Loading...
HomeMy WebLinkAbout11 - Fire Station & Community Center in Santa Ana HeightsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 11 July 8, 2003 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Fire Department Fire Chief Tim Riley, 644 -3101 triley(a) city. newport- beach. ca. us City Managers Office Assistant City Manager Dave Kiff, 644 -3002 dkiff(cDcity. newport- beach.ca.us SUBJECT: Agreement Between the City and the Orange County Development Agency Regarding a Fire Station and Community Center in Santa Ana Heights ISSUE: Should the City enter into an agreement with the Orange County Development Agency (OCDA) to construct a fire station and community center in Santa Ana Heights? RECOMMENDATION: Hold a Public Hearing and, after taking public input, enter into an agreement with the County of Orange ( "COUNTY ") and the Orange County Development Agency ( "AGENCY ") to acquire real property for a regional community center and fire station and to construct a permanent fire station in Santa Ana Heights. DISCUSSION: Background: On July 1, 2003 the eastern portion of the unincorporated area known as Santa Ana Heights will be annexed into the corporate limits of the City of Newport Beach ( "CITY "). The western portion of Santa Ana Heights is currently subject to possible annexation as early as July 1, 2004. Both of these areas are within the Santa Ana Heights Redevelopment Project Area, which is a component of the AGENCY's Redevelopment Plan. Agreement Between the City and the Orange County Development Agency Regarding a Fire Station and Community Center in Santa Ana Heights July 8, 2003 Page 2 Since January 2001, the CITY has been providing municipal fire protection and emergency medical service to these areas from a temporary facility located in Santa Ana Heights. Both the current location and the temporary facility do not adequately address the service concerns of the residents and businesses served by this temporary station. CITY staff, "staff representatives of the COUNTY, and staff representatives of the AGENCY agree that the acquisition of real property and the construction of a permanent fire station to serve the Santa Ana Heights Project Area as well as other surrounding areas is a high priority for the continued delivery of these essential municipal services. Further, we agree that the Redevelopment Plan establishes that the funding for the development of governmental service facilities as an appropriate use of Agency redevelopment funds. The Santa Ana Heights Project Area Committee (an advisory board to the AGENCY representing Santa Ana Heights residential and business interests) placed the Fire Station project as one of their highest project priorities. Additionally, the Santa Ana Heights Project Area Committee has also identified the development of a regional community center to serve the Santa Ana Heights Project Area and surrounding areas of Newport Beach, Costa Mesa and the County of Orange as one of their top priority projects. To this end, the City and County staffs have been exploring the acquisition and improvement of the Y.M.C.A., located at 1200 University, Newport Beach, to serve this purpose. The "Y" is conveniently located to serve a large regional service area and is currently available for purchase. Further, we agree that the Redevelopment Plan establishes that the funding for the development of recreational facilities to serve the Project Area is an appropriate use of Agency redevelopment funds. On July 1, 2003, the Orange County Board of Supervisors approved a motion to enter into this agreement as presented to the City Council. Key Points of the Agreement: Generally, the agreement sets forth an understanding between the aforementioned parties with respect to the acquisition of real property and the construction of a fire station in the Santa Ana Heights Project Area as well as the acquisition and improvement of the Y.M.C.A. The key points are: 1. Upon execution of the agreement by all parties, COUNTY and AGENCY agree to commence with and complete the acquisition of property for the construction of a fire station. CITY agrees it may be required to use its powers of condemnation or eminent domain to assist in acquiring real property that is in the best interest of providing municipal fire department services. AGENCY shall fund all acquisition costs for the real property up to $2,500,000.00 ($2.5 million dollars.) Any costs for property acquisition in excess of $2,500.000.00 shall be bome by CITY. Agreement Between the City and the Orange County Development Agency Regarding a Fire Station and Community Center in Santa Ana Heights July 8, 2003 Page 3 2. COUNTY and AGENCY empower CITY to undertake on their behalf the design and construction of the fire station project. AGENCY shall fund up to $1,600,000.00 (1.6 million dollars) of the actual costs of development. Any costs for development of the fire station in excess of $1,600.000.00 shall be borne by CITY. 3. CITY will continue to provide municipal fire department services to the Santa Ana Heights Project Area and neighboring jurisdictions through the use of automatic and mutual aid. 4. Upon completion of the project, the real property and fire station shall be deeded to CITY. 5. Following execution of the Agreement, CITY may purchase the Y.M.C.A. property at 1200 University, Newport Beach. Once complete, AGENCY will reimburse CITY with redevelopment funds for the cost of acquiring the real property. 