HomeMy WebLinkAboutResoultion 2014-06 Successor Agency - Approving Long Range P r
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Meeting Date 111312014
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CITY OF HUNTINGTON BEACH
REQUEST FOR SUCCESSOR AGENCY ACTION
MEETING DATE: 11/3/2014
SUBMITTED TO: Honorable Chair and Agency Members
SUBMITTED BY: Fred A Wilson. City Manager
PREPARED BY: Ken Domer. Assistant City Manager
Kellee Fritzal. Deputy Director. Office of Business Development
SUBJECT: Adopt Successor Agency Resolution No 2014-06 approving the Long Range
Property Management Plan (LRPMP)
Statement of Issue
Pursuant to Assembly Bill 1484 (AB 1484), all successor agencies are required to prepare a Long
Range Property Management Plan (LRPMP) that will govern the disposition and use of the former
non-housing properties owned by the former redevelopment agency. The Successor Agency is
asked to review and approve the LRPMP which after consideration by the Oversight Board. will
then be sent to the California Department of Finance (DOF) by November 13. 2014, which is six
months from the date the Successor Agency received its Finding of Completion from DOF
Financial Impact.
To be determined. based on final sale price of the properties The City will receive a portion of the
sale proceeds, subsequent to the distribution of the sale proceeds to the taxing agencies
Successor Agency Recommended Action:
Adopt Resolution No 2014-05 "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
Alternative Action(s)
Do not approve the LRPMP and direct staff accordingly
Analysis
Pursuant to Assembly Bill 1484 (AB 1484) all successor agencies are required to prepare a Long
Range Property Management Plan (LRPMP) that will govern the disposition and use of the non-
housing properties owned by the former redevelopment agency The LRPMP must be approved by
the Successor Agency and then by the Oversight Board
The approved plan is then submitted to the DOF for review no later than six (6) months following
the issuance of a Finding of Completion The DOF issues the Finding of Completion once the
Successor Agency has paid the amount indicated by the due diligence reviews and the county
auditor-controller has reported those payments to DOF
The Huntington Beach Successor Agency received its Finding of Completion on May 13, 2014, so
the LRPMP is due to DOF by November 13. 2014 Pursuant to Health and Safety Code Section
Item 11 . - I
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Meeting Date: 11/3/2014
34191.5(c), the LRPMP must include a detailed inventory with background information and the
recommended use or disposition of each property. Permitted actions under the LRPMP include:
Retention of the property for governmental use;
Retention of the property for future development of approved enforceable obligations;
Use of the property to fulfill a current enforceable obligation; and
Sale of the property with proceeds distributed to the taxing entities.
Generally, DOF interprets AB 1484 to require successor agencies to sell property unless it has an
approved enforceable obligation attached to it or is used for a governmental purpose. None of the
properties owned by the Huntington Beach Successor Agency have an approved enforceable
obligation. However, one property is being used for a governmental purpose.
The Huntington Beach Successor Agency owns seven (7) properties containing thirteen (13)
parcels described below, which were all acquired for general redevelopment purposes. Six of the
seven properties have buildings and/or approved planning entitlements and one is undeveloped.
As part of the wind down process of redevelopment, appraisals and/or a value is required to be
established on the properties that are recommended for sale. The estimated values for those
properties determined by the appraisals are shown on the following table. The LRPMP does not
require that new appraisals be conducted.
Estimated Sales
Property Disposition Recipient Price from Timing of Sale
Type Recipient
Future City s0 ASAP/Transfer
International Surf Development
Museum (retained as ISM)
Downtown Alley Government Use City $0 ASAP/Transfer
Public Skate Park Government Use City $0 ASAP/Transfer
Future City of Huntington $0 ASAP/Transfer
Westminster Development Beach / City of
Parcel (Water Westminster
Wells/Potential
Animal Shelter
Designated Buyer $7,900,000, less 1 Quarter 2015
Waterfront Hyatt Enforceable repayment of the
Regency ObligHy tt;retain two enforceable
obligations
Enforceable Designated Buyer Fair Market Value 4 Quarter
Waterfront Obligation (retain of the Leasehold 2015/15'Quarter
Hilton/Parcel C Hilton, build new Interest 2016
tower)
Other Liquidation Designated Buyer $3,100,000 ASAP/Close
Edinger Hotel (Construct Escrow
Springhill Marriott)
Item 11 . - 2 �s-
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Meeting Date: 1 1/312 0 1 4
The Successor Agency and then the Oversight Board are required to review and approve the
LRPMP. Once approved, the LRPMP will be sent to California Department of Finance for approval
and then for Agency implementation. The actual amount of sales proceeds will be dependent upon
the market conditions and the final sales prices, less listing costs and escrow fees.
Environmental Status:
Not applicable
Strategic Plan Goal:
Improve long-term financial sustainability
Attachment(s):
1. 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"
2. Long Range Property Management Plan, including Appendix A — Finding of Completion,
Appendix B — HB Inventory Matrix, Appendix C — Map of Properties, and Appendix W —
Long Range Property Management Checklist.
'Appendix documents D-V on file in the City Clerk's Office.
I-IB -149- Item 11 . - 3
ATTACHMENT
• 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 151 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 Ca4fornia Redevelopment .Association v. Mutosantos, 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 Citv 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. 20127 the Legislature passed and the Governor signed Assembly Bill No.
1484 ("AI3 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
HRS 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
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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 DOE all real property and interests in real property identified in the DDRs by
H&S Code Section 341795(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 341915(c) of the Dissolution Act requires that the LRPMMP (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 I-I&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 112014, 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 DOE The
LRPMP includes 13 parcels comprising seven properties; namely:
Property Name Parcel Number on Inventor,
Surf N4useum 1
Downtown Alley 2
Skate Park 3
Westminster Parcel 4
Waterfront Hyatt Regency Hotel 5
Waterfront Hilton I-lotel/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
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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, 20E)
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 53,100,000; 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-Controllers 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 I-RPMP is approved by the Successor Agency, the LRPMP shall thereafter be
submitted to the Oversight Board f'or 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 el 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 tens 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
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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 Agencv 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 LRPNlP, as approved by the Oversight Board, on the Successor Agency's
internet website; (iv) revise the LRPNlP 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 deenmed 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 time
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 temm 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 nlay deenm
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.
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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.
hatrperson
REVIEWS AID APPROVED: INITIATED AN APPROVED:
E. ut ve irector Deputy ive Director
, 1PPROVED AS TO FORM-
C
f]� )
Boaird Counsel
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Long Range 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 S, 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 (Parcel4)...............................................................................................15
Waterfront Hyatt Regency Hotel (Parcel 5)............................................................................18
Waterfront Hilton Hotel/Parcel C (Parcel 6 and 7)..................................................................22
Edinger Hotel (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 (Speck Plan 14)
Appendix I Local Coastal Plan
Appendix J Historic Survey
Appendix K CUP#08-005
October 15,2014 Pagel
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 Ground Lease
Appendix N Hyatt Regency (Parcel 5) Ground Lease
Appendix O Waterfront Disposition and Development Agreements (5)
Appendix P Parcel 5 Section 108 Loan
Appendix Q Parcel 5 Promissory Note
Appendix R Waterfront Hilton (Parcel 6) Ground Lease
Appendix S Implementation Agreement No. 5
Appendix T Parcel C (Parcel 7) Fire and Parking Easements
Appendix U Edinger Hotel Purchase and Sale Agreement
Appendix V Appraisal / Reuse Analysis / 33433 Report
Appendix W Long Range Property Management Plan Checklist
October 15,2014 Page 61
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 (DCF) 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 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
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Long Range Property Management Plan
Successor Agency to the former Redeveiopment 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 Obligation Designated Enforceable
Obligation Terms Obligation Recipient
Governmental Governmental Use in Accordance with Appropriate Public
Section 34181(a) Jurisdiction
Future Transfer to City for use in a project City
Development identified in the Approved Redevelopment
Plan. To the extent required by law,
disposition proceeds to be distributed
among Taxing Entities in accordance with a
Compensation 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
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);
ee 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 / Speck Plan 5 (Appendix G),
Beach and Edinger Specific Plan / Specific Plan 14 (Appendix H) and
Local Coastal Plan (Appendix 1).
