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03-19-2019 - AGENDA ITEM 10 REQUEST FOR PROPOSALS FOR DEVELOPMENT OPPORTUNITY SITE AT FORMER BKK LANDFILL SITEAGENDA ITEM NO. 10 AGENDA STAFF REPORT City of West Covina I Office of the City Manager DATE: March 19, 2019 TO: Mayor and City Council FROM: Nikole Bresciani Acting City Manager SUBJECT: REQUEST FOR PROPOSALS FOR DEVELOPMENT OPPORTUNITY SITE AT FORMER BKK LANDFILL SITE RECOMMENDATION: It is recommended that the City Council authorize the City Manager to release a Request for Proposals (RFP) for development of the Development Opportunity Site at the BKK landfill (APN Nos: 8735-001-919, 8735- 001-920, 8735-001-931, 8735-002-906, 8735-002-909, 8735-002-910, and 8735-002-018). BACKGROUND: The former West Covina Redevelopment Agency (RDA) purchased 231 acres from the BKK Corporation in 2003 to redevelop the BKK landfill. The RDA developed the Sportsplex and Commercial center that consisted of the following components: The Heights at West Covina Shopping Center, Big League Dreams Sports Park, and the last component was slated to be the 18-hole municipal golf course with a clubhouse. In addition, in 2006 the RDA sold two pads to M&A Gabaee who has the intent to develop an office complex; this development is still pending. The Heights Shopping Center and Big League Dreams were completed in 2007. There was an economic downturn when the golf course construction was going to begin. In August of 2008, the RDA marketed the site to golf course developers and received one proposal from Palacio Capital Partners, Inc. However, in 2010, due to the declining golf course development market, the developer let the Exclusive Negotiation Agreement (ENA) expire. The RDA decided to pursue alternative development proposals for the golf course site and released an RFP in 2010 for development proposals. The RFP received one proposal from a solar company interested in leasing a portion of that site for a solar farm. The RDA did not pursue the proposal or any other additional solar farm proposals that were submitted after the RFP in 2010. Thereafter, RDA staff continued to market the site to prospective developers either at real estate industry events, mailers, meeting with developers/brokers, and through the City website. In 2012, due to the elimination of redevelopment agencies throughout the State of California, marketing for the site was suspended. The Successor Agency (Agency) to the former West Covina Redevelopment Agency received its Finding of Completion (FOC) from the Department of Finance (DOF) on December 16, 2015. Shortly thereafter on December 18, 2015, the Agency also obtained DOF approval of the Long Range Property Management Plan (LRPMP), which included the disposition of properties previously owned by the former Redevelopment Agency. The "golf course" assets were listed for disposition. In August of 2018, the Agency obtained approval from the Oversight Board to sell and transfer the golf course assets and the license to the City of West Covina. The Oversight Board approval came with a stipulation that the proceeds from a future sale of the assets by the City first be applied to the reimbursement of the 2004 Lease Revenue Bonds, and any proceeds exceeding the bond repayment and the City's costs be shared among the taxing entities. Most recently, the City was under an Exclusive Negotiation Agreement (ENA) with a developer for a development project at the site. While the scope of the project changed over the course of the ENA, the last proposal included a recreational area on the "top deck", with a hotel, virtual reality park, and solar greenhouse project. The ENA expired in December of 2018. DISCUSSION: Staff is seeking City Council approval to release a Request for Proposal (RFP) for development proposals for the Development Opportunity Site (Development Site) at the former BKK Landfill (Attachment No. 1). The Development Site of 218-acres consists of City owned parcels totaling 134-acres and a licensed area on the "top deck" totaling 84-acres (Attachment No. 2). The RFP is designed to accept development proposals for the entire Development Site or a portion thereof and it does not specify a purchase price to encourage all types of development proposals to be submitted. Information on the Development Site including the history as well environmental factors are included in the RFP. In addition, staff will create a website that will provide pertinent information including summary of the Community Workshops held this year and a summary of the feedback from the Regulatory Agencies. If approved by the City Council, the RFP will be posted on Thursday, March 21, 2019, with a deadline of Wednesday, April 24, 2019 by 11:00 a.m. to the City Clerk's Office. The RFP will provide interested parties the opportunity to tour the site. Four tours to interested bidders will be provided by staff on Thursday, April 4, 2019, at 9:00 a.m., 10:00 a.m., 1:00 p.m. and 3:00 p.m. Staff intends to distribute the RFP as follows: Staff will post the RFP on the City website (through Planetbids), and on