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HomeMy WebLinkAbout03/11/2014 - Study SessionCity Council Minutes Study Session March 11, 2014 - 4.30 p.m. I. ROLL CALL Present: Council Member Gardner, Council Member Petros, Council Member Curry, Council Member Henn, Council Member Daigle, Mayor Pro Tom Selich, Mayor Hill II. CURRENT BUSINESS 1. Clarification of Items on the Consent Calendar - None 2. Balboa Village Theatre -Lease Amendment, Contribution City Manager Kiff introduced the item and deferred to representatives from The Balboa Performing Arts Theatre Foundation. Dr. Donald Hecht, Chairman of the Board for The Balboa Performing Arts Theatre Foundation, introduced Dr. Steven Beazley, the Foundation's CEO and President. Mr. Beazley displayed a PowerPoint presentation and provided information culled from recent community and expert input regarding the vision for the Theatre. He indicated that the Foundation has retained a top consultant in the theatre profession, built community support, and has created a presence in the Newport Beach Independent to raise community involvement. Mr. Beazley referenced several comparable theatre facilities based upon the criteria established by the consultant, including the Fairfield Theatre Company, an organization that has been operating for ten years. He indicated that the Fairfield Theatre's seven -page summary, profit and loss statement, programming analysis, and their keys to success document, was provided to the City Council, and noted that the Fairfield Theatre was noted as a model for a "Black Box Theatre" Mr. Beazley displayed various elevations which reference the proposed layout and the fagade that would stay the same, with the exception of a new marquee. He indicated that the business planning analysis was conducted by the planning firm AMS to evaluate community participation, motivation, and lifestyles. He believed that there is community support for renovation and reopening of the existing Theatre and discussed how it can contribute to the revitalization of Balboa Village. Mr. Beazley noted the Theatre would always be in the historic heart of Newport Beach and, referenced the Balboa Village Master Plan wherein the City pledged support of the Theatre as a cultural amenity. In response to Council Member Daigle's opinion that the City needs representation on the Foundation's Board, Dr. Hecht commented that, once Council approval has been given, the Foundation Board would be populated with members who would oversee the construction, programming, fundraising, and development. The Board itself would determine its membership and makeup. Council Member Henn urged caution in regard to the Brown Act when considering City membership on the Foundation Board. He noted that Dr. Hecht's role was to get the project off Volume 61 - Page 487 City of Newport Beach City Council Study Session March 11, 2014 the ground and conduct a feasibility report, and now a Board needs to be developed and self - sustaining. Council Member Henn thanked Dr. Hecht and Dr. Beazley, previous Foundation Board members, and the current staff for their work on this project. He emphasized that the action on tonight's agenda is not the final approval to proceed; however, it is an approval in concept to an approach for moving forward before final approval is granted. He further provided historical financial background for the Theatre project. The Foundation Board would be the operator going forward, subject to final approval by the City. He requested that certain conditions be included, such as the Board having $2 million in the bank which was unencumbered, due diligence on the cost estimate incurred by the City (including that the architect and contractor produce a preliminary set of plans and cost estimate, at the expense of the Foundation for the City's review), a full professional business plan conducted by the consulting firm acceptable to the City, and a renegotiated lease with operational covenants acceptable to the City, and, before final approval by the City. Council Member Henn expressed support for the project contingent upon the aforementioned conditions being met, believes this project would fill an important void in the City's portfolio of amenities and the investment would be fully recoupable since the City would own a building in Balboa Village whose value exceeds the City's costs. Council Member Gardner noted that she is a former president of the Foundation Board, but does not support the proposal. She noted that, if the project failed the City would have to subsidize a Theatre, questioned the actual support from the community, and noted that, if there was true support, the Foundation Board should be able to raise $4 million. Dr. Hecht stated that the Board is not asking for $2 million, but is asking for an approval of the concept so they can return to the community indicating that the City approves the concept, and now it is up to the community to handle the fundraising. Council Member Gardner stated that the City already supports the project since it purchased the building. Discussion ensued regarding the 50 -year terms of the historical lease and the current lease. Council Member Petros requested several conditions to the terms of the project, including the City's approval of a business plan and opt -out or termination clauses in the lease in the event the operator does not meet their side of the agreement. Dr. Hecht was amenable to the additional terms. Ralph Rodheim, Balboa Village Merchants Association, discussed community, resident and merchant support for the proposed project and stated that financial support is critical to its success. He distributed and read a letter expressing merchants support, indicated that the renovation will bring culture to the City, stated it is a destination point for residents