Redevelopment Plan (Appendix D)
"ie objectives and goals of the Redevelopment Plan are provided below
Huntington Beach Merged Project Area Redevelopment Plan Goals:
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 ?�P�
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 C Winger Hotel
(Parcels 8-13)
(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 certfied 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 ASAP
Downtown Alley Government Use City 50 .ASAP
Public Skate Park Government Use City $0 ASAP
Westminster Parcel Future Development City of $0 ASAP
Huntington
Beach /City
of
Westminster
Waterfront Hyatt Regency Other Liquidation or, Designated $7,900.000. ASAP
in the alternative, Buyer less repayment
Enforceable of the two
Obligation enforceable
obligations
Waterfront Hilton/Parcel C Other Liquidation or. Designated =MV of the 4th
in the attemative, Buyer Leased Fee Quarter
Enforceable Interest 2015-1st
Obligation Quarter
2016
Edinger Hotel Other Liquidation Designated $3,100,000 ASAP
Buyer
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 to,mer 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 5` 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.
n�
Parcel Data
Address 411 Olive Street
APN C24-147-01
Lot Size 5,375 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 1996
General Plan and the updated historic survey conducted by the City in 2014
(Appendix J).
Existing Use Houses the International Surfing Museum/Library
Use Restrictions CUP #08-005 (Appendix K). Local Coastal Plan (Appendix 1)
Zoning Specific Plan 5—District 1 (Appendix G), which allows for mixed-use
commercial/residential development. Per the Local Coastal Plan, the site
must provide visitor serving commercial uses only on the ground floor.
Former Project Area Main-Pier Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
October 15,2014
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Acquisition & Valuation Information
Purchase Date March 7, 1988
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 Cl However, due to the size and configuration of the parcel,
a new development would have difficulty parking the project in a subterrarean
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
• A historic designabon 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 fad 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 fad 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 Property and Contractual Requirements
Annual Revenues $3,000
Generated
Contractual Lease (Appendix L)
Requirements
Lease Rate $3,000 CPI Increases per year
Lessee International Surf Museum Foundation and Visit Huntington Beach
Lessor Successor Agency of the Huntington Beach Redevelopment Agency
History of Environmental Contamination or Remediation Efforts
History of None
Environmental
Contamination
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 Agency Planning Objectives
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 medical office
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 lease will be renewed in 2017 at market rate rent.
Recommendation for Disposition
Retain for Future The parcel has been used as a museum since 1990 and the tenant
Development invested $35.000 in building improvements in 2013. 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
n 3--
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 V Street near Pacific Coast Highway in the former Main-Pier Redevelopment
Project Area.
Parcel Data
Address Main Street near Pacific Coast Highway
A P N 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
Zoning Specific Plan 5—District 1(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 February 19, 1993
Purchase Price s'
Purpose Provide safe pedestrian/public access between Main Street and 5 Street
Current Value (Est.) so
Method of Valuation The size (ten feet wide) and location of the parcel makes it an
undevelopable remnant and is considered to have no effective value.
Revenues Generated by Property and Contractual Requirements
Annual Revenues None
Generated
Contractual None
Requirements
October 15,2014
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
Environmental
Contamination
Remediation Efforts None
Completed Studies None
Transit-Oriented Development & Advancement of Agency Planning Objectives
Potential for TOD None
Agency Planning The parcel provides public access between streets on large MOCKS 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 comer 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 Use 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 5i' 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 1C
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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October 15,2014 Page 11
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Public Skate Park (Parcel 3)
The parcel is located east of Gothard between McFadden and Center Avenue in the former
Huntington Center Redevelopment Project Area
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Parcel Data
Address 7541 Center Avenue
APN 142-073-03
Lot Size 108,910 Square Feet; 2.50 Acres _
Existing Public Skate Park
Improvements
Existing Use Public Skate Park Use Restrictions Public Skate Park. lease restrictions (Appendix M), Specific Plan 14 park
requirement(Appendix H - Book III: City Actions Section 3.2.4 Parks, Page
114). undergoing inclusion in City's Parks Master Plan (to be completed in
2015)
Zoning Specific Plan 14—T5 (Town Center Neighborhood) (Appendix H)
Former Project Area Huntington Center Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition & Valuation Information
Purchase Date December 9, 1987
Purchase Price St 055.071 (as part of the full price of Parcel 4)
Purpose For the future Gothard-Hoover Street Extension and Realignment.
Current Value (Est.) 50
Method of Valuation The property is currently leased to Vans for$1 per year and the use is
restricted to a public skate park. Given that the parcel will be included in
the City's Parks Master Plan as well as the ground lease restrictions and
environmental issues, the effective value of the parcel is$0.
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Revenues Generated by Property and Contractual Requirements
Annual Revenues 51 per year
Generated
Contractual 30 year Ground Lease with automatic extensions iAppendix W
Requirements
Lease Rate 51 per year
Lessee VF Outdoor Inc.
Lessor Successor Agency of the Huntington Beach Redevelopment Agency
History 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 concems were addressed through the City s
requirement of methane barner 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 Planrting 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 Extension and
Realignment, the former Agency sought other uses for the property. Due to the environmental issues
that do not allow digging on the property as well as the fact that in 2008 the School District closed the
skate park at Huntington Beach High School, the former Agency concluded that a public skate park
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 retum, 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
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
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
the City. The skate park is providing over 50 jobs in the community.
October 15,2014 Page 13
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 that is 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
ground 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.
�.nressa—
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Octooer 15,20.4 11
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
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.
H T 1
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Parcel Data
Address No Address
APN 142-311-34
Lot Size 50,573 Square Feet, 1.16 Acres
Existing None
Improvements
Existing Use Vacant Land/Landscaping
Use Restrictions None
Zoning Park/Open Space—City of Westminster
Former Project Area N/A
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition &Valuation Information
Purchase Date December9, 1987
Purchase Price W9.929 as part of the full price of Parcel 3
Purpose For the future Gothard-Hoover Street Expansion and Realignment
Current Value (Est.) s0
Method of Valuation Given the location. configuration and size, the Parcel is considered to be
undevelopable for commercial uses and thus is considered to have no
effective value
October 15,2014 p lee 15
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Revenues Generated by Property and Contractual Requirements
Annual Revenues None
Generated
Contractual None
Requirements
History of Environmental Contamination or Remediation Efforts
History Of Unknown no tests have occurred.
Environmental
Contamination
Remediation Efforts None at this time
Completed Studies City of Huntington Beach Water Department is currently studying the
oarcel.
