HomeMy WebLinkAbout1987-07-07; City Council; 8867-1; Recommendations For New Library In South CarlsbadCIT-I)F CARLSBAD - AGEND.-BILL
4B# BB1l-;r / I TITLE: LIBRARY SITE AND FUNDING RECOMMEN- MTG. 717187 DATION FOR A NEW LIBRARY IN SOUTH
DEPT. LIB I CARLSBAD
RECOMMENDED ACTION:
“3 DEPT. HD!
1. Approve the recommended library site and direct the City Manager to negotiate a
purchase agreement with the owner.
2. Direct the City Manager to include funds in the CIP for land acquisition and
construction of a library.
3. Direct the City Manager to evaluate alternative methods of financing and
constructing the library (developer build vs. City build).
ITEM EXPLANATION:
On January 27, 1987 the City Council directed staff to negotiate the acquisition
of a library site and/or a developer proposal to build and lease back a library
facility. Council action was based upon the library site selection committee
report which listed five sites for consideration. All five sites met the
selection criteria recommended in the Library Strategic Plan. Subsequent
investigation and negotiations with Carlsbad Retail Associates has resulted in
the selection of a preferred site. At its meeting of April 16, 1987 the site
selection committee endorsed Site E as the best site for a new library. The
library board also has endorsed the site. The asking price for the property
appears to be consistent with other property in the area.
Design funds of $650,000 are already budgeted in the CIP. Design of the building
will occur upon purchase of the site. Purchase is anticipated during 1988.
FISCAL IMPACT:
The City has several alternatives available for funding the acquisition of a new
library. All options depend on the City pledging public facilities fee funds,
both existing and future, to this project. The ultimate decision on exactly how
to finance the construction will determine the extent of public facilities fees
committed to the project in future years and the effect the library will have on
the timing of other improvements. The library project costs are summarized in
the following table:
Fiscal
Description Year
Land Acquisition 1988-89
Grading 88-89
Design 88-89
Construction 89-90 to 90-91
Total Project Cost
Operations 90-91 and
thereafter
Approximate
Amount Received
$1.1 million
0.9 million
0.6 million
8.4 million
$11.0 million
$0.5 to 0.9 million
Purchse of the library site and funding grading costs prior to 1989-90 may
require dedication of all available public facilities fee revenues for 1987-88
and delay of certain existing PFF projects. The list of projects to be delayed
includes Palomar Airport Road improvements, park improvements in the northeast
and southwest quadrants, the Public Safety Center phase II and III and many
smaller projects.
Page 2
AB NO.-p/#y-&
This delay in funding other improvements is brought on by reduced
PFF revenue due to the slowing of development activity. Existing
resources must be allocated to only top priority projects.
Staff is recommending that Council reserve funds for the acquisition
of land and grading costs from 1987-88 revenue (assuming 87-88
revenues are sufficient to cover these and other committed costs).
Actual purchase of the property would not occur until 1988-89.
The long term financing of the building construction costs could be
done in one of three ways:
1.
2.
3.
Building construction funded by site developer with lease back
agreement - under this concept the City would enter into a
lease back agreement with the site developer to build the
library to City specifications. The City would then enter into
a long term lease back agreement with the developer pledging up
to $1 million per year of public facilities fee revenue to lease
payments over a 20 year period. The actual lease payments will
depend on construction costs and interest rates during this 20
year period. By allowing the site developer to build the build-
ing , the City may be able to lower total construction costs by
taking advantage of certain economies of scale.
Certificates of Participation - The City may issue Certificates
of Participation for the construction of the building. The
public facilities fee fund would be pledged, along with City
general fund revenues, to the repayment of the debt, as in the
above approach the library debt would have first claim of PFF
revenues. This alternative offers the City a lower interest
rate due to our ability to issue tax exempt debt. Repayment
would require up to $1 million per year for 20 years; however,
due to lower interest rates, the actual cost to the City could
be slightly less than alternative %l.
Mello-Roos District Reimbursement - Under this alternative the
City must put together a series of financing steps. First, the
building could be constructed by the site developer or by the
City through the use of Mello-Roos tax exempt debt. In either
case the ultimate cost of the building would be supported by the
Mello-Roos district. The developers supporting the district
could have the annual assessment placed upon their district
reduced by the amount of public facilities fees payed by that
developer. The cost to the City is limited to the amount of
public facilities fees paid by developers within the district.
