Loading...
HomeMy WebLinkAboutMinutes 05/09/19891342 I CALL TO ORDER Mayor McPhee called the special meeting of the Port Angeles City Council to order at 7:00 P.M. The purpose of this special meeting was a discussion of the Waterfront Associates' Lincoln Landing project. II PLEDGE OF ALLEGIANCE The Pledge of Allegiance to the Flag was led by Mayor McPhee. III ROLL CALL Members Present: Mayor McPhee, Councilmen Gabriel, Hallett, Hordyk, Lemon, Sargent. None one position vacant. Manager Flodstrom, Attorney Knutson, Clerk Maike, 0. Miller, D. Wolfe. Members Absent: Staff Present: Public Present: CITY COUNCIL MEETING Port Angeles, Washington May 9, 1989 IV VII SUSPENDED VIII LEGISLATION 1. Discussion of Waterfront Associates W. Mustitch, D. Lee, R. Lindstrom, D. Alwine, E. Hansen, A. Tobias, P. Ripley, L. Beil, R. Harper, S. Everett, B. Melville, C. and A. Alexander, J. Burke, Ray Gruver, J. VanOss, R. Taylor, J. Buttin, M. Kenney, E. Knight. Mayor McPhee stated the reason he called the meeting was, in his opinion, that timing is critical regarding the action the City should take on The Landing project; a decision needs to be made as soon as possible, as $400,000 of City assets are at some degree of risk. Stating there are demonstrated needs for a larger Library, a new Senior Center, and to retain tourists in the Downtown area longer. Additionally, there is a need to attract retired people to the community. He felt this was an opportunity for the Council to respond to these needs by considering the purchase of The Landing Mall. Further, there are a number of factors that should be considered and evaluated, those being financing, the value of the building, as well as the use of the building; for example a library or a tourist area; the advisability of whether the Council should even get involved with the purchase of the building; the consideration of ownership and the question of the vote before the people. He requested approval from the Council of up to $2,000 for a feasibility study concept, to be conducted by two local realtors. He also stated he would like to make a proclamation regarding Mother's Day. Manager Flodstrom spoke to the issues involved with the purchase of the project and the options drafted by the staff. Planning Director Miller reviewed with the Council the land use issues relating to the purchase of The Landing project, outlining the options permitted with respect to the Comprehensive Plan, Zoning Ordinance, and Shoreline Master Program. These must be considered, as The Landing project is zoned CBD, Central Business District. In addressing the development of The Landing as a library, Planner Miller pointed out that libraries are not outright permitted uses. As they are not conditional uses, they are not addressed uses within the CBD. However, there are uses which could be interpreted to be similar to libraries. Councilman Lemon requested staff research regulations of the Department of Natural Resources concerning the shoreline. Attorney Knutson spoke to the Council regarding the options the City could pursue to recoup the $400,000 loan to the Waterfront Associates for The Landing project. He stated the City's loan terms are set forth in a loan -1- 1343 CITY COUNCIL MEETING May 9, 1989 agreement which is secured by a deed of trust. Currently, the loan payments are about $40,000 in arrears. The loan agreement provides that the City may sue the partnership to enforce that agreement in Clallam County Superior Court and that the partnership must pay the City's costs and attorney fees. The City's options at this point, resulting from the documents of the loan, include the following: (1) Sue the partnership and partners individually for repayment of the loan; (2) acquire the property by paying the bank's loan prior to the trustee's sale; (3) try to acquire the property by bidding the total amount of the bank's and the City's loans at the trustee's sale, and if a higher bid is made, allow the property be sold and recoup the $400,000 from the sale proceeds; (4) allow the property to be sold without bidding; (5) options 1 and 2; (6) options 1 and 3; (7) options 1 and 4; and (8) take a wait and -see attitude. This would allow the City the opportunity to see if the project can get back on its own. He discussed another security interest the City has in the property with the assignment of rents and leases; however, the problem with this situation is that it depends upon there being enough money coming in from the rents to allow for the payment of all the expenses and then whatever money is left over, the City could use. However, the bank also has a prior position to the City on the assignment of rents and leases. He stated he did not feel this was a very viable option. In closing, he stated if the Council wanted more detail, he would suggest discussion in executive session because of the litigation aspect. Mayor McPhee asked if the City were to join in the bidding process and the bidding did not reach the $2.4 million, could the City go to the partners for the shortage. Attorney Knutson stated yes. Director of Administrative Services Wolfe covered the financial considera- tions associated with the purchase of The Landing. He stated he has reviewed the financial impacts of acquiring The Landing Mall. There are three main areas of concern: capital acquisition cost, the ground lease, and on -going utilities. In order to acquire the property at the trustee's sale, the City would