Transit-Oriented Development & Advancement of Agency Planning Objectives
Potential for TOD Unknown
Agency Planning The City of Huntington Beach has had three water wells fail within the
Objectives general location, the City's Water Department needs an approximately 100
foot by 120 foot portion of the parcel to create a replacement water well
(12,000 square feet). The Water Department is conducting soils and
geological testing on the site. A multi-city group (including Huntington
Beach) is considering the site for a multi-city animal shelter on the
remaining approximate 38,500 square feet of the parcel. Discussions
regarding the development have just commenced A new shelter will assist
the County due to overcrowding and the distance to the County Animal
Shelter. Alternatively, the City of Westminster has expressed interest in
developing the remaining area as a Dark if the shelter is not developed
Brief History of Previous Development Proposals and Activities
Once it was established that the parcel was not required for the Gothard-Hoover Street Extension and
Realignment, the former Agency sought other uses for the property. On January 27.2011. the City
released a Request for Bids (RFB)for the sale of Parcel 4. The RFB was placed on the City's website.
sent to public agencies. local realtors and adjoining property owners. The City received a bid for the
purchase of the parcel. Subsequent to receiving that bid, the Westminster Redevelopment Agency
expressed interest in purchasing the property and provided a second bid. Based on the two bids, staff
recommended that the parcel be sold to the Westminster Redevelopment Agency. The sale was never
consummated due to the state-wide elimination of redevelopment agencies.
Due to the failure of three (3) nearby water wells, the City Water Department is in need of the majority of
the site for water wells and is currently conducting soils and geological testing on the site. A mufti-city
group (including Huntington Beach) is looking to the site in regards to placing an animal shelter on the
remaining approximately 38,500 square feet of the parcel. The City of Westminster has also expressed
interest in the remaining area as a park, if the shelter is not developed.
G' )ber :S, Y':I °ige to
Long Range Property Management Plan
Successor Agency to the former 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 park
• 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
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.
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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 Coastai 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 15,20'4
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 S7.722 159
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.) S7.900.000 based or an appraisai. 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 property.
Revenues Generated by Property and Contractual Requirements
Annual Revenues $184,618/annual
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 indude the
Waterfront site, which totaled 44-acres. The site was blighted,showing evidence of physical
October 15,2014 Page 19
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
deterioration and obsolescence due to long deferred maintenance. The farmer Agency purchased the
fee title in 1988, which was subject to an existing ground lease. With fee title to the site, the former
Agency approved a DDA with Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982
(Developer) in September 1988 that provided for a six phase development that would remove a gas
station, a pitch and putt golf course, the Huntington Beach Inn, and the 239-space Driftwood Beach Club
mobile home park along with its associated buildings and paved parking areas, as well as relocate the
City Beach Maintenance Facility A portion of the site adjacent to Beach Boulevard included a small
degraded wetlands area. In addition to the already mentioned blighting conditions above ground, seven
abandoned oil wells were found to be on the site. These wells did not meet the Division of Oil and Gas
requirements for future housing or commercial development and had to be re-abandoned and recapped
to current standards.
As stated above, the Waterfront Hilton Beach Resort opened in 1990. In 1998, the former Agency and
Mayer Financial L.P., an affiliate of the original Developer, entered into an Amended and Restated DDA
to redefine how the remaining phases of development would be carried out. The amended DDA called
for the fee interest in the residential portion of the site to be sold to the Developer for the subsequent
development of 184 units, which occurred in 2003. In addition, the amended DDA called for the
relocation of the remaining 102 mobile home park residents to be completed, which occurred at about
the same time Since approval of the amended DDA, there have been five implementation agreements
to the DDA.
Pursuant to the 1998 amended DDA, in 2001 the former Agency and PCH Beach Resorts, LLC, a
subsidiary of the Developer. (Lessee) entered into a 99-year ground lease for Parcel 5. The 1998
amended DDA and 2001 ground lease called for Parcel 5 to be developed with the 517 room Hyatt
Regency hotel. Given the extraordinary off-site and on-site improvements that were necessary to
complete the Hyatt Regency, the project was established to have a $22 million financial gap. as verified
by the Summary Report that at that time was required by California Health and Safety Code Section
33433
The 1998 DDA called for the financial gap to be filled with the following:
1. The City, on behalf of the former Agency, entered into a $6 million Section 108 loan (Appendix P)
with the US Department of Housing and Urban Development (HUD). The City and the former
Agency entered into a loan agreement that made the former Agency responsible for repaying this
Section 108 loan with property tax increment.
2 The remaining financial gap was filled by the Developer agreeing to impose a Communities Facilities
District (CFD) on the property, and to make the CFD debt service payments. The Developer and the
former Agency executed a Promissory Note that requires the former Agency to rebate the debt
service payments using property tax increment (Promissory Note, Appendix Q).
The DOF has established that the debt service payments on the Section 108 loan and the Promissory
Note are Enforceable Obligations. The debt service payments are as follows:
1. The Section 108 loan requires an annual payment ranging from $448.000 to $538,000 per year from
tax increment, has an existing balance of$2,300,000, and expires on August 1, 2019.
2. The Promissory Note requires an annual payment of approximately $735.000 per year, and the
obligation expires on August 1, 2022. The current outstanding balance is $4,620,000.
The Lessee has offered to purchase the Successor Agency's leased fee interest in Parcel 5 from the
Successor Agency for$7.900.000. The Successor Agency agrees this is the current Fair Market Value
of the Successor Agency's Leased Fee Interest in the premises and the offered price is supported by an
appraisal prepared by the highly respected consulting firm of PKF Consulting USA which the Successor
Agency's financial consultant has reviewed and accepted. The ground lease is set to expire in 2097,
and the Lessee has a Right of First Refusal if the Successor Agency should sell Parcel 5 prior to the end
of the ground lease term.
October 15,2014 cage 20
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 1 X 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 Redevelo ---,it 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.
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) Dispositior and Development Agreement and
four Implementation Agreements (Appendix O), 5`" DDA Implementation
Agreement (Appendix S). Local Coastal Plan (Appendix 1), 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 $3677,703
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 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
Occoner 15,2014 Page 22
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 property.
Revenues Generated by Property and Contractual Requirements
Annual Revenues $450,000 per year
Generated
Lease Rate Base plus annual CPS. increases
Contractual Ground Lease, Future Ground Lease, Fifth Implementation Agreement to
Requirement the Amended DDA
Lessee Waterfront Hotel LLC
Lessor Successor 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 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 mufti-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 tide to the site,the former
October 15,2014 Page 23
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Agency approved a DDA with the Developer in September 1988 that provided for a six phase
development that would remove a gas station, a pitch and putt golf course, the Huntington Beach Inn,
and the 239-space Driftwood Beach Club mobile home park along with its associated buildings and
paved parking areas, as well as relocate the City Beach Maintenance Facility. A portion of the site
adjacent to Beach Boulevard included a small degraded wetlands area. In addition to the already
mentioned blighting conditions above ground. seven abandoned oil wells were found to be on the site.
These wells did not meet the Division of Oil and Gas requirements for future housing or commercial
development and had to be re-abandoned and recapped to current standards.
In April 28, 1989, the former Agency and Robert L. Mayer, as Trustee of the Robert L. Mayer Trust,
entered into a 99-year ground lease (Appendix R) and the Waterfront Hilton was completed on Parcel 6
in 1990. The lessee's interest in the Ground Lease was subsequently assigned to The Waterfront Hotel
LLC, an affiliate of the original Developertlessee. As stated above, the Waterfront Hilton Beach Resort
was completed and opened in 1990. The Lessee also leases the adjacent Parcel 7/Parcel C, which the
DDA designates as the site of a planned expansion of the Waterfront Hilton. In accordance with the
DDA and Lease terms,the base rent for the Waterfront Hilton parcel and Parcel 7/Parcel C was recently
updated (as of January 1, 2014) based on an appraisal of the Leased Fee Interest in the property.
