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
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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
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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
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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
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(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.
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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