need to pay all costs superior to the City's lien. In determining those costs, they are personal property tax, the first lien obligation, interest to date, trustee's costs, and the interest to date on the sale of the first lien obligation. He discussed with the Council the options available in raising the necessary funds for the capital acquisi- tion. Briefly, those options are: without a vote of the people the City can issue debt totaling $4,425,000; however, with current issues out- standing, approximately $2,145,000 of debt is available. Another approach would be to lease- finance the facility; also to participate in a lease purchase agreement. With a vote, the available debt margin is nearly $6,450,000. The City could opt to issue bonds or to generate the money internally by utilizing the Equipment Rental reserves, Self- Insurance reserves, Utility reserves, Firemen's Pension reserves, and the LID Guaranty Fund. A short discussion followed, regarding the financial options of the City. Manager Flodstrom then spoke regarding the cost involved in completing the building. Currently, it was estimated by the Building Official the cost to complete the facility would be approximately $50,000. This does not include the furnishings. Figures have not been, compiled on the cost of completing the facility to house a senior center or a library; nor has any information been compiled on the impacts of the businesses currently in The Landing Mall, regarding change of ownership, sale through bankruptcy, or an outright purchase. Councilman Hordyk questioned whether requirements of floor space, weight, and loading were considered by the Building Official. Manager Flodstrom stated in regard to the Library, the Building Official did feel that all of the first floor and a portion of the second floor would support the use of the dead weight needed in a library building. Manager Flodstrom further spoke on the aspects of the building's vulner- ability during storms, stating the structure is protected by fill and docks in the Harbor area. Councilman Hallett requested that this item be placed on the May 16, 1989, Council agenda, as there has been new information provided and he did not feel there had been sufficient time for the members to study the issue. -2- 1344 CITY COUNCIL MEETING May 9, 1989 Mayor McPhee stated he felt it was beneficial to have input of the public on this issue and he preferred that input be given at this time. Council discussed the merits of the meeting and whether it was beneficial to speak to this issue or to wait until a later date. Councilman Sargent agreed partly with Councilman Hallett; however, she stated the Council should listen to the public, and also place the subject on the May 16th meeting agenda. Mayor McPhee stated it was his request that the Council take action on the $2,000 for the feasibility study to be conducted by Larry McHone and Dennis Alwine, realtors, and secondly that the Council ask for a response from the Library Board on this question. Councilman Hordyk stated he was not ready to vote on either one of the issues; that the Council needed more information. Mayor McPhee asked if the authority be granted to him to approach the realtors to possibly spend time on the feasibility study. Councilman Gabriel stated he did not believe the City should get involved in the project, as he felt the issue would be resolved on its own. Councilman Hallett requested that staff contact the Library Board. Councilman Hallett left the meeting at 7:48 P.M. Christopher Martin, 918 Seamount Drive, asked the Council several questions on the issue, the first being, has the City contacted the Waterfront Associates partners on the issue to see if possibly the partners will be finding their own funding to finish the project; secondly, the clause in the loan agreement states, "In case the partnership should need to borrow more money to finish the project, the City will not unreasonably withhold its approval." And finally, the City has created a situation which has forced the sale of the property and whereby it hopes to profit by the sale of the property. If the City is facing litigation because of the unreasonable conduct of the Council, this will not better the position the Council would have in court if it utilized the unreasonable conduct to achieve a profit. He also questioned the figures quoted. Wayne Mustitch, 718 East Third Street, owner of the Port of Entry and What's in Store located in The Landing Mall, stated he was amazed at the new plan of the Council. He felt the proposal of City ownership was extremely premature and voiced his concern over the lease agreements which the tenants currently have with the owners. Would the City be circumventing the existing leases and if so, he stated he would take legal action against the City. In his opinion, he felt The Landing Mall provides for more flavor within the community and stated if the Council wanted to work on a worthy project, they should work more effectively on a plan to revitalize the Downtown area. Peter Ripley, 114 East Sixth Street, #204, owner of Peter's Newsstand, questioned the intent of the Council to purchase The Landing and wanted to know what the Council intended to do with the current tenants. He stated if the intention of the Council was to take over The Landing to put in a library or senior center, this would take away from businesses and increase the unemployment rate. Mayor McPhee stated it has never been