In 1998, the farmer Agency and Mayer Financial L.P., also an affiliate of the original developer,
amended the DDA to redefine how the remaining phases would be carried out. The amended DDA
called for the fee interest in the residential portion of the site to be sold to the Developer for the
subsequent development of 184 units, which sale occurred in 2003. In addition, the relocation of the
remaining 102 mobile home park residents was completed. Since approval of the amended DDA. there
have been five implementation agreements to the DDA.
Pursuant to the 1998 DDA. the Developer submitted an application to the City to construct the hotel
expansion on Parcel 7/Parcel C by December 31, 2009 This hotel expansion is currently proposed to
be comprised of 151 rooms, with a spa. fitness facility and lounge/bar for guests. The project will add
needed public infrastructure upgrades to off-site improvements, create additional hospitality industry and
construction jobs, and increase property tax, sales tax and transient occupancy tax revenue.
On October 20. 2008 and October 18, 2010. the 3"and 41- Implementation Agreements to the 1998
DDA were executed between the former Agency and the Developer to extend the Schedule of
Performance for the development of Parcel 7/Parcel C. On May 16, 2011, the 51° Implementation
Agreement to the DDA (Appendix S) was executed between the former Agency and the Developer to
provide for an amended and restated ground lease to consolidate Parcels 6 and 7 into one site which
would be covered by a new consolidated ground lease if construction commences on the hotel
expansion within the time set forth in the 5P1 Implementation Agreement. The consolidated ground lease
includes both a base rent and a participation rent. and the term is set at 99 years. In addition, under the
terms of the agreement. the City of Huntington Beach (not the Successor Agency)will receive a
payment of$250,000 from the Developer each time an extension to the DDA is granted, to provide
compensation for the estimated loss in TOT that the City would have received as a result of the timely
development of the third hotel, and with the Developer entitled to a credit against these extension
payments for specified project-related costs.
If construction has not commenced on the third hotel by December 31, 2016. the consolidated ground
lease will not go into effect. In that case, the existing Parcel 6 ground lease would remain in place
through December 31, 2086. and Parcel 7 would continue to be encumbered by a Parking Easement
Agreement (in the form set forth in Attachment C to the'Intenm Short Term Lease'executed by the
former Agency on April 14, 1999), a 'License Agreement to Provide Landscaping and other
Improvements in the Public Right of Way', that was executed on February 20, 2001, and the'Reciprocal
Fire Lane Access Easement Agreement" dated August 30. 1995 The Parking Easement Agreement
provides for a parking easement on Parcel 7 for the benefit of Parcel 6 (Hilton property), as more
particularly set forth in the Parking Easement Agreement.
D=ber 'S, 2011 D39e .a
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 Agency's leased fee. The
Lessee's proposal is that the conveyance would occur in approximately the 4* 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 full 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 proceecs
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
Goober .5, 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
7 or the sale is not consummated. Within a reasonable time after the Lessees
99-year lease of Parcels 6 and 7 commences. the Successor Agency wiil
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 on Parcel 7 in accordance wdh the Schedule of Performance, the
DDA terminates as to Parcel 7, and the existing Lease on Parcel 6 remains in
place Within a reasonable time after the DDA terminates as to Parcel 7, the
Successor Agency will market both (i) its separate leased fee interest ir Parcel
6 at the Fair Market Value 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 as a hotel at the Fair Market Value of the fee interest in the
property as encumbered with the Fire Easement, Parking Easement and
Landscaping Easements, provided, however, Parcels 6 and 7 will not
necessarily be marketed as being sold together The sales proceeds for both
Parcels will be shared with the Taxing Entities to the extent required by law
• Alternative 4 The Lessee does not commence construction on the hotel
expansion on Parcel 7 in accordance with the Schedule of Performance, the
DDA terminates as to Parcel 7, and the existing Lease on Parcel 6 remains in
place. Within a reasonable time after the DDA terminates as to Parcel 7, the
Successor Agency will market its separate leased fee interest in Parcel 6 at the
Fair Market Value of its Leased Fee Interest. subject to the Lessee's Right of
First Refusal, and(n)convey its fee interest in Parcel 7 to the City to be
retained for future development as a hotel as 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 by law
It is anticipated that Alternative 1 will generate the highest proceeds of the
four alternatives for the Taxing Entities.
f
FUTURE '
HOTEL SITE
October 15,2014 Page 25
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Edinger Hotel (Parcels 8 — 13)
.he property is located on the southeast comer of Edinger Avenue and Parkside Lane and is
undeveloped with the exception of a vacated Big O Tire Store on Parcel 8.
�r
Ir _:a:•:A-
Parcel Data
Address 7872 Edinger Avenue
APN 142-081-09. 10, 11, 12, 06. 28
Lot Size 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.
Zoning Specific Plan 14—T4 (Appendix H)
Former Project Area Huntington Center Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition &Valuation Information
Purchase Date All parcels were purchased in 1988 with the exception of Parcel 13, which
was purchased in 2009.
Purchase Price S4 844 425
Purpose 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.) S3 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 15,20A 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 for$110
million. This sales price is supported by an appraisal dated January 9,
2012 (Appendix 1n. 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 asks and the provisions for such risks
- -- - already agreed to within the PSA. It Is concluded that the sales price listed
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 53.10 million.
Revenues Generated by Property and Contractual Requirements
Annual Revenues none
Generated
Contractual Purchase and Sale Agreement (Appendix U)
Requirements
History of Environmental Contamination or Remediation 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 cost$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 properties (2014
premium was approved by DOF). The policy will expire in 2016. The
Developer is responsible for any other plumes that are found on the
property and leakages from those plumes. As a result, the Developer was
required by the PSA to obtain an insurance policy for$2.5 million to cover
this nsk.
Remediation Efforts Will occur when the building is demolished by the Developer.
Completed Studies Phase 1 and limited Phase 2 reports are completed.
Transit-Oriented Development & Advancement of Agency Planning Objectives
Potential for TOD None.
Agency Planning This property is noted in the former Agency 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 comer 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 faaiities and public infrastructure
Cc-.ober :5, 2014 Pagp _g
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
• Promote local lob 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 faohties
• Recycte and/or develop underutilized parcels to accommodate higher and
better economic uses while enhancing the City's financial resources.
