict the use of the New Toyota Site for the construction and continual operation of the Project on the New Toyota Site for a minimum of twelve (12) years; and 3. Pinnacle will redevelop the New Toyota Site and operate the Project in accordance with the terms of the Disposition and Development Agreement, the Ground Lease, and the Operating Covenant ( collectively the "Conveyance Documents "); WHEREAS, the following are sometimes collectively referred to in this Resolution as the "Redevelopment Actions ": 1. this Resolution; 2. the Conveyance Documents; 3. the lease by the Agency of the Property to Pinnacle, and the development of the Project on the New Toyota Site; and 4. the related physical actions to be undertaken and achieved through the Conveyance Documents; WHEREAS, the Redevelopment Actions will serve the purposes of the Redevelopment Law, the Redevelopment Plan, the Implementation Plan, and the City's Resolution No. 10 -058 Page 3 General Plan by eliminating blighting conditions including the rehabilitation and improvement of obsolete, deteriorating, and inappropriate buildings, elimination of conditions of underutilized property, elimination of conditions that prevent or substantially hinder the viable use or capacity of buildings, reducing abnormally high vacancy rates and the number of abandoned buildings within the Project Area; WHEREAS, the Agency has placed on file a copy of the Conveyance Documents and the report (including a summary and reuse valuation for the Property) called for in Section 33433 of the Redevelopment Law (the "Section 33433 Report") with respect to the lease of the Property to Pinnacle, and the Agency has made the Conveyance Documents and the Section 33433 Report available for public inspection and copying pursuant to Section 33433 of the Redevelopment Law; WHEREAS, the City Council and the Agency have conducted a duly noticed public hearing on the Conveyance Documents pursuant to Section 33431 and 33433 of the Redevelopment Law for the purpose of receiving the input and comments of the public on the Redevelopment Actions; WHEREAS, by this resolution the City Council, acting in its capacity as the City's "planning agency," pursuant to the requirements of Government Code Section 65402 desires to make the findings, determination and report that the location, purpose and extent of the proposed conveyance of the Property in accordance with the Conveyance Documents conforms to the City's General Plan; WHEREAS, by this resolution the City Council desires to make the findings and grant the consent required by Section 33433 of the Redevelopment Law in connection with the Agency approval and implementation of the Redevelopment Actions; WHEREAS, in considering approval of the Redevelopment Actions, the City and the Agency have complied with the requirements of the California Environmental Quality Act and the applicable state and local implementing guidelines (collectively "CEQX) through the preparation of a Notice of Exemption (the "Notice of Exemption ") pursuant to 14 Cal. Code of Regulations Section15061; WHEREAS, the following additional materials (collectively, the "Supporting Documents ") have been presented to and considered by the City Council in support of the findings and approvals set forth in this Resolution: (1) the staff report of August 17, 2010 accompanying this Resolution; (2) the Section 33433 Report; (3) the Conveyance Documents; and (4) the Notice of Exemption. The Supporting Documents are hereby incorporated by reference in this Resolution and, together with the above recitals (the "Recitals "), form the evidentiary basis and establish the analytical route for reaching the ultimate findings and conclusions contained in this Resolution. NOW, THEREFORE, BE IT RESOLVED, that the City Council hereby finds that the above Recitals are true and correct and have served, together with the Supporting Documents, as the basis for the findings and approvals set forth below. BE IT FURTHER RESOLVED, pursuant to 14 Cal. Code of Regulations Section 15061, the City Council hereby finds and determines that the Notice of Exemption Resolution No. 10 -058 Page 4 adequately addresses the environmental issues pertaining to the Redevelopment Actions and properly concludes that the Redevelopment Actions are exempt from further CEQA review pursuant to 14 Cal. Code of Regulations Section 15301 as an alteration of an existing structure involving a negligible expansion of use and /or Section 15303 as a replacement or reconstruction of existing structures and facilities located on the same site and serve substantially the same purpose and capacity as the structure being replaced, and the Notice of Exemption thus serves as the environmental documentation for the Agency's consideration of the Redevelopment Actions in compliance with CEQA. BE IT FURTHER RESOLVED, that the City Manager is hereby authorized and directed to file a Notice of Exemption with respect to approval of the Redevelopment Actions in accordance with 14 Cal. Code of Regulations Section 15062 with the County Clerk of the County of San Diego. BE IT FURTHER RESOLVED, that the City Council, acting in its capacity as the City's "planning agency," pursuant to the requirements of Government Code Section 65402 hereby finds and determines and reports that the location, purpose and extent of the proposed disposition of the Property in accordance with the Disposition and Development Agreement and the Ground Lease conforms to the City's General Plan. This finding, determination, and report is based on the facts and analysis set forth in the Recitals and the Supporting Documents, which may be briefly synopsized as follows: 1. The General Plan designation for the use of the Property is automotive /general commercial; and 2. The disposition and development of the Property in accordance with the Disposition and Development Agreement and the Ground Lease is for the development of automotive related uses and will achieve various General Plan goals and objectives and will be consistent with the