6. CITY will manage all real property improvements associated with the Y.M.C.A. 7. AGENCY shall fund all acquisition and real property improvement costs up to a total of $11,500,000.00 ($11.5 million dollars.) Any costs in excess of $11,500.000.00 shall be borne by CITY. CITY will agree to operate the Y.M.C.A. as a regional community center. Should CITY no longer wish to operate the Y.M.C.A. as a regional community center, the ownership will revert back to AGENCY. Environmental Review: This agreement has no requirement for environmental review. Eventually, the construction project will be subject to normal public works environmental review requirements. Funding Availability: Sufficient funding is available in the AGENCY's Capital Projects Fund for the land acquisition and project development for a fire station. Should the development costs exceed $1,600,000.00 or the land purchase costs exceed $2,500,000.00 CITY staff shall return to the City Council for further direction. Agreement Between the City and the Orange County Development Agency Regarding a Fire Station and Community Center in Santa Ana Heights July 8, 2003 Page 4 Sufficient funding is available in the AGENCY's Capital Projects Fund for the acquisition of the Y.M.C.A. and the real property improvements for a regional community center. Should the land purchase and real property improvement costs exceed $11,500,000.00, CITY staff shall return to the City Council for further direction. Alternatives: Reject the agreement and direct staff to resume negotiations with the County of Orange and the Orange County Development Agency consistent with City Council direction. Prnnornr4 hv Attachments: Memorandum of Agreement MEMORANDUM OF AGREEMENT SANTA ANA HEIGHTS FIRE STATION AND SANTA ANA HEIGHTS RECREATION FACILITY THIS MEMORANDUM OF AGREEMENT ( "Agreement "), is made and entered into this _ th day of July, 2003 by and between the COUNTY OF ORANGE ( "County "), the ORANGE COUNTY DEVELOPMENT AGENCY ( "Agency ") and the CITY OF NEWPORT BEACH ( "City ") (the "Parties "). RECITALS WHEREAS, the County Board of Supervisors has previously approved Ordinance No. 3595 on July 15, 1986 adopting a Redevelopment Plan (the "Redevelopment Plan ") for a redevelopment project area known as the Santa Ana Heights Redevelopment Project (the "Project Area ") which Project Area included a portion of the City at the time of adoption of the Redevelopment Plan in 1986; and WHEREAS, the City has annexed an additional portion of the Santa Ana Heights area effective July 1, 2003 and is considering annexation of additional territory in Santa Ana Heights effective July 1, 2004; and WHEREAS, the Orange County Fire Authority's fire station located on Campus Drive in the Airport/Santa Ana Heights area was severely damaged by a fire in December 2000 and service has been provided by the City since that event with only a temporary fire station; and WHEREAS, to replace the temporary fire station, the City seeks to construct the Santa Ana Heights Fire Station (the "Fire Station Project ") to provide fire and emergency response services to areas both in the City today, in the area to be annexed to the City as of July 1, 2003, and in the unincorporated area of the County previously served by the Orange County Fire Authority; and WHEREAS, there is an existing privately owned recreation facility in the Santa Ana Heights Project Area that is in need of substantial repair and improvement to properly serve recreation needs in the area; and WHEREAS, the City seeks to acquire that existing recreation facility and repair and improve it (the "Recreation Facility Project ") to provide recreation services to areas both in the City today, in the area to be annexed to the City as of July 1, 2003, and in the unincorporated area of the County; and WHEREAS, the construction of the Fire Station Project and the Recreation Facility Project will benefit the Santa Ana Heights Project Area by providing needed fire service in a permanent building strategically located to provide optimum response time to the area and by providing needed and improved recreation facilities; and WHEREAS, the Agency is willing to fund land purchase costs and site development costs for the Fire Station Project and the Recreation Facility Project subject to the limits set out in this Agreement; and 758 \08 \168920.6 WHEREAS, the City is willing to purchase the needed property for the Fire Station Project and the Recreation Facility Project, coordinate design and construction of the improvements for the projects using Agency funding as described in this Agreement, and operate the Fire Station Project and the Recreation Facility Project, at no cost to the County or the Agency; and WHEREAS, the Parties have reached concurrence on the manner in which the Fire Station Project and the Recreation Facility Project will be financed and developed and wish to utilize this