07/10/2001 RA RPT 02 - Laserfiche WebLink

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, CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: July 10,2001 Item No.: 2 Subject: Third Amendment to Memorandum of Understanding -FancherlKaser Partners (formerly known as The Fancher Companies) Regarding the Development of a LifestylelEntertainment Center in Downtown Riverside Background On May 16, 2000, the Redevelopment Agency authorized the Executive Director to Enter into a Memorandum of Understanding with The Fancher Companies regarding the development of a Downtown Riverside lifestyle/ entertainment center. The document allowed the developer to represent the project and solicit tenant interest at the annuallntemational Council of Shopping Centers (ICSC) conference in Las Vegas in May of 2000. As proposed, the lifestyle entertainment center would encircle the Main Street Mall, taking advantage of the existing ambiance, and further enhancing the area by refurbishing existing historic buildings, and constructing new buildings to create a variety of retail, dining and entertainment venues. Despite the good faith efforts of the Agency and The Fancher Companies, the parties were unable to complete a Limited Right to Negotiate within the timeframe contemplated by the MOU which expired on August 30, 2000. Subsequently, on September 5, 2000, the Agency authorized the extension of the term through January 31, 200 I. The Agency approved another extension which term expired on May 31, 200 I and reflected the assignment of the Fancher Companies to FancherlKaser Partners. Both staff and FancherlKaser Partners attended the ICSC Conference last month, and observed that retailers are becoming increasingly selective in locating future sites. Further, the softening economy has resulted in retailers pulling back on their expansion plans. Current Issue Despite the fact that encouraging responses were received from potential tenants at ICSC and during ensuing conversations, changes have occurred in the retail and entertainment sectors, resulting in the need to reexamine the development approach for the lifestyle center. As a result, under the Third Amendment, the scope and size of the lifestyle/entertainment center will be greatly reduced to include the area bounded by 5th Street to the north, Mission Inn Avenue on the south, Market Street on the west and Orange Street on the east, and will not include a housing component. To allow for the Third Amendment, staff and the developer agree that it would be in the best interest of both parties to amend the MOU by extending the term through November 7, 2001 versus entering into a Limited Right to Negotiate. This methodology will allow time to reexamine the development approach for Downtown revitalization. Fiscal Impact There is no financial impact related to the approval of the Third Amendment to the Memorandum of Understanding. Alternatives The Agency could elect to not approve the Third Amendment to the M~morandum of Understanding. ~oin.g so would result in the developer ceasing efforts to attract tenants and housmg developers to Downtown RIversIde. 2-1