www.opsites.com (a website for cities to post available sites for sale or lease). Staff will also forward the RFP to the City's list of developers that requested to be on the mailing list for this RFP, and to the developers the City knows of that specialize in brownfields development. The City will also forward the RFP to nature conservancies in the region. On February 28, 2019, the City sent notices to those entities listed in Government Code § 54222 (part of the Surplus Land Act) to notify those listed entities of the City's intent to sell City -owned properties. The entities include Housing Sponsors, School Districts, and Park Agencies. The notice allows those entities sixty (60) days to respond in writing with an offer to purchase or lease the properties. Staff anticipates coming back at the May 21, 2019 City Council Meeting with proposals received. LEGAL REVIEW: The City Attorney's Office has reviewed and approved the RFP as to form OPTIONS: The City Council has the following options: 1. Approve staff's recommendation; 2. Revise the RFP with different terms; 3. Not pursue an RFP at this time; or 4. Provide alternative direction. Prepared by: Paulina Morales, Economic Development and Housing Manager Additional Approval: Scott Porter, City Attorney Attachments Attachment No. 1 - Draft Request for Proposals Attachment No. 2 - Aerial of Development Opportunity Site CITY COUNCIL GOALS & OBJECTIVES: CITY OF WEST COVINA COMMUNITY DEVELOPMENT DEPARTMENT ("CDD") REQUEST FOR PROPOSALS ("RFP") FOR Former BKK Landfill Development Opportunity site 218-acre Development Opportunity Site Submittal: One (1) original Proposal, fourteen (14) printed copies, and one electronic copy (PDF file) must be received on or before: 11:00 AM — Wednesday, April 24, 2019 Addressed to: City of West Covina City Clerks Office 1444 West Garvey Avenue, Ste. 317 West Covina, CA 91790 Mark envelope: RFP FOR THE 218-ACRE DEVELOPMENT OPPORTUNITY SITE AT FORMER BKK LANDFILL Documents may be inspected and obtained at the office of the City of West Covina - Community Development Department (CDD), 1444 West Garvey Avenue, West Covina, or by calling the CDD at (626) 939-8417. This RFP can also be found at: www.westcovina.org/business/legal.asp. The City hereby affirmatively ensures that minority owned business enterprises will be afforded full opportunity to submit and have considered, a Proposal in response to this notice and will not be discriminated against on the basis of race, color, national origin, ancestry, handicap, gender, sexual preference, or religion in any consideration leading to the award of contract. The right is reserved by the City to reject any or all submittals, to waive any irregularities or informalities not affected by law, to evaluate the submittals provided and to award the contract according to the offer which best serves the interests of the City. RFP — Development Opportunity Site at Former BKK Landfill Site — 218 Acres City of West Covina Community Development Department RFP for 218-acre Development Opportunity Site The CDD is seeking development proposals from qualified and experienced developers for development at the 218-acre Development Opportunity Site (Development Site) located at the former BKK Landfill. The Development Site consists of a 134-Acre Opportunity Site (Opportunity Site) that is fee owned by the City and an 84-Acre Top Deck Site (Top -Deck) that is under license. The site was initially purchased by the former City of West Covina Redevelopment Agency (Agency) in 2003 as part of the Sportsplex Project. The Agency purchased 231-acres and licensed 85- acres from the BKK Corporation to develop the Sportsplex Project that consisted of the Heights Shopping Center, Big League Dreams Sports Park, and an 18-hole championship municipal golf course. The Heights Shopping Center was developed on a 43-acre parcel the Agency sold to a developer and was completed in the Spring of 2007. Big League Dreams Sports Park (BLD) sits on a nearby 27-acre site featuring six (6) replica major league baseball fields, a nine -station batting cage, and a multi -purpose pavilion. Big League Dreams was completed in the Fall of 2007. In addition, in 2006 the RDA sold two pads (700 & 750 Pads) to M&A Gabaee for the development of an office complex, this development is still pending. The golf course was never built. At the time the Agency was going to start construction of the 18- hole championship municipal golf course, there was economic recession, a downturn in golf course development, and then in 2011, Redevelopment Agencies were dissolved. Since then the City of West Covina obtained approval of the Long -Range Property Management Plan in December of 2015, which listed the three "golf course assets" that make up the Opportunity Site for disposition. The Successor Agency sold the three golf course assets and transferred the licensed area in August 2018 to the City of West Covina. The City of West Covina is seeking proposals to develop the 218-acre site as shown in the aerial map below and are identified as Ton Deck with approximately 50-acres that are flat (yellow overlay) and Opportunity Site (blue overlay). The site offers stunning views of the San Gabriel Valley. RFP - Sportsplex 218- Acres City of West Covina Community Development Department RFP for 218-acre Development Opportunity Site West Covina enjoys easy access to the Los Angeles Freeway System. A major freeway, Interstate 10 (the San Bernardino Freeway) runs through the northern section of the city. The following major freeways also serve the City: State Highway 60 (Pomona Freeway) to the south; Interstate 605 (San Gabriel Valley River Freeway) to the West; and State Highway 57 (Orange Freeway) to the east. The West Covina Sportsplex project site is centrally located within the City having access to Azusa Avenue (a major thoroughfare). The I-10 freeway is located just 2.7 miles to the north of the site, and the SR-60 is located 3 miles to the south. BACKGROUND The Development Site is located near the intersection of Azusa Avenue and Amar Road. For reference purposes, the Development Site is generally located at 2200 South Azusa Avenue in the City of West Covina, California. The Assessor's Parcel Numbers ("APNs") are as follows: Opportunity Site 0 8472-001-919,8735-001-920,8735-001-931,8735-002-906,8735-002-909,8735-002-910 Top Deck • Portion of 8735-002-018 (Closed BKK Class III Landfill) The City of West Covina took a proactive role to force the closure and redevelopment of a privately - owned Class I and Class III landfill, owned and operated by BKK, that has impacted the City for over 50 years. The landfill officially closed and stopped accepting material in 1996. In 2003, the Agency purchased a total of 231-acres (including the 134-acre Opportunity Site) and licensed 84- acres (including the 50-acre "Top -Deck") from the BKK Corporation ("BKK'), which had operated the 583-acre BKK Landfill facility. As part of the purchase, the CDC negotiated Prospective Purchaser Agreements ("PPA") with both the U.S. Environmental Protection Agency ("EPA") and the California Department of Toxic Substance Control ("DTSC"), which provides contribution protection and covenants not to sue from both EPA and DTSC pursuant to which EPA and DTSC have agreed not to take any other civil or administrative action under CERCLA or RCRA against the CDC or qualified, approved subsequent property owner(s) for any and all civil liability for injunctive relief or reimbursement of response costs from existing contamination pursuant to the respective PPA's. Such efforts were monumental to the successful redevelopment of the Sportsplex Project as it provided environmental protection to the City, CDC, and private developers from the landfill. Such efforts also removed any potential future environmental liability and ensured that BKK continue to implement its ongoing post closure remediation with the appropriate oversights from DTSC and EPA. As a result of the City's leadership and vision, the West Covina Sportsplex and Commercial Retail Center Redevelopment Project won thirteen (13) prestigious national, state and regional awards in 2008 and 2009. WEST COVINA SPORTSPLEX REDEVELOPMENT PROTECT Originally, the site was envisioned as a new championship quality 18-hole golf course development with a clubhouse and a 300-person banquet facility. The golf course was designed with the first nine holes and a driving range on the 84-acre Top Deck of the closed Class III Landfill. The 122- acre Opportunity Site is comprised of natural slopes and a portion is partially graded; and, was RFP - Sportsple 218- Acres q City of West Covina Community Development Department RFP for 21 S-acre Development Opportunity Site envisioned to contain the back nine holes and the clubhouse. The site sits approximately at the 1,000 feet elevation level and offers a dramatic panoramic view of the San Gabriel Valley. It is important to note that the Top Deck sits on the closed Class III (municipal) landfill. The landfill has been certified closed by the California Integrated Waste Management Board (CIWMB) in March 2008 and is in post closure maintenance. The landfill has been capped with the required one -foot (F) thick clay cap and a minimum 2 1/2-foot vegetative layer. The Closure Plan requires a minimum vegetative layer of 2.5 feet of soil for existing undeveloped status and 7 1/2 feet of vegetative layer for a golf course development. However, additional soils have been imported, resulting in a vegetative layer that varies in thickness, but is generally between a minimum of 7.5 feet to 19 feet above the landfill material. Because of potential ground settlement, development is limited to minimal -weight bearing uses. Aerial view of Top Deck The 134-acre Opportunity Site is located to the north and northeast to the Top Deck. The Site was also acquired from BKK, however was not used for the landfill disposal and does not contain trash material. The westerly portion of the site is currently built with a temporary water retention basin. The Easterly portion is mostly undeveloped and in its natural hilly condition. Aerial view of the Opportunity Site RFP - Sportsple 218- Acres City of