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HomeMy WebLinkAboutRDA REQUEST PROP'S 02-06-95~,ATE' FEBRUARY 6, 1995 RDA NO. 3 2-6-95 Inter-Com TO' WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJEC~ AUTHORIZATION TO ISSUE REQUEST FOR QUALIFICATIONS/PROPOSALS RECOMMENDATION It is recommended that the Agency authorize the issuance of a Request for Qualifications/Proposals for the solicitation of a developer for the Old Town Gateway Project. FISCAL IMPACT While the issuance of the Request for Qualifications/Proposals will not have any fiscal impact on the AgencY, the Agency may ultimately incur costs for the redevelopment of the property. Any such costs will be incurred after selection of a developer and the negotiation of a Disposition and Development Agreement, subject to the direction and approval of the AgenCy. BACKGROUND In June, 1991, the Redevelopment Agency sponsored an Old Town Charette, bringing together over 70 Old Town business and property owners, community leaders, citizens and City officials and staff to identify constraints and opportunities within Old Town. During the course of the Charette, the participants walked, reviewed and studied Old Town with an eye to what improvements needed to be made to provide for revitalization and reinvestment. As a result of the Charette process, the Agency commissioned a Regional/Urban Design Assistance Team (R/UDAT) of the American Institute of Architects to undertake a focused study of Old Town and to recommend broad development parameters for specific properties, as well as overall Old Town. The R/UDAT study identified E1 Camino Plaza, and the property between the Plaza and Newport Avenue, as one of the most important opportunities the City has to strengthen and reinvigorate Old Town. As the R/UDAT study states, this property "...is the most critical edge from a design standpoint, because development south of Sixth Street faces onto the Old Town center at Main and E1 Camino. Newer development to the south of Sixth Street should play a significant role in becoming more fully integrated into the overall Old Town William A. Huston Issuance of RFQ/RFP February 6, 1995 Page 2 fabric." In discussing specific development of the property, the R/UDAT states: "This important Site anchors the south end of the core as the Retail/Transition zOne. E1 Camino Real should be abandoned and the properties south as it would be consolidated into a single entity. This new node could become an extension of E1 Camino Plaza, giving the center a Newport Avenue presence. New structures within this redeveloped area would supplement the center with night-time entertainment and eating establishments, anchored by Elizabeth Howard's Curtain Call Dinner Theater. The theater's presence should be made more evident by making it visible from the E1 Camino Real street frontage. A new campanile/theater marquee will terminate the south vista of E1 Camino Real and give the center scale and prominence from the freeway. A cluster of new buildings containing coffee houses and other evening uses would tie the Theater to the street through a landscaped forecourt. The updating of the center would be anchored by the construction of the Old Town Trellis inserted at the center's inner courtyard. This dramatic structure would give the theater a great sense of scale, relate it better to Old Town, and provide another skyline event that would create a dramatic nighttime signature when illuminated. Suggested new businesses to enhance the tenant mix are: Specialty food markets Theme restaurants Ethnic restaurants Comedy club or other night clubs "Revival movie house" Since 1991, the retail market in Orange County has been saturated with unleased space. Little or no new development has been undertaken and private financing for new centers has, for the most part, been non-existent. However, the vacancy rate in retail space in Orange County has been falling over the past 12 months and developers are again looking for prime opportunities for investment and development during the next two to three years. Therefore, staff believes this is an opportune time to solicit developers for this property. In 1992, the Agency sent formal notification to the property and business owners on site of the Agency's intent to redevelop the William A. Huston Issuance of RFQ/RFP February 6, 1995 Page 3 property. Each was asked to return a Statement of Interest in Participating, if they wished to be considered for the development of the property. The Agency received Statements of Interest from three property owners, one of whom owns property which is not included in the proposed development site, and one tenant, specifically Elizabeth Howard's Curtain Call Dinner Theater. The property owner of E1 Camino Plaza, the largest property on the site, did not respond at that time. However, the staff has also been in contact with the owner of E1 Camino Plaza, which represents approximately. 