General Plan designation for the Property. BE IT FURTHER RESOLVED, that pursuant to Section 33433 of the Redevelopment Law, the City Council hereby finds and determines that the consideration to be given by Pinnacle, for the lease of the Property under the Conveyance Documents is not less than the fair reuse value of the Property at the use and with the covenants, conditions, and development costs authorized by the Conveyance Documents. This finding and determination is based on the facts and analysis set forth in the Recitals and Supporting Documents, which may be briefly summarized as follows: 1. The fair reuse value of the Property under the terms of the Conveyance Documents has been determined to be negligible (i.e. zero dollars or a negative value, in this instance - $2,267,000); 2. Under the terms of the Ground Lease, the Developer will be required to make Annual Rent payments to the Agency. The Developer will receive rent credits against the Annual Rent due in amounts equal to the net sales tax proceeds received by the City attributable to the New Toyota Site during the preceding four Resolution No. 10 -058 Page 5 (4) quarters of sales tax receipts data available from the State Board of Equalization compared to the sales tax proceeds received during the 2008 calendar year. If the net sales tax proceeds in the preceding four quarters are less than the total Annual Rent due for that fiscal year, the outstanding amount of Annual Rent will accrue and be payable in the subsequent fiscal year. The outstanding amount of Annual Rent will accrue interest at a variable rate tied to the interest rate on the Developer's acquisition and rehabilitation loans for the Midland Site; and 3. The estimated value of the compensation to be received by the Agency is $0, which exceeds the estimated re -use value of the interest to be conveyed by the Agency in light of the terms and conditions imposed on the entire New Toyota Site under the Conveyance Documents. BE IT FURTHER RESOLVED, that, pursuant to Section 33433 of the Redevelopment Law, the City Council hereby finds and determines that the lease of the Property to Pinnacle will assist in the elimination of blighting conditions within the Project Area, will provide for economic revitalization of a focal point of the Project Area, and is consistent with the Implementation Plan adopted pursuant to Section 33490 of the Redevelopment Law. These findings and determinations are based on the facts and analysis set forth in the Recitals and Supporting Documents, which may be briefly synopsized as follows: 1. The conveyance of the Property and the development of the Project pursuant to the Conveyance Documents will result in the rehabilitation and improvement of obsolete, deteriorating, and inappropriate buildings, elimination of conditions of underutilized property, elimination of conditions that prevent or substantially hinder the viable use or capacity of buildings, reducing abnormally high vacancy rates and the number of abandoned buildings within the Project Area; and 2. The development of the Project on the New Toyota Site pursuant to the Conveyance Documents will implement several goals of the Agency's currently adopted Implementation Plan and is a specifically enumerated and budgeted activity in the Implementation Plan. BE IT FURTHER RESOLVED, that, pursuant to Section 33431 and 33433 of the Redevelopment Law, the Agency hereby approves and authorizes: 1. The Conveyance Documents and all ancillary documents attached as exhibits thereto, or referenced for execution by the Agency therein; 2. The execution by the Agency Executive Director of the Conveyance Documents and all such ancillary documents in substantially the form on file with the City Clerk and the Agency Secretary, with such changes as are approved by the Agency signatory (such approval to be conclusively evidenced by the execution of the Agreements); and 3. The lease of the Property by the Agency pursuant to the provisions of the Conveyance Documents. Resolution No. 10 -058 Page 6 BE IT FURTHER RESOLVED, that nothing in this Resolution shall affect the City's policy discretion in granting or denying the planning approvals related to the Property or any other portion of the New Toyota Site. BE IT FURTHER RESOLVED, that the City Council hereby designates the City Clerk as the custodian of the documents and other material which constitute the record of proceedings upon which the decision herein is based. These documents may be found at the City Clerk's Office at 13325 Civic Center Drive, Poway, California 92064. BE IT FURTHER RESOLVED, that this Resolution shall take immediate effect from and after its passage. PASSED, ADOPTED AND APPROVED, by the City Council of the City of Poway at a regular meeting thereof this 17 day of August, 2010. Don Higginson, Mayo ATTEST: A. Tro�an, MMC, City Clerk Resolution No. 10 -058 Page 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN DIEGO ) I, Linda A. Troyan, MMC, City Clerk of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 10 -058 was duly adopted by the City Council at a meeting of said City Council on the 17 day of August 2010, and that it was so adopted by the following vote: AYES: CUNNINGHAM, MULLIN, KRUSE, HIGGINSON NOES: NONE ABSENT: BOYACK DISQUALIFIED: NONE EXHIBIT A LEGAL DESCRIPTION OF THE AGENCY SITE The land is situated in the State of California, County of San Diego, City of Poway, and is described as follows: Parcel .A: Parcel 2, in the City of Poway, County of San Diego, State of California, as shown at Page 15255 of Parcel Maps, filed in the office of the County Recorder of San Diego County, June 6, 1988. Parcel B: An easement for ingress and egress, over, along, and across that portion of Parcel I in the City of Poway, County of San Diego, State of California, as shown at Page 15255 of Parcel Maps, filed in the Office of the County Recorder of San Diego County, June 6, 1988, delineated as "mutual ingress and egress easement reserved hereon" on said Parcel Map 15255, Assessor's Parcel No: 317 - 190 -21/45