West Covina Community Development Department RFP for 218-acre Development Opportunity Site DEVELOPMENT GOALS The City's goal in releasing this RFP is to seek and consider all development proposals from experienced and qualified developers for development of the 218-acre Development Site. It is the City's desire that the Development Site is developed with a use (or uses) that complement(s) the surrounding developments, and which further benefits the economic and recreational opportunities of the West Covina community. In that respect and due to the unique physical characteristics of the Site, the City will entertain any or all development proposals for the entire 218- acres or any portions thereof. It is however, the ultimate goal of the City that the entire 218- acre is developed in some manner. Therefore, the City will reserve the sole discretion to either pursue or decline any proposal. The City will weigh all factors which affect the value of the proposal. Among these factors (among any other the City Council deems relevant) are how such proposal complements the overall surrounding developments, the economic consideration that is provided to the City over the short and the long term, and how the new development would benefit the community. 1 NOW I;ZII►`lu I DION r1 A 101 O171755 /:r 11 All responders to this RFP should take note that the Development Site is a Brownfields development and certain conditions are already in place for redevelopment of the site. Each responder is encouraged to contact the City pertaining to any specific questions and also to conduct its own due diligence as part of preparing a response to the RFP. Responders should be aware of the following issues (among others): • Environmental Deed Restrictions restrict the following uses: o Residential use o Schools for persons under 21 years of age o Day care centers o Parks or playground (except golf course) • Any proposed development would require the approval of Regulatory Agencies including but not limited to, EPA and DTSC. • All building and enclosed structures will require specific environmental monitoring and protective measures, including but not limited to, vapor barrier under the building(s) and methane monitoring devise. • Implementation and compliance with environmental plans, including the Habitat Mitigation & Monitoring Plan (HMMP) and the Coastal Sage Scrub (CSS) Conservation & Monitoring Plan. Any development would be required to provide replanting of CSS and oaks and walnuts as approved by US Fish and Wildlife under the HMMP. Please contact the City for more information. • The 122-acre site is undeveloped and requires infrastructure and utilities. The City has studied the infrastructure/utilities potential routes and is available to provide assistance in the planningprocess. RFP - Sportsple 218- Acres q City of West Covina Community Development Department RFP for 218-acre Development Opportunity Site There is a 99-year License Agreement (2003) for the Top Deck (for golf course development), with one option period of additional of 99-years. This License Agreement is transferable but would most likely require further consent from BKK for an alternative development. ESTIMATED REUSE VALUE OR ASKING PRICE The City has not commissioned an appraisal of the property and has not established a "set" asking price. That stated, Bidders should be aware that the City acquired the assets from the Successor Agency in August of 2018 with the stipulation by the Oversight Board that the proceeds from the sale would first be used to pay off the 2004 Lease Revenue Bonds on the property. The principle amount of the 2004 Lease Revenue Bonds, Series A & B is approximately $13.5 million. While the City has not established a "set" asking price, the City is seeking proposals that would offset in whole or in part, the existing bond obligations. All responses to this RFP shall include a proforma, which will include the proposed purchase price or lease rate and terms. The City reserves the sole discretion and right to pursue any development proposal not only based on the economics of the project, but also on the overall benefit to the City and the community. SITE VISIT OR WALK THROUGH The City will offer bidders tours of the site on Thursday, April 4, 2019. There will be four tour times made available; 9:00 a.m., 10:00 a.m., 1:00 p.m. and 3:00 p.m. To attend a tour, please ensure to email your RSVP no later than Tuesday, April 2, 2019 stating the desired tour time to Paulina Morales, Economic Development & Housing Manager, at email (pmorales@westcovina.ore). Space is limited on each tour so make sure to RSVP at your earliest convenience. If additional tours are required due to demand, those additional tours may be offered on Monday, April 8, 2019 during the same times. PROPOSAL DEADLINE One (1) original Proposal, fourteen (14) printed copies, and one electronic copy (PDF file) are to be submitted to the following: City of West Covina City Clerk's Office 1444 W. Garvey Avenue, Ste. 317 West Covina, CA 91790 on or before 11:00 a.m., Wednesday, April 24, 2019 all" Df.