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Successor Agency - 2014-06
Successor Agency RESOLUTION NO. 2014-06 A RESOLUTION OF THE SUCCESSOR AGENCY TO THE HUNTINGTON BEACH REDEVELOPMENT AGENCY APPROVING THE LONG RANGE PROPERTY MANAGEMENT PLAN PREPARED PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34191.5 WHEREAS, the Redevelopment Agency of the City of Huntington Beach ("Redevelopment Agency") was a redevelopment agency in the City of Huntington Beach ("City"), duly created pursuant to the California Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code) ("Redevelopment Law"); and Assembly Bill No. X1 26 (2011-2012 1" Ex. Sess.) ("AB 26") was signed by the Governor of California on June 28, 2011,making certain changes to the Redevelopment Law and to the California Health and Safety Code ("H&S Code"), including adding Part 1.8 (commencing with Section 34161) ("Part 1.8") and Part 1.85 (commencing with Section 34170) ("Part 1.85") to Division 24 of the H&S Code; and Pursuant to AB 26, as modified by the California Supreme Court on December 29, 2011 by its decision in California Redevelopment Association v. Matosantos, all California redevelopment agencies, including the Redevelopment Agency, were dissolved on February 1, 2012, and successor agencies were designated and vested with the responsibility of paying, performing and enforcing the enforceable obligations of the former redevelopment agencies and expeditiously winding down the business and fiscal affairs of the former redevelopment agencies; and The City Council of the City elected for the City to serve as the successor agency to the Redevelopment Agency upon the dissolution of the Redevelopment Agency under AB 26 ("Successor Agency"); and On June 27, 2012, the Legislature passed and the Governor signed Assembly Bill No. 1484 ("AB 1484", Chapter 26, Statutes 2012). AB 1484 imposes additional statutory provisions relating to the activities and obligations of successor agencies and to the wind down process of former redevelopment agencies, including the preparation of a Long Range Property Management Plan ("LRPMP"); and AB 26 and AB 1484, as further amended, are collectively referred to herein as the "Dissolution Act"; and H&S Code Section 34179 of the Dissolution Act establishes a seven (7) member local entity with respect to each successor agency and such entity is titled the "oversight board." The oversight board has been established for the Successor Agency (hereinafter referred to as the "Oversight Board"); and Pursuant to H&S Code Section 34191.5(a) of the Dissolution Act, upon the issuance of 1 14-4437/113672 Successor Agency Reso. 2014-06 the Finding of Completion to the Successor Agency, a Community Redevelopment Property Trust Fund ("Trust") will be established to serve as the repository of certain real properties of the former Redevelopment Agency that are identified in the Due Diligence Reviews by H&S Code Section 34179.5(c)(5)(C) of the Dissolution Act; and Pursuant to H&S Code Section 34191.5(b) of the Dissolution Act, once the California Department of Finance ("DOF") issues a Finding of Completion to the Successor Agency, the Successor Agency shall prepare a LRPMP that addresses the disposition and use of certain real properties of the former Redevelopment Agency. The LRPMP shall be submitted to the Oversight Board and the DOF for approval no later than 6 months following the issuance of the Finding of Completion to the Successor Agency; and Pursuant to H&S Code Section 34191.4(a) of the Dissolution Act, upon the approval of the LRPMP by the DOF, all real property and interests in real property identified in the DDRs by H&S Code Section 34179.5(c)(5)(C) of the Dissolution Act shall be transferred to the Trust, unless such a property is subject to the requirements of any existing enforceable obligation; and H&S Code Section 34191.5(c) of the Dissolution Act requires that the LRPMP (1) include an inventory of all properties in the Trust, which inventory shall consist of specific information relating to each such property including, without limitation, the date of and purpose for acquisition, value of property, applicable zoning, any property revenues and contractual requirements for disposition of same, history of environmental issues and any related studies and remediation efforts, potential for transit-oriented development and advancement of planning objectives of the Successor Agency, and history of previous development proposals and activity; and (2) address the use or disposition of all properties in the Trust, including (i) the retention of such property for governmental use pursuant to H&S Code Section 34181(a) of the Dissolution Act, (ii) the retention of such property for future development, (iii) the sale of such property, or (iv) the use of such property to fulfill an enforceable obligation; and On May 13, 2014, the Successor Agency received its Finding of Completion; and The Successor Agency has prepared a proposed LRPMP ("LRPMP") for consideration by the Successor Agency and then for consideration by the Oversight Board and the DOF. The LRPMP includes 13 parcels comprising seven properties, namely: Property Name Parcel Number on Inventory Surf Museum 1 Downtown Alley 2 Skate Park 3 Westminster Parcel 4 Waterfront Hyatt Regency Hotel 5 Waterfront Hilton Hotel/Parcel C 6,7 Edinger Hotel 8, 9, 10, 11, 12, 13; and The proposed LRPMP is attached to the Staff Report prepared for this Agenda Item, and is presented to the Successor Agency for review and approval; and 2 1 4-443 7/113 672 Successor Agency Reso. 2014-06 For each of the properties, the LRPMP includes all of the information required by H&S Code Section 34191.5(c) of the Dissolution Act and their respective use and disposition are in accordance with the Dissolution Act; and The Edinger Hotel property is proposed to be sold to Miramar GP, LP, a California limited partnership ("Miramar"), a private third party developer, pursuant to a proposed Purchase and Sale Agreement and Joint Escrow Instructions dated January 27, 2012, as further amended by an Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated January 31, 2012, and further amended by that Escrow Amendment/Supplement dated April 25, 2012, and further amended by that Second Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated June 25, 2012, and further amended by that Third Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 25, 2013, and further amended by that Fourth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 21, 2014 (collectively, the "Agreement"). The Agreement was previously considered by the Oversight Board and approved on January 8, 2013 by Resolution NO. 2013-04 and will be re-considered for approval by the Oversight Board and submitted to the DOF for review concurrently with the LRPMP; and In accordance with the appraised value of the Edinger Hotel property, as supported by an appraisal dated January 9, 2012, attached to the LRPMP, the "Purchase Price" for the Edinger Hotel property is $3,100,000; and The anticipated sale proceeds from the sale of the Edinger Hotel property to Miramar pursuant to the proposed Agreement in the amount of$3,100,000 will be remitted after the close of escrow to the Orange County Auditor-Controller's Office for distribution to the taxing entities in accordance with H&S Code Section 34191.5(c)(2)(B) of the Dissolution Act; and If the LRPMP is approved by the Successor Agency, the LRPMP shall thereafter be submitted to the Oversight Board for review and approval, pursuant to H&S Code Section 34191.5(b); and Pursuant to H&S Code Section 34191.3 of the Dissolution Act, once the LRPMP is approved by the DOF, the LRPMP shall govern, and supersede all other provisions of the Dissolution Act relating to, the disposition and use of the properties; and The activity proposed for approval by this Resolution has been reviewed with respect to applicability of the California Environmental Quality Act ("CEQA"), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the "Guidelines"), and the City's environmental guidelines; and The activity proposed for approval by this Resolution is not a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378, because this Resolution is an organizational or administrative activity that will not result in a direct or indirect physical change in the environment, per Section 15378(b)(5) of the Guidelines. In this regard, the projects associated with the properties identified in the LRPMP, along with their respective contractual agreements, have been reviewed and analyzed pursuant to CEQA and their required 3 14-4437/113672 Successor Agency Reso. 2014-06 environmental documents have been prepared, circulated and approved/certified by the appropriate lead agency; and All of the prerequisites with respect to the approval of this Resolution have been met. NOW, THEREFORE, the Successor Agency to the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Successor Agency hereby finds and determines that the foregoing recitals are true and correct. 2. The Successor Agency hereby approves the Long Range Property Management Plan ("LRPMP"), substantially in the form attached to the Staff Report prepared for this Agenda Item. 3. The Executive Director, or designee, of the Successor Agency is hereby authorized and directed to remit to the Orange County Auditor-Controller's Office for distribution to the taxing entities in accordance with H&S Code Section 34191.5(c)(2)(B) of the Dissolution Act the proceeds of the Purchase Price that are received from the sale of the Edinger Hotel property to Miramar pursuant to the proposed Agreement. 