HomeMy WebLinkAboutUrban Projects, Inc - 1975-07-07 AGREEMENT FOR
ECONOMIC CONSULTING SERVICES
THIS AGREEMENT, made on the 7th day of July. 1975, by 'and between the
CITY 'OF 'HUNTINGTON '3EACH, CALIFORNIA, a 'municipal corporation (hereinafter
referred to as CITY) , 'and . PROJECTS, INC. , a California Corporation with
principal offices in Los Angeles , California (hereinafter referred to as CON-
' -
SULTANT) :
WITNCSSETH:
WHEREAS, .%:ITY has determined that professional assistance is needed to
provide enano•nic consulting services in conjunction with structuring a viable
General and Development Plan for the Downtown Study Area hereinafter defined.
WHEREAS, CITY desires that the planning proposals recently advanced fr:
revitalizing the downtown area be tested for their workability and economic-
Impact consequences , and that an effective implementation strategy be formu-
lated in order to facilitate the realization of the optimum revitalization
concept.
WHEREAS, CONSULTANT is qualified to undertake and competently complete
such economic consulting services, and is willing to undertake same;
NOW, THEREFORE, the CITY and CONSULTANT in consideration of the mutual
covenants and agreements hereinafter contained , do hereby agree, each with
the other, as follows:
I . SCOPE OF CONSULTING SERVICES
The services to be performed by CONSULTANT are described and set
forth in Exhibit "A", attached hereto and by this reference made a part hereof.
b.
II .. STUDY .AREA
The .Rudy a rea i a defined as that 350-acre`district comp�r i s i rig
the "i ntown planning area recently studie& by VTN Consolidated , a planning
consultant.
Ill . SCHEDULE
CONSULTANT agrees to commence work program set forth in Exhibit
"A" within five (5) days following the execution, of this Agreement, and to
diligently continue the same to completion. the work program shall be com-
pleted and recommendations submitted to the CITY within forty-five (45) days
following execution of this Agreement. In the event that CONSULTANT'S work
flow prr..grarn is delayed for reasons beyond the control of CONSULTANT in con--
nectior< with required CITY staff input, CONSULTANT reserves the right to delay
his vi-ark schedule by a corresponding amount of time.
IV. MEETINGS
CONSULTANT further agrees to provide oral public presentations
of work program results to CITY ' S Planning Commission and City Council at
such times and in such numbers as CITY'S representative deems appropriate.
CITY agrees to notify CONSULTANT of the time and place of said oral prese'nta-
tions at least ten (10) days prior to the date on which the presentations are
to take place.
Beyond these oral public presentations, CONSULTANT will meet
regulari ;• each week and at other such times deemed mutually appropriate with
authorized representatives of the Planning Department staff in order to fa-
cilitate coordination and to dutifully carry out CONSULTANT work program
tasks to completion.
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V. MIBILLING AND' PAYMENT FOR SERVICES
Fo`r fu'r`nishing the consulting services specified under Exhibit
i
''A" of this Agreement, CITY aq�ees to pay CONSULTANT the sum of Ten Thous'iid
Dollars ($16;000.do) . Partial payments shall be made within ten (10) days
after presentation to CITY of sta .ements in accordance with the following
billing schedule:
Upon Execution of Agreement. . . . . . . . . . . . . . . $ 2,500
Within 30 Days of Agreement Exerution. . . . . 50000
Upon Completion of Work Program. . . . . . . . . . . 2�500
TOTAL $10,000
The total amount of Ten Thousand Dollars ($10,000.00) shall in-
clude 'all costs incurred by CONSULTANT for salary and out-of-pocket costs for .
travel and miscellaneous expenses necessary to perform the Scope of Consulting
Services specified under Exhibit "A" of this Agreement.
Any oral public presentations , and any specific additional assign-
ments, • salary expenses, authorized travel and appearances not provided for in'
the Scope 'of Consulting Services set forth under Exhibit"A" must be approved
by CITY; and payment for said approved oral public presentations, cesignated
additional work and reimbursable expenses shall be made on a calendar month
basis at monthly intervals on the basis of CONSULTANT Billing Rate Schedule,
marked Exhibit "B" and attached hereto and by reference made a part hereof,
and each payment shall be made within ten ( 10) days after presentation to CITY
of a statement setting forth in detail the additional work performed and all
costs incurred by CONSULTANT, together with supportina vouchers , for the period
covered by each said statement.
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VI DESIGNATI.ON 'OF AUTHORIZED REPRESENTATIVES
CONSULTANT hereby agrees, upon the signing of this Agreement, to
Earn"ish the CITY in writing the name of the individual who 'will be autihorized
to actin person or through `his designee for CONSULTANT in all matters per-
taining to the consulting services to be performed. Such individual shall be
approved by the CITY'S Planning Director.
CITY agrees, upon signing this 'Agreement, to furnish CONSULTANT
the name of an individual who, as the CITY' S Project Representative, will be
authorized to act in person or through his designee as representative for the
CITY in all matters pertaining to this study.
It is understood and agreed by said parties that the authorized
representative may be changed, provided either party to this Agreement so de-
siring the change give at least five (5) days' prior notice in writing to the
other, naming its new authorized representative, 'and that CONSULTANT' S said
representative shall be acceptable to *the CITY.
