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CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: June 20, 2000 Item No.: 3 Subject: Authorize the~xclusive Negotiation Agreement with Zelman Retail Partners to Revitalize the Town Squari~ Shopping Center - University Corridor/Sycamore Canyon Project Area Background On February 15, 2000. the Redevelopment Agency approved authorization for staff to prepare an Exclusive Negotiation Agreement with Zelman Retail Partners to revitalize the Town Square Shopping Center. Upon completion of the Exclusive Negotiation Agreement, the item would return to the Agency for their consideration of approval. Current Issue Staff now requests authorization to execute a six-month Exclusive Negotiation Agreement with Zelman Retail Partners. The Agreement will allow the developer and Agency to negotiate diligently and in good faith towards a disposition and development agreement to revitalize the Town Square Shopping Center. The developer is interested in expanding Town Square to a 32-acre retail center. The proposed development is for a "repositioned" center anchored around one or more large format retail uses. If a co-anchor tenant is identified, the proposed development may extend across Twelfth Street, expanding to a 36-acre project. Staff has attached two site plans, "Scheme A" illustrates one large format user, while '*Scheme B" illustrates two large format users. In addition, on February 15, 2000, the Agency Board authorized staff to proceed with the Owner Participation solicitations as required by the California Community Redevelopment Law. Owner Participation letters were mailed to the appropriate property owners and business occupants. Three Statements of Interest were received by the Agency: however, none were accompanied with a detailed proposal for a project. Mr. Mark Spiegel, on behalf of the Spiegel Family & Trusts expressed an interest to participate with the Agency on a financial relationship, i.e., a ground lease for the project. Staff will certainly consider Mr. Spiegel's interest to participate as negotiations for the project continue to evolve. Mr. Stephen J. Meringoff, Meringoff Properties, Inc., of New York responded with a Statement of Interest to expand the center; however. as mentioned above, did not submit a detailed proposal to the project expansion. Big Saver Foods' Statement of Interest identified they were open to all options. i.e., to continue to participate at the same location, change their present location and to acquire real property for expansion. Big Saver Foods does not qualify as an "owner" as defined in the Agency's Rules Governing Participation and Preferences by Property Owners and Business Occupants because it does not hold fee title to the property or a leasehold interest pursuant to a lease of twenty (20) years or more. Since staff did not receive any detailed proposals to revitalize the Town Square Shopping Center, it is staff's recommendation that the Agency approve authorization to enter into an Exclusive Negotiation Agreement with Zelman Retail Partners. Fiscal Impact Entering into an Exclusive Negotiation Agreement with Zelman Retail Partners to revitalize the Town Square Shopping Center will not have a fiscal impact on the Agency. 3-1