4. The Executive Director, or designee, of the Successor Agency is hereby authorized and directed to: (i) provide the LRPMP to the Oversight Board for review and approval and concurrently submit a copy of the LRPMP to the Orange County Administrative Officer, the Orange County Auditor-Controller ("County Auditor-Controller"), and the California Department of Finance ("DOF"); (ii) submit the LRPMP, as approved by the Oversight Board, to the DOF (electronically in PDF format) and the County Auditor-Controller; (iii) post a copy of the LRPMP, as approved by the Oversight Board, on the Successor Agency's internet website; (iv) revise the LRPMP and make such changes and amendments as necessary, before official submittal of the LRPMP to the DOF, in order to complete the LRPMP in the manner provided by the DOF and to conform the LRPMP to the form or format as prescribed by the DOF; (v) make non-substantive changes and amendments to the LRPMP deemed necessary and as approved by the Executive Director of the Successor Agency and its legal counsel; and (vi) take such other actions and execute such other documents as are necessary to effectuate the intent of this Resolution on behalf of the Successor Agency. 5. The Successor Agency determines that the activity approved by this Resolution is not a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378, because this Resolution is an organizational or administrative activity that will not result in a direct or indirect physical change in the environment, per Section 15378(b)(5) of the Guidelines. 6. The staff of the Successor Agency is hereby authorized to execute and record such documents and instruments and to do any and all other things which they may deem necessary or advisable to effectuate the intent of this Resolution and any such actions previously taken are hereby ratified, including, without limitation, execution of any deeds or certificates of acceptance. 4 14-4437/113672 Successor Agency Reso. 2014-06 7. The adoption of this Resolution is not intended to and shall not constitute a waiver by the Successor Agency of any constitutional, legal or equitable rights that the Successor Agency may have to challenge, through any administrative or judicial proceedings, the effectiveness and/or legality of all or any portion of the Dissolution Act, any determinations rendered or actions or omissions to act by any public agency or government entity or division in the implementation of the Dissolution Act, and any and all related legal and factual issue, and the Successor Agency expressly reserves any and all rights, privileges, and defenses available under law and equity. 8. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The Successor Agency declares that its Board would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution. 9. This Resolution shall take effect upon the date of its adoption. PASSED AND ADOPTED by the Successor Agency to the Redevelopment Agency of the City of Huntington Beach at a meeting thereof held on the 3rd day of November , 2014. 'R> airperson REVIEWEIYAN,p APPROVED: INITIATED A APPROVED: E u e irector Deput ive Director AFIPROVED AS TO FORM: f� Boa d Counsel 5 14-4437/113672 LongRange Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach 2000 Main Street, Huntington Beach, California 92648 Approved by Successor Agency on November 3, 2014 Approved by Oversight Board on November 5, 2014 Approved by Department of Finance on 2014 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Table of Contents Introduction................................................................................................................................ 1 Successor Agency Asset Summary........................................................................................... 1 Property Disposition and Use................................................................................................. 2 Summary of Recommended Property Disposition and Use .................................................... 2 Summary of Plan Category Decision...................................................................................... 3 Summary of Recommended Property Disposition and Use .................................................... 4 Long Range Property Management Plan ................................................................................... 5 International Surfing Museum/Library(Parcel 1)..................................................................... 6 DowntownAlley (Parcel 2)...................................................................................................... 9 Public Skate Park(Parcel 3)..................................................................................................12 Westminster Parcel (Parcel 4)...............................................................................................15 Waterfront Hyatt Regency Hotel (Parcel 5)............................................................................18 Waterfront Hilton Hotel/Parcel C (Parcel 6 and 7)..................................................................22 EdingerHotel (Parcels 8— 13)...............................................................................................27 Appendix A Finding of Completion Letter Appendix B Property Inventory Data Appendix C '' Map of Properties Appendix D Redevelopment Plan Appendix E Redevelopment Implementation Plan Appendix F General Plan Appendix G Downtown Specific Plan (Specific Plan 5) Appendix H Beach and Edinger Specific Plan (Specific Plan 14) Appendix I Local Coastal Plan Appendix J Historic Survey Appendix K CUP#08-005 October 15,2014 Page i Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Appendix L Surf Museum Lease Appendix'M Vans ►eu�Luse ` �' Appendix N Hyatt Regency (Parcel 5) Ground Lease p p g its Appenndix Q, Waterfront Dis ositror�4� Develo rnent A teem ` Appendix P Parcel 5 Section 108 Loan appendix( ,; Parcel 5 Promissory Note . i Appendix R Waterfront Hilton (Parcel 6) Ground Lease Appendix S Implementation Agreement No. 5 Appendix T Parcel C (Parcel 7) Fire and Parking Easements y Appendix U Edinger i ietef Ptt€o�ta Arid �e�4reeri Appendix V Appraisal/ Reuse Analysis/33433 Report Appendix W` Long flange Property,Management Plan Checklist October 15,2014 Page ii Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach INTRODUCTION As required by Health & Safety Code Section 34191.5, this document is the Long-Range Property Management Plan (LRPMP) of the Successor Agency of the former Redevelopment Agency of the City of Huntington Beach (Former Agency). The Successor Agency received a Finding of Completion from the Department of Finance (DOF) on May 13, 2014 (Appendix A). In accordance with Health & Safety Code Section 34191.5(c), the LRPMP includes an inventory of properties included in the Community Redevelopment Property Trust Fund and provides the proposed plan for disposition and uses of each of the properties. SUCCESSOR AGENCY ASSET SUMMARY Section 34191.5(c)(1) of the Health and Safety Code, which was added as part of Assembly Bill 1484 (AB 1484), requires that the LRPMP include an inventory of all properties held in the Community Redevelopment Property Trust Fund. For the Successor Agency, this inventory identifies 13 parcels comprising seven properties. In accordance with statutory requirements each of these 13 legal parcels are described in Appendix B and a map showing the location of the seven properties is presented in Appendix C. The following pages describe each of the following properties, and the applicable legal parcel or parcels comprising each: Parcel Number on Property Name Inventory Surf ltAuseum `' 1...: Downtown Alley 2 Skate Park 3 Westminster Parcel 4 Waterfront Hyatt.Rege�y°Hat Waterfront Hilton Hotel/Parcel C 6,7 Edinger Hotel 8, 9x_10, 11, 12, 13 October 15,2014 a e 1 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Property Disposition and Use LRPMP also provides the planned use or disposition of each of the 13 parcels in the manner described in Health & Safety Code Section 34191.5(c)(2). The following summarizes the four types of permitted disposition/use: Plan Category Use/Disposition Purpose of Property Property Transferee Enforceable ` Use Consistent with Enforceable©bhgatron meted Enfre Obligation Terms Qb rgat[on,Reapeft, e { Governmental Governmental Use in Accordance with Appropriate Public Section 34181 a Jurisdiction Future Tr4nsfef to City,for use 6 a project City Development identif in the Approved Redevelopment Plan. To the extent required bylaw, disposti�ort proceeds to be distributed among Ta' NW-Entities in accordance,with a Cornpensatorr Agreement. Other Liquidation Sale by Successor Agency to private buyer Designated Buyer with proceeds distributed to Taxing Entities Summary of Recommended Property Disposition and Use As required by Health & Safety Code Section 34191.5(c)(2), the LRPMP identifies that: ❖ Two (2) of the properties (3 legal parcels) are to be liquidated or, in the alternative, retained for purposes of fulfilling an enforceable obligation; ❖ Two (2) of the properties (2 