Any shortfall could be assessed against property with the
district.
Council is not required to select a funding alternative at this time.
However, an understanding of the alternatives is necessary before the
City moves forward with the project. Two important points found in all
financing methods are 1) Public facilities fees are pledged to repay the
Page 3
AB NO. )f&t7-#/
cost of the building and, 2) The City will be delaying many public
facilities fee projects to make way for library funding.
The CIP which will be presented to Council in the next few months will
detail the fiscal impact of this project. The City will require
development of 400 to 600 dwelling units per year to fund the library
construction.
The operating costs for the new library will run from $500,000 to
$900,000 per year depending on the level of operations. The City
presently is unable to support this additional cost. Preliminary
projections of General Fund revenue show that an operating deficit of
about $1.5 million will exist in 1990-91, the first year of operations
for this facility. The City must consider revenue enhancements or
zone fees assessed against development to cover operating costs for
the first year or two of operations.
EXHIBITS:
1. Memo from Library Director to Site Selection Committee dated
April 16, 1987.
2. Site plan.
3. Letter from Johnson Wax Development Corporation to Frank Mannen
date June 26, 1987.
4. Site map.
APRIL 16, 1987
TO: SITE SELECTION COMMITTEE
FROM: Library Director
LIBRARY SITE SELECTION PROGRESS REPORT
Library and city staff have had six meetings with the developers
who plan to build a shopping center on El Camino Real between
Alga Road and Dove Lane. The result of those meetings has been
the development of a tentative site plan for a library building.
The next step will be to develop a final site plan. .
The addition of the new post office to this general site plan
has caused some of the revisions we have developed. That has
also required the developers to purchase an additional seven
acres of land to accommodate both the library and the post office.
The developers are in the process of purchasing the property
at this time. We have also been working with some preliminary
financial data to purchase the site and the building. The follow-
ing options appear to be possible:
1. Purchase the land from the developer and lease back the build-
ing.
2. Lease back the l&d and the building.
3. Purchase outright the land and the building from the developer
after the building is built. .
Any one or a combination of these options may be feasible. More
work needs to be done on various financing alternatives.
This proposed site appears to be the best possible site for the
library in the southern half of the city. The combination of
a shopping center, post office and library will make for an ideal
mix and should provide a convenient source of services to the
public. The site satisfies all the major criteria we have used
to evaluate various potential library sites.
PAB
Distribution:
Geoff Armour
John Cahill
Bebe Grosse
Michael Holzmiller
Ann Kulchin
Sharon Schramm
Seena Trigas r..- - I. ..- .- - - -
II souyE-9 CPaRbSBAD
LUBRARY SUYES -6
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CARLSBAD RETAIL ASSOCIATES 1601 Dove Street, Suite 242 NeWpOrt Beach, CA 92660
June 26, 1987
Mr. Frank Xannen Assistant City Managar City of Carlsbad 1250 Elm Str88t Carlsbad, California 92008
RE: South Carlabnd Library Site NWC Alga C El Camino Real Carlsbad, California
Dear Frank:
This letter is to set forth the term and conditions upon which Carlsbad Retail AssOCiat88 woulcl be prepared to proceed with negotiations for the City of Carlsbad to purchase a portion of
the above site for a City of Carlsbad Library.
1. Building SiZ8 wIc----LIIII-
The subject site shall accommodate a fifty eight thousand
(58,000) square foot library facility with adequate parking and
on-site amenities. The location of the Purchaser's building on the site will be basically as shown on the attached site plan.
2. PNCG81 aiU8
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The subject site shall contain approximately six acres.
3. Purchase Price ~~~-~~c---~ll~
The price to be paid by Purchaser to Seller for the land
befOr8 grading and installation of site utilities will be One Million Thirty Two Thousand Dollars ($ 1,032,OOO) based upon a
$ 3,95 per square foot purchase price. The purchase price shall be adjusted by $3.95 per square foot if the actual parcel is
more or less than six acres. This purchase price shall be
effective until September 30, 1987. Beyond September 30, 1987,
th8 purchase price will increase by S8118rVs cost of carry, including but not limited to interest on the land, taxes and insurance, Purchaser shall pay for its share of escrow fees and
closing costs. Seller shall pay for Purchaser's CLTA standard policy of title insurance (8XCepting any special 8ndOrSelnentS
required by Purchaser), transfer taxes and documentary stamps.