� Please direct any questions or concerns regarding the RFP to Paulina Morales, Economic Development & Housing Manager at pmorales@westcovina.org, by 5:30 p.m. on Monday, April 8, 2019. Only questions with "Development Opportunity Site- 218-acre" in the subject line will be RFP - Sportsple 218- Acres City of West Covina Community Development Department RFP for 21 S-acre Development Opportunity Site accepted. Answers to submitted questions will be posted on the Cities' website Any revisions to the RFP will be issued and distributed as addenda. Developers are specifically directed not to contact any other City personnel for meetings, conferences or technical discussions related to this RFP. Failure to adhere to this policy may be grounds for rejection of proposals. PROPOSAL CONTENTS Proposals will be accepted for development of the Top Deck, the Opportunity Site, or the entire 218-acre Development Site. The City reserves the right to proceed with the entire site or any portions therein at the sole discretion of the City. Proposals must include the following information in the following order and with corresponding section numbering (all proposals must include page numbers): 1. A cover page that includes the following information: a. Developer's name and mailing address. b. Developer's current legal status: corporation, partnership, sole proprietor, etc. c. Contact person's name, title, phone number, fax number, and email address. d. Signature of authorized corporate officer for each entity proposing as a partnership or team. 2. A description (narrative, preliminary schematic plans and elevations) of the proposed development. As an example, identify the parcels to be part of the proposed development, include the estimated size of the building and square footage of various components, nature of improvements, number of parking spaces, and design elements. If the development is proposed to be phased, the narrative should clearly define the components and timing of each phase and indicate the nature of the conditions upon which construction of subsequent phases would be based. Also include information about the anticipated type of tenants expected, and rents and/or saleprices. 3. Describe the developer's experience in developing similar projects, including the location, type of development, proposer's role, cost of the project, funding sources, status of project, and information about any continued financial or operating interest in each. 4. A preliminary pro forma showing the detailed sources and uses of funds to acquire the parcel(s) and construct the development. Information as to the status of securing those funds should be included and inclusion of a conditional financing commitment is strongly encouraged. If any public assistance is to be requested, clearly indicate the request. If the project includes multiple uses, the capital pro forma should be broken down for the componentuses. 5. A proposed timeframe for the development. 6. Any other information that would help the City understand and evaluate the concept. The contents of the proposal and any clarification to the contents submitted by the successful proposer may become part of the contractual obligation and be incorporated by reference into the development contract between the selected developer(s) and the City. RFP - Sportsple 218- Acres City of West Covina Community Development Department RFP for 21 S-acre Development Opportunity Site REVIEW AND SELECTION PROCESS The City reserves the right to reject any or all proposals or parts of the proposals, to negotiate modifications of proposals submitted, and to negotiate specific work elements with a proposer into a project of lesser or greater magnitude than described in this RFP or the proposer's reply. The process for selection may occur in the following sequence: • Reviewproposals • Identify the best qualified candidate(s) and/orfirms(s) • Reference checks • Determine financial stability of the firm • Staff review and/or interviews of qualified firms • Negotiate with best qualified candidate(s) and/or firm(s) • Staff present City Council with its recommendation and City Council action on proposal • Execution of sale, lease and/or development agreement EVALUATION Evaluation of qualification statements and proposals will be based on the information called for in this RFP. Brochures or other promotional presentations beyond that requested are not desired. Elaborate artwork, expensive paper or binders, and expensive visuals are not necessary. The City reserves the right to waive any irregularities or informalities in any RFP process when it is in the best interest of the City to do so; to re -advertise for proposals, if desired; to sit and act as sole judge of the merit and proposals of the service offered and; to evaluate in its absolute discretion, the qualification statement and proposal of each developer, so as to select the developer which best serves the requirements of the City, thus ensuring that the best interest of the City will be served. The City may make such investigation as it deems necessary to determine the ability