75% of the total site. He has indicated a growing concern for the condition and future of the center and has given his support to the Agency's efforts to bring about redevelopment of his property. DISCUSSION The staff is recommending a traditional approach to the redevelopment of this property. This approach calls for the solicitation and selection of a developer, negotiations of a Disposition and Development Agreement (DDA) and Agency assistance in land assembly and, possibly, ~ financial assistance, if deemed necessary, to reach the community's goals for the property. The developer solicitation process is a lengthy one, anticipated to take close to a year before a DDA is brought to the Agency for approval. It is divided into several phases. The first phase is a Request for Qualifications (RFQ). The preparation of formal proposals for redevelopment of property is a costly one for the private sector. Few, if any development companies will undertake preparation of such proposals unless they have a reasonable chance to be selected. The purpose of the RFQ phase is to reduce the number of potential developers to a few, between three and five, to make it worthwhile for the selected developers to undertake the effort and expense to prepare full proposals. If the Agency authorizes the issuance of the Request for Qualifications/Proposals, staff expects to release it by February 13, 1995. Statements of Qualifications will be due by March 23, 1995. These statements will include background information on the potential developers, including their experience with similar projects, their financial capability, and their relationships with ultimate users, lenders and other government agencies in similar projects. It will also include conceptual discussions of the developer's vision for the property. William A. Huston Issuance of RFQ/RFP February 6, 1995 Page 4 Based on a review of these statements, the staff will recommend a small group of developers to enter the second phase of the process by inviting them to submit formal proposals. The staff currently. anticipates these invitations being issued on May 4, 1995. The developers will be given three months to prepare full proposals. The proposals will be required to include full site plans, elevations and floor plans, identification of major users, development and operating pro formes as well as a discussion of the anticipated assistance from the Agency, if any. These proposals will be fully reviewed by staff and consultants and,.subsequently, the staff will recommend that the Agency enter into an Exclusive Right to Negotiate Agreement with the selected developer. This agreement would bind the Agency and the developer to negotiate in good faith, only with each other, to develop a DDA acceptable to both parties. Negotiations are expected to take approximately 90 to 120 days. Upon successful completion of these negotiations, a DDA would be presented to the Agency for approval, which is expected early in 1996. A schedule for developer selection as outlined in the attached RFQ/RFP is included as Attachment I. After entering into a DDA, the developer would then be required to obtain entitlements for the development, financing for the project, signed" leases with major tenants and to begin the actual redevelopment of the site. The Agency will also be required to fulfill its obligations, which may include land assembly, swift processing of development plans and building permits, or assistance in financing. CONCLUSION Attached for Agency consideration and approval is the draft Request for Qualifications/Proposals. Staff recommends the Agency authorize its issuance to the property and business owners of the '/Chr~i~-~/~~site' as well as the developmelnt~mmunity.:/~~~/~i ' -' i'e ~ Sh~ngleton ~h~d~im~er ' Assistant City Manager /RedevelOpment Program Manager ATTACHMENT 1 SCHEDU___LE OF DEVELOPER SELECTION PROCESS PHASE 1 QUALIFICATIONS PHASE February 13, 1995 2:00 PM February 28, 1995 Issuance of Solicitation Presubmittal meeting on RFQ 5:00 PM March 23, 1995 Submittal of Statements of Qualifications March 23 - May 1, 1995 Agency review of Statements of Qualifications May 1, 1995 Selection of Proposers PHASE 2 PROPOSAL PHASE May 4, 1995 Invitations for Proposals Issued May 16, 1995 Presubmittal Meeting on Proposals August 18, 1995 Submittal of Proposals August 18, 1995 Completion of Draft Exclusive Right to Negotiate August 18 - September 18, 1995 Staff Review of Proposals September 18, 1995 September 18, - December 18, 1995 January 2, 1996 Agency Selection of Developer and Approval of Exclusive Right to Negotiate Negotiation of Disposition and Development Agreement Agency Approval of Disposition and Development Agreement