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4, Transaction Schedule & Conditions ----------"------I--------"------
City Council approval Of a mutually acceptable purchas~*agreement no later than September 30, 1987.
b. Seller'5 purchase of approximat8ly 9 acres from Walter J, and Wanda L, Frandsen together with approximately 7.26 acres from Wastwood Savings and Loan Association (parcels B and
C, Exhibit A).
C. S8118r1s demonstration of its ability to provide Purchaser with a developable library site. This ability will be demonstrated by Seller's implementation of its development plan
for the Master Plan area according to a mutually acceptable schedule. The present schedule anticipate5 completion of grading and installation of utilities and services far the
Master Plan area by September 1, 1988. This date will become the close of escrow unless extended by mutual consent,
d. Prior to doe8 of BSCrOW, the parties shall enter into an agreement for the dev8lOpment of the property. This agreement shall survive the Clo5e of'escrow and provide for,
among other things, the timing and co& of all grading and site improvements for the property, and the timely construction of a library facility in accordance with plans and specifications
approved by both Purchaser and Seller,
e. The PllrchaS8r'8 interest in the praperty,sha13, be subject to covenants, conditions and restrictions providing for, among other things, a non-exclusive reciprocal easement for ingress, egress and parking as well as provisiOns for maintenance of common drives and parking areas. Purchaser shall approve said dOCIIm8nts, prior to close of escrow and within
thirty (30) days of receipt of same,
f. Purchaser is aware that sale of this property is physically and financially linked with the overall Master Plan
to b8 developed by Seller. Subject Master Plan will be subnritted to the City of Carlsbad for review and approval.
S8118r, with PUrChaS8r's a5SiStanC8, shall pursue all governmental approvals including approvals by the City of
Carlsbad and the California Coastal Commission for the proposed
Master Plan.
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g- Seller shall supply soils tests to the reasonable satisfaction of Purchaser at the approximate time Purchaser BOmm8nC8s its plans and specifications for its building. The closing of escrow shall b8 contingent upon approval of the soils
conditions, which shall be within fifteen (15) days of receipt of same.
h. Seller shall provide Buyer with a cultural resource study indicating the status of known or potential archaeological
or palrohtCd~giC~l reSourc8s on subject parcel.
5. Selection of Escrow and Title Company shall be at Seller's discretion.
6. Purchaser shall deposit Seventy Five Thousand Dollars ($ 75,000) into escrow within fifteen (15) days of execution of
the purchase docuaents described herein. Said $ 75,000 shall apply to the purchase price and shall b8 forfeitable to Seller if Purchaser terminates the agreement for any reason other than the non-satisfaction of the conditions and contingencies outlined herein. In the event Purchaser meats all conditions outlined herein and Seller is Unable to deliver subject property in the condition outlined in the agreement for development of
the property,. Seller shall return the full $75,000 to Purchaser,
7. The balance of the purchase price shall be paid by Purchaser to Seller upon the close of escrow.
8. Seller shall provide Purchaser with a preliminary title report covering the entire center and a topographic and boundary SUr'v8y. The title report shall be accompanied with copies of all items as eXceptionS ther8to and a plat map with th8 location of the easements sketched thereon. Purchaser shall approve title within thirty (30) days of receipt of the above report and
exceptions. The closing of escrow shall be contingent upon title being in the same condition as approved by Purchaser,
This letter is not intended to be contractual in nature, is not an offer, and is to be taken only as an expression of the general terms and conditions upon which we would be willing to enter into purchase negotiations. The proposed agreement shall be effective Only upon final approval by the City of Carlsbad, the Board of Directors of Johnson Wax Development Corporation
and final execution of documents.
Please verify receipt of this letter and your acceptance of all
terms and conditions contained herein by execution of the
original where provided and returning to the undersigned,
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We look forward to working with you with respect to this purchase and are hopeful we will be able to consummate a mutually acceptable transaction with the City of Carlsbad as a library would be a most welcome addition to the proposed La
Costa Center.
Sincerely,
Carlsbad Retail Associates, a California General Partnership
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Frederick T. Von der Ahe
The terms and conditione indicated herein are hereby acknowledged, agreed and accepted on this day of June, 1987.