of a developer to furnish the required services, and the developer will furnish to the City all such information and data for this purpose as the City may request. The City reserves the right to reject any submittals if the evidence submitted by, or investigation of, such developer fails to satisfy the City that such developer is properly qualified to carry out the obligations of a contract and to deliver the services contemplated herein or; the submittal of any developer who has previously failed to perform properly, or complete on time, contracts of a similar nature. Any material misrepresentation or material falsification of information provided to the City in the developer's Proposal, or at any point in the evaluation process, is grounds for rejection. In the event that the misrepresentation or falsification is not discovered until after any agreement is awarded, the agreement may be terminated at that time. A determination as to whether a misrepresentation or falsification of the submittal is material shall be made solely in the exercise of the City's sound discretion. The City expressly reserves the right to reject the submittal of any developer who is in default on the payment of taxes, licenses or other moneys due to the City of West Covina. The City reserves the right to conduct a background inquiry of each developer which may include the collection of appropriate criminal history information, contractual and business associations and practices, employment histories, financial background, and reputation in the business community. By submitting a proposal to the City, the developer agrees to make available to the City such RFP - Sportsple 218- Acres A City of West Covina Community Development Department RFP for 21 S-acre Development Opportunity Site information as the City deems necessary to conduct the inquiry ETHICS IN PUBLIC CONTRACTING Each offeror, by submitting a proposal, certifies that it is not a party to any collusive action or any action that may be in violation of the Sherman Antitrust Act by submitting a proposal, the offeror certifies that it was made without fraud; that it has not offered or received any kickbacks or inducements from any other offeror in connection with this RFP. The offeror further certifies that no relationship exists between itself and the City or another person or organization that interferes with fair competition or constitutes a conflict of interest with respect to a contract with the City of West Covina. For breach or violation of this warranty, the City shall have the right to terminate any Agreement, either in whole or in part. The rights and remedies of the City provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under the Agreement. The proposals received shall become the property of the City and are subject to public disclosure. Developers are to indicate any restrictions on the use of data contained in their responses. Those parts of a proposal which are defined as business or trade secrets, as that term is defined in California Government Code, Section 6254.7, and are reasonably marked as "Trade Secrets", "Confidential" or "Proprietary" shall only be disclosed to the public if such disclosure is required or permitted under the California Public Records Act or otherwise by law. Developers who wish to have such information maintained confidentially shall be responsible for advancing all reasonable attorney's fees and costs associated with disputes that may arise respecting whether records are subject to disclosure The City is not liable for any costs incurred by Developers in responding to this RFP ICITATION OF PROPOSAI, O Nothing contained herein shall be deemed as a binding offer or commitment by the City, its officers, agent, employees, or related party. Each party or parties responding to this RFP do acknowledge that they are not guaranteed that they will be selected as the developer or offered an opportunity to purchase, lease or develop the site. ATTACHMENTS / ADDITIONAL INFORMATION (electronic downloads) For additional information on the site please visit the City's website at www.westcovina.org/BKKDevelopmentOpportunity The RFP and attachments below can be found for download at: www.westcovina.org/rfp: A. Aerial Map RFP - Sportsple 218- Acres City of West Covina Community Development Department RFP for 21 S-acre Development Opportunity Site B. EIR — Big League Dreams City Park, Sports Complex and Commercial Retail Center (Draft Supplemental Environmental Impact Report, May 2003) C. Habitat Mitigation and Monitoring Plan (June2008) D. Coastal Sage Scrub Conservation and Monitoring Plan (June 2008) E. DTSC — Perspective Purchase Agreement, and Agreement and Covenant Not to Sue the City of West Covina F. US EPA — Perspective Purchase Agreement, and Agreement and Covenant Not to Sue the City of West Covina G. DTSC - Environmental Restriction and Covenant and Agreement to Restrict Use of Property (parcel 1) H. License Agreement — BKK Corporation & Redevelopment Agency of the City of West Covina (July 2003) RFP - Sportsple 218- Acres 10 DEVELOPMENT OPPORTUNITY SITE