VII . COOPERATION
All departments of the CITY will assist CONSULTANT in' the perfor-
mance of this study, and CONSULTANT agrees to provide general guidance and
direction to CITY personnel that are to assist CONSULTANT in the collection
of data and preparation of the final report. CITY shall provide letters of
introduction. of CONSULTANT to such other persons , firms , -or -governmental en-
tities as necessary to assist CONSULTANT in obtaining required data.
The use of CITY records and personnel b� CONSULTANT shall be
coordinated through the CITY'S Representative.
VIII . OWNERSHIP OF REPORTS AND DATA
All reports, work papers, memoranda, exhibits, data, and other
work or materials prepared in compliance with this Agreement shall be made
rl
and iemain the property of the C{TY, to be used by CITY as may. be reQuired.
I`X. CHANGES 1N WORK
CITY may, at' any time, by written request of the CITY'S project.
Representative, make, any minor changes in the services specified hereundar,
-provided further, if such change involves additional work, additional compen-
sation not to exceed One Thousand Dollars 01 ,000.00) may be approved by
CITY Pro*ect .Representative. - Any claim. for adjustment under this article
must be made in writing to the CITY'S .Project Representative within ten ( 10)
days frtxn the date the change is requested.
X. TERMINATION
This Agreement is subject to termination by the CITY at any time
upon serving written notice to CONSULTANT, and the CITY shall thereafter be
liable to CONSULTANT only for fees and costs accrued to thedate •of receipt
by CONSULTANT of such notice. All completed paper work and accumulated data
shall hecome the property of the CITY.
XI . NOTICES
All notices to CONSULTANT under this Agreement shall be deemed
valid and effective upon deposit in the United States Mail , postage prepaid,
by certified and/or registered mail , addressed to URBAN PROJECTS, INC. , 10850
Wilshire Boulevard , Los Angeles, California, 90024.
All notices to the CITY under this Agreement shall be deemed
valid and effective when personally served upon the Planning Director or upon
deposit in the United States Mail , postage prepaid , by certified and/or re-
gistered mail , addressed to the Planning Director, City of Huntington Beach,
P.O. Box 190, Huntington Beach, California, 92648.
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IN WITNESS WHEREOF,' the parties h `re`tio have caused this Agreement to.
be:executed `on the 'date 'f i rst above written.
C i T'! OF• HUNT I NGTON BEACH,
a -Municipal Corporation
C L'• v
Dated: ��, \� By:
M6yor
ATTEST:
Ye
APPROVED AS TO .FORM:
�- URBAN PROJECTS, INC.
City Attorney a California Corporation
r
Dated: By:
Senior Vick President
Ronald J. Bussey
APPROVED AS TO CONTENT
�s
BY........................................... Ex ive `lice �&nt
CITY ADMINISTRATOR r r,�` A. Roger ,
EXHIBIT A
SCOPE OF CONSULTING SERVICES
TASK 1 - UPDATE ECONOMIC BASE ANALYSIS
Consultant shall` review and evaluate all priorly prepared reports and avail-
able historic economic trend information, growth forecasts, space-use inven-
tories, statistical compilations , etc. with the objectives of deciding upon
the current relevance of this material and determining in what areas data
gaps exist from the standpoint of present intents and purposes. New informa-
tion will then be compiled by City staff under direction of Consultant to
r fill these gaps and update as well the earlier prepared data considered nec-
essary and pertinent.
Maximum use shall be made of all applicable factual and statistical material
included in the economic studies prepared by ERA in 1970 and the more recent
evaluation undertaken by VTN in 1974. In updating the information deemed
pertinent , use will be made of the results of the 1970 Censuses of Population
and 'Housing , the special 1973 City Census, the 1972 Census of Business, and
any other Federal , State, or local statistical data source which would apply.
The updating of this prior work and data gap fill- ins will. permit Consultant
to: (1 ) thoroughly understand the current role and make-up of the local eco-
nomy; (,)) fix the general parameters measuring past and possible future eco-
nomic change within the Huntington Beach cn;nmunity and its related metropoli-
tan setting; and (3) precisely define and quantify th;; prospects for future
change in population, employment, land use , and oth%-r key facets of the local
economy. . .so that the validity "of the City' s downtown revitalization planning
proposals might be assessed and judged on a soundly researched and factual
basis.