legal parcels) are to be dedicated for governmental use purposes; ❖ One (1) of the properties (6 legal parcels) is to be liquidated; and ❖ Two (2) of the properties (2 legal parcels) are to be held for future development. October 15,2014 Page 2 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Summary of Plan Category Decision The relevant "approved redevelopment plan"that identifies the projects for which the properties will be disposed and used consists of: ❖ The Huntington Beach Merged Redevelopment Plan, which was adopted by Ordinance No. 3343 on December 16, 1996, as amended on July 15, 2002 (Appendix D); ❖ The accompanying Implementation Plan for the Huntington Beach Merged Project Area (HB Implementation Plan) adopted by the Former RDA on December 21, 2009 in accordance with the requirements of Health & Safety Code Section 33490 (Appendix E); ❖ General Plan (Appendix F); ❖ Downtown Specific Plan / Specific Plan 5 (Appendix G); ❖ Beach and Edinger Specific Plan /Specific Plan 14 (Appendix H); and ❖ Local Coastal Plan (Appendix 1). Redevelopment Plan (Appendix D) The objectives and goals of the Redevelopment Plan are provided below: Huntington Beach Merged Project Area Redevelopment Plan Goals: 1. Eliminate and prevent the spread of conditions of blight including: underutilized properties and deteriorating buildings, incompatible and uneconomic land uses, deficient infrastructure and facilities, obsolete structure, and other economic deficiencies in order to create a more favorable environment for commercial, office, industrial, residential and recreational development. 2. Expand the commercial base of the Project Area. 3. Improve public facilities and public infrastructure. 4. Improve inadequate drainage infrastructure. 5. Improve and/or provide electric, gas, telephone, and wastewater infrastructure to both developed and undeveloped properties within the Project Area. 6. Promote local job opportunities. 7. Encourage the cooperation and participation of residents, businesses, business persons, public agencies and community organizations in the redevelopment/revitalization of the Project Area. 8. Implement design and use standards to assure high aesthetic and environmental quality, and provide unity and integrity to developments within the Project Area. 9. Address parcels of property that are: of irregular form and shape, are inadequately sized for proper usefulness and development, and/or are held in multiple ownership. 10. Remove impediments to land disposition and development through the assembly of property into reasonably sized and shaped parcels served by improved infrastructure and public facilities. October 15,2014 Page 3 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach 11. Recycle and/or develop underutilized parcels to accommodate higher and better economic uses while enhancing the City's financial resources. 12. Promote the rehabilitation of existing housing stock. 13. Increase, improve, and preserve the community's supply of housing affordable to very- low, low and moderate income households. Huntington Beach Merged Project Area Implementation Plan (Appendix E) The goals and objectives of the Implementation Plan match those of the Redevelopment Plan. However, the following property-specific programs mentioned in the Implementation Plan are as follows: Hotel Parcel Wate H� _� (Parcels 6,7) Local Coastal Program (Appendix 1) The purpose of the Coastal Development Permit (CDP) is to implement the California Coastal Act of 1976 (Division 20 of the Public Resources Code) as amended, in accordance with the City's Local Coastal Program (LCP). The Local Coast Program includes the City's land-use plans, zoning ordinance, zoning map, and implementing actions certified by the Coastal Commission pursuant to the Coastal Act and adopted by the City Council for the purpose of carrying out the provisions of the Coastal Act within the coastal zone. Any person, partnership, or corporation, or state or local government agency wishing to undertake development in the coastal zone shall obtain a Coastal Development Permit in accord with the provisions of this chapter, unless exempt or categorically excluded. Such permit must be issued prior to the start of development and shall be required in addition to any other permits or approvals required by the City. All development within the coastal zone requires a coastal development permit unless specifically exempted or excluded. A public hearing shall be required prior to any action on a Coastal Development Permit. Any person may submit written comment to the Director on an application for a Coastal Development Permit, or on a Coastal Development Permit appeal, at any time prior to the close of the public hearing. Summary of Recommended Property Disposition and Use As required by Health & Safety Code Section 34191.5(c)(2), the LRPMP identifies that: ❖ Two (2) of the properties (3 legal parcels) are needed to be retained for purposes of fulfilling an enforceable obligation; Two (2) of the properties (2 legal parcels) are dedicated for governmental use purposes; ❖ One (1) of the properties (6 legal parcels) is to be liquidated; and ❖ Two (2) of the properties (2 legal parcels) is to be held for approved redevelopment plan projects. October 15,2014 Page 4 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Estimated Sales Price from Timing Property Disposition Type Recipient Recipient of Sale International Surf Museum Future Development - City $0 77 Downtown Alley Government Use City $0 ASAP Public Skate'Park Government Use City $0 SAP Westminster Parcel Future Development City of $0 ASAP Huntington Beach/City of Westminster Wate roir t Hyatt Regency Other Liquidation or, Designated $7,900,000� in the alternative, Buyer less repaint Enforceable of the two Obligation enforceattle.' obligations 5 .: Waterfront Hilton/Parcel C Other Liquidation or, Designated FMV of the 4th in the alternative, Buyer Leased Fee Quarter Enforceable Interest 2015-1st Obligation Quarter 2016 Edinger Hotel Other Liquidation Designated $3,100,000 . ASAP LONG RANGE PROPERTY MANAGEMENT PLAN The following provides the details for each parcel to be disposed by the Successor Agency. October 15,2014 Page 5 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach International Surfing Museum/Library (Parcel 1) The property, consisting of one parcel, is located on the corner of Olive and 51h in the Downtown area. The existing improvement is a historically significant building that the Successor Agency leases for the use of the International Surfing Museum and Library. The Museum was ranked as one of the 125 icons of Orange County in 2014 by the Orange County Register. INA g SO u r Parcel Data _ Address 411 Qlive Street; APN 024-147-01 LOt size S3f5 Square Feet, 0`.12 Acres Existing The parcel is improved with a 2,052 square foot, one-story wood-framed Improvements commercial building built in 1935 and six adjacent parking spaces. The building has historic significance and is called out in the City's 1996 General Plan and the updated historic survey conducted by the City in 2014 (Appendix J) E7Clstiri se k„ Houses the International SurfM Museum/Library Use Restrictions CUP#08-005 (Appendix K); Local Coastal Plan (Appendix 1) # Specific Plan 5 District 1 (Appegd&bW1Wfii Haws for mixed r commercial 1 residential development.'Per the:Local Coastal Plan, thesite RM VT must provide visitor serving commercial uses only on the ground floor. Former Project Area Main-Pier Redevelopment Project Area Current Titles:," Successor Agency to the Huntington Beach Redevelopment Agency -- ------- -_--------...._...------ October 15,2014 Page 6 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Acquisition &Valuation Information a.Purchase Date March 7, 1988 w Purchase Price $285,000 [Purpose To acquire a blighted vacant property with the intent of restoration. ., Current Value (Est.) $0 Method of Valuation The parcel is considered to be undevelopable for the following reasons: ■ The CUP allows for the installation of two Southern California Edison (SCE) electrical transformer cabinets on a 520 square foot portion of the parcel. Thus the CUP will limit the ability to use the entire Site for development. ■ The existing building is designated historic and would need City Council approval to be demolished. • The Downtown Specific Plan requires developments to meet the parking requirements on-site. However,due to the size and configuration of the parcel, a new development would have difficulty parking the project in a subterranean parking garage in a financially feasible manner as well as structurally. Therefore,the highest and best use is the existing structure. The value of. the existing structure is limited by the following: 0 A historic designation that restricts changes to the building ■ The property is not ADA compliant. ■ The property has not been earthquake retrofitted. ■ To park the 5,375 square foot building to code,there needs to be 11 parking spaces. The fact that the property is under parked will limit the types of commercial uses that would be interested in the property. While the property currently generates$3,000 per year, and assuming an 8% capitalization rate, the value is estimated at$37,500. However, due to the fact that the property is not ADA compliant or earthquake retrofitted, these costs, necessary to lease to a