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 or 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
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 into a
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 — 1' Amendment. June 2012—
2'a Amendment; and January 25, 2013— 3"Amendment) On January 21, 2014, the parties entered
into the 4? 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 $2.94
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
Other Liquidation The parcels will be held by the Successor Agency until the sale of the
property is closed per the PSA, which is estimated to be June 2015,
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
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
Clerkof The Successor AZgency to
the Redevelopment Agency of the
City of Huntington Beach, California
ATTACHMENT #2
Long Range 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
1111 -25;_ Item H . - 9
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......................................................5
Long Range Property Management Plan......................................................................................6
International Surfing Museum/Library (Parcel 1).......................................................................7
Downtown Alley (Parcel 2) .................................................................................................. 10
Public Skate Park (Parcel 3) ............................................................................................... 13
Westminster Parcel (Parcel4)................................................................................................. 16
Waterfront Hyatt Regency Hotel (Parcel 5)............................................................................. 19
Waterfront Hilton Hotel/Parcel C (Parcel 6 and 7)............................................................___.22
Edinger Hotel (Parcels 8 — 13) ............................................................................................ 28
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 (Speck 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 ,
Item IL - 10
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 Ground Lease
Appendix N Hyatt Regency (Parcel 5) Ground Lease
Appendix O Waterfront Disposition and Development Agreements (5)
Appendix P Parcel 5 Section 108 Loan
Appendix Q Parcel 5 Promissory Note
Appendix R Waterfront Hilton (Parcel 6) Ground Lease
Appendix S Implementation Agreement No. 5
Appendix T Parcel C (Parcel 7) Fire and Parking Easements
Appendix U Edinger Hotel Purchase and Sale Agreement
Appendix V Appraisal / Reuse Analysis / 33433 Report
Appendix W Long Range Property Management Plan Checklist
October 15, 2014 Page ii
1113 .257_ Item 11. - 11
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 Museum 1
Downtown Alley 2
Skate Park 3
Westminster Parcel 4
Waterfront Hyatt Regency Hotel 5
Waterfront Hilton Hotel/Parcel C 67
Edinger Hotel 8, 9, 10, 11, 12, 13
October 15, 2014 Page 1
Item 11 . - 12 HB -258-
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 Obligation Designated Enforceable
Obligation Terms Obligation Recipient
Governmental Governmental Use in Accordance with Appropriate Public
Section 34181(a) Jurisdiction
Future Transfer to City for use in a project City
Development identified in the Approved Redevelopment
Plan To the extent required by law,
disposition proceeds to be distributed
among Taxing Entities in accordance with a
Compensation 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
Item 11 . - 13
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 s0 ASAP
Downtown Alley Government Use City s0 S .=
Public Skate Park Government Use city $0 ASAP
Westminster Parcel Future Development City of so ASAP
Huntington
Beach /City
of
Westminster
Waterfront Hyatt Regency Other Liquidation or, Designated $7,900,000. ASAP
in the alternative. Buyer less repayment
Enforceable of the two
Obligation enforceable
obligations
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 S3.100 000 ASAP
Buyer
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).
October 15, 2014 Page 3
Item I I . - 14 1 If3 -2011-
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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.
11 Recycle and/or develop underutilized parcels to accommodate higher and better
economic uses while enhancing the City 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
(Parcels 6,7) (Parcels 8-13)
October 15, 2014 Page a
HB -261- Item 11 . - 15
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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 5
Item 11 . - 16 HB -262-
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 so ASAP
Downtown Alley Government Use City so ASAP
Public Skate Park Government Use city $0 ASAP
Westminster Parcel Future Development City of 50 ASAP
Huntington
Beach !City
of
Westminster
Waterfront Hyatt Regency Enforceable Successor FMV of the Unknown
Obligation Agency/ Leasehold
Lessee Interest
Waterfront Hilton/Parcel C Erforceable Successor FMV of the Unknown
of -_abon Agency / Leasehold
Lessee Interest
Edinger Hotel Other Liquidation Designated $3.100,000 ASAP
Buyer
LONG RANGE PROPERTY MANAGEMENT PLAN
The following provides the details for each parcel to be disposed by the Successor Agency
October 15, 2014 Page c
1113 -2631- Item 1 l . - 17
Long Range Property Management Plan
Successor Agency to tt,� - ,_ 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 5`"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 RegisterAt
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Parcel Data
Address 411 Olive Street
APN 024-147-01
Lot Size 5,375 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
budding has historic significance and is called out in the City 1996
General Plan and the updated historic survey conducted by the City in 2014
(Appendix J)
Existing Use Houses the International Surfing Museum/Library
Use Restrictions CUP #08-005 (Appendix K) Local Coastal Plan (Appendix I
Zoning Specific Plan 5—District 1 (Appendix G), which allows for mixed-use
commercial / residential development Per the Local Coastal Plan, the site
must provide visitor serving commercial uses only on the ground floor
Former Project Area Main-Pier Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
October 15, 2014 Page 7
Item 11 . - 18 1 Ili -2o4-
Long Range Property Management Plan
• Agency to the former Redevelopment Agency of the City of Huntington Beach
Acquisition & Valuation Information
Purchase Date March 7, 1988
Purchase Price S285000
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 limn 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
• 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 Property and Contractual Requirements
Annual Revenues $3.000
Generated
Contractual Lease (Appendix L)
Requirements
Lease Rate $3,000+ CPI Increases per year
Lessee International Surf Museum Foundation and Visit Huntington Beach
Lessor Successor Agency of the Huntington Beach Redevelopment Agency
History of Environmental Contamination or Remediation Efforts
History of None
Environmental
Contamination
Remediation Efforts None
Completed Studies None
October 15,2014
Item 11 . - 19
Long Range Property Management Plan
Successor Agency to the former Redevelc, =•-t Agency of the City of Huntington Beach
Transit-Oriented Development & Advancement of Agency Planning Objectives
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 medical office
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 S10 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 S250 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 lease will be renewed in 2017 at market rate rent.
Recommendation for Disposition
Retain for Future The parcel has been used as a museum since 1990 and the tenant
Development invested $35,000 in building improvements in 2013. 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
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October 15, 2014 Page c
Item IL - 20 1113 -266-
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 5' Street near Pacific Coast Highway in the former Main-Pier Redevelopment
Project Area
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Parcel Data
Address Main Street near Pacific Coast Highway
A P N 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
Zoning Specific Plan 5—District 1(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 February 19, 1993
Purchase Price S1
Purpose Provide safe pedestrian/public access between Main Street and 5" Street
Current Value (Est.) S0
Method of Valuation The size (ten feet wide) and location of the parcel makes it an
undevelopable remnant and is considered to have no effective value
Revenues Generated by Property and Contractual Requirements
Annual Revenues None
Generated
Contractual None
Requirements
October 15, 2014 P•a
l� „-_ Item 11 . - 21
Long Range Property Management Plan
Successor Agency to the former RedevelcF - __ _, of the City of Huntington Beach
History of Environmental Contamination or Remediation Efforts
History of None
Environmental
Contamination
Remediation Efforts None
Completed Studies None
Transit-Oriented Development & Advancement of Agency Planning Objectives
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 comer of Main Street and PCH The
exchange of land was considered to be an equal exchange valued at S1 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 Use 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'" 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 11
Item 11 . - 22 Ins -268-
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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October 15, 2014 Page 12
HB -269- Item 11 . - 23
Long Range Property Management Plan
Agency to the former Redevelopment Agency of the City of Huntington Beach
Public Skate Park (Parcel 3)
The parcel is located east of Gothard between McFadden and Center Avenue in the former
Huntington Center Redevelopment Project Area
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Parcel Data
Address 7541 Center Avenue
A P N 142-0 7 3-03
Lot Size 108,910 Square Feet. 2 50 Acres
Existing Public Skate Park
Improvements
Existing Use Public Skate Park
Use Restrictions Public Skate Park lease restrictions (Appendix M). Specific Plan 14 park
requirement (Appendix H - Book III City Actions Section 3 2 4 Parks. Page
114) undergoing inclusion in City s Parks Master Plan (to be completed in
2015)
Zoning Specific Plan 14—T5 (Town Center Neighborhood)(Appendix H)
Former Project Area Huntington Center Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition & Valuation Information
Purchase Date December 9, 1987
Purchase Price S1 055.071 (as part of the full price of Parcel 4)
Purpose For the future Gothard-Hoover Street Extension and Realignment
Current Value (Est.) s0
Method of Valuation The property is currently leased to Vans for S1 per year and the use is
restricted to a public skate park Given that the parcel will be included in
the City's Parks Master Plan as well as the ground lease restrictions and
environmental issues, the effective value of the parcel is S0
October 15, 2014
Item 11. - 24 HB -2711-
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Revenues Generated by Property and Contractual Requirements
Annual Revenues $1 per year
Generated
Contractual 30 year Ground Lease with automatic extensions (Appendix M)
Requirements
Lease Rate St per year
Lessee VF Outdoor Inc
Lessor Successor Agency of the Huntington Beach Redevelopment Agency
History 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
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 Extension and
Realignment the former Agency sought other uses for the property Due to the environmental issues
that do not allow digging on the property as well as the fact that in 2008 the School District closed the
skate park at Huntington Beach High School, the former Agency concluded that a public skate park
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
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
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
the City. The skate park is providing over 50 jobs in the community
October 15, 2014
1113 -27 1- Item I I . - 25
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 that is 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
ground 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
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October 15, 2014 Page 15
Item 11 . - 26 HB -172-
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
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.