Information to be considered by Consultant. . .which City staff will assist Con-
sultant in assembling , updating and making more complete, shall at least in-
clude: (1 ) historic ' Huntington Beach population change trends and current as
well as projected future population estiiiates ; (2) employment trends and
forecasts by occupation and employment category; (3) trend information deal-
ing with key socie-economic characteristics of the local resident base having
relevance to Consultant' s subsequent analysis of special land use markets. . .
such as changing income levels and age profiles , household size and work
commuting patterns, etc. ; (4) historic space-use absorption trends and deve-
lopment patterns in Huntington Beach and vicinity with respect to certain
types of downtown-related uses , based on building permit records and land
use inventory information; (5) study area assessed valuation data ; (6) de-
tailed use inventories defining the characteristics and quality of existing
space within the downtown study area. . .as well as at locations competitive
to the downtown in the related Huntington Beach region in the case of se-
lected uses suggested in the downtown plan proposals; and (7) definition,
through a series of market analysis tables, of the land use development
potentials which 'accrue to the downtown study area. . .keying on those appro-
priate specific use types implied within the general use categories proposed
in the alternative study area plans .
ti
r
In determining , the ,potentials for downtown-related uses, Consultant ari11 se-
lectively decide upon (within the framework of the suggested plan alternates)
K.. ..
i66S"e uses for which expans i On. or development opportunities wou 1 d 'appea r to
exist. . . in both the downtown core for which Consialtant shall prepare detailed
space-use potential determinations) and its immediate adjoining "frame" (for
which Consultant',s analytical treatment shall be more general ) portions of
the study area. .The individual use market analyses shall be designed to. de-
fine the extent of the opportunity available for various types of compatible
uses (i .e. to establish what probably will succeed at the downtown study area .
location and therefore what might be realistically planned for) , and to spe-
cify (based on probable market absorption potentials) the scale, use-mix, . and
staging of the warranted development projects deemed appropriate to the study
area' s revitalization proposals.
TASK 2 - EVALUATION OF PLAN ALTERNATES
City staff have prepared three general plan concepts for entire study area,
in addition to specific development concepts for. downtown core target area ,
based upon the VTN planning study recommendations and City' s own input. A
separate transportation planning• analysis will be undertaken (concurrently
with the economic analysis) relative to these concepts. Connsultant will test
each of these plan alternates against the space-use market support findings
described previously and the economic- investment realities which would apply.
City staff will be available to assist Consultant in this task, particularly
in terms of investigating the non-economic aspects which relate.
Consultant 's comparative evaluation will consist of the following sequence
of work steps, including:. (1) assessment of the suitability of each concept
in terms of the market and any other "real world" constraints which apply;
(2) testing the market and investment appropriateness of each •concept; (3)
analysis of the compatibility of the proposed development concepts within
the current downtown setting, including an assessment of their potential im-
pact on the community and existing study area uses; (4) evaluation of the
financial implications of each particular concept. . . leading to specific rec-
ommendations as to the optimum complement of constituent functions or space-
use for each concept; and (5) analysis of each proposed scheme' s development
soundness from both the City's and prospective developer 's standpoints against
various levels 'of private and public sector commitment.
z Consultant' s cost-benefit model and private developer pro formas will be
structured in simple, understandable terms. . . identifying what the City's
cost exposure will be, against the private sector' s ability to participate,
for each of the schemes. The economic benefits which would accrue to each
scheme (i .e. retail sales volumes, City revenues , jobs creat!d, spinoff
demaxnds, etc.) shall be quantified to the extent and detail deemed appropri-
ate at this preliminary and exploratory stage, and the attendant public
costs ( i .e. funding amounts and sources, acquisition costs , land cost write-
down, relocation resources and costs, public improvement costs , administra-
tive costs, demolition and clearance costs, etc. ) shall be estimated in con-
junction with information and assistance provided by City staff.
TASK 3 - FORMULATION OF IMPLEMENTATION PLAN
The comparative plan evaluation described in Task 2 will lead Ito Consultant's ,
reco`mmendation ..Identifying- the optimum- or most viable concept and development
scheme. Consultant will then
prepare a plan for implementing this preferred
proposal , . focusing particularly upon the financial and development aspects as-
sociated with the oroposed 'revitalization effort (i .e. developing responses
to; such questions as. . . in what manner and from which sources can the City
generate the necessary funds to implement the project and, in what sequence
should the various sites be developed or improved?) .
In recognition of the fact that the probable means of implementing the chosen
plan will be through the. redevelopment process, with the probabiII that
some part ;of the project ' s support will come from CD funds, Consultant would
Pe prepared to investigate 'on a preliminary basis the tax increment funding
potential of the selected crAncept. Trade-off investigations may be warranted
for inclusion in the general plan concept because of their tax increment po-
tential . In any case, the Consultant's efforts would be directed toward spel-
ling out the financial , role participant , and development staging aspects of
plan Implementation.
Accordingly, Consultant shall identify a desirable and feasible development
sequence, and to the extent that the implementation process must be self-sus-
taining, Consultant will incorporate in his work an evaluation of tax incre-
ment funding considerations. In this regard, Consultant could ra' K tiie var-
ious proposed land uses in terms of their net tax increment revenue-generating
potentiai, (after net -project costs) . Those projects generating surplus funds
could be sequenced ahead of others. In any case,' Cr„r;ultant fully understands
the revenue implications of projects in terms of the scheduling of tay incre-
ment funds with respect to date of Redevelopment Plan adoption, construction
completion timing, new revenues generated , etc. , . . .as the result of his accu-
mulated experience in preparing tax increment projections and determining
bonding -apacity, plus the structuring of financial packages for Agencies
throughout Southerr, California.
