Resolution - 9715RESOLUTION NO. 9715
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA RESCINDING THE SECOND
AMENDED AND RESTATED DISPOSITION,
• DEVELOPMENT, AND OWNER PARTICIPATION
AGREEMENT, AND APPROVING AND AUTHORIZING
EXECUTION OF THE REVISED SECOND AMENDED AND
RESTATED DISPOSITION, DEVELOPMENT AND
OWNER PARTICIPATION AGREEMENT BY AND
BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF WEST COVINA AND HASSEN IMPORTS
PARTNERSHIP AND WEST COVINA MOTORS, INC., AND
MAKING CERTAIN FINDINGS IN CONNECTION
THEREWITH
WHEREAS, the City Council of the City of West Covina (the "City Council") approved
and adopted the Redevelopment Plan for the West Covina Redevelopment Project (the
"Redevelopment Plan") by the merger of the Central Business District and Eastland
Redevelopment Plans on December 21, 1993 by Ordinance No. 1928; and
WHEREAS, the City Council did duly pass and approve Ordinance No. 1951 on
December 20, 1994, and did thereby amend the Redevelopment Plan; and
WHEREAS, the Redevelopment Agency for the City of West Covina (the "'Agency") is
authorized and empowered by the Community Redevelopment Law, California Health and Safety
Code Sections 33000, et sect. (the "CRL"), to enter into agreements for the acquisition,
disposition and development of interests in real and personal property and otherwise to assist in
the redevelopment of real property within a redevelopment project area in conformity with a
redevelopment plan adopted for such area, to acquire real and personal property in redevelopment
project areas, to receive consideration for the provision by the Agency of redevelopment
assistance, to make and execute contracts and other instruments necessary or convenient to the
exercise of its powers, and to incur indebtedness to finance or refinance redevelopment projects;
and
WHEREAS, pursuant to Section 33444.5 of the CRL, the Agency may establish a
program under which it may make loans to property owners or tenants for the purpose of
rehabilitating and redeveloping commercial properties within a redevelopment project area' and
WHEREAS, on or about July 20, 1983, the Agency entered into a Disposition and
Development Agreement ("DDA No. 1 ") with Hassen Imports, Inc., a California corporation (the
"Previous Developer") which provides generally for, among other things, (i) the sale of certain
real property ("Parcel No. 1 ") to the Previous Developer, (ii) the development and operation of a
new car franchise on Lot A of Parcel No. 1, and (iii) the improvement of Lot B of Parcel No. 1
for parking purposes, and
WH EREAS, on or about September 20, 1984, the Agency and the Previous Developer
entered into the First Implementation Agreement to DDA No. 1, pursuant to which the parties
agreed to certain revisions to DDA No. 1 including the extension of the time for completion of
the improvements required under DDA No. 1 and to the revision of the use restrictions in DDA
• No. 1; and
WHEREAS, pursuant to DDA No. 1 the Previous Developer constructed the required
improvements and operated a new and used Mitsubishi automobile franchise (the "Mitsubishi
Dealership") thereon, however, no improvements were made to Lot B of Parcel No. 1, as
required under DDA No. I and
WHEREAS, on or about July 28, 1986, the Agency, the Previous Developer and the
Hassen Imports Partnership (the "Developer") entered into the Second Implementation
Agreement to Disposition and Development Agreement, pursuant to which the Previous
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Developer assigned to Developer its rights and obligations with respect to DDA No. 1 and the
Mitsubishi Dealership, and
WHEREAS, on or about November 71 1987, the Agency and the Developer entered into
a Disposition and Development Agreement (DDA No. 2"), pursuant to which the Agency agreed
to utilize its best efforts to acquire that certain real property commonly known as the "La Ronde
• Property" and the Developer agreed to, among other things, purchase the La Ronde Property
from the Agency; to expand the Mitsubishi Dealership onto the La Ronde Property, and to
complete the development of Lot B of Parcel 1 as required under DDA No. 1; and
W H EREAS, on or about May 28, 1991, the Mitsubishi Dealership operating on Lot A of
Parcel No. 1 closed for business; and
W H EREAS, on or about May 4, 1993, the Agency, the Developer and West Covina
Motors, Inc. (the "Operator") entered into an Owner Participation Agreement (the "OPA") which
provides for, among other things, the development of a new and used Dodge automobile franchise
(the 'Dodge Dealership") on Lot A of Parcel 1 by Developer and the operation of the Dodge
Dealership thereon by the Operator for a period of not less than fifteen (15) years; and
WHEREAS, pursuant to the OPA the Agency loaned funds to the Developer for the
development of the Dodge Dealership (the "Participant Loan"); and
WHEREAS, on or about November 22, 1994 the Agency acquired fee title to the
La Ronde Property which was improved with an apartment building; and
WHEREAS, in light of the numerous agreements entered into by the parties, the Agency,
the Developer and the Operator entered into the Amended and Restated Disposition,
Development and Owner Participation Agreement (the "ARDDOPA") on or about June 13, 1996,
in order to consolidate and restate the rights and obligations of the parties pursuant to DDA No.