his intention to do anything unless it was what the people of the City of Port Angeles wanted the Council to do. He was strongly opposed to using the power of the City government to break leases. Roger Lindstrom, 1316 Eden Valley Road, stated his interest in this is vested because his wife is a small business owner, currently in The Landing Mall. What he sees is a prime opportunity for the City of Port Angeles to increase its economic diversity; to increase the tax base; to increase the actual multiplier, which is the amount of dollars generated within the community which stay within the community and by dollars brought in by tourists. He also believed that a joint private public venture within the small businesses at The Landing Mall is feasible. Regarding the Library, his question to the Council regarded the litigation costs in getting a -3- 1345 CITY COUNCIL MEETING May 9, 1989 variance and creation of the infrastructure of the Library might outweigh the benefits in terms of actual money contributed to the community. He felt congregate care was a viable option; however, it is cost intensive and he did not feel it was a good idea. For the City to meet the challenge of economic development, the economy must be diversified and the City has the opportunity to take a lead role. Using this crisis as an opportunity, he stated the Council must focus on the businesses, to help the small businesses and keep the money within the community. Jerry Cornell, 1019 East Ninth Street, Vice Chairman of the North Olympic Library System, stated the Board had discussed the possibility of using The Landing Mall as a new library site at a meeting last week. The opinions voiced by the Board members were very favorable. He stated the Board is currently looking at three areas of concern: One, the load bearing capacity of the facility; two, the ability of the Library System to pass a bond issue; and three, the financial problems involved with the purchase of a new facility. He stated the Board would need more information prior to making a final decision. Larry Leonard, 1030 Olympus Avenue, asked at what stage the bank foreclosure on the deed of trust was and how much time was involved before the fore- closure proceeding took place. Administrative Services Director Wolfe stated this is a non judicial fore- closure and the sale is slated for July 28, 1989. Mr. Leonard stated he did not feel the Council should make a decision in haste and this issue needs a vote of the people. Ray Taylor, 1025 West Sixth Street, stated he did not recall that a vote had been taken on how the $400,000 granted to the City should be spent; that The Landing has been a failure; that the design of the building was very poor and he did not feel a vote of the people would be the appropriate action to take; that the Council and staff could make a wiser decision. However, he did support the idea of purchasing the building. A discussion took place regarding the bond issue and the need for the vote of the people. Carl Alexander, 1712 West Fifth Street, cautioned the Council on any action they may take on this issue. He did not feel the City should enter into a landlord agreement, stating that it was the Council's action which led to the present position. This would only cause an appearance of improper use of governmental powers. It would be in the City's best interests to only try to recover the $400,000 investment. Councilman Lemon took exception to the statement, saying it was not the City that put The Landing in the position it is now in, as liens had already been filed against the project prior to any action taken by the City. Mr. Alexander stated it was the action of the Council which led to the current position, and in his opinion, it was only throwing good money after bad. Christopher Martin, 918 Seamount, stated in reviewing the files he did find that the partnership was in debt by approximately $225,000 to $250,000. However, he stated this was not unusual for a construction project; that the partnership did go to the bank to try to cure the problem and he questioned the action of the Council, whether this was, in fact, a legal area of withholding a reasonable function. He also questioned whether the City has approached the partners to see if they are willing to sell out. It was his opinion that the action of the Council placed the partnership in a "catch 22" situation whereby they could not get the approval from the City until they had secured the lease of the restaurant and the motel. However, the partnership could not secure those leases until such time as they had the money to finish the project. Jewell VanOss, 1019 East Fourth Street, stated she did not feel it was the City Council's responsibility or authority to analyze whether or not the loan should be repaid, as that was the lending institution's responsibility. It was the Council's responsibility to decide whether or not they could go along with the bank's reasoning not to supersede. She also stated she felt it was unethical behavior on the part of the City government. -4- 1346 CITY COUNCIL MEETING May 9, 1989 Councilman Sargent stated she had not known about this issue until she had read it in the newspaper as she had just returned to town. She stated she was not in support of the action to purchase The Landing. CC.76 Mayor McPhee questioned Attorney Knutson whether the Council had an obligation to protect the investments. Attorney Knutson stated the City Council