DOCUMENTATION
Upon completion of each work task or sub -task, as appropriate, Consultant shali
prepare a summary memorandum or "work paper" presenting the Consultant's con-
cluslons - and recommendations along with his reasoning leading to same. The
format of these concisely written progress reports will be such that they will
be easily understood by the general public, and yet provide a comprehensive
and thorough assessment of each aspect under- investigation.
City staff will prepare similar memoranda, serving as the Ccty' s input to the
overall work program. Upon work program completion, City staff shall summar-
ize and assemble all work task end products for insertion into a final plan-
.ning document designed for public dissemination.
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w tom, • � � � �. - ..
'WORK.'FLOW SCHEDULE
The Consultant' s work program "Project Director will be `Ronald J. Bussey,
Senior„ Vice President, who'will attend-'a,] 1 of the required `meetings work;
sessiois, , an
d.'presentations with the City as..'well as personally direst and
contribute to"the data review an`d assembiy ' 'hases of _ the assignment. 'The
aria lyt i ca l- and writing phases `of, the `ass i gnt ent will be accomp l i shed by Mr.
Bussey and ,the other pr inci pails of the fi r m -( i .e. Mr'. Bryant, Mr. Rogers `
and Mr. DeDios) , in addit"fo'n 'to experienced members of 'the Consultant' s
professional staff as appropriate.
Mr. William M. Bryant, President sh6l`1 be available to ,directly participate
in 'a'ny oral `public presentations required in con;jLLunction with or pertinent'
to the work program assignment . Principals, inclusive of Mr. Jerry A. Rogers
-and"Mr. Manuel l.. DeDfos, will also provide experienced input in the plan
. evaluation and implementation planning work tasks.
The . Consulta'nt' s planned work flow schedule is outlined as follows:
1 . Hrst 'Week ( 1-7 Days)
(a) Meeting with City staff to review available data, present data needs
List, assign data collection tasks, receive and discuss plan alter-
nates.
(b) Initiate analysis and synthesis of data.
. 2. Second Week (7-14 Days)
(a) Conference with City staff to review results of City staff data c;ul-
le'ction efforts , discuss plan alternates .
'(b) Initiate plan evaluation and market analyses.
-3. Third" Week (14-21 Days)
(a) Discussion with City staff to review updated data and forecasts, com-
pletion of data review and assessment.
' (b) Prepare Task I work paper.
4. Fourth Week (21-28 Days)
(a) Work session with. City staff to review results of plan evaluation and
market analyses.. Conclude as to best plan scheme.
(b) Initiate -formulation of implementation strategy.
(c) Prepare Task 2 work paper.
5. Fifth Week (28-35 Days)
(a) Meeting with City staff to review Task 2 work paper, discuss implemen-
tation "plan.
(b) Prepare Task 3 work paper.
6. Sixth Week (35-42 Days)
(a) Presentation . to City staff of work program results.
(b) Prepare for Oral Public Presentation.
7. Seventh Week (42 Days Plus)
(a) Oral Public Presentations, as required.
(b) Finalization of work task progress reports for final submittal .
• •EXHIBIT B
URBAN PROJECTS, INC. BILLING RATE SCHEDULE
Hourly
'Employee Classification Ra f te
1 . President . $60.'00 '
2. Executive Vice President 60:00
3. Senior Vice President 55.00
4. Senior Associate 35.00
5. Associate'/Senior Analyst 30.00
6. Analyst/Research Assistant 20.00
7. Steno/Secretarial/Typi,t 12.00
8. Graphics 12.50
NOTES:
1 . Rates include salaries, employee benefits, office operating expenses
and fee. `
2. ','Reimbijrsable expenses are in addition to the above time-charges and
include air fares, `hotels and motels, meals, car rentals, taxis, long
distance telephone calls, special delivery charges,' and costs of pro-• p
curing special research materials 0'.e. maps. and outside electronic
data processing) . ,All items listed are reimbursed at cost.
3. When 'regOired, materials such as, photographic supplies, art work,
reproduction expenses and any other sub-contracted services will be
killed at invoice cost.
4. Air travel and auto travel expenses shall be 'reimbursed as follows:
The actual cost of transnortation by common carrier or the sum of
Twenty Cents (20�)' per r►,ile, if the travel is peformed by privately
owned automobile.
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URBAN PROJECTS, INC.
E• i'S (} P. ANF) UM-
DATE: ;�oYt.'i:t;Jel' 5, .ig75 RECEIVED
TU: Ed ,S:.1 ich Litt' of..1-bhtingtun :Beach
1'1 G.1: Doug S;obzrg, 11rhan Projects, 'Inc..
