11/21/2000 RA RPT 02 - Laserfiche WebLink

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, CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: Item No.: November 21,2000 2 Subject: Request Authorization to Enter Into an Exclusive Right to Negotiate with Hopkins Real Estate Group for the Development of Villages at Van Buren-Arlington Redevelopment Project Area-Supplemental Appropriation Background On May 16, 2000, the Agency Board approved a Memorandum of Understanding ("MOU") between the Agency and Hopkins Real Estate Group ("Hopkins") regarding their proposal to redevelop the area generally bounded by Indiana A venue, Lincoln A venue, V an Buren Boulevard, and Gibson Street ("site area") in the Arlington Redevelopment Project area. Hopkins proposed a mixed-use development to combine multi-family and residential housing with some additional commerciaUretail development, including an expansion of the retail center located at the comer of Lincoln Avenue and Van Buren Boulevard ("Project"). The MOU set forth provisions to negotiate towards either a Limited or Exclusive Right to Negotiate regarding Hopkins' development proposal. At the same meeting, the Agency Board also authorized staff to commence the owner participation process and notify all affected property owners of their right to submit competing proposals or other statements of participation interest for development of the site area. Current Issue Among the provisions set forth in the MOU was the requirement that Hopkins use its best efforts in good faith to negotiate with each of the major real property owners within the site area and conduct a marketing program reasonably sufficient to attract potential commercial tenants to the Project. The MOU expired at the end of July, 2000, and Hopkins has received encouraging responses in these efforts sufficient to warrant entering into an Exclusive Right to Negotiate ("ERN"). Furthermore, the Agency commenced and completed the owner participation process during the term of the MOU and did not receive any competing development proposals. The attached ERN will allow staff and Hopkins to properly evaluate project viability, analyze the financial feasibility, assess project compatibility with redevelopment plan goals and objectives, and explore the business terms of a potential development agreement, while Hopkins continues to negotiate in good faith with the property owners. Per the ERN, the negotiating period shall expire on June 30, 2001. Analysis Upon execution of the ERN, Hopkins shall formalize the conceptual project into a comprehensive development proposal, provide a schedule to include milestones for land use entitlements and permits, provide evidence of financing, obtain signed purchase and sale agreements or similar owner's binding commitment to sell parcels, continue marketing the project to obtain binding commitments from commercial tenants and residential developers, and submit a detailed financial proforma for the Project. As this is a very large undertaking, should the project move forward, staff anticipates the potential for considerable new investment, resulting in increased tax increment and sales tax revenues to the Agency and City respectively. Total project investment is anticipated to be approximately $62 million, and approximately 200 new jobs would be created primarily from the commercial components. 2-1