Agreement to commit said understanding to writing; and WHEREAS, the Parties desire that the provisions of this Agreement supercede and replace Paragraphs 4 and 5 of the Pre - Annexation Agreement dated September 30, 2002, among the Parties, which paragraphs pertained to Agency assistance to the City for the fire station and recreation facility; and WHEREAS, prior to approval of this Agreement, in accordance with Health and Safety Code Section 33679, the City Council of the City, the Board of Supervisors of the County acting as the Board of Supervisors of the County and as the Governing Board of the Agency have published notice of and held public hearings on the Agency's expenditure of funds for the Fire Station Project and the Recreation Facility Project, the Agency has made available to the public the information required by Health and Safety Code Section 33679, and the City Council and the Board of Supervisors have made the findings required pursuant to Health and Safety Code Section 33445 necessary to authorize the Agency to spend its funds for the Fire Station Project and the Recreation Facility Project. NOW, THEREFORE, the Parties hereto state and agree as follows: 1. The purpose of this Agreement is to set forth the understanding and agreement of the Parties with respect to the Fire Station Project and the Recreation Facility Project. The contents of this Agreement are intended to be as comprehensive as possible yet not necessarily exhaustive with respect to the issues that may arise relative to the development of the Fire Station Project and the Recreation Facility Project. In the event that issues occur that are not identified in this Agreement, the Parties agree to work together in good faith to resolve each matter. 2. Concurrent with the execution of this Agreement, the City shall commence and complete the acquisition of property for the Fire Station Project. The County, Agency, and City agree that the City may exercise the power of condemnation or eminent domain associated with any property acquisition in the event that condemnation becomes necessary. The County, Agency, and City agree to cooperate fully in any acquisition effort. As the first step in that effort, the City has identified three possible alternative sites for the location of the station, all of which are in the Project Area. The proposed sites are shown on the map attached to this Agreement as Exhibit A. Promptly following execution of this Agreement, the City shall, after consultation with the Agency, select the site for the Fire Station Project (which selected site is referred to in this Agreement as the "Fire Station Property "). Promptly following selection of the Fire Station Property, the City shall obtain an appraisal of the fair market value of the parcel or parcels that constitute the Fire Station Property from an appraiser approved by the Agency. Upon completion of the appraisal, the City shall submit it to the Agency for review and approval. Once the appraisal has been approved, the City shall make good faith efforts to acquire the parcel or parcels by voluntary acquisition. If the City is unable to acquire a parcel or parcel by voluntary agreement, the City may proceed to use its eminent domain authority to acquire the parcel or parcels, provided, however, that nothing in this Agreement is intended to limit the City's discretion as to whether or not it should exercise its eminent domain 758 \08 \168920.6 authority. Once the City has obtained Agency approval for the appraisal, the City shall not agree to purchase a parcel or offer to purchase a parcel for more than its appraised value or settle an eminent domain lawsuit for more than the appraised value of the parcel without the consent of the Agency. The total amount that the Agency shall be required to pay for the acquisition costs of the Fire Station Property shall not exceed the lesser of the City's acquisition costs or $2.5 million. Acquisition costs shall include the purchase price the City pays for the parcel or parcels to be acquired, relocation costs the City is required to pay by law to owners or occupants of the parcels, and reasonable transaction costs for attorneys, experts, consultants, closing costs and other similar costs. 3. Following or concurrent with the acquisition of the Fire Station Property, the County and Agency herewith appoint, direct and empower the City to act on their behalf to undertake or cause to be undertaken the development, including design, construction and related activities of the Fire Station Project on the Fire Station Property. The estimated costs of the Fire Station Project (excluding acquisition of the Fire Station Property) are reflected in the Fire Station Project Cost Estimate attached to this Agreement as Exhibit B. The Parties acknowledge that this cost estimate represents only an estimate of the Fire Station Project's cost and that the actual costs may exceed the amount of this estimate. The City has responsibility for managing all aspects of the Fire Station Project's design and construction. The Agency shall fund the development costs -- exclusive of acquisition costs identified above -- up to and including $1.6 million. In the event that actual development costs are less than $1.6 million, the Agency shall pay only the actual development costs. In the event that actual development costs are more than $1.6 million, the City shall pay any amount over $1.6 million. Once final plans for the Fire Station Project have been completed, the City shall prepare a cost estimate and budget for the remaining costs of the Fire Station Project and submit the estimate and budget to the Agency for approval. 