St.JI?.1: G'!': I"i.ancin N-Ilefiz of Disposition of C:*vir Cel;tcr Situ
IPtrndL)ct 10 r,
his cl.is:.'ll:sscd in Bob 1 ali:er' s mtomorand.,-v- to ycu di.`ted Oct6ber 6, 1976, UP1
1'rlc}1C'•Li to i)E' a111e: to ClL1.].V:'2' 1t5 111:11 r+-i:':CrandLn Report (i`.n. 6) 1til1ich 1:r)::id
disecl_,s .thc :inr lcial i7e:ie:.'its of di:::;:)sitir)n of t},e uld ccnter. site,
t;lX incroments fivii out!}'i;la plaIrlee1�COi1:iol:liniu,T. project.,,. mid project '.'Q`yt
r�}t,'iTact eri rti.cs of the .at:t�ntrJiril i-et:l.il. center. UPI has ilv� ;'CT ]'(,C�.lvh,� the
cult in;ore.•:tion for they doumt:omn project -in,.,, thus, has not been abic to
finzl:i.:c: the thir6i taS?:. !'�o ever, in OUT last tel:�phoi::: c.-Mversat:i.on ;rou
rlentioi,c-] the desirability of receiving the infon:!ation or, curie cent:er
by t.}iC first t)a:•t of Nave;'.1ber ;Ind :•o we al•c tran5lnitti;;� 4tiU�c• �].:ld]113 s :.lt
this tir-0.
11 inp t}1C' 2f2::1?C_ry.l ��n)io.l.�:; to the cit;}' Cif
t t7 ,. , h • .� wt �� ' • •i t to c• i c. t v r ♦ r.t..
cc rite . _ i.... , we n..��e' ;:5 ,:l;i .c; Lrs•- tI1 d, Sired xti.i:,.. •>;��!1id i:c 1:J. ,:
ly-ut.x.od residential deve'ior,:r.,-nt , and tl;at the prL:iar}• ubjec►ivex v,-G l 1 lie
to cre'avi - initial funds :.Ur the City RcdevolopMent ikile1•cy to .eatable it to
U11r1:':'; l:e I1Ca:-".::7111 activities 1'E:lv.ed to the dQi,'nt:,.%m area. T}1LIS, i., un-
(lt'I'L.lkiNt, our an:i.11'sis wo have identified only t}•:c f.11lil; dal henef:its -c,
he ��b:.�itl:,d tllrcxl h sale-. of the site and frc-m f.:l;ld� to •be c;en�hl-:ltc:cl fr�,r1
t 1 c ::Ile of tax allot itions bonds L'I• 11r�t i Ir,a:le pot- iible thro.wh L1'an!VCl:r Gr
thc sit:;' to private 0mlcrshii) and dcv:Rn;-.,ent thereoi,. Uth,.�r les-:
!ilic }.1on% .f.i is will also acc1-uc- to the Ci::l' i TOill tilt lest.:c?<��:'t; Z1GiTi.i.l;it?.t:11 cl�Ui
resulting sa1.s tax revenues , St•=t c •':�venti on I)• � r ~�• � tc• ' � t
. ,i:t •i •ii• Ili l illlt .hL>e
SM. of icsser significance ani have noll beer, analyzed.
C,i i i; :1ren U hsstnnet l I ens i ty
iiz.sed on c.m* calc.:Intions, there i , a tct.al of 15;:6 -1CIO sci1.15re fete ::it.i:M
tho, site: -. !►,' Sth , 5th ant? ►•}:yin Streets, repre."Cllt-ii:h :lP1)roxD _. -L0ly
.. ,_;• s _ and ii po it n of
Rt71.os of v C � i.�z' :1)'C:3. This :. :.L c1C)Sil:'C= �' � n
a• • e y'in, to City Pl'3'1,lling s iafx th.Cr. a ' :: 'rl". -
1�t:C. ,l ��t,llli , x(ld :1CCVI .: S t '}' , c 1'r• n0 11dE . ,
illg utilities or othel• .):o'al::�s w.lich would�prLc.lt1':.10 this.
i1�;ili.Iltit C►;11' er.r3ier discussions iritJl you. vm have :sSm:-.ed a low-rise i1i;Oh
resideAnt sal &-vo ZC)all.-at cc..-Ilprised of cither :!i)i:1'L7 ent!: at the .,.peter '
po:s.iblr. 1;1111it of 35 u::its per gro•r Acre, or condc,.itni,s: knits at ap})rex--
immit'e.'iy 1•; ,units p r acl e:.. Those densities tr-1,i:ito iilto 1.S .apartvment.
units or .50 C;011d0.".!i.Tl]iLil 121irs Cll ':}1e site. We 10*1:e':: -it., I.)rov1 O: t?;C'S al.-
r, .,..� it �s in oruC. 1:., e... e.r'i;i.t, t. ,. te, +�:e. in ic'il
TABLE•.�i
CIVIC CL,`Nn- SITE ,PROJECT XAWATION:
• :ALTERNATIVE DEVELOFTIFa\IT ASSLEMPTIOyS
Alternative A - Apa.rtment''Deyelopmeht
'Scheduled .Gross Income 12`5 units @ $285 average
mon`tfily rental . . . . : . . . . . . . . : . . . . : . . . . . . . . . . . . . . . . . . . . . . . . $ 427,500
Less Vacancy Allowance @ 5% .4 . . . 0 0 0 - 0 . . . 0 0 10 0 0 . 0 0 0 0 21 ,400
Adjusted Gross Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 406,100
Less Operating Expe.ises @ 45% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,700
Annual Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 223,400
Capitalized Value @ 100 . . . . . $2,234,000
Indicated Assessed Value @ 25%, . . . . ... . . . . . . . . . . . . . . . . . . . . . . $ 5582500.
