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REDEVELOPMENT AGENCY AGENDA ITEM NO. 3

Meeting Date: November 25, 2003

Subject/Title: Approve Resolution amending the Reimbursement Agreement between the Brentwood Redevelopment Agency and the City of Brentwood for an additional $728,000 to fund construction of cul-de-sac improvements and traffic signal improvements for the Sunset Industrial Complex, CIP Project No. 336-3128, and authorizing the Agency Treasurer to use funds from the Redevelopment Agency of the City of Brentwood Tax Allocation Bonds, Series 2001, to fund the Amended Reimbursement Agreement.

Submitted by: Gina Rozenski, Redevelopment Manager

Approved by: John Stevenson, Executive Director

RECOMMENDATION
Approve Resolution amending the Reimbursement Agreement between the Brentwood Redevelopment Agency and the City of Brentwood for an additional $728,000 to fund construction of cul-de-sac improvements and traffic signal improvements for the Sunset Industrial Complex, CIP Project No. 336-3128, and authorizing the Agency Treasurer to use funds from the Redevelopment Agency of the City of Brentwood Tax Allocation Bonds, Series 2001, to fund the Amended Reimbursement Agreement.

PREVIOUS ACTION
 City Council authorized the purchase of approximately 40 acres of property located at the northeast corner the Tresch and Sunset Roads.

 City Council authorized various consultant contracts to master-plan and prepare environmental documents for approximately 132 acres of city owned land northeast of Tresch and Sunset Roads to include a 49.2 acre Wastewater Treatment Plant, 2.7 acre Solid Waste Plant, 37.7 Sports Park, 13.3 acre Corporation Yard and a 28.4 acre Industrial Complex.

 City Council authorized a consultant contract with McGill Martin Self to prepare infrastructure improvement plan for the Sunset Industrial Complex.

 In September 2001, the Brentwood Redevelopment Agency issued Tax Allocation Bonds (TAB) to refinance existing bonds and to pay for certain redevelopment and public improvement projects. One of the top three projects identified by the Agency included funding the infrastructure improvements at the Sunset Industrial Complex with TAB proceeds.

 On June 4, 2002, the Planning Commission certified the Environment Impact Report for the Sunset Industrial Complex, and on June 6 the Notice of Determination was filed with the County.

 On July 23, 2002 the City Council adopted Ordinance 710 approving the PD Zoning for Sunset Industrial Complex, and also awarded the construction contract for the Sunset Industrial Complex Improvements Project (CIP No. 336-3128) to Teichert Construction.

 On August 13, 2002, the City Council and Redevelopment Agency approved a Reimbursement Agreement wherein the Agency would loan $3,000,000 to the City for infrastructure improvements at Sunset Industrial Complex (CIP No. 336-3128).

 On November 26, 2002 the City Council approved a sales strategy for property located at the Sunset Industrial Complex and adopt criteria for the selection of successful candidates to purchase the subject property.

 On September 23, 2003 authorize the City Manager to execute a professional services agreement with Carlson Barbee & Gibson, Inc. to prepare a Survey, Tentative Map, Final Map and related work for the Sunset Industrial Complex and amend the CIP Project # 336-3128 budget.

 On October 28, 2003, the City Council approved the Sunset Industrial Complex sales strategy criteria ranking and preliminary lot layout which included the cul-de-sac site plan.

BACKGROUND
The City purchased a 40-acre parcel off Sunset Road in 1999 for the expansion of the adjacent sports complex by 16± acres, and to implement an economic development strategy by zoning the remaining acres for medium industrial land use in the 2001 General Plan update. The City intends to sell parcels within the Sunset Industrial Complex to end-users. The sale revenues to the City will be then used to reimburse the City for its cost of the land, planning, engineering and a portion of the infrastructure improvements. The sales revenues will also reimburse the Redevelopment Agency for paying a portion of the cost of improvements. Therefore, both the City and the Agency expect to receive full reimbursement for their out-of-pocket costs associated with developing the Sunset Industrial Complex as parcels are sold. Any excess receipts from the proceeds of the sales beyond the actual costs shall be shared between the City and Agency in amounts equitable to their contributions.

The project construction improvements are presently 95% complete. Requests for proposals (RFPs), following Council-approved guidelines, to purchase property in the Complex were distributed to interested buyers in late Spring 2003. Responses to our RFPs indicated a need for more industrial-zoned property than what is available at Sunset Industrial Complex. Over 28 acres were requested, while Sunset Industrial Complex has only 21.7 acres to sell. To accommodate the majority of the requests, a site plan was prepared that included cul-de-sac configurations. This provided the City an opportunity to accommodate as many buyers as possible within the Sunset Industrial Complex, while also configuring 1.0 acre parcels in a more developable manner. Rather than long, narrow 1.0 acre parcels, the cul-de-sacs provide a suitable geometry for truck traffic patterns and efficient site development.