4. Following completion of the Fire Station Project and until such time as the Parties agree that these services are not necessary, the City agrees to provide fire suppression and emergency medical services to the Santa Ana Heights Project Area and to neighboring jurisdictions (including, but not limited to, County unincorporated areas) per existing mutual aid and automatic aid agreements between the County and the City. If necessary, the County and City shall amend those existing agreements to make clear that the City is responsible for first response for calls for fire suppression and emergency medical services from the Santa Ana Heights Project Area and adjoining unincorporated areas (but excluding John Wayne Airport aircraft and aircraft- related improvements). The Fire Station Project and the Fire Station Property shall be owned by the City. 5. Concurrent with the execution of this Agreement, the City shall commence and complete the acquisition of property for the recreation facility. The County, Agency, and City agree to cooperate fully in any acquisition effort. As the first step in that effort, the Parties have jointly identified the property where the recreation facility would be located (the "Recreation Facility Property "). The proposed Recreation Facility Property is shown on the map attached to this Agreement as Exhibit C. The Parties expect that the City will be able to enter into a voluntary purchase agreement for the City's purchase of the Recreation Facility Property from its current owner. Promptly following execution of this Agreement, the City shall make good faith and diligent efforts to enter into an agreement with the current owner to purchase the Recreation Facility Property. The total amount that the Agency shall be required to pay for the acquisition costs of the Recreation Facility Property shall not exceed the lesser of the City's acquisition costs or $4 million. Acquisition costs shall include the purchase price the City pays for the Recreation Facility Property and reasonable closing costs for the acquisition. The current owner of the Recreation Facility Property is a nonprofit entity that operates a recreation program on the property. 758 \08 \168920.6 6. Following or concurrent with the acquisition of the Recreation Facility Property, the County and Agency herewith appoint, direct and empower the City to act on their behalf to undertake or cause to be undertaken the development, including design, construction and related activities of the Recreation Facility Project on the Recreation Facility Property. The estimated costs of the Recreation Facility Project (excluding acquisition of the Recreation Facility Property) are reflected in the Recreation Facility Project Cost Estimate attached to this Agreement as Exhibit D. The Parties acknowledge that this cost estimate represents only an estimate of the Recreation Facility Project's cost and that the actual costs may exceed the amount of this estimate. The City has responsibility for managing all aspects of the Recreation Facility Project's design and construction. The Agency shall fund the development costs -- exclusive of acquisition costs identified above -- up to and including $7.5 million. In the event that actual development costs are less than $7.5 million, the Agency shall pay only the actual development costs. In the event that actual development costs are more than $7.5 million, the City shall pay any amount over $7.5 million. Once final plans for the Recreation Facility Project have been completed, the City shall prepare a cost estimate and budget for the remaining costs of the Recreation Facility Project and submit the estimate and budget to the Agency for approval. 7. Following completion of the Recreation Facility Project and until such time as the Parties agree that these services are not necessary, the City agrees to provide recreation facilities and services on and from the Recreation Facility Property and the buildings and facilities thereon to those who live and work in the Santa Ana Heights Project Area and to neighboring jurisdictions (including, but not limited to, County unincorporated areas). The Recreation Facility Project and the Recreation Facility Property shall be owned by the City. At the time the City obtains fee title to the Recreation Facility Property, the City shall execute and record a covenant running with the Recreation Facility Property land requiring that the Recreation Facility Property and the improvements thereon be operated and used as a recreation facility, and that, if not so used and operated for a continuous period of six (6) months or more, title to the Recreation Facility Property and all improvements thereon shall be conveyed to the Agency. 