ASS '��� • t � �?►
Parcel Data _
Address No Address
APN 142-311-34
Lot Size 50,573 Square Feet, 1 16 Acres
Existing None
Improvements
Existing Use Vacant Land / Landscaping
Use Restrictions None
Zoning Park/Open Space— City of Westminster
Former Project Area NIA
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition & Valuation Information
Purchase Date December 9, 1987
Purchase Price 5489 929 as part of the full price of Parcel 3
Purpose For the future Gothard-Hoover Street Expansion and Realignment
Current Value (Est.) So
Method of Valuation Given the location, configuration and size. the Parcel is considered to be
undevelopable for commercial uses and thus is considered to have no
effective value
October 15, 2014
- ]tern 11 . - 27
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agc of the City of Huntington Beach
Revenues Generated by Property and Contractual Requirements
Annual Revenues None
Generated
Contractual None
Requirements
History of Environmental Contamination or Remediation Efforts
History of Unknown, no tests have occurred.
Environmental
Contamination
Remediation Efforts None at this time
Completed Studies City of Huntington Beach Water Department is currently studying the
parcel
Transit-Oriented Development & Advancement of Agency Planning Objectives
Potential for TOD Unknown
Agency Planning The City of Huntington Beach has had three water wells fail within the
Objectives general location the City Water Department needs an approximately 100
foot by 120 foot portion of the parcel to create a replacement water well
(12 000 square feet) The Water Department is conducting soils and
geological testing on the site A multi-city group (including Huntington
Beach) is considering the site for a multi-city animal shelter on the
remaining approximate 38,500 square feet of the parcel Discussions
regarding the development have just commenced A new shelter will assist
the County due to overcrowding and the distance to the County Animal
Shelter Alternatively, the City of Westminster has expressed interest in
developing the remaining area as a park if the shelter is not developed
Brief History of Previous Development Proposals and Activities
Once it was established that the parcel was not required for the Gothard-Hoover Street Extension and
Realignment, the former Agency sought other uses for the property On January 27. 2011 the City
released a Request for Bids (RFB) for the sale of Parcel 4. The RFB was placed on the City website..
sent to public agencies. local realtors and adjoining property owners The City received a bid for the
purchase of the parcel Subsequent to receiving that bid the Westminster Redevelopment Agency
expressed interest in purchasing the property and provided a second bid Based on the two bids. staff
recommended that the parcel be sold to the Westminster Redevelopment Agency. The sale was never
consummated due to the state-wide elimination of redevelopment agencies
Due to the failure of three (3) nearby water wells, the City Water Department is in need of the majority of
the site for water wells and is currently conducting soils and geological testing on the site. A multi-city
group(including Huntington Beach) is looking to the site in regards to placing an animal shelter on the
remaining approximately 38,500 square feet of the parcel The City of Westminster has also expressed
interest in the remaining area as a park. if the shelter is not developed.
October 15, 2014 Page
Item 11 . - 28 1113 -_274-
Long Range Property Management Plan
Successor Agency to the former 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-junsdictional 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 park.
• 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 18
1113 -27,- Item 11 . - 29
Long Range Property Management Plan
- _ r Agency to the for- 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
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Parcel Data
Address 21500 Pacific Coast Highway
APN 024-251-01
Lot Size 660.741 Square Feet, 15 17 Acres
Existing 517 room Hyatt Hotel
Improvements
Existing Use Hotel
Use Restrictions Ground Lease (Appendix Ni Local Coastal Plan (Appendix I
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
Item 11 . - 30 FIB -276-
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.) 57 900 000 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 property.
Revenues Generated by Property and Contractual Requirements
Annual Revenues $184,618/annual
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 Acton 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 to 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
Waterfront site, which totaled 44-acres. The site was blighted showing evidence of physical
October 15, 2014
1113 -277- Item 11 . - 31
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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
Agency approved a DDA with Robert L Mayer, as Trustee of the Robert L Mayer Trust of 1982
(Developer) in September 1988 that provided for a six phase development that would remove a gas
station a pitch and putt golf course. the Huntington Beach Inn, and the 239-space Driftwood Beach Club
mobile home park along with its associated buildings and paved parking areas. as well as relocate the
City Beach Maintenance Facility A portion of the site adjacent to Beach Boulevard included a small
degraded wetlands area In addition to the already mentioned blighting conditions above ground, seven
abandoned oil wells were found to be on the site These wells did not meet the Division of Oil and Gas
requirements for future housing or commercial development and had to be re-abandoned and recapped
to current standards
As stated above, the Waterfront Hilton Beach Resort opened in 1990 In 1998. the former Agency and
Mayer Financial L P , an affiliate of the original Developer. entered into an Amended and Restated DDA
to redefine how the remaining phases of development would be carried out The amended DDA called
for the fee interest in the residential portion of the site to be sold to the Developer for the subsequent
development of 184 units. which occurred in 2003 In addition, the amended DDA called for the
relocation of the remaining 102 mobile home park residents to be completed, which occurred at about
the same time Since approval of the amended DDA, there have been five implementation agreements
to the DDA
Pursuant to the 1998 amended DDA, in 2001 the former Agency and PCH Beach Resorts. LLC, a
subsidiary of the Developer, (Lessee) entered into a 99-year ground lease for Parcel 5 The 1998
amended DDA and 2001 ground lease called for Parcel 5 to be developed with the 517 room Hyatt
Regency hotel Given the extraordinary off-site and on-site improvements that were necessary to
complete the Hyatt Regency. the project was established to have a S22 million financial gap as verified
by the Summary Report that at that time was required by California Health and Safety Code Section
33433
The 1998 DDA called for the financial gap to be filled with the following
1 The City, on behalf of the former Agency, entered into a $6 million Section 108 loan (Appendix P)
with the US Department of Housing and Urban Development (HUD). The City and the former
Agency entered into a loan agreement that made the former Agency responsible for repaying this
Section 108 loan with property tax increment.
2 The remaining financial gap was filled by the Developer agreeing to impose a Communities Facilities
District (CFD) on the property. and to make the CFD debt service payments The Developer and the
former Agency executed a Promissory Note that requires the former Agency to rebate the debt
service payments using property tax increment (Promissory Note Appendix Q)
The DOF has established that the debt service payments on the Section 108 loan and the Promissory
Note are Enforceable Obligations The debt service payments are as follows
1 The Section 108 loan requires an annual payment ranging from S448.000 to $538,000 per year from
tax increment, has an existing balance of S2,300.000. and expires on August 1, 2019
2 The Promissory Note requires an annual payment of approximately S735,000 per year, and the
obligation expires on August 1. 2022 The current outstanding balance is $4,620.000.