Say . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 560,000
Alternative B - Condominium Development
50 Units at $45,000 sales price/unit ... . . . . . . . . . . . . . . . . . . . $2, 250; f100
.Less 5% t1nappraised financing costs* . . . . . . . . . . . . . . . . . . . . .... 113,000
Adjusted cash market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,137,000
'Assessed Value @ 25% — e s . — O . . . 0 0 — 0 0 0 . . . . . . . . . . . . . . . . . . $ 5349250
Say . . . . . . . . . . . . . . . . . . . . . 00 . . . . . . . . 0 . . . . . . 0 . . . . . . . . . . . 0 $ 535,000
ATJustment currently made by Assessor' s office to reflect financing costs
associated with non-cash sales of new units.
(2)
MWORANDUM
Novemb6r `5, 3975
-Page,Two
and corresponding potential assessed value increment.
Project Valuation
The project valuation under eitherdevelopment assumption can be approxi-
Mated, realizing that a more accurate projection can be made when and if '
specific projects are proposed for 'th"e site. . Ae total project valuation,
assuming development of an apartrent project 'on: the site, has been esti-
mated based on the probable capitalized,,net ,income likely to result from
such 'a development. This is.,the.approach typically used by the Orange
County Assessor's office for `resid'entlal income.projects after: their first
few years 'of operation. As shown under Alternative A in Table 1 shown
facing, the assessed value generated -by an apartment project at the site
Would 'be approximately $560,000. This value has been derived against an
average rental "of. $28S per unit which,; based oil conversations with local
sources, is considered representative 'of the local market though perhaps
slightly conservative.
The project valuation assuming condominium development on the site is
shown under Alternative B and agsinst this. assunption, we have arrived at
a total assessed value increase of $535,000. This estimate assumes an
average sales price per unit of $45,000, which is lower than we discussed
in our earlier conversations. 'Generally, achievable sales price per unit
declines'with increasing density, particularly for those projects ;not pos-
sessing direct hater views or other very strcing natural site amenities.
The assumed density ,of 14 uni.ts 'per gross acre is near the top end of den-
sities among condominium projects in Orange County to date, and existing
competitive projects in ffuntington Beach 'general ly offer densities of 10
units or less. For example, the La Cuesta Racquet Club project is cur-
.rently marketing units between $49,990 to $54,000 at a density of 10 units
per gross acre. The Beachialk development offers units at a lower density
of 6. 8 units in its current phase which range from $,52,000 to $70,000, with
an average price ' in theneighborhood of $61,000. Though project design and
other factors also play a significant role, lower density permits greater
open space and other salable an, which are. reflected in the achiev-
able sales price.
The estimated price of $45,000 per unit at a density of 14 units per gross
acre is believed to represent generally the upper limit on total project
value for a condominium development at the civic center site. An obvious
alternative would be to lower the density to say 10 units per. acre so as
to achieve a higher unit price, but total project valuation (and resulting
tax increment) will not change significantly, even assuming a high average
sales price of $60,000 per unit at this loi..er density.
Isroj ect Costs
Costs directly associated with disposition of the site by the City/Agency
will take the fonrj of possible relocation, demolition, site preparation,
and incidental e,:penses such as legal and appraisal costs. It is our-under-
T&LE 2
f ESTI1�IATED DDYJL•MUN COSTS: -:CIVIC CENTER SITE
Ulsting. Construction .
Use Type Area Unit Cost Total.
Ft.
Library ReYnforc�d Concrete 99344 $1:30 $12,200
Jaycee Bldg. steel. Fabricated 13200 0:60 700
h . � Reinforced Concrete 6 168 1:U0 6 200
Plannang I3ept. , ,
Administration Wood Frame 51728 .0:60 3,400
Detective's Bldg. {good Frame 3,582 0.60 21-100
Comicil' Chamber Concrete 121'560 1000 129600
Totai 38,632 $37,200
SAY . . . . . . . . . . . :. . . . . . . . . . . . : . . . . . . . . . . $403000
(3)
November 5, 1975
Page Three '
standing that existing- tenants . at the :,ite, with .the exception of the li-
bra7 occupy space with the understanding that the arrangement is only
temporary and subject to "other City. use. .. Thus, we have assumed that the
only relocation cost would be for. the library itself. Relocation of the
library will incur both direct moving expenses and possible capital costs
associated with provision of a new library facility. An allowance of
$10,000 has, been made for moving and related expenses, but costs of pre-
paring .or ,construct ing a new library facility at another site have not
been " included.
Demolition costs have been estimated based upon data on 'existing building
area and ,type of construction supplied by Planning staff and are. summur-
ized . in the facing table. As can be noted, these costs total approxi-
mately . $40;n000. Due to "che fact that the site is already served by exist-
ing city utilities and that there are no other known physical site probl-
lems, any site preparation costs' prior 'to disposition should be negligible.
A potential major project cost 'may result if another park site is to be
acquired to replace the old civic center site. Disposition of the site
will reduce the amount: of open space potential available to residents of
the area, and it may be necessary to program for the acquisition of a
similarly-sized parcel for this use. This can potentially- be a large
cost to the project if the City/Agency desires to fund it from project
land sale and/or tax increment proceeds.