City of Caxlsbad
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July 7, 1987
Honorable Mayor Lewis and City Council Members 1200 Elm Street Carlsbad, California 92008
Honorable Mayor & Council Members:
Re: Library/South Carlsbad
We have reviewed the staff report on the proposed library for Carlsbad, Conceptually we agree on the future needs of a library for south Carlsbad, however, we are concerned about the size of library, the timing of construction,and the selection of the funding mechanism at this time,
We would recommend that the size of the library be commensurate with .projected population through 1991 with the ability to expand the facility at a later date. (It is our understanding that people using the facility and checking out books come from outside City limits and represent approximately 40%).
Since we view that a higher priority in preserving the "health, safety and welfare" of the citizens of Carlsbad is the widening of Palomar Airport Road, and the addition of a fire station at the Safety Center, we recommend that further consideration be given to alter- native financing vehicles rather than utilizing public facilities fees.
We suggest that this issue be held open until the review of Capital Improvement Program.
We the undersigned are in accord with the conceptual recommendations listed above. Thank you in advance for your consideration to our recommendations.
CARLSBAD RESEARCH CENTER
A
Bill Miller President
CENTRE DEVELOPMENT
President
BEDFORD PROPERTIES
.
rnL :,u& ,“ i$.$(/1;&~ /i / d Ann Shannon Project Manager
T & G INVESTMENTS
Ted Tchang Owner Representative
LAUREL TREE INVESTMENTS
er Representative
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CHAMBER OF COMMERCE
July 7, 1987
Mayor Bud Lewis
City of Carlsbad
1200 Elm Ave.
Carlsbad, Ca. 92008
Dear Buddy:
The Chamber of Commerce is pleased that the City Council is
moving forward on the funding of a site and design of a new South
Carlsbad library facility for our community. This is a project which will be extremely beneficial for all citizens, and will maintain our excellent level of library service which we can all
be proud of.
We would like to take this opportunity to share a few com-
ments with you which we hope you will consider while determining
your funding and construction plans. The proposal before you
calls for a 58,000 square foot facility, not including any ex-
pansion of the existing library.
In light of the fiscal posture of the City, specifically
recent five-year budget deficit projections and belt tightening,
it is of concern to the business community that the City plans
to expend $11 million for this project. City figures indicate
that the projected population in the year 1995 is 80,000. In or-
der to meet the City library standard of 800 square feet per 1000
population, the total library square footage must be 64,000 in the year 1995. Taking into account the present 25,000 square foot
facility, this would suggest that an additional 39,000 square
foot facility is needed in order to meet the standard in 1995.
A plan which includes the expansion of the existing facility
and reduces the initial capital outlay for this project might be
a prudent way to meet this demand. Good fiscal management and
business practices may dictate that the City avoid building a
facility which will not be fully utilized until approximately
the year 2004, according to present City population projections.
Another concern is the possible “dedication of all available
public facilities fee revenues for 1987-88 and delay of certain
existing PFF projects”, according to the agenda bill before you.
Projects such as Palomar Airport Road improvements are essential
to the enhanced safety and circulation efforts you already have
underway. In addition, the “many smaller projects” have not yet
been discussed publicly to our knowledge, and we would appreciate
the opportunity to review those which may be withdrawn from the
CIP.
In the event the City were to build the entire 58,000 square
foot facility and lease out the portion not in use, we would have
several concerns. First, in our estimation the City should not
get involved in leasing office space.
5411 Avenida Encinas, Suite 100 l F?O. Box 1650 l Carlsbad, California 92008 l (619) 729-5924
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Second, where would the revenues generated from the lease,
should this option be exercised, be allocated to in the City?
Would it be for payment of the City’s debt service or would it be
plugged right back into the fund from which it was taken, the
CIP?
Finally, our recommendation is that the City consider a well
planned, phased in project which would provide the needed library
space, not unduly burden the City’s already strained budgetary
situation, and maintain the projects in the capital improvement
plan which the entire community has demanded and expects. This
strategy might call for the land acquisition, grading, design and
construction of a 40,000 square foot facility by 1991 at the
proposed site, with the expansion of the existing facility and a
simultaneous completion of another phase of the new facility in
the mid to late 1990’s.
These are just a few ideas and concerns which have surfaced
in our discussions of the proposal to date. We appreciate your
consideration of our input.
Sincerely,
1987 PPesident