and visitors, and believed that a multi -use entertainment venue will inject excitement and revenue into the surrounding restaurants and shops. Roger Grable, previous longtime resident noted that he has a strong attachment to the community. He shared the same concerns as Council, but indicated that the City now has an opportunity to put this item to rest or accomplish something, and the conceptual review will provide an opportunity to encourage support for the Theatre. Kennie Joe Rizzo, theatergoer, stated that it sounds like the City is committing to the project; however, she expressed concerns that traffic issues in that area would prevent her and others not living in the adjacent area to utilize the venue. Volume 61 - Page 488 City of Newport Beach City Council Study Session March 11, 2014 Jim Mosher expressed concerns as to the funding that was raised for the project two to three years ago. He expressed confusion as to the difference between "approval in concept" and "final approval" and that the terms seem very vague. He suggested that Council review the terms and return at a future meeting for discussion. Doug Pasquale stated that he and his wife will contribute $50,000 toward the project and that the Theatre is an important component for the revitalization of Balboa Village. He believed that the City should take advantage of some of the best real estate in the country, or do something else, such as condemn properties for other usages. Council Member Petros reiterated the City's commitment to the Balboa Village restoration and noted its support for the success of the Theatre project. Council Member Curry stated that the City is working on revitalizing the area. He noted the partnership with neighbors and the private sector for future success of the area, as revitalization will keep property values high and provide amenities that people want to have. He noted that the City needs to be a lead partner to have a catalyst that will revitalize the Village and now a proposal came forward from a dedicated group of citizens, and all people who have served on the Board over the years, to develop the Theatre. He commended Council Member Henn for his dedication to the project and noted that the Theatre will provide a resource to the community for generations. Mayor Pro Tern Selich expressed concerns with the City committing $2 million without reviewing a business and financial plan, cost for overruns, the building's worth after the improvements, and alternate uses if the Theatre does not meet its operational terms. He further noted that he would like to see an outside peer review of the proposed business and financial plans, and indicated that a performing arts center may be better served in another location within the City. He understood that seven of ten performances at the proposed Theatre would be music performances, not stage plays, and that this would make it a de facto concert hall. He stated that he is inclined to be supportive of the project; however, has practical concerns with the lack of a business plan. Mayor Hill stated that the City's commitment of $2 million should be contingent upon receipt of a business plan and operational lease approved by the City, and that the preliminary conceptual design and cost estimate fits within the $2 million allocation. In his estimation, the lot value of the parcel is approximately $3 million and that the City would not be at risk in the event the Theatre was not successful. Council Member Henn emphasized that there will be many issues which must be vetted prior to the City making final approval of the project, and tonight's approval in concept is only the first step toward making a prudent decision. 3. Update on the Transition to Automated Residential Refuse Collection - Continued 4. West Newport Facilities Plan City Manager Miff thanked Council Members Petros and Henn and Mayor Hill, along with the Westside residents for their involvement in this discussion. He noted that the project is still in the early stages of development and staff is seeking Council input and direction. Assistant City Manager Badum utilized a PowerPoint Presentation to discuss consolidation of the corporate yards and construction of a new Police Station. He reported that the maintenance yard is no longer fully utilized due to outside contracting, the utilities yard at 16rs Street has an underground reservoir and 800 MHz antenna, the antenna may be relocated on the existing parcel, and, if the yards are consolidated, the Police Station could be built on the remaining site or there is potential to purchase or lease land for this use near the airport. Volume 61 - Page 489 City of Newport Beach City Council Study Session March 11, 2014 Recreation and Senior Services Director Detweiler discussed the various aspects for community center needs in the Westside area. She stated that the new West Newport Community Center is proposed to have multi- generational programming, designated hours to get a work out in, various sports, national junior basketball usage, as well as usage for the local schools, gymnastics, wellness room yoga, balance mobility, and flexible classroom space to offer other miscellaneous programming. Other amenities discussed include an indoor rock climbing wall. Outside amenities desired include a four to five lane lap pool, water aerobics and swim programs, pickleball courts, outdoor walking and fitness stations, a community garden, and playground. Council Member Daigle requested information on the optimal level of reserves for the City and inquired as to the lack of a financial analysis from the Finance Department. She inquired as to the need for public safety matters as a priority for residents and to the priority for the new Police Station. Council Member Henn indicated that, as a member of the Finance