01-08-2002 RA RPT 04 - Laserfiche WebLink

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People Serving People Riverside CITY OF RIVERSIDE m._.6..., AGENCY MEMORANDUM HONORABLE MAYOR AND AGENCY MEMBERS DATE: January 8, 2002 ITEM NO: 4 SUBJECT: CONSIDER APPROVAL OF TAMALE FACTORY RELOCATION AGREEMENT BACKGROUND: On November 6, 2001, the Redevelopment Agency approved the Pumhase and Sale Agreements for the acquisitions of properties located at 3834 Main Street, 3866 Main Street and 3870 Main Street, and conveyance of said properties to UCR for the Barbara & Art Culver Center for the Arts. The Purchase and Sale Agreements were contingent upon the Agency approval of a Memorandum of Understanding ("MOU") with UCR and the successful concurrent closing of double escrows with the property owners and UCR, which had to close no later than January 15, 2002. At the same meeting, the Agency authorized funds for environmental studies; title and escrow fees; legal and other consulting services; filing fees; and appraisals and relocation costs of the sole tenant, The Tamale Factory. Subsequently, on December 18, 2001, the Agency entered into the Memorandum of Understanding (MOU) with UCR. Among other items, the MOU stipulated that UCR would contribute up to 50 percent of the relocation costs of The Tamale Factory, up to a maximum of $250,000. The MOU also stated that a settlement agreement must be approved prior to the January 15, 2002 close of escrow. CURRENTISSUE: Acting as staff to the Redevelopment Agency, Property Services retained Pacific Relocation Consultants (PRC) to determine the relocation benefits that Chuck and Naomi Avila, the owners of The Tamale Factory would be eligible to receive. PRC concluded that The Tamale Factory is eligible to receive approximately $550,000 which includes the cost to relocate and re-establish their business as well as any and all other claims that they might assert relative to the relocation, which includes fixtures and equipment and/or loss of goodwill associated with the business. Discussions have been held with the Avilas; and they have indicated their willingness to accept this amount as well as to relocate their business in the City of Riverside. Following are the deal points identified in the Settlement Agreement: · Compensation for Benefits: Charles and Naomi Avila will receive $550,000 in cash benefits to relocate their business, The Tamale Factory, from their current location at 3834 Main Street. Payments by the Agency will be made in four installments, $275,000, $100,000, $100,000, and $75,000. If the Avila's choose not to relocate The Tamale Factory, they will only be entitled to the first payment. · Relocation of Business: Benefits include consideration for relocating The Tamale Factory within the City of Riverside with preference to the downtown area. · Interim Tenancy of Property: The Tamale Factory will be allowed to operate on a month-to-month basis under current lease terms, and agrees to vacate their current location on or before November 1, 2002, unless extended by UCR. UCR has also reviewed and approved the Settlement Agreement, and will provide $250,000 toward the relocation costs $550,000.