commercial tenant, the property is estimated to have a$0 value. Revenues Generated by Proiperty and Contractual Re uirements ry Contractual Lease (Appendix L) Requirements y $3,000+CPI Increases per year Lessee International Surf Museum Foundation and Visit Huntington Beach L#: lr Successor Agency of the Huntington Beach Redevelopment Agency History of Environmental Contamination or Remediation Efforts HilsitoliYof Nome 'k E�7Yl>1`�I ;tlleflta'I _ COn11171at1011 r=.. W.;., Remediation Efforts None Completed Studies _ None October 15,2014 Page 7 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Transit-Oriented Development&Advancement of Agenc.y PlanningObjectives Potential for TOD None Agency Planning The property will continue to host the world renowned International Surfing Objectives Museum and library that educates and supports the surf culture. The existing use of a museum is approved by the California Coastal Commission as a visitor serving commercial use in accordance with the Local Coastal Plan. Brief History of Previous Development Proposals and Activities Prior to the former Agency acquiring the property, the existing building was used for medl a space, a restaurant and a nightclub. However, at the time of the acquisition in March 1988,the building was vacant and in disrepair. In 1988, the former Agency entered into a one-year lease with the International Surfing Museum Foundation (Foundation)for$10 per year. The Foundation agreed to restore the building. The Foundation continued to lease the space through January 2012 when the Foundation asked Visit Huntington Beach (formally the Huntington Beach Visitors and Marketing Bureau)to assist the foundation with staffing, rent and building improvements. The current lease between the Successor Agency and the Bureau expires in January 2017. The lease requires the Bureau to pay the Successor Agency rent in the amount of$250 per month in 2014. This amount will increase with inflation through the end of the lease term in 2017. The International Surfing Museum Foundation was established in 1987 and moved to the parcel in June 1990. The Museum/Library invested approximately$35,000 into new flooring, lighting and ADA improvements in the building in November 2013. There are no plans to move the Museum/Library elsewhere and it is expected that the Eerie will be renewed in 2017.at„Market rate rent. Recommendation for Disposition Retain for Future The parcel has been used as a`museum since'f01 .and the tenant Development invested $35,000 in building improvements in 20 3, . The City does not intend to change the use when the current lease expires in 2017, as the use is consistent with the Local Coastal Plan and encourages visitors to visit the City's beach front. Implementation Plan The parcel will transfer to the City at no cost, as the minimal rent earned from the lease will be used for administrative and maintenance costs by the City. If the City should sell the property in the future,the proceeds will be shared with the Taxing Entities to the extent required by law. Im October 15,2014 Page 8 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Downtown Alley (Parcel 2) The parcel is a 10-foot wide alleyway between buildings providing a pedestrian connection from Main Street to 5th Street near Pacific Coast Highway in the former Main-Pier Redevelopment Project Area. .. N riE Parcel Data Address Main Street near Pacific Coast Highway APN 024-153-21 Lot Size 1,022 Square Feet, 0.02 Acres Existing Paved Alleyway Improvements Existing Use Public Access Use Restrictions Coastal Zone; Public Access In Zoning Specific Plan 5 Districtt 1(Appendix G} MON Former Project Area Main-Pier Redevelopment Project Area Current Title Successor Agency to the Huntington E# acf ,Redeyelt{ eci!,R� ; Acquisition &Valuation Information Purchase Date :ebraary 1z,1,193 27 Purchase Price $1 Purpose _ ''Provide safe pedestrianlpublicaccess between Majn Street and titre Current Value(Est.) $0 Method`of Valuation The size(ten feet wide) and location of fine parcel makes it ar . . undevelo ble remnant and is'corrsrdered tc�have no effective valu .n. Revenues Generated by Property and Contractual Requirements Annual Revenues None T Generated Contractual None Requirements October 15,2014 Page 9 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach History of Environmental Contamination or Remediation Efforts History of None ig Environmental Contamination Remediation Efforts None Com feted Studies . - _N�ane p, rs Development� Advancement of Agency Planning Objectives Transit-Oriented � Potential for TOD None Agency Planning The parcel provides public access between streets on large blocks in the Objectives downtown. The Downtown Specific Plan 5 also calls the parcel out as an alleyway and part of the downtown circulation plan. Brief History of Previous Development Proposals and Activities In 1993,'the former Agency acquired the parcel through a land exchange with the Developer of the adjacent Abdelmuti project. The Abdelmuti project includes a 42,000 mixed-use commercial development with seven on-site parking spaces located on the corner of Main Street and PCH. The exchange of land was considered to be an equal exchange valued at$1. The former Agency received the property from the Developer for future dedications including the alleyway. The parcel is currently used to provide public pedestrian access from Main Street to 5"Street. Recommendation for Disposition Government Ilse The Successor Agency is responsible for maintaining the property; however, the City has been maintaining the property, including lighting. The parcel is used by the public for pedestrian access between 5`h Street and Main Street in the middle of a larger block. While the parcel does not currently have an easement recorded on it(since the Successor Agency owns it) if the Agency were to sell the parcel to a third party, the City would require a public access easement be recorded, which would remove any value to the parcel. Implementation Plan Given the public use,the parcel will be transferred to the City at no cost, which is the same as the effective current value. The City intends to place a public access easement on the parcel. The Successor Agency, upon approval of this LRPMP,will promptly affect the transfer of the government use properties to the applicable public entity by grant deed or quitclaim deed. October 15,2014 Page 10 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach �k e } � � 4 � mith j�l�u�c :4 October 15,2014 Page 11 L - Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Waterfront Hilton Hotel/Parcel C (Parcel 6 and 7) The parcel is located on Pacific View Avenue between Huntington Street and Twin Dolphin Drive on Pacific View Avenue in the former Main-Pier Redevelopment Project Area and consists of a 290 room Hilton Hotel and Parcel C—the future site of an expansion to the existing hotel, currently used as additional parking and event space as needed. 10 _ 'b fir, n' -". .,,.'"'� _,� •,� s�� � ^ 'iV rpo w ` „P4NNNPn 06 s� Parcel Data Address 21100 Pacific Coast Highway APN 024-252-01 and 024-252-02 Lot Size Hilton - 156,657 Square Feet; 3.60 Acres; Parcel C - 158,023 Square Feet, 3,63 Acres Existing A 290 room Hilton Hotel, surface parking lot and event space Improvements Existing Use Hotel and parking lot, event space Use Restrictions Ground Lease (Appendix R); Disposition and Development Agreement and four Implementation Agreements (Appendix O); 51h DDA Implementation Agreement (Appendix S); Local Coastal Plan (Appendix I); Parcel C - parking and access (Fire) easements (Appendix T) Zoning Specific Plan 5—District 3 (Appendix G) Former Project Area Main-Pier Redevelopment Project Area Current Title Successor Agency to the Huntington Beach Redevelopment Agency Acquisition &Valuation Information Purchase Date September 19, 1988 Purchase Price $3,677,703 Purpose To develop two hotel towers, which was to be included within a 44-acre master plan that includes residential developments and three hotels. Current Value (Est.) To be determined based on an appraisal of the value of the Successor Agency's leased fee interest. The Lessee of both parcels has submitted an appraisal to the Successor Agency valuing the Successor Agency's leased fee interest as of January 1, 2016 (estimated date of conveyance). As of October 15,2014 Page 22 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Revenues Generated by Propeq and Contractual Requirements IIIA Annual,Revenues ��peryear Generated Contractual 30 year Ground Lease with automatic extensions (Appendix M) Requirements Lease Rate $1' per_year Lessee VF Outdoor Inc. Lessor Successor Agency of the Huntington Beach Reder€6Ooment ka Histo of Environmental Contamination or Remediation Efforts History of The site was previously used as a tree farm and storage area for the City. Environmental Although the soil test and soil gas vapor sampling reported low levels of Contamination methane, metals and Total Recoverable Petroleum Hydrocarbons (TRPH's), the tests results did not reach the level that would warrant remediation. Remediation Efforts Potential methane gas concerns were addressed through the City's requirement of methane barrier installation for the two constructed buildings on site. However, any other development other than a skate park would require additional mitigation. - Completed