The Lessee has offered to purchase the Successor Agency s leased fee interest in Parcel 5 from the
Successor Agency for S7.900.000 The Successor Agency agrees this is the current Fair Market Value
of the Successor Agency s Leased Fee Interest in the premises and the offered price is supported by an
appraisal prepared by the highly respected consulting firm of PKF Consulting USA which the Successor
Agency s financial consultant has reviewed and accepted The ground lease is set to expire in 2097.
and the Lessee has a Right of First Refusal if the Successor Agency should sell Parcel 5 prior to the end
of the ground lease term
October 15, 2014
Item 11 . - 32
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 S7,900.000 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 Loanr in full in
compliance with the provisions of AB 1484 and AB 1 X 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 1 X 26 and any remaining proceeds will be shared with the
Taxing Entities to the extent required by law
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
October 15, 2014 Page
11B -279- Item 11 . - 33
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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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 0). 5" DDA Implementation
Agreement (Appendix S) Local Coastal Plan (Appendix 1) Parcel C -
parking and access (Fire) easements (Appendix T)
Zoning Specific Plan 5—District 3(Appendix G)
Former Project Area Man-Pier Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition & Valuation Information
Purchase Date September 19, 1988
Purchase Price S3 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 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
the date this LRPMP is being approved. the Successor Agency has not
accepted the Lessees appraisal If the Successor Agency and the Lessee
reach an agreement on the terms and conditions of a sale of the Successor
Agencys 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 Leased Fee
interest in the property.
October 15, 2014
Item 11 . - 34 1113 -281
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
Revenues Generated by Property and Contractual Requirements
Annual Revenues $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
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 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 154 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
Agency approved a DDA with the Developer in September 1988 that provided for a six phase
development that would remove a gas station. a pitch and putt golf course. the Huntington Beach Inn,
and the 239-space Driftwood Beach Club mobile home park along with its associated buildings and
paved parking areas, as well as relocate the City s Beach Maintenance Facility A portion of the site
adjacent to Beach Boulevard included a small degraded wetlands area In addition to the already
mentioned blighting conditions above ground. seven abandoned oil wells were found to be on the site.
These wells did not meet the Division of Oil and Gas requirements for future housing or commercial
development and had to be re-abandoned and recapped to current standards.
October 15, 2014
1111 _281_ Item 1 1 . - 35
Long Range Property Management Plan
Successor Agency to me _,mer Redevelopment Agency of the City of Huntington Beach
In April 28, 1989, the former Agency and Robert L- Mayer. as Trustee of the Robert L. Mayer Trust,
entered into a 99-year ground lease (Appendix R) and the Waterfront Hilton was completed on Parcel 6
in 1990 The lessee s interest in the Ground Lease was subsequently assigned to The Waterfront Hotel
LLC an affiliate of the original Developer/lessee As stated above. the Waterfront Hilton Beach Resort
was completed and opened in 1990 The Lessee also leases the adjacent Parcel 7/Parcel C. which the
DDA designates as the site of a planned expansion of the Waterfront Hilton In accordance with the
DDA and Lease terms. the base rent for the Waterfront Hilton parcel and Parcel 7/Parcel C was recently
updated (as of January 1 2014) based on an appraisal of the Leased Fee Interest in the property
In 1998. the former Agency and Mayer Financial L P . also an affiliate of the original developer,
amended the DDA to redefine how the remaining phases would be carried out The amended DDA
called for the fee interest in the residential portion of the site to be sold to the Developer for the
subsequent development of 184 units, which sale occurred in 2003 In addition, the relocation of the
remaining 102 mobile home park residents was completed Since approval of the amended DDA. there
have been five implementation agreements to the DDA
Pursuant to the 1998 DDA, the Developer submitted an application to the City to construct the hotel
expansion on Parcel 7/Parcel C by December 31, 2009 This hotel expansion is currently proposed to
be comprised of 151 rooms, with a spa. fitness facility and lounge/bar for guests The project wnll add
needed public infrastructure upgrades to off-site improvements create additional hospitality industry and
construction jobs. and increase property tax. sales tax and transient occupancy tax revenue
On October 20. 2008 and October 18 2010 the 3" and 41b Implementation Agreements to the 1998
DDA were executed between the former Agency and the Developer to extend the Schedule of
Performance for the development of Parcel 7/Parcel C On May 16, 2011, the 5M Implementation
Agreement to the DDA (Appendix S) was executed between the former Agency and the Developer to
provide for an amended and restated ground lease to consolidate Parcels 6 and 7 into one site which
would be covered by a new consolidated ground lease if construction commences on the hotel
expansion within the time set forth in the 5 Implementation Agreement The consolidated ground lease
includes both a base rent and a participation rent, and the term is set at 99 years In addition. under the
terms of the agreement. the City of Huntington Beach (not the Successor Agency) will receive a
payment of$250.000 from the Developer each time an extension to the DDA is granted to provide
compensation for the estimated loss in TOT that the City would have received as a result of the timely
development of the third hotel and with the Developer entitled to a credit against these extension
payments for specified project-related costs
If construction has not commenced on the third hotel by December 31 2016, the consolidated ground
lease will not go into effect In that case the existing Parcel 6 ground lease would remain in place
through December 31, 2086, and Parcel 7 would continue to be encumbered by a Parking Easement
Agreement(in the form set forth in Attachment C to the 'Interim Short Term Lease' executed by the
former Agency on April 14. 1999). a 'License Agreement to Provide Landscaping and other
Improvements in the Public Right of Way-. that was executed on February 20, 2001. and the -Reciprocal
Fire Lane Access Easement Agreement' dated August 30. 1995 The Parking Easement Agreement
provides for a parking easement on Parcel 7 for the benefit of Parcel 6 (Hilton property) as more
particularly set forth in the Parking Easement Agreement
The Lessee of Parcels 6 and 7 has offered to purchase the Successor Agency's leased fee The
Lessees proposal is that the conveyance would occur in approximately the 4' 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
October 15, 201.3 Pai,e
Item 11 . - 36
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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 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
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
7 or the sale is not consummated Within a reasonable time after the Lessees
99-year lease of Parcels 6 and 7 commences. the Successor Agency will
market the property at the Fair Market Value of the Leased Fee Interest, subject
to the Lessees 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
October 15, 2014 Page 26
11t; -2831- Item 11 . - 37
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
expansion on Parcel 7 in accordance with the Schedule of Performance. the
DDA terminates as to Parcel 7. and the existing Lease on Parcel 6 remains in
place Within a reasonable time after the DDA terminates as to Parcel 7. the
Successor Agency will market both (i) its separate leased fee interest in Parcel
6 at the Fair Market Value of its Leased Fee Interest, subject to the Lessees
Right of First Refusal. and pp its fee interest in Parcel 7 for its intended
development as a hotel at the Fair Market Value of the fee interest in the
property as encumbered with the Fire Easement. Parking Easement and
Landscaping Easements, provided. however. Parcels 6 and 7 will not
necessarily be marketed as being sold together. The sales proceeds for both
Parcels will be shared with the Taxing Entities to the extent required by law.