Committee, an analysis showed that the Police Station project could move forward in 2020, and that this project could be accommodated on a cash basis without borrowing. Council Member Daigle inquired as to the assumptions the plans are based upon in terms of maintaining the City's reserve levels. City Manager Kill reported that the City's Facilities Financing Plan (FFP) includes a component from reserves and indicated that some of the reserves are set aside for facilities. Council Member Daigle asked what the appropriate level of reserves should be in the next three to ten years and whether we are using consultants to review these numbers. Council Member Curry stated that reserves should not be utilized for operating costs, however, no expert has the magic number for the correct amount in reserve. Council Member Henn noted the City's AAA rating for underlying obligations and that the current FFP does lay out the ebb and flow of reserves associated with the spending related to that plan. Mayor Hill directed the meeting back to staff to explain where the proposed Community Center sites would be. Assistant City Manager Badum noted the need for approximately 25,000 square feet, 120 parking spaces and a minimum 2 acre parcel. City staff recommended two possibilities for placement of the Community Center, the Superior/Coast Highway site and the 16th Street corporate yard. The Superior/Coast Highway site is adjacent to the highway where there is an existing parking lot. He noted that there is 60 feet of elevation change, which would require excavation and retaining walls, and by building into the slope, this site would protect local views. Council Member Henn expressed support for a park and tram system to access the Peninsula. In response to Council Member Daigle's question, Assistant City Manager Badum indicated that the site would not require a view easement and is not subject to the Caltrans view restrictions on Sunset Ridge. Assistant City Manager Badum noted that the traffic improvement needed would include improved access to Sunset Ridge, overcrossings to provide better traffic circulation, and removal of crosswalks. Another feature, if the parking structure could be pushed into the hillside, would be to include a green roof that could accommodate various recreation uses. Disadvantages of the site include the steepness which would make construction costly, as well as highway noise which would prohibit quiet recreation uses. Volume 61 - Page 490 City of Newport Beach City Council Study Session March 11, 2014 Council Member Gardner expressed support for the Superior /Coast Highway site since workouts could be extended into outdoor activities, there would be extra parking, and there would be better access to Sunset Ridge. The site is also closer to the Peninsula. Assistant City Manager Badum noted the connection to the Hoag Hospital property which would facilitate traffic circulation. He pointed out that the site is in the Coastal Zone and would require a coastal permit, as well as Caltrans review due to its adjacency to the State highway. Council Member Petros expressed concerns with Orange County Transportation Authority (OCTA) and the California Coastal Commission (CCC) for rulings on various projects. He expressed support for the proposed site's ability to integrate an entire stretch of active space. He added that this could be an opportunity for improved traffic circulation and accessibility from the Peninsula, as well as an opportunity for the re- greening of Balboa. He expressed support for the opportunity to partner and integrate with Hoag Hospital. Assistant City Manager Badum provided a review of the other site, which is the 16th Street Utilities Yard, where one -half of the parcel would be used for the Community Center. He noted that the existing reservoir under the parking area and pump station would have to remain, however, the remainder of the three acres could be utilized for a Community Center and outdoor recreation. He stated that the site has excellent views and if the Banning Ranch project moves forward, the proposed park area would be immediately adjacent to this site. Council Member Petros noted the high level of community support on the Westside for community amenities similar to the OASIS Senior Center and the Newport Coast Community Center. He expressed support for the potential partnership with Hoag Hospital and that, of the seven sites that were reviewed, the Superior /Coast Highway and 16th Street sites were the most viable. He noted the pros and cons for each site and his desire to continue receiving input from the Westside residents for their preference. Council Member Henn expressed support for the potential partnership between the City and Hoag Hospital and that his inclination was to support the Superior /Coast Highway site. He requested that staff focus on vetting the cost for developing this site and also review the FFP to establish the City's financial capacity to accommodate the estimated cost of that site. Mayor Pro Tem Selich believed that the Superior /Coast Highway site could cost up to $28 million to construct and suggested finding ways to ensure that a project of this magnitude fits into the City budget. Council Member Daigle stated that both sites have promise. She expressed support to continue to receive input from residents and also to be mindful of the costs. George Schroeder stated the Superior /Coast Highway site is closer to his home; however, expressed concerns because it will negatively impact parking in the area, which is already severely compromised. His preference is for the 16th Street location as there is room for adequate parking. He believed that the Superior /Coast Highway site would be used for beach parking and there are already complaints from residents in the Sunset Ridge neighborhood