Oversight Board Meeting

MINUTES OVERSIGHT BOARD MEETING Wednesday, February 26, 2014 – 7-9 p.m. COUNCIL CHAMBER, FEW MEMORIAL HALL OF RECORDS MONTEREY, CALIFORNIA Oversight Board Members: Present: Harvey Kuffner, Michael Adamson, Chip Rerig, Dave Potter, Vicki Nakamura Absent: Mitch Winick and Chuck Della Sala City Staff Present: Housing and Property Manager Rick Marvin, Assistant Finance Director, Julie Porter, Legal Counsel Dave Laredo, and Secretary to Board, Maria Buell. CALL TO ORDER Chair Kuffner called the meeting to order at 7:00 PM. APPROVAL OF MINUTES 1. The Minutes of the November 27, 2013 meeting were approved by the following vote: ADOPTED BY THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY OF THE CITY OF MONTEREY REDEVELOPMENT AGENCY this 26th day of February, 2014 by the following vote: AYES: 4 MEMBERS: Kuffner, Adamson, Potter, Nakamura NOES: 0 MEMBERS: None ABSENT: 2 MEMBERS: Winick, Della Sala ABSTAIN: 1 MEMBERS: Rerig PUBLIC APPEARANCE 2. Approval of Proposed Administrative Budget for the July through December, 2014 period Pursuant to Health and Safety Code section 34177(j) Staff Presentation/Board Member Questions Assistant Finance Director Porter introduced this item and answered Board member questions. Board member comments: Chair Kuffner asked staff if the Administrative Budget is going over the $125,000 cap. Ms. Porter responded the figure is currently at $50,000 because the OB is winding down its review and that the Board will also have to approve the ROPS for the Monterey Hotel today. Public Comments: Chair Kuffner opened discussion to members of public on this item. Having no requests to speak, Chair Kuffner closed public comment. 1 On a motion by Board member Potter, seconded by Board member Nakamura, the Board unanimously moved to Approve the Proposed Administrative Budget for the July through December, 2014 period Pursuant to Health and Safety Code section 34177(j). ADOPTED BY THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY OF THE CITY OF MONTEREY REDEVELOPMENT AGENCY this 26th day of February, 2014 by the following vote: AYES: 5 MEMBERS: Kuffner, Adamson, Rerig, Nakamura, Potter NOES: 0 MEMBERS: None ABSENT: 2 MEMBERS: Winick, Della Sala ABSTAIN: 0 MEMBERS: None 3. Approval of Recognized Obligation Payment Schedule for the Period July 1, 2014 - December 31, 2014 Staff Presentation/Board Member Questions Assistant Finance Director Porter introduced this item and answered Board member questions. The ROPS is for the period of July 1 to December 31, 2014 and it includes 5 items from the original ROPS. Item No. 2, operating expenses, and No. 3, Monterey Hotel mixed used, were originally denied by Department of Finance (DOF) on last ROPS submitted 13-14B. She apprised the board of the meeting Ms. Porter and Mr. Marvin had with DOF in November 2013 to appeal their decision. The appeal was subsequently approved in December by DOF. Ms. Porter anticipates that funds will be expended and the ending balance is approximately $960,000 at the end of 2014. She said that Item No. 4 has a separate source of funds and they are basically set aside funds earning interest and anticipates they will be used. Board member comments: Board member Adamson asked why line Item 5 of the ROPS is kept in the records. Ms. Porter responded that this is DOF’s format requirement and it must be kept as such. Board member Potter said that the 2nd attachment was not legible due to the small font. Mr. Rerig asked Ms. Porter if she could be more descriptive in line 5 regarding the loans for low income housing so that 10-15 years from today people can understand this item. Ms. Porter responded that additional records are available but due to their format, she was not able to enter it into the forms, but that she would try. Public Comments: Chair Kuffner opened discussion to members of public on this item. Having no requests to speak, Chair Kuffner closed public comment. On a motion by Board member Adamson, seconded by Board member Rerig, the Board unanimously moved to Approve the Recognized Obligation Payment Schedule for the Period July 1, 2014 - December 31, 2014. ADOPTED BY THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY OF THE CITY OF MONTEREY REDEVELOPMENT AGENCY this 26th day of February, 2014 by the following vote: AYES: 5 MEMBERS: Kuffner, Adamson, Rerig, Nakamura, Potter NOES: 0 MEMBERS: None ABSENT: 2 MEMBERS: Winick, Della Sala ABSTAIN: 0 MEMBERS: None 4. Pursuant to Health and Safety Code Section 34191.5 Approve Successor Agency Long Range Property Management Plan That Proposes Transfer of Hotel Pacific at 300 Pacific Street to the City of Monterey Staff Presentation/Board Member Questions Rick Marvin introduced this item and answered Board member questions. Mr. Marvin said that a Long Range Property Management Plan (LRPMP) is one of the requirements for the dissolution and winding 2 down of activities of the Oversight Board. A LRPMP is the disposition of agency properties that are still retained by the agency. Staff concluded that one property, the 300 Pacific Street Hotel, is a property transferrable consistent with Health & Safety Code sections. It must be inventoried, categorized correctly and disposed of properly. The staff report and Exhibit A to the Resolution includes all the information that State requires along with the LRPMP. It describes how it is going to be disposed of and the transfer will include it as an enforceable obligation. Staff concluded transferability standards, and government purpose property. Even though it is a hotel, the Closeout Agreement with HUD requires that all proceeds be consistent with Community Development Block