Studies Phase 1 and 2 Soils Reports Transit-Oriented Development &Advancement of Agency Planning Objectives Potential for TOD None Agency Planning The use meets Specific Plan 14 park requirement(Appendix H - Book III: Objectives City Actions Section 3.2.4 Parks, Page 114). In addition, the skate park assists the City in meeting its General Plan and Parks Master Plan strategic plan goals by providing free park use. The City is currently updating its Parks Master Plan and the skate park will be included. The Beach Edinger Specific Plan EIR also discussed that the City is below National and State standards on park space. Brief History of Previous Development Proposals and Activities Once it was established that the parcel was not required for the Gothard-Hoover Street Extensioff.,40d, Realignment,the former Agency sought other uses for the property. Due to the environmental that do not allow digging on the property as well as the fact that in 2008 the School District closed.tf skate park at Huntington Beach High School, the former Agency concluded that a public skate p would be an appropriate use for the site. A Ground Lease was entered into with VF Outdoor Inc, dba Vans, to lease the property to Vans for$1 per year over a 20 year term with one 10-year option (Appendix M). In return,Vans was required to construct, operate and maintain a public skate park that is free and open to the public open 7 days a week from 10 AM to 6 PM. Vans is also required to supervise the skate park and provide free i! equipment for low income children to use. Vans constructed a free 42,500 square foot skate facility that includes every type of skating terrain, restrooms, lockers and a small concession/retail building. The revenue generated by the on-site concessions does not cover Vans' staff costs of providing Av supervision at the public skate park, as well as the cost of insurance and operations. The skate park was opened in March 2014. The City and Vans are currently working with both Golden West College -and high school skate teams to create synergy between the educational and recreational elements of Cit The skate park is providing over 50 jobs in theWcommunity.the .W .. �_ October 15,2014 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Recommendation for Disposition Government Use This parcel is improved with a public skate park thatis leased and operated— by Vans. While Vans is allowed to lease concession space,the income generated from the concessions is not sufficient to cover the costs of „ supervising, operating and insuring the skate park as required by the around lease, This use meets the park land requirement in the Specific Plan,.General Plan and the Parks Master Plan. Implementation Plan The parcel will be transferred to the City at no cost,which is the same as the effective current value. The Successor Agency, upon approval of this LRPMP, promptly will affect the transfer of the government use properties to the applicable public entity by grant deed or quitclaim deed. — I ,;I � Nal��lllm I I k ���I�RII�IIIIIIII141 � - - w.,.. ...�+iu ItiIill!Rd°VVrw a.�. i�G'HPNI JI d — If: R r October 15,2014 Page 14 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Westminster Parcel (Parcel 4) The parcel is located on the west side of the 405 Freeway and McFadden Avenue and is s between College Park and the railroad tracks in the City of Westminster. The property is currently unimproved next to a park in the City of Westminster, the 405 Freeway and a storage facility. _ g E . , Parce A l Data �_ddress.: _ ,-W.. No"_Addre__._ esss"_..,r ry APN 142-311-34 $l_ot Size 50,573 Square Feef, 1.16 Acres Existing None Improvements _-Existing Use Vacant Land/Lando", Use Restrictions None Zaing Park/Open Space Former Project Area N/A Currenik Tile' Successor Agencjii to ftie Hu " "I��Rdev ' Ac uisition &Valuation Information Purchase Date December 9, 1987 y Purchase Price $489,929 as part of the full price of Parcel 3 Turpose For the future Gothard-Hoover Street Expansion and Realignntee „rats Current Value (Est.)s $o Method of Valuation : Given the location, configuration and size,the Parcel is considereck' Mza undevelopable for commercial uses and thus is considered to have no u effective value. October 15,2014 Page 15 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach The Lessee of Parcels 6 and 7 has offered to s purchase the Successor _......_.mm..v p _or Agency's leased"fee. The Lessee's proposal is that the conveyance would occur in approximately the 4t quarter of 2015 or the 1 st quarter of 2016, when the Lessee is prepared to pull building permits and break ground on the hotel expansion project. The proposed purchase price is based upon an appraisal of the value of the Successor Agency's leased fee interest in Parcels 6 and 7 as of January 1, 2016,which appraisal was prepared by the highly respected consulting firm of PKF Consulting USA. As of the date this LRPMP is being approved, the Successor Agency has not accepted the PKF appraisal. The Successor Agency and Lessee of Parcels 6 and 7 are currently negotiating a purchase transaction for the fee interest in Parcels 6 and 7. Key components of the negotiations are a requirement that the Lessee will be required to construct the hotel expansion on Parcel 7 in a timely fashion, and that the purchase price will be set at the Fair Market Value of the Leased Fee Interest in the property. If the Successor Agency and the Developer are unable to reach agreement on the sale transaction terms, or the sale is not consummated, the Successor Agency will continue to follow the requirements in the legal agreements for Parcels 6 and 7 and fulfill the Enforceable Obligations. In that event, the Successor Agency will continue to market Parcel 6 at the Fair Market Value of the Leased Fee Interest and/or Parcel 7 at the Fair Market Value of the Fee Interest, subject to the requirements imposed by the legal agreements and the Enforceable Obligations. Recommendation for Disposition Enforceable Through the approval of Resolution No. 389, "A Resolution of the Obligation Redevelopment Agency of the City of Huntington Beach, California, Approving and Making Certain Findings Pursuant to Health and Safety Code Section 33433 for a Proposed Fifth Implementation Agreement to Amended and Restated Disposition and Development Agreement by and among the Redevelopment Agency of the City of Huntington Beach, the City of Huntington Beach, and Mayer Financial, L.P. including an attached Lease by and between the Redevelopment Agency of the City of Huntington Beach and the Waterfront Hotel, LLC" If the consolidated site lease does not become effective,the Parcel 6 ground lease remains in place through 2086. Implementation Plan The Successor Agency is currently in negotiations with the Developer with the goal of selling the fee interest in Parcels 6 and 7 if: 1)the timing of the conveyance is tied to the commencement of construction on the hotel expansion on Parcel 7; and 2) if the Successor Agency and Developer can reach agreement on the Fair Market Value of the Leased Fee Interest. If the Successor Agency and the Developer are unable to reach agreement on the sale transaction terms or the sale is not consummated, the Successor Agency will continue to follow the requirements in the legal agreements for Parcels 6 and 7 and fulfill the Enforceable Obligations for Parcels 6 and 7. The following summarizes the potential disposition alternatives for Parcels 6 and 7: ■ Alternative 1: The Lessee begins construction on the hotel expansion on Parcel 7 by December 31, 2016, and the Lessee purchases the Successor Agency's leased fee interest in Parcels 6 and 7 for Fair Market Value as determined by the Successor Agency based upon an appraisal. The proceeds will be shared with the Taxing Entities to the extent required by law. If the Successor Agency and Lessee reach agreement on the terms and conditions of a sale by the Successor Agency to the Lessee of the Successor Agency's leased fee interest in Parcels 6 and 7 to the Lessee before the DOF approves this LRPMP,the Successor Agency may submit an amendment to this LRPMP to its Oversight Board and DOF for consideration. ■ Alternative 2: The Lessee begins_construction on the hotel expansion on October 15,2014 Page 25 Long Range Property Management Plan Successor Agency to the farmer Redevelopment Agency of the City of Huntington Beach Recommendation for Disposition Retain for Future The Site is considered undevelopable for commercial uses and three,public Development entities are interested in developing the parcel for public use.. Implementation Plan The Successor Agency, upon approval of this LRPMP, promptly will affect the transfer of the government use properties to the applicable public entity by grant deed or quitclaim deed. An approximately 12,000 square foot(100 feet x 120 feet) portion of the Parcel will be transferred to the City of Huntington Beach's Water Department at no cost. The following are the options for the remaining approximately 38,500 square feet of the parcel. The City will continue discussions with the multi-jurisdictional cities in regards to the animal shelter for the portion of the parcel that will remain after the water well is developed. That portion of the parcel will be transferred to the City at no cost and the shelter will be developed in cooperation with other