1, as amended, DDA No. 2 and the OPA, as amended, to supersede such agreements, and to
amend certain of those rights and obligations as agreed to by the parties, and
WHEREAS, on September 5, 1995 the Agency adopted the Relocation Plan for the La
Ronde Apartments Project in order to provide for the relocation of the existing occupants of the
La Ronde Property; and
WHEREAS, the Agency conveyed the La Ronde Property to the Developer on or about
July 31, 1998 for the expansion of the Dodge Dealership or the location of a new automobile
franchise on the La Ronde Property, Lot B of Parcel 1, and certain adjacent residential properties,
pursuant to the ARDDOPA; and
WHEREAS, the Developer has not expanded the Dodge Dealership or located another
new automobile franchise to the La Ronde Property, Lot B of Parcel 1, and the adjacent
residential properties (which collectively compose the "Development Property"); and
WHEREAS, the Developer was reorganized pursuant to Chapter 11 of the United States
Bankruptcy Code (1I U.S.C. §§ 101 ez seq.) under a reorganization plan confirmed by the U.S.
Bankruptcy Court, Central District of California, Los Angeles Division, in Case No. LA-
98-2428 1 -ER (the "Reorganization Plan"); and
WHEREAS, pursuant to the Reorganization Plan, certain obligations of Developer to
Agency pursuant to the ARDDOPA were assumed by the Developer, or subordinated to other
lenders, or otherwise affected, as set forth in the Reorganization Plan; and
WHEREAS, Agency, Developer and Operator entered into a Second Amended and
Restated Disposition, Development, and Owner Participation Agreement (the "2°a ARDDOPA'),
which amended and restated certain rights and obligations of the parties under the ARDDOPA
and the Reorganization Plan, and pursuant to which, subject to the terms and conditions thereof,
the Agency agreed to loan Developer Four Million One Hundred Thousand Dollars ($4,100,000)
to rehabilitate certain commercial properties, including Lot A of Parcel No. 1 and the
Development Property (collectively, the "Site"); and
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WHEREAS, based on information provided by the Developer to the Agency, the Agency
desires to rescind its previous approval of the 2"a ARDDOPA and enter into a new agreement (the
"Revised 2"a ARDDOPA"), which Revised 2`1 ARDDOPA shall amend and restate the parties'
rights and obligations pursuant to the ARDDOPA and the Reorganization Plan, and which shall
provide, subject to the terms and conditions thereof, for the Agency to make a loan to Developer
of One Million Five Hundred Thousand Dollars for the rehabilitation of existing commercial
• buildings and structures on the Site; for the Agency to acquire from Developer certain use and
operating covenants, and sales and property tax generation guaranties at a cost to Agency of Two
Million Six Hundred Thousand Dollars; and for the Developer to construct the Developer
Improvements on the Site (as defined in the Revised 2"a ARDDOPA) and operate such Developer
Improvements in a manner which will satisfy the use and operating covenants and sales and
property tax generation guaranties; and
W HEREAS, on July 6, 1999 the West Covina Planning Commission approved Precise
Plan No. 871, and Tree Removal Permit No. 21 and adopted a Mitigated Negative Declaration
(the "MND") with respect to the same project which is contemplated under the 2"a ARDDOPA
and the Revised 2"a ARDDOPA, including the construction and operation of the Developer
Improvements, in compliance with the California Environmental Quality Act, Public Resources
Code sections 21000 et seq. ("CEQA") and the State CEQA Guidelines; and
WHEREAS, the MND was appealed to the City Council, and the MND was adopted and
certified by the City Council after de novo review and consideration of the MND, all comments
thereto, and all other evidence in the record, and after conducting a full public hearing on the
MND, and such MND, as certified, covers the Revised 2"d ARDDOPA with any minor, non -
substantive changes; and
WHEREAS, the MND adequately addresses the environmental effects and feasible
mitigation measures associated with the Revised 2i° ARDDOPA pursuant to CEQA; and
WHEREAS, pursuant to Section 33433 of the Community Redevelopment Law
(California Health and Safety Code Section 33000, et seq.), the Agency is authorized, with the
approval of the City Council after a duly noticed public hearing, to sell or lease property acquired
by the Agency using property tax increment for development pursuant to the Redevelopment Plan
upon a determination by the City Council that the sale of the property will assist in the elimination
of blight and that the consideration for such sale is not less that either the fair market value or fair
reuse value of the property in accordance with the covenants and conditions governing the sale
and the development costs required thereof, and
WHEREAS, the Revised 2"d ARDDOPA alters the timing of the payment of the purchase
price for the La Ronde Property, which property was acquired with tax increment and the sale of
which was originally subject to the provisions of CRL Section 33433, and therefore, the Revised
2nd ARDDOPA could be deemed to require the determinations required by CRL Section 33433;
and
WHEREAS, ajoint public hearing of the Agency and City Council on the proposed
Revised 2,d ARDDOPA was duly noticed in accordance with the requirements of CRL
Section 33433; and
WHEREAS, the proposed Revised 2"a ARDDOPA, and a summary report meeting the
requirements of CRL Section 33433, were available for public inspection consistent with the
requirements of CRL Section 33433, and