In accordance with your suggestion, ive have estimated the above possible
cost assuming that acquisition of additional. 'railroad-o►med land along
Lake Street between Atlanta and Gross Avenue can be made to provide for
a new.pnrk site. Except for,.existing unused railroad trackage along the
Lake Street frontage, this land is currently vacant and contains 144,000
square feet, or 3.31 acres , which is nearly as large as the present civic
center site. Based on assessed values currently assigned to 'other vacant
parcels along Lake Street, plus an adjustment for underassessment , we .esti-
mate the current market value of this parcel at between $210,000 to $260,000
assuming it were ready for development. Costs to remove the existing track-
age can be deducted to arrive at the parcel's actual open market value and,
further, since the parcel is not hevng used by Southern Pacific, it may be
possible to negotiate a lower price. For purposes of this analysis, an
acquisition cost of approximately $225,000 has been assumed.*
Additional -incidental project costs will also be incurred which will be re-
lated to necessaiy legal and appraisal costs, etc. Doe to the fact that
only one public tenant trust be relocated mid that the site is already tinder
City oumership, acbninistrative time (and costs) should be limited and ven-
likely able to be provided by existing City staff. ':UZ allowance of $15,000
Park and recreation fees generated by new residential development at the
civic c.cnter site, .which would tanount to between $25,000 to $60,000, can
assist in meeting this cost.
i
TABLE 3
PROJECT REVENUES A. D COSTS: CIVIC CMER SITE DISPOSITIay
4
=I. PROJECT;REVEINUES
A. Laiici Disposition Proceeds (1) $321,000
B. Tax Allocation Note Proceeds
Assessed ,Value After Development $560,o00
Current Assessed.Value (2) 70-
Assessed` Value I"ncrease 5 00
Annual .Tax Increment- Revenue @" $10. 60/100 A.V. 59,360
Estimated 'Total Bonding Capacity ' (3) 594,000
Estimated Supportable Short-term Tax Allocation Notes 460,000
Less "Discount,4 Un-denariting & Issuance Costs @ 7 0 . 32,000
.Less Three Years. Funded Interest @ 8%/Year " " 110,000
Net Tax Allocation Note Proceeds $318,000
TOTAL PROJECT REVE,UES $639,000
I I. PROJ EU COSTS
A. land Acquisition (4) $ -0-
B• Relocation Costs
1. Library Moving Expenses (allow) 10,000
2. New Library Facility Costs : (5)C. Demolition .Costs, 40,000
D. Site Preparation Costs -0-
E. Miscellaneous, legal, appraisal. & administrative
costs (allow) 15,000
Subtotal' Project Costs $ 659000
PARK SITE ACQUISITION COSI'S $574,000
F. Replacement Park Site Costs 225,000
Nur PRWEC1' R1lT--\UE kFITR M-PLAC ENT
PARK SITE ACQUISITION OOSTS $349: 000
.(15, 3. 7 acres 0 $90,000 per acre.
(2) Currently tax-exempt property.
(3) Assumes 840 bonds with 1.25 coverage ratio.
(4) City assumed to donate site to Agency.
(5) Not estimated.
(4)
it.
`November 5, 1975
Page Four
has therefore, been made for these incidental or miscellaneous project costs.
Net Project Revenues
Estimated project revenues .and costs are shown in ,the table facing. Proceeds
from sale. of the site to a residential developer are estimated at 5321 ,000 or
$90,OOO, ,per gross site acre. This `sale prase is believed supportable in the
.local market for the type of development proposed. 'Total annual tax incre-
ment revenues are estimated 'at $59,360 'per year, . based upon the current year
tax rate aind assessed value increase discussed earlier, The timing; of the
receipt of these. funds will be controlled by the. adop t:ion date of the down-
town redevelopment plan, reperting deadlines imposed by law, and development
timetable and, thus, several assumptions have been necessary.*
It has been assumed that the redevelopment plan will be adopted . by late suin-
mer of 1976, at the earliest, and the legal reporting requirement will be
completed prior to January 1, 1977. It has been assumed further that the
City/Agency, if it elects to dispose of the civic center site, will coUTlete
the disposition of the site by ,the fall of. 1976; due to normal. construction
time, if. 'is unlikely that the total value of the civic center project would
appear on the assessment roll until March 1, 1978. As a result, Agency tax
increment revenues flowing as a result of the project would first be re-
ceived in late fall of the 1978- 79 fiscal year. **
Given the current municipal bond market picture, it is likely, that the Agency
would elect to sell short-teen tax allocation notes to be refunded later by
long-tenii bonds. After allowance for normal discount and other issuance
costs, plus provision for funded interest reserves to cover interest payments
during the period until project tax increment revenues .begin to flow regular-
ly, it is estimated that net proceeds from the sale of notes will equal ap-
proximately $318,000. This is a conservative estimate wHch assumes maxi-
mum legal discount and interest rate on Ithe notes. It shotild also be noted
that the above proceeds reflect the 'incremental effect of the civic center
project alone, and that in actuality a larger note issue reflecting combined
increments from other redevelopment projects would need to be structured for
reasons of marketability.