• Alternative 4. The Lessee does not commence construction on the hotel
expansion on Parcel 7 in accordance with the Schedule of Performance, the
DDA terminates as to Parcel 7, and the existing Lease on Parcel 6 remains in
place. Within a reasonable time after the DDA terminates as to Parcel 7. the
Successor Agency will market its separate leased fee interest in Parcel 6 at the
Fair Market Value of its Leased Fee Interest, subject to the Lessee's Right of
First Refusal. and (i) convey its fee interest in Parcel 7 to the City to be
retained for future development as a hotel as 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 by law
It is anticipated that Alternative 1 will generate the highest proceeds of the
four alternatives for the Taxing Entities
FUTURE F �' " •
j HOTEL SITE
- >r
October 15, 20-;
Item 11 . - 38 1113 _,Sa_
Long Range Property Management Plan
Successor Agency to the for P,edevelopment 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
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Parcel Data
Address 7872 Edinger Avenue
APN 142-081-09, 10 11 12 06 28
Lot Size 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
Zoning Specific Plan 14—T4 (Appendix H)
Former Project Area Huntington Center Redevelopment Project Area
Current Title Successor Agency to the Huntington Beach Redevelopment Agency
Acquisition & Valuation Information
Purchase Date All parcels were purchased in 1988 with the exception of Parcel 13, which
was purchased in 2009
Purchase Price S4 844 425
Purpose 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 -
Item 11 . - 39
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 for$3.10
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 listed
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 S3 10 million
Revenues Generated by Property and Contractual Requirements
Annual Revenues None
Generated
Contractual Purchase and Sale Agreement (Appendix U)
Requirements
History of Environmental Contamination or Remediation 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 cost S200.000 to remediate The
Successor Agency placed S200,000 In an escrow account However there
was no way to know if the plume leaked onto surrounding properties The
Successor Agency has obtained a S5 million insurance policy for potential
leakage from that single plume to the surrounding properties (2014
premium was approved by DOF) The policy will expire in 2016 The
Developer is responsible for any other plumes that are found on the
property and leakages from those plumes As a result, the Developer was
required by the PSA to obtain an insurance policy for S2 5 million to cover
this risk
Remediation Efforts Will occur when the building is demolished by the Developer
Completed Studies Phase 1 and limited Phase 2 reports are completed
Transit-Oriented Development & Advancement of Agency Planning Objectives
Potential for TOD None,
Agency Planning This property is noted in the former Agency 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 RFO 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 29
Item 11 . - 40 Ills -,�t,-
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 Proles 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 financial resources
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
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 into a
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 — 1" Amendment. June 2012 —
2n0 Amendment. and January 25 2013 — 3rtl Amendment) On January 21. 2014, the parties entered
into the 4'n 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 $2 94
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
Other Liquidation The parcels will be held by the Successor Agency until the sale of the
property is closed per the PSA, which is estimated to be June 2015
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 53 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 30
Item 11 . - 41
Long Range Property Management Plan
Successor Agency to the former Redevelopment Agency of the City of Huntington Beach
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October 15, 2014 Page 31
Item 11 . - 42 tIB -289-
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• DEPARTMENT OF EDMUND G. BROWN JR. • GOVERNOR
C1lifOP+J F I N A N C E 915 L STRELT 8 9PCPAMENto CA ■ 95SI A-3706 • WW'W.00r.CA.00V
May 13, 2014
Ms. Lori Ann Farrell, Director of Finance
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Dear Ms. Farrell:
Subject: Finding of Completion
The California Department of Finance (Finance) has completed the Finding of Completion for the
City of Huntington Beach Successor Agency.
Finance has completed its review of your documentation, which may have included reviewing
supporting documentation submitted to substantiate payment or obtaining confirmation from the
county auditor-controller. Pursuant to Health and Safety Code (HSC) section 34179.7, we are
pleased to inform you that Finance has verified that the Agency has made full payment of the
amounts determined under HSC section 34179.6, subdivisions (d) or(e) and HSC section 34183.5.
This letter serves as notification that a Finding of Completion has been granted. The Agency may
now do the following:
• Place loan agreements between the former redevelopment agency and sponsoring entity on
the ROPS, as an enforceable obligation, provided the oversight board makes a finding that
the loan was for legitimate redevelopment purposes per HSC section 34191.4 (b) (1). Loan
repayments will be governed by criteria in HSC section 34191.4 (a) (2).
• Utilize proceeds derived from bonds issued prior to January 1, 2011 in a manner consistent
with the original bond covenants per HSC section 34191.4 (c).
Additionally, the Agency is required to submit a Long-Range Property Management Plan to
Finance for review and approval, per HSC section 34191.5 (b), within six months from the date of
this letter.
Please direct inquiries to Derk Symons, Staff Finance Budget Analyst, or Chris Hill, Principal
Program Budget Analyst, at (916) 445-1546.
Sincerely,
JUSTYN HOWARD
Assistant Program Budget Manager
cc: Ms. Kellee Fritzal. Deputy Director of Economic Development, City of Huntington Beach
Mr. Frank Davies, Property Tax Manager, Orange County
California State Controller's Office
Item 11 . - 43
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� LONG-RANGE PROPERTY MANAGEMENT PLAN CHECKLIST
Instructions: Please use this checklist as a guide to ensure you have completed all the required components
of your Long-Range Property Management Plan Upon completion of your Long-Range Property Management
Plan email a PDF version of this document and your plan to
Redevelopment_Administration@dof ca gov
The subject line should state '[Agency Name] Long-Range Property Management Plan" The Department of
Finance (Finance) will contact the requesting agency for any additional information that may be necessary
during our review of your Long-Range Property Management Plan. Questions related to the Long-Range
Property Management Plan process should be directed to (916) 445-1546 or by email to
Redevelopment Admin,stration(d)dof ca gov
Pursuant to Health and Safety Code 34191 5 within six months after receiving a Finding of Completion from
Finance. the Successor Agency is required to submit for approval to the Oversight Board and Finance a Long-
Range Property Management Plan that addresses the disposition and use of the real properties of the former
redevelopment agency
GENERAL INFORMATION:
Agency Name: Redevelopment Agency of the City of Huntington Beach
Date Finding of Completion Received: May 13. 2014
Date Oversight Board Approved LRPMP: November 5. 2014
Long-Range Property Management Plan Requirements
For each property the plan includes the date of acquisition, value of property at time of acquisition and an estimate
of the current value
® Yes ❑ No
For each property the plan includes the purpose for which the property was acquired
❑ Yes ❑ No
For each property the plan includes the parcel data, including address. lot size and current zoning in the former
agency redevelopment plan or specific community, or general plan
❑ Yes ❑ No
For each property the plan includes an estimate of the current value of the parcel including, if available, any
appraisal information
❑ Yes ❑ No
Page 1 of 2
1tem IL. - 46
For each property the plan Includ•n estimate of any lease rental or any other revenues generated by the
property and a description of the contractual requirements for the disposition of those funds
E Yes ❑ No
For each property the plan includes the history of environmental contamination. Including designation as a
brownfleld site, any related environmental studies and history of any remedlation efforts
E Yes ❑ No
For each property the plan includes a description of the property's potential for transit-oriented development and
the advancement of the planning objectives of the successor agency
Yes ❑ No
For each property the plan includes a brief history of previous development proposals and activity including the
rental or lease of the property
E] Yes ❑ No
For each property the plan identifies the use or disposition of the property, which could include 1) the retention of
the property for governmental use. 2) the retention of the property for future development. 3) the sale of the
property. or 4) the use of the property to fulfill an enforceable obligation
0 Yes ❑ No
The plan separately Identifies and list properties dedicated to governmental use purposes and properties retained
for purposes of fulfilling an enforceable obligation
❑ Yes ❑ No
ADDITIONAL INFORMATION
If applicable, please provide any additional pertinent information that we should be aware of
during our review of your Long-Range Property Management Plan.
Agency Contact Information
Name Kellee Frltzal Name
Title Deputy Director Title.
Phone: 714-374-1519 Phone.
Email: kfritzal@surfcity-hb org Email
Date October 29, 2014 Date
Department of Finance Local Government Unit Use Only
DETERMINATION ON LRPMP- ❑ APPROVED ❑ DENIED
APPROVED/DENIED BY. DATE:
APROVAL OR DENIAL LETTER PROVIDED ❑ YES DATE AGENCY NOTIFIED.
Form DF-LRPMP I11/15112)
Page 2 of 2
n+ Item 11 . - 47