8. The Agency Executive Director and the City Manager shall cooperate to design payment procedures for the Agency's funding of the acquisition of the Fire Station Property and the Recreation Facility Property and for the development of the Fire Station Project and the Recreation Facility Project. Those procedures shall provide for the City's submittal to the Agency of detailed documentation of expenditures or expected expenditures and for the County's prompt payment of costs after receipt of the necessary documentation. 9. The City understands and agrees that the source of funds that the Agency will use to fund the acquisition of the Fire Station Property and the Recreation Facility Property and to fund the development costs for the Fire Station Project and the Recreation Facility Project will include the proceeds of tax exempt bonds secured by the tax increment revenue the Agency receives pursuant to Health and Safety Code Section 33670 (the "Bonds "). In light of the funding sources, the City covenants and agrees with respect to the Fire Station Property and the Recreation Facility Property and the Fire Station Project and the Recreation Facility Project to comply with all applicable requirements of the federal Internal Revenue Code (the "Code ") necessary to preserve the tax - exempt status of the interest on the Bonds and specifically covenants, without limiting the generality of the foregoing, as follows: 758 \08 \168920.6 (a) Private Activity. The City will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or of any other monies or property which would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code; (b) Arbitrage. The City will make no use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code; (c) Federal Guaranty. The City will make no use of the proceeds of the Bonds or take or omit to take any action that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code; (d) Information Reporting. The City will cooperate with the Agency in providing information that the Agency needs to comply with the informational reporting requirement of Section 149(e) of the Code; (e) Hedge Bonds. The City will make no use of the proceeds of the Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the Bonds to be considered "hedge bonds" within the meaning of Section 149(g) of the Code unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the tax exempt status of interest on the Bonds for federal income tax purposes and such action has been approved by the Agency. In addition, the City shall, prior to entering into an operating or management agreement or lease for the Recreation Facility Property and/or the facilities thereon, provide to the Agency an opinion of counsel acceptable to the Agency that the execution and performance of that operating or management agreement or lease will not affect the tax exempt status of the interest on the Bonds. 10. In contemplation of the provisions of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public entities solely by reason of such entities being Parties to an Agreement as defined in Section 895 of said code, the Parties hereto, as between themselves pursuant to the authorization contained in Sections 895.2 and 895.6 of said code, will each assume the full liability imposed upon it or any of its officers, agents or employees by law for personal injury, property damage or loss to third Parties caused by a negligent or wrongful act or omission of that party occurring in the performance of the Agreement. To achieve the above stated purpose, each party indemnifies and holds harmless the other party for any damage, loss, cost or expense arising out of its own negligent or wrongful acts or omissions. 11. This Agreement shall be governed by the laws of California and together with the attached exhibits represents the entire agreement of the Parties as to the subject matter of this Agreement. The Parties intend that this Agreement supercede and replace the provisions of Paragraphs 4 and 5 of the Pre - Annexation Agreement dated September 10, 2002 and entered into among the Parties, and, upon execution of this Agreement, said provisions of Paragraph 4 and 5 of the Pre - Annexation Agreement shall have no further force or effect. 758 \08 \168920.6 c IN WITNESS WHEREOF, the County, Agency and City have approved the foregoing MEMORANDUM OF AGREEMENT and caused the same to be executed by their duly authorized officers as set forth below. APPROVED AS TO FORM County Counsel Deputy 758%08%168920.6 COUN'T'Y AGENCY i CITY Un County Executive Officer Executive Director City Manager APPROVED AS TO FORM Stradling Yocca Carlson & Rauth, A Professional Corporation i Special Counsel to the City EXHIBIT A FIRE STATION PROJECT SITE MAP 768 \08\168920.6 1 A, FIRE STATION PROJECT COST ESTIMATE LAND ACQUISITION COSTS NOT TO EXCEED $2,500,000.00 IMPROVEMENT COSTS NOT TO EXCEED $1,600,000.00 TOTAL $4,100,000.00 7581081168920.6 0,49,11.3y RECREATION FACILITY PROJECT SITE MAP f A am Nil .,2MI I 5w 3� I R 7581081168920.6 -r,A EXHIBIT D RECREATION FACILITY PROJECT COST ESTIMATE ACQUISITION COSTS $4,000,000.00 IMPROVEMENT COSTS $7.500,000.00 TOTAL $14,500,000.00 7531031163920.6