Total project revenues resulting from land sale and tat allocation notes
will, as shokii in the table, equal approximately $639,000. Direct project
costs are estimated �t only $65,000, which results in a net project surplus
of $574,000. If the Cite/Agency requires that a portion of these finch; be
set aside to acquire another park site, then net project revenues will be
decreased to approximately $350,000.
t should a noted that the above asstnnes that the estimated civic center
site assessed Value increase will not be negated by r-;Qnulative decreases
(if any) elsewhere in the prcj cct area.
** The Agency woul.4 be eligible to receive revenues from other possible as-
sessed value increases in the project area by as early as late 1977.
MFhiORAMM
h'ovemb5ar, 510 1075
ge Pa -Five
bisposition �of the.'Ad civio c,:ent6r site for; residential use, can be utilized
by the City/Agency to create su:plus,•funds to' finance near;-term redevelop-
ment activities: Transfer. of ,the ,site �to..private ownership and ;its subse-
quent developmdnt by a privatP,'developer ;for .either
,hi gh-density . apartment
or 'condo�nini um residential :units wi11 ,result, in net .surplus .funds :of at
least $574;000, which,,would -be available at i,the :outset. of the downtown
redcvelopment� program., These proceeds will be reduced substantially to
approximately $3509
000, however, if the City/Agency requires that an equiv-
alent amp ht�;of Ufid'te_acquiredi elseis•here to provide for .the open space.,
which would otherwise ,be lost.' Further,:'depending upon .City; needs and
budgetary requirements Vis-a-vis, library facilities serving the,do%%Mtown
area, the above pr'ocee'ds ,may .need torbe -considered in light of the possi-
ble 'costs of providing fori a 'new•library' in the 'area. ;
IJouQ j oberg
DS:mis :
cc: Monica Florian.•�
Ron Bussey
Jerry ;Rogers . ,
Bob 'Walker:
.r4
6
i
3,
t
RESOLUTION NO. ' 4iO3
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH AUTHORIZING THE EXECUTION OF A
CONTRACT WITH URBAN PROJECTS, INC .
WHEREAS , the city desires to develop a comprehensive and
realistic plan for revitalization and redevelopment of the
Downtown area; and
Special professional economic consulting services are re-
quired to formulate the plan; and
Urban Projects, Inc . has submitted a contract to provide
such services at a total cost of Ten Thousand and no/100ths
Dollars ( $10 , 000 . 00 ) , a copy of such contract is attached hereto
and by reference made a part hereof; and
On June 9, 1975 the City Council authorized funding for
such services ,
NOW, THEREFORE , BE IT RESOLVED by the City Council of the
City of Huntington Beach that it does authorize the execution
of the contract by the Mayor and City Cleric with Urban Projects ,
Inc . for economic consulting services for the Downtown area in
the total sum of Ten Thousand and no/100ths Dollars ( $10,000 . 00 ) .
PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on the 7th
day of July , 1975 •
Mayor
ATTES APPROVED AS TO FORM
t City Clerk City Attorney
APPROVED AS TO CONTENT :
City Administrator
JOC: ahh
,. Ro. Na. 4103
STATE OF CALIFORNIA )
I COUNTY OF.`oRANGE,,
f CITY OF HUNTINGTON BEACH )
I, 'ALICIA M. WENTk1ORTH, the' duly elected, qualified City
Clerk of' the City of Huntington Heach, ' and ex-officio Clerk of the
City Council. of said City, do hereby certify that the whole number of
members of the city Council of the .Ci.ty of Huntington Beach is seven=
that the foregoing resolution was passed and adopted by the affirmative
vote of more than a majority of all the -members of said City Council
at a regular meeting thereof held on the 7th day
of July y 19 75 , by the following vote:
AYES: Councilmen:
p
AgrtJett, Wieder, Ma�neti►, Duhe,_ Gib s
NOES: Councilmen:
None .
ABSENT: Councilmen:
QQAD.,_bipley
City Clerk and 'ex-of£icio Clerk
of the City Council of the City
of Huntington Beach, California
The foregoing instrument is a correct copy
of the original on file in this office.
(TICIA M. ti4ENTWORTH .
w... .........................................
-- . ...._.....
City Clerk and Ex-officio Clerk of the Cite
Co - it of the City of JjOtirgton Beach,Cal.
iJ _
"Cit' '! .Y f
- Huntingt %ach
0 -on . Be
CALIFORNIA MW
IDOX too
�•�� Poo. �•
��:: :;, , ;�•.: OFFICE OF THE CITY CLERK
W
1 � y�
July 81 1975
Urban Projects, Inc.
10850 Wilshire Boulevard
Loa Angeles, California 90024
Attention: Ronald J. BuPsey
Senior Vice President
Gentlemen:
The City. Council of the City of Huntington Beach at its regular
meeting held :Monday, July 7, 1975 adopted Resolution No. 4103 au-
thorizing the execution of an agreement between the City and your
firm for economic consulting services for the Downtown area.
lie are enclosing a duly executed copy of said agreement together
with a certified copy of Resolution No. 4103 for your records.
Sincerely yours,
Alicia M. Wentworth
City Clerk
AMW:t to
Encl.
r
a• _