about traffic impacts. Bennie Jo Rizzo, Newport Shores resident, believed that the parking lot at the proposed Superior /Coast Highway site would become the parking lot for beachgoers and residents would have to fight for a spot to use the Community Center on the weekend. She expressed her support for the 16th Street location as it is flat and has superior views. Mike Johnson noted his views on both proposed sites and that he likes the idea of incorporating the Police Station with the maintenance yard. He believed that the three story parking lot at the Volume 61 - Page 491 City of Newport Beach City Council Study Session March 11, 2014 Superior /Coast Highway site would be well used for beachgoers and would protect the investment in Sunset View Park. He noted that the 16th Street site is in a manufacturing zone /commercial area and likes the concept of finding a location that is more central in Newport Beach. Lori Morris expressed her support for the 16th Street location, believing the Superior /Coast Highway site would be troublesome in terms of disturbing the view plane. She suggested developing the parking structure, but to ensure that it does not impact views, and requested that, if the site was used there be no jail facility located on the premises. Mayor Hill pointed out that there is a jail located in Fashion Island and that the area seems to be doing well. Gina Westley expressed support for both locations; however, was inclined to lean towards the 16th Street location for those who were serious about working out. Jim Mosher expressed concerns as to whether the yards would be needed in the future due to contracting out services, and requested clarification on the size of the proposed Police Station. He believed that staff seemed inclined toward heavy sports usage at the proposed Community Center, but that the Westside is also lacking a library and other, broader uses other than fitness. He stated that the CCC also needs to complete their duties as assigned through the agency and traffic circulation must ensure pedestrian safety across bridges and underpasses. Dr. Gorgina Takemoto expressed concerns with the traffic impacts of the Superior /Coast Highway site since her neighborhood is already impacted and believed that the proposed parking structure will be used for beach parking. She also suggested that bridges were a useful measure for keeping pedestrians out of the intersections as a safety precaution. Cindy Koller expressed concerns with traffic impacts should the Superior /Coast Highway site be selected, as there are already traffic impacts projected if the Banning Ranch project moved forward. She suggested using the site as a dog park and a view park, and not adding uses that would result in more congestion. Jim Miller, President of Newport Island Homeowners Association, expressed support for the Community Center project in concept and that any location the City selects will be successful. He expressed his preference for a facility closer to the Peninsula, to have a bridge over the highway, and to partner with Hoag Hospital for various programming. Sharon Boles, Newport Crest Board of Directors, expressed support for the 16th Street location and noted that residents have been aware that the City has been looking to build a new community center. She stated that any additional facility will be welcomed by the residents. With no Council Member objecting, it was the direction of Council to continue with community forums to seek resident interests and desires for the Community Center project and proposed locations, and to further vet the cost of the Superior and Coast Highway site and return to Council with additional recommendations. III. PUBLIC COMMENTS INCLUDING PUBLIC COMMENTS ABOUT ITEMS ON THE CLOSED SESSION AGENDA Jim Mosher expressed concerns regarding a recent Superior Court decision resulting from badly written legislation approved by the City Council in regard to changes to the Harbor Code, believing that the wording used in the proposed legislation was unclear and suggesting that independent scrutiny be given to all legal documents. Volume 61 - Page 492 City of Newport Beach City Council Study Session March 11, 2014 Blake Hockenbury, Peninsula resident suggested an alternative use for the building at the end of the Newport Beach pier and presented information and a financial plan for a concept called "PierFIT Studio" which would include various fitness activities. In response to Mr. Mosher's comments, City Attorney Harp stated that Mr. Mosher had mischaracterized the judge's tentative ruling and the Vallely case. He clarified that the ruling required the applicant to obtain a permit for a particular use and emphasized that the Newport Beach Municipal Code did not exempt the applicant from getting the required permit. City Attorney Harp announced that Council will adjourn to Closed Session to discuss the items as listed in the Closed Session agenda and proceeded to read each title. He also announced the following recusals: • Mayor Hill recused himself from Item II.B.1 (Conference with Real Property Negotiators regarding 5810 West Coast Highway) since he owns property within 500 - feet of the subject property Council Member Henn recused himself Item H.B.2 (Conference with Real Property Negotiators regarding APN 423 - 102 -03 and APN 423 - 382 -05) as a precaution since he has a business relationship with a business in Via Lido Plaza IV. ADJOURNMENT - 6:40 p.m. The agenda for the Study Session was posted on the City's website, on the City Hall Electronic Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive, and in the Meeting Agenda Binder located in the entrance of the City Council Chambers at 100 Civic Center Drive on March 6, 2014, at 4:00 p.m. am� b ov-- City Clerk Recording Secretary Mayor Volume 61 - Page 493