WHEREAS, on June 20, 1999, the Agency and City Council held ajoint public hearing _
on the proposed Agreement, at which time the Agency reviewed and evaluated all of the
information, testimony, and evidence presented during the joint public hearing, and
WHEREAS, all actions required by all applicable law with respect to the proposed
Revised 2"" ARDDOPA have been taken in an appropriate and timely manner; and
WHEREAS, the City Council has reviewed the summary required pursuant to CRL
Section 33433 and evaluated other information provided to it pertaining to the findings required
pursuant to CRL Section 33433; and
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WHEREAS, the La Ronde Property is located within an area of the West Covina
Redevelopment Project (the "Project Area") which was found by the City Council, in its adoption
of the Redevelopment Plan, to be blighted as a result of physical deterioration of structures and
lack of maintenance of property, as well as other indicia of blight; and
WHEREAS, the payment of the purchase price for the La Ronde Property pursuant to
• the Revised 2"d ARDDOPA will assist in the elimination of blight by expediting the infusion of
funds into Agency activities, including activities to increase the supply of affordable housing
throughout the Project Area and to improve the economic conditions in the Project Area; and
WHEREAS, the disposition and development of the La Ronde Property is specifically
identified as a proposed project in the AB 1290 Redevelopment and Housing Implementation Plan
which was adopted by the Agency pursuant to Resolution No. 469 on December 6, 1994 (the
"Implementation Plan"), and furthers the goals of the Agency set forth in the Implementation Plan
as it will eliminate and prevent the spread of blight, encourage private sector investment and
promote the economic well-being of the Project Area by encouraging diversification of the
commercial building; and
WHEREAS, the City Council has duly considered all terms and conditions of the
proposed Revised 2"d ARDDOPA and believes that the redevelopment of the Site pursuant
thereto is in the best interests of the City of West Covina and the health, safety, and welfare of its
residents, and in accord with the public purposes and provisions of applicable state and local laws
and requirements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West
Covina as follows:
Section 1. The City Council finds and determines that, based upon substantial
evidence provided in the record before it, the consideration for the Agency's disposition of the
La Ronde Property pursuant to the terms and conditions of the Revised 2"d ARDDOPA is not less
than the fair reuse value in accordance with covenants and conditions governing the sale, and the
development costs required under the Revised 2"d ARDDOPA.
Section 2. The City Council hereby finds and determines based upon substantial
evidence in the record before it that the disposition of the La Ronde Property pursuant to the
Revised 2"d ARDDOPA, and the further execution and performance of the Revised 2"d
ARDDOPA, will eliminate blight within the Project Area by providing for the proper reuse and
redevelopment of a portion of the Project Area which was declared blighted for the reasons
described above.
Section 3. The City Council, after de novo review, has upheld the Planning
Commission's determinations on environmental review for the Project, and the City Council
finds in its independentjudgment and,based upon the record before it that the environmental
documentation prepared for and referenced in Planning Commission Resolution No. 7-99-4555
adopting and certifying the MND addressed and addresses the environmental effects and
feasible mitigation measures associated with the Revised 2"d ARDDOPA and the Project, and,
therefore, as previously considered, is adequate to serve as environmental documentation for
the Revised 2"d ARDDOPA under CEQA.
Section 4. The City Council hereby finds and determines based upon the record that
the mitigation measures and the Mitigation Monitoring Program set forth in the MND, will
mitigate or avoid all significant environmental effects of the Project and the Revised 2'
ARDDOPA. The Agency hereby will follow the adopted the Mitigation Monitoring Program
as set forth in the MND.
Section 5. The City Council hereby approves the Revised 2"d ARDDOPA with such
minor non -substantive revisions which are approved by the Agency Counsel and authorizes and
directs the Chairman of the Agency to execute the Revised 2"d ARDDOPA on behalf of the
Agency. A copy of the Agreement when executed shall be placed on file in the office of the
Agency Secretary/City Clerk. The Executive Director of the Agency is authorized to implement
the Revised 2"d ARDDOPA and take all further actions and execute all escrow documents and
other documents necessary or appropriate to carry out the Revised 2"d ARDDOPA.
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•
Section 6. The Revised 2"' ARDDOPA is consistent with the provisions and goals of
the Implementation Plan.
Section 7. The City Clerk shall certify to the adoption of this Resolution.
The foregoing Resolution is hereby approved this 20th day of July, 1999.
C Z: "- � 6 4, G
Mayor.
ATTEST:
City Clerk
APPROVED AS TO FORM:
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City
Council of the City of West Covina at a regular meeting hereof, held on the 20th day of July,
1999 by the following vote, to wit:
AYES: Herfert, Melendez, Wong
NOES Howard
ABSENT: None
ABSTAIN: Touhey
CITY COUNCIL OF THE CITY OF WEST
COVINA
By:.
City Clerk.,_
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