A traffic signal at the intersection of Sunset Road and Elkins Way has always been planned. However, the installation of the traffic signal was intentionally delayed until such time Garin Parkway was extended to Sunset Road, meeting the entrance of Sunset Industrial Park. Plans have since been amended to provide for Garin Parkway to extend to the entrance of Sunset Sports Complex. Consequently, engineering staff proposes to install the traffic signal at the intersection of Sunset Road and Elkins Way at this time, since Garin Parkway will no longer extend into the Sunset Industrial Complex.

The submitted bids from Teichert Construction for the construction of the two cul-de-sacs and installation of the traffic signals, and the associated construction management costs, are $661,697 plus 10% contingency for a total of $727,867, rounded to $728,000. The City Council shall consider a change order for these improvements earlier this evening.

The proposed public improvements at the Sunset Industrial Complex are included in the North Brentwood Redevelopment Plan (as part of the Plan Amendment), and provided for in the Five-Year Implementation Plan, specifically:

1. To provide needed improvements to revitalize the Project Area.
2. To encourage expansion of local industrial opportunities to achieve the greatest return on investment and maximize the leveraging of tax increment.
3. To improve transportation and enhance circulation within the Sunset Area.

Furthermore, the improvements are of benefit to the North Brentwood Project Area, as well as the entire community, in that the proposed Sunset Area is the only area within the City’s General Plan to reasonably accommodate new industrial uses and the possible relocation of non-conforming, incompatible businesses from Brentwood Boulevard or from other areas within the Agency’s two Redevelopment Project Areas. As such, the payment of Agency funds towards these improvements will assist in the elimination of one or more blighting conditions inside the Project Areas.

The existing Reimbursement Agreement of August 13, 2002, between the Brentwood Redevelopment Agency and the City of Brentwood evidences the Agency’s contribution of $3,000,000 from its Tax Allocation Bond proceeds to this Capital Improvement Project to fund a portion of the public improvement costs, and evidences the City’s reimbursement back to the Agency as parcels are sold. Staff recommends the Agency approve an amendment to the Reimbursement Agreement for an additional $728,000 to fund the construction of two cul-de-sacs, including but not limited to, sidewalk, curb, gutter and landscaping, and the installation of the traffic signals at the intersection of Sunset Road and Elkins Way.

FISCAL IMPACT
The existing Reimbursement Agreement between the Agency and the City for the infrastructure improvements at Sunset Industrial Complex is $3,000,000. The proposed amendment to the Reimbursement Agreement is for an additional $728,000, for a total contribution of $3,728,000. This shall be funded from the Agency’s 2001 Tax Allocation Bond Proceeds, with the expectation of full reimbursement to the Agency as parcels in the Sunset Industrial Complex are sold. Any excess receipts shall between the City and Agency in amounts equitable to their contributions.

Attachments: 1. Resolution
2. Amended Reimbursement Agreement

RESOLUTION NO. RA-

RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD APPROVING AN AMENDMENT TO THE REIMBURSEMENT AGREEMENT AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD AND THE CITY OF BRENTWOOD

WHEREAS, the City Council of the City of Brentwood ("City") approved and adopted the Redevelopment Plan for the North Brentwood Redevelopment Project ("Project") on July 9, 1991, by Ordinance No. 496, as amended; and

WHEREAS, the Redevelopment Agency of the City of Brentwood ("Agency") is carrying out the Redevelopment Plan and in connection therewith adopted an Implementation Plan for the Project on March 28, 2000, by Resolution No. RA15 in accordance with Health and Safety Code Section 33490; and

WHEREAS, the Agency and City entered into a Reimbursement Agreement on August 13, 2002, by Agency Resolution RA-58, pursuant to which the Agency proposed to pay the City the cost of designing, constructing and installing certain public improvements ("Public Improvements") within the Project, and the City proposed to reimburse the Agency as set forth in the Reimbursement Agreement; and

WHEREAS, the Agency and City wish to amend the Reimbursement Agreement to provide for an additional $728,000 funding from the Agency to the City to pay for additional costs of designing, constructing and installing cul-de-sac and traffic signal improvements (“Public Improvements”) within the Project, and the City agrees to reimburse the Agency as set forth in the Amended Reimbursement Agreement.

NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of Brentwood as follows:

1. The Agency hereby finds and determines as follows:

a. The Public Improvements will be of benefit to the Project. This finding is based on the fact that the Public Improvements will be located within the Project Area and will provide needed infrastructure within the Project.

b. There is no other reasonable means of financing the Public Improvements. This finding is based on the lack of sufficient funds in the capital improvement budget of the City to fund the Public Improvements together with other urgently needed public improvements and facilities and the infeasibility of financing the Public Improvements through an assessment district, community facilities district or other conventional method of financing public facilities.

c. The payment of funds for the Public Improvements will assist in the elimination of one or more blighting conditions inside the Project and is consistent with the Implementation Plan. This finding is based on the following facts:

(1) Reimbursement for the Public Improvements is anticipated to help revitalize other areas of the Project, provide needed infrastructure for and provide area for relocated businesses to move to;

(2) Reimbursement for the Public Improvements will help implement development of underutilized property by the City and the provision of necessary public facilities; and

(3) The Implementation Plan identifies as objectives for the five-year period from Fiscal Year 1999-2000 through Fiscal Year 2003-2004 the following:

Provide needed public improvements: revitalize the redevelopment project areas through installation of public improvements, including streets, curbs, gutters, sidewalks, utility undergrounding, landscaping, sewer, water and storm drain systems, and bring area infrastructure into compliance with all Federal and State laws.

2. The Agency hereby approves the Amended Reimbursement Agreement in the form attached hereto as Exhibit A, together with such minor technical and clarifying revisions as shall be approved by the Executive Director and Agency Counsel. The Agency hereby authorizes the Executive Director to execute the Amended Reimbursement Agreement on behalf of the Agency and to take all further actions reasonably necessary to carry out the provisions of the Amended Reimbursement Agreement.

BE IT FURTHER RESOLVED that the Redevelopment Agency of the City of Brentwood authorizes the Agency Treasurer to use a portion of the Agency’s 2001 Tax Allocation Bond Proceeds to fund the Amended Reimbursement Agreement.

PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Brentwood at a regular meeting held on the 25th day of November 2003 by the following vote:

AYES:
NOES:
ABSENT:
_____________________________
Brian Swisher
Agency Chairman
ATTEST:
__________________________________
Karen Diaz, CMC
Agency Secretary

EXHIBIT A

AMENDED REIMBURSEMENT AGREEMENT

[Attached]

AMENDED REIMBURSEMENT AGREEMENT

NORTH BRENTWOOD REDEVELOPMENT PROJECT
(Sunset Industrial Complex Project)

THIS AMENDED REIMBURSEMENT AGREEMENT is entered into this 25th day of November, 2003, by and between the REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD, a public body, corporate and politic (the “Agency”), and the CITY OF BRENTWOOD, a municipal corporation (the “City”).

Recitals

A. Pursuant to the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.), the Agency is a duly constituted redevelopment agency under the laws of the State of California and pursuant to said laws is carrying out a redevelopment project in the City, in accordance with the redevelopment plan duly adopted by the City Council.

B. By Ordinance No. 496, adopted on July 9, 1991, as amended to date, the City Council of the City of Brentwood adopted, and the Agency is carrying out the Redevelopment Plan for the North Brentwood Redevelopment Project (the “Project”).

C. Pursuant to Health and Safety Code Section 33445, the Agency is authorized, with the consent of the City Council, to pay all or part of the cost of the installation and construction of any building, facility, structure, or other improvements which are publicly owned either within or without the Project Area, upon a determination by the City Council that such buildings, facilities, structures or other improvements are of benefit to the Project or the immediate area in which the Project is located, that no other reasonable means of financing such buildings, facilities, structures, or other improvements are available to the community, and that the payment of funds for the cost of such buildings, facilities, structures or other improvements will assist in the elimination of one or more blighting conditions inside the project area and is consistent with the Agency’s five-year Implementation Plan. The City Council has heretofore given and made, and the Agency and the City hereby reaffirm and declare, such consents and determinations with respect to the infrastructure improvements within the Sunset Industrial Area and related improvements proposed to be installed and constructed as further defined below in Section 1 (collectively, the “Infrastructure Improvements”). The Agency has agreed to secure the financing for and the City has agreed to undertake the construction and installation of the Infrastructure Improvements for the benefit of the Project and the immediate area in which the Project is located.

D. The Agency is funding a portion of the Infrastructure Improvements through proceeds of the Tax Allocation Bond issued in September of 2001 by the Brentwood Infrastructure Financing Authority.

E. Once Infrastructure Improvements are completed, the City shall diligently market and sell the parcels to third party buyers. The proceeds of such sales shall be used to reimburse the Agency for its contribution of the cost of the Infrastructure Improvements as further set forth herein.