Grants and remain compliant with this use. The City of Monterey is the best agency to fulfill these obligations. Staff recommends approval after the Successor Agency approved it last week. Board member comments: Chair Kuffner asked who is the current lease holder for the Hotel. Staff member Marvin responded that Successor Agency is the ground lessor and the Operator of the Hotel is the Lessee. Chair Kuffner asked if the Operator were to change, what would happen to the Lease. Mr. Marvin responded that in November of last year, the lender had to take the hotel back after a foreclosure. A new operator bought the hotel and the improvements and they took over the lease as an assignment. They are now responsible for the Lease which expires in 2058 and the Successor Agency receives monthly rent payments. Approving the LRPMP will continue with the obligation. Board member Adamson said that the original lease refers to it as “Motel.” Mr. Marvin said the original document drafted back at inception references it as such and it has to remain consistent with this identification. Board member Nakamura asked if DOF will approve the Long Range Property Management Plan. Staff member Marvin answered affirmatively. Public Comments: Chair Kuffner opened discussion to members of public on this item. Having no requests to speak, Chair Kuffner closed public comment. On a motion by Board member Potter, seconded by Board member Nakamura, the Board unanimously moved to Approve the Successor Agency Long Range Property Management Plan That Proposes Transfer of Hotel Pacific at 300 Pacific Street to the City of Monterey, pursuant to Health and Safety Code Section 34191.5. ADOPTED BY THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY OF THE CITY OF MONTEREY REDEVELOPMENT AGENCY this 26th day of February, 2014 by the following vote: AYES: 5 MEMBERS: Kuffner, Adamson, Rerig, Nakamura, Potter NOES: 0 MEMBERS: None ABSENT: 2 MEMBERS: Winick, Della Sala ABSTAIN: 0 MEMBERS: None 5. Receive Status Report on Monterey Hotel Apartment Project Staff Presentation/Board Member Questions Staff member Marvin introduced this item and answered Board member questions. Mr. Marvin stated that staff is hopeful they are successful with the LRPMP in addressing the funds obligated to go to Monterey Hotel. Mr. Marvin said last December the City took ownership of the condominium airspace units (18 apartments) through a Deed-in-Lieu process. The owner of the hotel will be reimbursed for the construction that the City will do. The hallways and common path in the common area hotel are getting ready for construction and the reimbursements will be made as draw downs are done for work completed. Staff hopes that the construction will be completed in 12 to 18 months with the target full completion date of summer 2015. Board member comments: Board Potter asked if occupancy will be ready in 18 months. Staff member Marvin said the hotel owner will complete the rooms in 6-8 months. They are working on the common area and will get an occupancy permit. The apartments will follow. Board member Potter asked why they could not be done concurrently. 3 Mr. Marvin said that City faces some challenges in determining how it will be finished and the source of funding (loan) which must be provided. Board member Potter asked if staff had discussions with other local entities such as the Monterey Institute of International Studies (MIIS). Staff member Marvin answered affirmatively and that in addition to MIIS, they met with representatives of Community Housing Improvement Systems and Planning Association, Inc., (“CHISPA”), and Mid-Peninsula Housing. There are some restrictions because these apartments have to be affordable to low-moderate households and all three agencies can do this. Staff has to figure out a way to offer it for sale or lease or construction consistent with City’s purchasing requirements. An RFP or RFQ would need to be prepared. Board member Potter encouraged staff to do it soon. Board member Rerig said that any of these groups can become the taker of the City’s money (approx. $1.7M) and use it for the property. City will take other monies that are NOT as restrictive back. Chair Kuffner asked who the sales agent will be. Mr. Marvin replied that these units are not going to be condominium units. They are 18 apartment units contained in this 2-condominium shared-space. The hotel contains retail, garage and other existing pieces of hotel. They share a common access and ingress/egress areas. It is not 18 individual spaces within this Condo unit. Board member Kuffner asked if once the units are completed would a realtor/property management company market these units. Mr. Marvin said that City will be making this decision soon. An “Operator” may lease (long term) or purchase the property and complete it and/or own it; or, do a lease but complete it with City’s money and then go into a long term lease. Staff has not ascertained the best option for City at this time. Chair Kuffner asked if City will be entering this arrangement on a long-term basis. Mr. Marvin said that City will own airspace only but its role is constrained. Public Comments: Chair Kuffner opened discussion to members of public on this item. Having no requests to speak, Chair Kuffner closed public comment. PUBLIC COMMENTS Chair Kuffner opened discussion to members of public on this item. OTHER BUSINESS None. BOARD MEMBER COMMENTS None. ADJOURNMENT There being no further business, the meeting adjourned at 7:33 PM. Respectfully submitted, Approved, _______________________ _______________________ Maria Buell Harvey Kuffner Secretary, Oversight Board Chair, Oversight Board 4