northwest Orange County cities. • If the animal shelter project does not go forward,the Successor Agency will offer the remnant portion to the City of Westminster to be used as a public parts. ■ If the City of Westminster is not interested in the property, then the Successor Agency will market the remnant portion on the open market to be sold at the appraised highest and best use value. The proceeds from the sale of the remnant parcel will be distributed to the Taxing Entities to the extent required by law. October 15,2014 Page 17 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Waterfront Hyatt Regency Hotel (Parcel 5) The parcel is located on the northwest corner of Beach Boulevard and Pacific Coast Highway in the former Main-Pier Redevelopment Project Area and is improved with the 517 room Hyatt Hotel. The hotel also includes 9,090 square feet of commercial space, a 52,000 square foot conference center, 20,000 square foot spa, three restaurant and lounges, and 990 underground parking spaces. .R _ y � ay m« Parcel Data Address 21500 Pacific Coast Highway AP N 024-2 51-01 Lot Size 660,741 Square Feet; 15.17 Acres Existing 517 room Hyatt Hotel Improvements Existing Use Hotel Use Restrictions Ground Lease (Appendix N); Local Coastal Plan (Appendix 1) Zoning Specific Plan 5—District 3 (Appendix G) Former Project Area Main-Pier Redevelopment Project Area Current Title Successor Agency to the Huntington Beach Redevelopment Agency October 15,2014 Page;g Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Acquisition &Valuation Information Purchase Date September 19, 1988 Purchase Price $7,722,159 Purpose To develop a hotel, which was to be included within a 44-acre master plan that includes residential developments and hotels. Included remediation and infrastructure(including roads, water sewer). Current Value (Est.) $7,900,000 based on an appraisal, less repayment of the two enforceable obligations Method of Valuation Based on the Fair Market Value of the Successor Agency's Leased Fee Interest in the grope , Revenues Generated by Property and Contractual Requirements - Annual Revenues $184,6181annual Generated Contractual 99 Year Ground Lease expires in 2097(Appendix N) Requirement Lease Rate Base rent with annual CPI increase plus a share of room revenue above the base rent. Lessee PCH Beach Resorts LLC Lessor Successor Agency to the Huntington Beach Redevelopment Agency History of Environmental Contamination or Remediation Efforts History of Hazardous material remediation was required, as well as wetlands Environmental mitigation. Seven abandoned oil wells were on site that had not met the Contamination Division of Oil and Gas requirements for future housing or commercial development. The former gas station also had leaking tanks with soil contamination. Remediation Efforts All seven oil wells needed to be re-abandoned and recapped to current state standards. The City received a letter of"No Further Action" in approximately 1999. Completed Studies Numerous studies, if desired, can be provided'. Transit-Oriented Development&Advancement of Agency Planning Objectives Potential for TOD Not Applicable Agency Planning Keep existing Hotel with a large employment base. Objectives Brief History of Previous Development Proposals and Activities The Hyatt Regency is the result of years of redevelopment planning from 1982 to 2003. As part of the comprehensive and complex"Waterfront"development, the Hyatt Regency opened in January 2003. Besides the Hyatt Regency, the multi-phased Waterfront development includes the Waterfront Hilton Beach Resort that opened in 1990, a 184 unit residential component and a future expansion of the Waterfront Hilton on a parcel of land adjacent to the existing hotel. When the Disposition and Development Agreement(DDA)for the Waterfront project was approved in 1988'"(Appendix O), the purpose for the redevelopment efforts was to eliminate blight and assist with economic revitalization. The Main-Pier Redevelopment Plan was adopted in 1982 and amended in`1983 to include the m - showing evidence of physical Waterfront site, which totaled 44 acres. The site was blighted_ Oc cber 15, 2014 Page 19 .v._ ,:. l?r .ann' �3 !ts's1 t. + t ,. e i�;,J'�;�5.. _ MCA to .,,�. .."' .,I.. .., w..;�. . �91'� .fi : 'dryrys �*Si �. e;; AlymV ✓E...,., r ._,��.�. 1 Rh _....� .. y: ca._ .. .d...._ of die .-:.�'�,.�e _..- ,�i;.9yer CIS„a.. 1932" , 73 3 1983 art ,f _, ._. a-six u . s dc--.veiopnnent tat vvoJri b'.: mJ:r-SS X� memoi:, 3... .. .�.Won pax Awl _ _.I I'..0 :i:! ,. -aa r„_ '� s ,. _i"f.�9U <yfv."�� ,;.:a--3 la c'abc:-dhe A perinn ,.f We a ea "acd.=_tic Be__h-:_ cule»,iu? elk e .a,sina,'s -- - x.;;;.., a. v.. _..,, ...._I to o .. 2 beat y e , t Ming cwd e6 grf<,rci Mon. raquSments i...- ,..=_P-�a _...r+; <i iat'"ia..,,., .., ,_....,.;..�'_. u....and rad ... And y 3i'vW V .,;:s.,.c vKvj the v'r..., .":nt F'on M+..;n _.._.;"1 opmed 4 19K. in 5 ,�.. j, IL"74"1'Y'i�r� �.wr+�. ss"9d e cd ai LT, a n W?::,. of 0 a nag.3,-';1 ._-ev5pen .»f ._ ed'irit'1 an ''-dXx1anc.-ed a. S'.:!usa-.,d" C"'D,f, .t, ,_ .?..,..... how W "'w?r - ng _ . .°.i to ..1<-:. r _.,. mil be ,MAN ,u;.at Ma apavedcDA Mod ..� °a .r r'." - ,.,,�` _ r S,n' _::.,,.. �_v:,... .` f": ..'.. . .._. ...::`I -,..%.t^':G .., q".a �t .. al`.3F _'or t:` f-,radpQ :22 7>40 4, na ps _ ,.a M, s - -:i.7 4s:.... h..1, vYl ,-d,:� 1 p"_.:: e 1Y.:.c--; £.,gj5" .,mue ras- _- n.i i..- - Pasuant to to 1098 w PDA , m .- w. . ke OD.ODA a _y e. w !.,}. !J&i 5!8" )7,i . carpets-he hyst Re, F R __he 1929 re 3'he on ,tiha ff o. "he I r"' .... Agercy, _..,.- ,.. a ,,+J is !°i --'�axa. 1 c'x f.' U"S .,.ci -.ii 07: .=v and Wan C> - o mile. HUD) The city 2' a�'e is -Mr- eJ...1,„<m :LT' icani koJ! LdNa .S .a1`.4 .P. "riv ._.. .. v ._. n.;.w: 1,„.'.!i .., `,?: s ! .,,•:i�. '.�;. ��t�_ �.�'y' � �:. �1�,�ru ,,., 1 E�".e-.>1:^w fu ,i'f„'+"._. ,_, ,» �'. .,„s'r'I t,�..y _.0 i_' fir r popwo, ' i toWs re CT1 Q&ssviceVapmenmThe c.y and Oe 4'e.a...,_e hh.e-t'keb`1 _--- Prarinscry ( lot w ante Se o. 48 c.�n and F =,,.sao w.,?.)Ie( gatio ._ he 'fit%.4�. a p .,.ms 2C"e aS �,s #'r'_;: k�' lh.. SSACM d war WqAmfir. I -0Hui..$451000 5 4W A Tomwany Not Yquoz an :roa :i' :�'.-;'1'." peryean d,. me v "I p7awAisA t -MForM a&ill ya Ius a¢P the rev Fa arc L - 1az s �.i� Lkl OWN q [OdS x d a oppmon JP». the `' pe"'C. , c,.. `,1 ,; .)' KF � .. a!IzM,' Mr., S,.-cgss, arate Lassee nas",l ,1 v . u' ..14.E ..6aif a e Succ6smAganny H_ Wd seA `'zl E"`,3"lo tqp end M..-. Age A Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Recommendation for Disposition Enforceable The DOF has approved two Enforceable Obligations on Parcel 5, the Obligation Promissory Note and the Section 108 Loan. These obligations will continue through 2022 and 2019, respectively. Implementation Plan The Successor Agency is in negotiations with the Lessee with the goal of selling the fee interest in the property for the agreed upon Fair Market Value price of$7,900,000. If the sale transaction is consummated, the proceeds will be used to first repay the two Enforceable Obligations on Parcel 5, the Promissory Note and the Section 108 Loan, in full in compliance with the provisions of AB 1484 and AB 1X 26 and any remaining proceeds will be shared with the Taxing Entities to the extent required by law. The Lessee would continue operating the desired hotel use, employing over 400 employees and providing sales tax, additional property tax and transient occupancy tax to the City. If the Successor Agency and the Lessee are unable to reach agreement on the sale transaction terms or the sale is not consummated within a reasonable period of time after the DOF approves this LRPMP, the Successor Agency will continue to market the property at the Fair Market Value of the Leased Fee Interest, subject to the Lessee's Right of First Refusal. If a sale transaction is consummated, the proceeds will be used first to pay the two Enforceable Obligations on Parcel 5, the Promissory Note and the Section 108 Loan, in full in compliance with the provisions of AB 1484 and AB 1X 26 and any remaining proceeds will be shared with the Taxing Entities to the extent required by law. October 15,2014 Page 21 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Waterfront Hilton Hotel/Parcel C (Parcel 6 and 7) The parcel is located on Pacific View Avenue between Huntington Street and Twin Dolphin Drive on Pacific View Avenue |n the former Main-Pier Redevelopment Project Areeondooneiots of o 280 room Hilton Hotel and Parcel C-thefutuna site of an expansion to the existing hotel, currently used aa additional parking and event space aaneeded. 