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HomeMy WebLinkAbout05 APPOINTMENT OF REPRESENTATIVES TO STEVENS SQUARE PARKING STRUCTURE ASSOCIATIONMEETING DATE: September 20, 2016 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: JEFFREY PARKER, CITY MANAGER SUBJECT: APPOINTMENT OF REPRESENTATIVES TO STEVENS SQUARE PARKING STRUCTURE CONDOMINIUM ASSOCIATION SUMMARY: This agenda item would appoint two individuals to serve as interim directors on the Board of the Stevens Square Parking Structure Condominium Association and authorize the City Manager to remove and make all future appointments to the Board on the City's behalf. RECOMMENDATION: It is recommended that the City Council: Appoint Jerry Craig and Dana Ogdon to serve and act in the capacity as the City's selected interim directors in the Stevens Square Parking Structure Condominium Association; and 2. Authorize the City Manager in his/her discretion to permanently or temporarily remove and appoint directors to that Association in the future. FISCAL IMPACT: Appointment of the two interim directors will not have a direct fiscal impact upon the City. In the event that the Board of the Condominium Association pursues future maintenance of the Stevens Square Parking Structure, authorization to pay the City's share of the costs of such maintenance will be included in future budgetary requests from the Council. CORRELATION TO STRATEGIC PLAN: Approval would advance Strategic Plan Goal D: "Continue to work collaboratively with agencies within and outside Tustin on issues of mutual interest and concern" (e.g., the Condominium Association and its other members) by implementing the process authorized by existing agreements for maintenance of the parking structure that is partially owned by the City. 1190053.1 STEVENS SQUARE PARKING STRUCTURE September 20, 2016 Page 2 BACKGROUND AND DISCUSSION: Since the early 1980s, the Community Redevelopment Agency of the City of Tustin, and later the Successor Agency to that Redevelopment Agency, had been a part owner of the parking structure adjacent to the Stevens Square. On January 20, 2016, the Successor Agency's interest in that Parking Structure was conveyed to the City, and the structure continues to provide public parking for the benefit of the downtown area. The parking structure was developed as a condominium. In broad terms, the City owns one "unit" of airspace within a number of assigned parking spaces contained in the structure. The current Mall owner owns the other 2 "units" of airspace in the remaining parking spaces. The structure itself is owned by both the Mall Owner and the City as tenants in common. In addition, the City has an easement for public use and ingress and egress to the structure. The parking structure was developed in accordance with a "Mall and Plaza Agreement" entered into between the Community Redevelopment Agency and a prior owner of the mall. The agreement was offered and accepted, in part, in consideration for the City's Resolution of Vacation of a portion City Street needed to make way for the construction of the parking structure. Pursuant to the Mall and Plaza Agreement, a set of Covenants, Conditions and Restrictions ("CC&R's") were recorded against the property and a non-profit mutual benefit corporation was established to repair and maintain the parking structure. The Association is required by the CC&R's incorporated into the Mall and Plaza Agreement to impose and collect assessments on the "unit" owners sufficient to maintain and improve the parking structure. The Association has been formed but has not been active for a number of years. The parking structure is now in need of maintenance and repairs. To ensure that this and future required maintenance of the structure is conducted in accordance with the existing recorded agreements, it is necessary to re -activate the non- profit corporation known as "Stevens Square Parking Structure Condominium Association." That Association will coordinate the actual maintenance work and collect the required assessments from the City and the Mall Owner. (Under the CC&R's recorded against the parking structure, the City is required to pay 38.03% of the assessed maintenance costs and operating expenses of the Association while the Mall Owner is required to pay 61.97%.) The City has 50% voting power in the Association and the Mall Owner has the other 50% - per the Association's By-laws and the CC&R's. In order to re -activate that Association, the City must designate two (2) interim directors of the Association to exercise its voting power as a member of the Association. Those interim directors will then participate in a meeting of members to appoint the actual Board of Directors of the Association. The Association will then act by and through its Board of Directors. The Association By-laws provide for 4 members on the Board. (Ultimately, once the appointed interim directors duly call an election, it is expected that the City will effectively elect 2 directors, Jerry Craig and Dana Ogdon, and the Mall Owner will elect the other 2 directors). 1190053.1 STEVENS SQUARE PARKING STRUCTURE September 20, 2016 Page 3 It is recommended that the two individuals to be initially appointed be familiar with the City's existing interests in the parking structure, as well as with the economic development roles of that structure and the City's community development/planning requirements. Jerry Craig serves as the Economic Development and Housing Manager for the City and brings extensive background overseeing the City's interests in the Stevens Square Parking Structure and in the advancing the City's overall economic development objectives both downtown and City-wide. Dana Ogdon serves as Assistant Director of Community Development, with extensive background and familiarity with the City's building and planning processes and requirements. It is therefore recommended that those two individuals be appointed to serve as the interim directors. City staff and the City Attorney's office met with the Mall Owner and their legal counsel on August 30, 2016 to discuss options for maintaining, and potentially improving the parking structure in the future. One option is to reactivate the Association as originally envisioned at the time of the Resolution of Vacation of the affected City Street. The Mall Agreement does provide, however, that upon termination of the Agreement by the Mall Owner the parking structure is irrevocably dedicated to the City. One topic of discussion at the member meeting will likely involve conditions whereby the Mall Owner could simply elect to terminate the Mall and Plaza Agreement and dedicate the structure to the City. In this way, the Mall Owner could avoid assessments causing it to bear the lion's share of all future maintenance and capital improvement expenditures as may be approved the Association's Board of Directors. When future changes need to be made to the City's representative members, it is also recommended that the Council authorize the City Manager to make such future appointments in his/her discretion. 1190053.1