F. The City will reserve approximately six and one-half (6.5) acres of land for use by the Agency to relocate existing businesses from Brentwood Boulevard and from within the Agency’s two Redevelopment Project Areas to the Sunset Industrial Area.

G. In order to enable the City to undertake the construction of the Infrastructure Improvements for the benefit of the Project and the immediate area in which the Project is located and as an inducement to the City to do so, the parties desire to enter into this Agreement providing for the Agency to pay for a portion of the Infrastructure Improvements and the City to reimburse the Agency once the land is sold to third party buyers.

Agreements

THE AGENCY AND THE CITY HEREBY AGREE AS FOLLOWS:

1. The City shall cause to be designed, constructed and installed within the Sunset Industrial Area, Infrastructure Improvements which include modification of existing Tresch Road, widening and overlaying Sunset Road and the new construction of an entrance road (more commonly referred to as “Elkins Way”) with grading, wet utilities, joint trench, landscaping, irrigation, and planting. A portion of the costs for the construction of the Infrastructure Improvements shall be paid by the Agency to the City from the proceeds of Tax Allocation Revenue Bonds issued through the Brentwood Infrastructure Financing Authority in September of 2001 (the “Bonds”). The City shall cause the Infrastructure Improvements to be commenced as soon as feasible after the execution of this Agreement and shall ensure that the Infrastructure Improvements are completed in a timely manner.

2. In consideration of the undertakings of the City under Section 1 of this Agreement, the Agency shall pay the City a portion of the actual costs incurred by the City for the design, construction and installation of the Infrastructure Improvements.

The estimated total costs to be funded by the Bond proceeds is Three Million Seven Hundred Twenty Eight Thousand Dollars ($3,728,000).

The City shall, immediately upon completion of the construction of the Infrastructure Improvements, begin to market and sell the land. The proceeds of sales of the land shall be allocated to the City in the amount of the unimproved value of the land and to the Agency in the amount of the difference between the unimproved value of the land and the actual sales price up to a maximum of Three Million Seven Hundred Twenty Eight Thousand Dollars ($3,728,000). The City shall pay the Agency as set forth above as funds are available to the City or in such other amounts and times as the parties may agree.

Receipts from the proceeds of the sales exceeding the combined actual amount of the unimproved value of the land and the Infrastructure Improvements shall be shared between the City and Agency in amounts equitable to their contributions, which equals fourteen percent (14%) of excess receipts to the City and eighty-six percent (86%) of excess receipts to the Agency. The City shall pay the Agency its share of the excess receipts as funds are available to the City or in such other amounts and times as the parties may agree.

3. The City shall designate six and one-half acres (6.5) acres for use as relocation sites for existing businesses to be relocated from Brentwood Boulevard and from within the Agency’s two Redevelopment Project Areas. The City has agreed to hold this property for the Agency’s use for eighteen (18) months from the date of this Reimbursement Agreement or until the Agency has reached agreement with those relocated businesses, whichever occurs first. The reserved acreage may be expanded and the time period may be extended as the parties may agree.

4. Failure by either party to perform its obligations hereunder shall constitute a default under this Agreement, and the other party may institute legal action to cure, correct or remedy such default, to recover damages for such default or to obtain any other remedy, including injunctive or declaratory relief, consistent with the purpose of this Agreement.

5. This Agreement constitutes an indebtedness of the Agency incurred in carrying out the Project, and a pledging of Bond proceeds to repay such indebtedness.

6. Pursuant to Section 895.4 of the Government Code, the Agency and City agree that each will assume the full liability imposed upon it or any of its officers, agents or employees for injury caused by a negligent or wrongful act or omission occurring in the performance of this Agreement and each party agrees to indemnify and hold harmless the other party for any loss, costs or expense that may be imposed upon such other party by virtue of Sections 895.2 and 895.6 of the Government Code.

7. This Agreement and the obligations of the City and the Agency hereunder shall terminate upon the sale of the land and the Agency’s reimbursement of the Infrastructure Improvements and excess receipts, if any, as set forth in Section 2.

IN WITNESS WHEREOF, the Agency and the City have executed this Amended Reimbursement Agreement as of the date first above written.

REDEVELOPMENT AGENCY OF THE
CITY OF BRENTWOOD

By:
John Stevenson, Executive Director

ATTEST:

By:
Karen Diaz, CMC, Secretary

CITY OF BRENTWOOD

By:
John Stevenson, City Manager

ATTEST:

By:
Karen Diaz, CMC, City Clerk

City Administration
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