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Agency Counsel/City Attorney Kahn introduced Lee Rosenthal, Agency Redevelopment Counsel, who was in attendance to assist with any questions Agency/Council may have. Agency Counsel/City Attorney Kahn then presented the staff report and explained that the Redevelopment Agency is legally considered a separate agency.
Agency Member/Councilmember Chu asked if the City will own all of the parking within Block 18. Agency Counsel/City Attorney Kahn stated the City will own all of the public parking. Agency Member/Councilmember Chu inquired as to where the private parking would be located in this area. Agency Counsel/City Attorney Kahn stated there will be private parking spaces dedicated to office and residential townhomes within this development.
Agency Member/Councilmember Chu confirmed with Agency Counsel/City Attorney Kahn that the parking area under the Target store is owned by Target and is private parking.
Agency Member/Councilmember Moylan questioned what would happen if the Reciprocal Easement Agreement (REA) is not signed by all parties. In the recent past, this issue occurred as part of the previous developer’s breach of the Disposition and Development and Owner Participation Agreement (DDOPA); whereas, the developer stated Macy’s would not sign the agreement. Agency Member/Councilmember Moylan stated he thought it was understood that dates would only be placed on the calendar after Macy’s signature had been received. However, the staff report lists hard and fast dates, but does not list a date by which the REA must be signed. Agency Member/Councilmember Moylan asked for clarification regarding the consequences should one of the anchor stores not sign the new REA. He questioned if the entire project would be halted.
Agency Counsel/City Attorney Kahn stated there is a structure in place under the DDOPA where closing is required to occur by April 15, 2007; however, for good cause it could be extended by the Agency Executive Director. Staff and the developer anticipate that the signatures and the approvals for the REA and DDOPA will be obtained prior to April 15. The milestone dates were added (with flexibility) and with the understanding that commencement of demolition and excavation has to occur by October 15, and completed by December 31, 2007.
Agency Member/Councilmember Moylan asked what would occur if all parties do not sign by April 15, 2007. Agency Counsel/City Attorney Kahn stated the Agency Executive Director would have the discretion to extend the closing date if it appeared that a signature was imminent.
Agency Member/Councilmember Moylan asked, if an extension had to be granted (which would require a modification to the milestone dates), what would be the process for amending the dates. Agency Counsel/City Attorney Kahn stated the DDOPA can be amended. Should unforeseen circumstances occur, the developer may immediately come before the Agency with an explanation of why the delay occurred, along with a request for an extension to the milestone dates. Agency Member/Councilmember Moylan confirmed with Agency Counsel/City Attorney Kahn that the Agency has the prerogative to decide whether to approve or disapprove any modifications to the milestones.
Public hearing opened 9:56 p.m.
Peter Pau, applicant, stated his company is currently under contract with Fourth Quarter Properties and there is not an unlimited amount of time to close escrow. He stated his company is on a deadline to perform, and they must get approvals from the City, Macy’s and Target. If these approvals are not received by March 2007, Fourth Quarter Properties can cancel the transfer to Mr. Pau (Sand Hill Properties and RREEF). Mr. Pau stated they are hopeful they can get started and meet the deadlines.
Agency Member/Councilmember Hamilton left the dais.
In his closing statement, Mr. Pau stated his company did not get everything they asked for, but he has been treated fairly. Mr. Pau stated that the City Attorney’s numbers are conservative. He believes shared tax increments to the Agency from this project will be significantly higher. Additionally, the sales tax projections were somewhat conservative and Mr. Pau believes that should a hotel be approved, the Transient Occupancy Tax (TOT) would be approximately seven-hundred thousand dollars.
Agency Member/Councilmember Hamilton returned to the dais.
Public hearing closed 10:13 p.m.
MOTION: Agency Member/Councilmember Howe moved, and Agency Member/Councilmember Chu seconded, to approve Alternative No. 1: Agency/Council approves Resolution authorizing the Agency Executive Director/City Manager to execute the Amended and Restated Disposition and Development and Owner Participation Agreement with Downtown Sunnyvale Mixed Use LLC (RREEF and Sand Hill Property Company).
Agency Member/Councilmember Howe asked if he should make the motion as a joint Agency Member/Councilmember. Agency Counsel/City Attorney Kahn stated the motion should be made by the Agency Member as this is an agreement with the Agency only.
Restated MOTION: Agency Member Howe moved and Agency Member Chu seconded to approve Alternative No. 1: Agency approves resolution authorizing the Agency Executive Director to execute the Amended and Restated Disposition and Development and Owner Participation Agreement with Downtown Sunnyvale Mixed Use LLC (RREEF and Sand Hill Property Company).
VOTE: 7-0
Agency Counsel/City Attorney Kahn stated that although this is an Agency approval of the DDOPA, City acknowledgement is also required. He stated City Council will now need to act on this item. He stated he neglected to add an alternative for this item in the staff report but that Council would need to vote on Council’s approval of the resolution authorizing the City Manager to execute the Amended and Restated Disposition and Development and Owner Participation Agreement with Downtown Sunnyvale Mixed Use LLC (RREEF and Sand Hill Property Company).
Agency Member/Councilmember Hamilton left the dais.
MOTION: Councilmember Howe moved and Councilmember Moylan seconded to approve proposed resolution authorizing the City Manager to execute the Amended and Restated Disposition and Development and Owner Participation Agreement with Downtown Sunnyvale Mixed Use LLC (RREEF and Sand Hill Property Company).
VOTE: 6-0 (Agency Member/Councilmember Hamilton was not at the dais)
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