101 iT IN Parcel Data Fe~~~,~~~ p 1 �3.60 Acres; �R��� Sare a Acres Existing A2SU room Hilton Ho0e|� surface parking lot and event space Improvements Existing Use , ���r` _Hotel andparking space|� Y Use Restrictions Ground Lease (Appendix R); Disposition and Development Agreement and four Implementation Agreements (Appendix O); 5mDOAImplementation Agreement(Appendix S); Local Coastal Plan (Appendix |); Parcel C ' parking d access(Fire) easements (Appendix T) �zoning �-^~- S 4APP � Former Project Current Title Successor Agency�tqtlho,kWongtori" h Redevelopment Agency Acguisition &Valuation I nformation !Purchase Seplember F»umchasePrics $3.877.703 develop'two hotel towers, which was to be i6iiWded:,within a 44-acre master plan that includes residential,:developments and three hotels. Current Value (Est) Tobe determined based onan appraisal nf the value of the Successor Agency's leased fee interest. The Lessee of both parcels has submitted on appraisal to the Successor Agency valuing the Successor Agency's leased fee interest as of January 1, 2016 (estimated date of of October z5'2O14 Pagezz Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach the date this LRPMP is being approved, the Successor Agency has not accepted the Lessee's appraisal. If the Successor Agency and the Lessee reach an agreement on the terms and conditions of a sale of the Successor Agency's leased fee interest to the Lessee before the DOF approves this LRPMP, the Successor Agency may submit an amendment to this LRPMP to its Oversight Board and DOF for consideration. Method of Valuation Based on the Fair Market Value of the Successor Agency's Leased Fee interest in the�ropert-y. Revenues Generated by Property and Contractual Requirements Annual Reeves, $450,000 per year Generated Lease Rate Base plus annual CPI increases Contractual Ground Lease-, Future Ground Lease, Fifth Implementation Agreement to Requirement the Amended DDA Lessee Waterfront Hotel LLC Lessor Successor Agency Histo of Environmental Contamination or Remediation Efforts History of Hazardous material remediation was required, as well as wetlands Environmental mitigation. Seven abandoned oil wells were on site that had not met the Contamination Division of Oil and Gas requirements for future housing or commercial development. The former gas station also had leaking tanks with soil contamination. Remediation Efforts All seven oil wells needed to be re-abandoned and recapped to current state standards. The City received a letter of"No Further Action" in 1999. Completed Studies Numerous studies, if desired, can be provided. Parcel C may need further studies. Transit-Oriented Development&Advancement of Agency Planning Objectives Potential for TOD Not applicable Agency Planning Keep existing Hotel and build a second tower with a large employment Objectives base. Brief History of Previous Development Proposals and Activities The Waterfront Hilton Hotel/Parcel C is the result of redevelopment planning from 1982 to 2003.'As part of the comprehensive and complex"Waterfront"development; the Waterfront Hilton opened in 1990. Besides the Waterfront Hilton, the multi-phased Waterfront development includes the Hyatt Regency that opened in January 2003, a 184 unit residential component and a future expansion of the Waterfront Hilton hotel on the adjacent Parcel 7 (also known as Parcel C).,When the Disposition and Development "Agreement(DDA) between the former Agency and the original Developer of the Waterfront project was approved in 1988 (Appendix;O), the purpose of the redevelopment efforts was to eliminate blight and assist with economic revitalization. The Main-Pier Redevelopment Plan was adopted in 1982 and amended in 1983 to include the Waterfront site, which totaled 44-acres. The site was,blighted, showing evidence of physical deterioration and obsolescence due to long deferred maintenance. The former Agency purchased the fee title in 1988,,which was subject to an existing ground lease. With fee title to the site,the former October 15,2014 Page 23 lnnyxn�sn tiv, Pro"re 272 inan . = SeamOwn VOW, . _n Tr aj la7 . _. ., . Va vav ., to ;a _;no _ n Ora s, no cis no was Inna I be 07 Wa as. w . _s .. , .,. 70, ..asil . 4d . , .,q I .. V ccGot r 3 70�7 ,. t ,. ti vh� =WPOWSOonto o ,'.3 �'< ,. no� nr _ .i ., . . N a7...,. ,I, a e..d..>a1ma m., at' a w -q 1 � a E,_ I 3 _. .f ... T�ngt _ . . .... . s ,_ so; _< .. ,. _ ;cPqwbnrOrgi eQe _d U_. . .. t _u_.11 r a 0 7rs n n a _k . .. a. . <w .3 .N s..e�Ic . j _ n . . w . _r _. . „ m 4pn0y T naq Z .nvw'wti . .. e .Dev,., AS 1w F snAnd wi .I ,._ sen�Pnt hC _ .. m. Dam.. _. d .je-agaIr bC TS .,. t ..Wd ...., ..+ ., Q�y i.,...z ?' e r.>.w. I t: .. .. maranwen .. -A�n n7y _ - x- O�Wcn Lambnalng arc w, Ow e,.s 11 n .....2canals. 0 ., v F 1 .. .<..,a.._e ..... ., non; _.a. V 7rzaO. PUPA M .,5 . . Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach The Lessee of Parcels 6 and 7.has offered to purchase the Successor° tgerrc r"s Teased fee. Tire rA Lessee's proposal is that the conveyance would occur in approximately the 41 quarter of 2015 or the 1 quarter of 2016, when the Lessee is prepared to pull building permits and break ground on the hotel - expansion project. The proposed purchase price is based upon an appraisal of the value of the Successor Agency's leased fee interest in Parcels 6 and 7 as of January 1, 2016,which appraisal was prepared by the highly respected consulting firm of PKF Consulting USA. As of the date this LRPMP is being approved, the Successor Agency has not accepted the PKF appraisal The Successor Agency and Lessee of Parcels 6 and 7 are currently negotiating a purchase transaction for the fee;interest in Parcels 6 and 7. Key components of the negotiations are a requirement that the Lessee will be required to construct the hotel expansion on Parcel 7 in a timely fashion, and that the purchase price will be set at the Fair Market Value of the Leased Fee Interest in the property. If the Successor Agency and the Developer are unable to reach agreement on the sale transaction terms, or the sale is not consummated, the Successor Agency will continue to follow the requirements in the legal agreements for Parcels 6 and 7 and fulfill the Enforceable Obligations. In that event, the Successor Agency will continue to market Parcel 6 at the Fair Market Value of the Leased Fee Interest and/or Parcel 7 at the Fair Market Value of the Fee Interest, subject to the requirements imposed by the;legal agreements and the Enforceable Obligations. Recommendation for Disposition Enforceable + Through the approval of Resolution No. 389, "A Resolution of the Obligation Redevelopment Agency of the City of Huntington Beach, California,' Approving and Making Certain Findings Pursuant to Health and,Safety Code Section 33433 for a Proposed Fifth Implementation Agreement to Amended and Restated Disposition and Development Agreement by and among the Redevelopment Agency of the City of Huntington Beach,the City of Huntington Beach, and Mayer Financial, L.P. including an attached Lease by and between the Redevelopment Agency of the City of Huntington Beach and the Waterfront Hotel, LLC" If the consolidated site lease does not become effective, the Parcel 6 ground lease remains in place through 2086. Implementation Plan The Successor Agency is currently in negotiations with the Developer with the goal of selling the fee interest in Parcels 6 and 7 if: 1)the timing of the conveyance is tied to the commencement of construction on the hotel expansion on Parcel 7; and 2) if the Successor Agency and Developer can reach agreement on the Fair Market Value of the Leased Fee Interest. If the Successor Agency and the Developer are unable to reach agreement on the sale transaction terms or the sale is not consummated, the Successor Agency will continue to follow the requirements in the legal agreements for Parcels 6 and 7 and fulfill the Enforceable Obligations for Parcels 6 and 7. The following summarizes the potential disposition alternatives for Parcels 6 and 7: ■ Alternative 1: The Lessee begins construction on the hotel expansion on Parcel 7 by December 31,2016, and the Lessee purchases the Successor Agency's leased fee interest in Parcels 6 and 7 for Fair Market Value as determined by the Successor Agency based upon an appraisal. The proceeds will be shared with the Taxing Entities to the extent required by law. If the Successor Agency and Lessee reach agreement on the terms and conditions of a sale by the Successor Agency to the Lessee of the Successor Agency's leased fee interest in Parcels 6 and 7 to the Lessee before the DOF approves this LRPMP,the Successor Agency may submit an amendment to this LRPMP to its Oversight Board and DOF for consideration. ■ Alternative 2: The Lessee begins construction on the hotel expansion on October 15,2014 Page 25 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Parcel 7 by December 31, 2016, pursuant to the existing DDA, but either the Successor Agency and the Lessee are unable to reach agreement on the sale transaction terms for the conveyance of the leased fee interest in Parcels 6 and Tor the sale io not consummated. Within a reasonable time after the Lessee's 99'year lease of Parcels 8 and 7 commences,the Successor Agency will market the property at the Fair Market Value of the Leased Fee Interest,subject to the Lessee's Right of First Refusal. If a sale transaction is consummated, the proceeds will be shared with the Taxing Entities to the extent required by law. " Alternative 3: The Lessee does not commence construction on the hotel expansion nn Parcel 7in accordance with the Schedule of Performance, the DDA terminates aoto Parcel 7.and the existing Lease on Parcel O remains in p|eno. Within o reasonable time after the DDA terminates aoto Parcel 7. the Successor Agency will market both (i)its separate leased fee interest in Parcel 6 at the Fair MarketV21ue of its Leased Fee Interest,subject to the Lessee's Right of First Refusal, and(ii)its fee interest in Parcel 7 for its intended development ooa hotel at the Fair Market Value nf the fee interest inthe property aa encumbered with the Fie Eosement, Parking Easement and Landscaping Easements; provided, however, Parcels Dand 7 will not necessarily be marketed oo being sold together. The sales proceeds for both Parcels will be shared with the Taxing Entities m the extent required bylaw. " Alternative 4: The Lessee does not commence construction on the hotel expansion on Parcel 7in accordance with the Schedule nf Performance,the DDA terminates outo Parcel 7.and the existing Lease on Parcel O remains in place. Within a reasonable time after the DDA terminates oeto Parcel 7. the Successor Agency will market its separate leased fee interest in Parcel Uat the Fair Market Value of its Leased Fee Interest,subject to the Lessee's Right of First Refusal, and (ii)oonvoy its fee interest in Poom|7tu the City Vo be retained for future development aaa hotel an encumbered with the Fire Easement, Parking Easement and Landscaping Easements. The sales proceeds for both Parcels will be shared with the Taxing Entities to the extent required bylaw. It is anticipated that Alternative 1 will generate the highest proceeds of the four alternatives i � October 15'ZQI4 Pa0ers � � Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach Edinger Hotel (Parcels 8 — 13) The property is located on the southeast corner of Edinger Avenue and Parkside Lane and is undeveloped with the exception of a vacated Big O Tire Store on Parcel 8. -- _ _ W - FP I � Parcel Data _..... u-- AddreS ... 7872 Edinger Avenue wJ..v. APN 142-081-09, 10, 11, 12, 06, 28 Lot Sine a 79,199 Square Feet, 1.82 Acres Existing Undeveloped with the exception of Parcel 8 which includes a vacant 8,169 Improvements Square Foot auto retail shop. Existing Use None Use Restrictions Property is restricted by a Purchase and Sale Agreement(Appendix U)to hotel development. Zang Specific Plan 14 T4 (Appends 4 Former Project Area Huntington Center Redevelopment Project Area Current Title IuccessorAgency to the Huntington Beach RedevelQpmerrt At ency _Acquisition &Valuation Information Purchase Date All parcels were purchased in 1986 of Parcel 13,which was purchased in 2E#tl9 v F Purchase Price $4,844,425 Pu�P�sv,. The parcels were acquired as an opportunity to pursue a more comprehensive redevelopment proposal for the entire block, and the development of a hotel, Current Value(Est.) $3,100,000 Method of Valuation The property is restricted to the development of a 120 to 140 room branded hotel by the amended Purchase and Sale Agreement(PSA). In October 15,2014 Page 27 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach accordance with the PSA, the developer will acquire the land'ftlr$ 0 million. This sales price is supported by an appraisal dated January'9, 2012 (Appendix V). It should be noted that the value is impacted by hazardous materials located on the site,as well as the potential for additional environmental remediation that may be required. Therefore, given the_environmental remediation risks and the provisions for such risks already agreed to within the PSA, it is concluded that the sales price Tested in the PSA is appropriate as the current market value. If the current PSA were to be cancelled and the insurance policies expire, the likelihood of negotiating a similar deal would be unlikely, since the remediation requirements would be known and there is no longer redevelopment'funds to off-set the financial gap created by the required remediation. Thus the sales price would likely be substantially,lower than$3.10 million.. Revenues Generated q Propeq and Contractual Requirements Annual Revenues None Generated Contractual Purchase and Sale Agreement(Appendix U) Requirements Histo!y of Environmental Contamination or Remed_iation Efforts History'of The Phase 1 and 2 reports on Parcel 8`were limited in scope due to the Environmental operating Big O Tire Store on the site. One plume was found from Contamination hydraulic leaks and is estimated to cast$200,000 to remediate. The Successor Agency placed $200,000 in an escrow account. However, there was no way to know if the plume leaked onto surrounding properties. The Successor Agency has obtained a $5 million insurance policy for potential leakage from that single plume to the surrounding_properfies(2014 premium was approved by DOi ). The policyi:i wil!empire in 20 The 16. Developer is responsible for any other plumes tttat:a4re Wind he property and leakages from those plumes. Asa.result,the C3eveloper was required by the PSA to obtain an insurance policy for. na cover this risk, Remediation Efforts Will occur when the building is demolished by the Developer. Completed Studies Phase 1 and lirt #ed Phase 2 reports'are eoaglete .',.' ., Transit-Oriented Development&Advancement of Agency Planning Objectives Potential for TOD None. Agency Planning This property is noted in the former Agency's latest Implementation Plan Objectives (Appendix E). The former Agency acquired the 7872 Edinger Avenue parcel to combine with the adjacent Agency-owned properties in 2009. In 2009, the former Agency also prepared a RFQ for the development of a hotel at the southeast corner of Edinger Avenue and Parkside Lane. This hotel site could achieve a high quality nationally branded hotel consisting of approximately 120 to 150 rooms with amenities that would make the hotel an attractive lodging option in the central region of Orange County. As stated in the most recent Implementation Plan, the project will meet the following planning goals: ■ Eliminate and prevent the spread of conditions of blight. ■ Expand the commercial base of the Project Area. ■ Improve public facilities and public infrastructure. October 15,2014 Page 28 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach ■ Promote local job opportunities. ■ Implement design and use standards to assure high aesthetic and environmental quality, and provide unity and integrity to developments within the Project Area. ■ Remove impediments to land disposition and development through the assembly of property into reasonably sized and shaped parcels served by improved infrastructure and public facilities. ■ Recycle and/or develop underutilized parcels to accommodate higher and better economic uses while enhancing the City's financial resources. .0 _Brief History of Previous Development Proposals and Activities _ The former Agency issued an RFP on October 2009 in search of a hotel developer to develop a high quality, select brand hotel on the site with a minimum of 125 hotel rooms. Ayres Hotel Company was selected by staff; however, the former Agency and Ayres could not come to terms and the property was r' transferred from the former Agency to the City for continued attempts at redevelopment. After several failed attempts with other hotel developers, on January 27, 2012, the City entered in' t0'at " PSA with Campbell Lodging to purchase the property and develop the site as a Hyatt Place Hotel, or similar brand hotel, ranging in size from 120 to 140 rooms. On October 2, 2012, Campbell Lodging, Inc. transferred its interest in the PSA to KPHL, LLC. Since then, there have been four amendments to the PSA (January 31, 2012-15t Amendment; June 2012.- 2"d Amendment and January 25, 2013—3`6 Amendment). On January 21,2014, the parties entered into the 4th Amendment, which extended the close of escrow deadline to June 30, 2015. The property has been reconveyed to the Successor Agency and remains subject to the terms of the PSA. The extension allows additional time to process project entitlements and final parcel map as well as obtain a Finding of Completion and a certified LRPMP from the DOF. The sales price is substantiated by an appraisal review by Nagasaki &Associates, dated January 9, 2012, that valued the parcels at$294 million to$3.50 million. The property is fully entitled and the developer has the financing in place. Once the LRPMP has been approved by DOF, the sale can take place immediately. Recommendation for Disposition ether Liquidation The parcels will be held by th€, dce6-s-sorArgency 66tV* ae dit ; property is closed per the PSA, kict: stimatec ,to Implementation Plan The Successor Agency will request that the Oversight Board ratify and affirm the PSA and will re-submit to Department of Finance as a part of this Long Range Property Management Plan. The $3.10 million in sales proceeds, set in the PSA and substantiated by the appraisal, will be distributed to the Taxing Entities to the extent required by law. October 15,2014 Page 29 Long Range Property Management Plan Successor Agency to the former Redevelopment Agency of the City of Huntington Beach 4 ,w, � �� " Nd+IPf,l ha VIwIIItR,vlhllllh11.�. rw n l� f � .uw �' w �h �l�� s• r �. �N IuS�bl�ll4lkalPI'd'ii r6'1k �'I�llu II €sl uFd" �i�IklV� y w Ili d lw w ' _ m lh llalul'll — w — w October 15,2014 Page 30 Successor Agency Res. No. 2014-06 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the Clerk of the Successor Agency to the former City of Huntington Beach Redevelopment Agency, Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by The Successor Agency to the Redevelopment Agency of the City of Huntington Beach at a special meeting held on November 3, 2014 and that is was so adopted by the following vote: AYES: Katapodis, Hardy, Shaw, Harper, Boardman, Sullivan, Carchio NOES: None ABSENT: None ABSTAIN: None R Clerkof The Successor AVgency to the Redevelopment Agency of the City of Huntington Beach, California