took one action which was well within its legal rights and he did not feel it was unreasonable action to deny consent. Bonita Melville, 913 South "N" Street, owner of the Northwest Native Art Gallery located in The Landing Mall, stated the businesses will be an asset to the community; that the negative publicity which has been generated by the issue has hurt the businesses. She voiced her concern with the Council action. Lorraine Ross, 418 losing the $400,000 She stated the City purchase. She also Michael Kenney, 2714 -A Deer Park Road, tenant in The Landing, stated the plan of the Council does not have any feeling for the future of the water- front. He stated the $400,000 invested into the development has been a good investment and he believed the Council had a good return on their money. He stated the Council should consider the impact beyond the immediate cost. IX ADJOURNMENT Councilman Lemon moved for adjournment. Councilman Hordyk seconded and the motion carried unanimously. The meeting adjourned at 8:43 P.M. East Front Street, stated the Council should gamble on and hope that a bidder will come in to bid on the loan. may lose a lot more than $400,000 if it should choose to stated she did not feel the Library was a good idea. Mayor Signed: May 9, 1989 CITY OF PORT ANGELES 140 WEST FRONT ST., P.O. BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 PROCLAMATION WHEREAS, the Mo.thenus ob Ameni.ca cvice the nuhtwe ob Ametc -ca'- bu.twce; and WHEREAS, the part genehationo ob Poit.t Ange.Les MoTheA4 bu.L.Ly accepted the -pon 6.11 ...y ob na zing and guid�.ng thein chitdnen; and WHEREAS, each ob u- owes a debt to ouh own mo .then bon the gib.t ob ti4e; and WHEREAS, a Mo.the t' 4 .Love -1.4 a deep and £aztc.ng -Love; and WHEREAS, Suzan Jo McPhee gave b-.nth to Ian Gken F -anc -4 McPhee on Apn�.t 14, 1989, and a.Long with aU o then new motheh4, 4 continuing the on -gong -t4ad -U ion ob .Love and can.ing pAov-ded to owc chiLdnen; NOW, THEREFORE, I, Punk McPhee, Mayox ob Pond Angetes, Wazhington, do hviceby pxoc.La-_m May 14, 1989 a's MOTHER'S DAY IN PORT ANGELES and ash, aL.L ch- i.Ldnen, ba the/t4 and huzband4 to ishow .them gxati-tude and .love, p' va -ety and pubVc -Ly, ezpec.i.aL2y on that day, and bwc.their., I pay that the butme mayors- ob -th-14 city annual -Ly -e.t a--.de one day in May PA Mo-thenus and obbicia.L.Ly pnoc -La-m that day, MOTHER'S DAY IN PORT ANGELES. 11 f Fnanh. hee Mayon SPECIAL MEETING NOTICE NOTICE IS HEREBY GIVEN that the City Council of Port Angeles, Washington, will hold a special meeting beginning at 6:00 p.m. on Tuesday, May 16, 1989, in the City Council Chambers, 321 East Fifth Street, Port Angeles. The purpose of this special meeting is to inter- view candidates for the City Council vacancy. Michelle M. Maike City Clerk Pub.: May 10, 1989. CITY OF PORT ANGELES ADVERTISEMENT FOR BID TO PURCHASER WATER UTILITY MATERIALS Sealed bids will be received by the office of the City Clerk, 321 East Fifth Street, P.O. Box 1150, Port Angeles, Washington 98362, until 2:30 p.m. June 13, 1989, and not later, and will be opened publicly at that time. Bids will be taken for: Project No. 89 -2 (1) Revised Water Meters aid documents may be ob- tained from the office of the City Engineer, City of Port Angeles at the above ad- dress (206) 457 -0411, Ext. 120. All proposals or bids shall be submitted on the pres- cribed form .and in the man- ner as indicated in the In- structions to Bidders and Conditions and said propos- als or bids shall be ac- companied by a certified or cashier's check or a bid bond in the amount of five per- cent (5%) of the total amount of the proposal or bid, said bid bond shall be issued by a surety auth- orized and licensed to issue said bonds in the State of Washington. The City of Port Angeles re- serves the right to accept the proposals or bids and award to responsible bidders which are in the best inter- est of the City; to postpone the acceptance of proposals or bids and the award of the contracts for a period not to exceed thirty (30) days; or to reject any and all proposals or bids received and further advertise for bids. Jack N. Pittis, P.E. Director of Public Works Pub.: May 26, 1989. SUMMARY(s) of Ordi- nance(s) adopted by the Port Angeles City Council at their .regular meeting of May 16, 1989. ORDINANCE 02533 An ordinance allowing vehic- ular rental services, inc- luding light trucks, automo- biles, motorcycles, mopeds and bicycles in the Central Business District. ORDINANCE 02534 An ordinance allowing Bed and Breakfast establish- ments by Conditional Use Permits in the CSD -C1 Com- munity Shopping District and clarifying that apartments are permitted uses in the CSD -C1 zone. ORDINANCE 02535 An ordinance providing for increased density in RMF Residential Multi Family Dis- tricts by adding as a condi- tional use publicly subsidized senior housing development at a maximum of 58 units per acre. This ordinance shall take ef- fect 5 days after publication. Full text of said ordinance shall be mailed upon request. Michelle M. Maike City Clerk Pub.: May 19, 1989. NOTICE IS HEREBY GIVEN that the PORT ANGELES CITY COUNCIL will hold a public hearing on JUNE 6, 1989, at 7:00 P.M., or as soon there- after as possible, in the City Council Chambers, 321 East Fifth Street. Port Angeles, Washington, to consider a revision to the City's Zoning Ordinance, 01709, as amend- ed, revising the City's DOWNTOWN SIGN ORDINANCE LOCATION: Central Business I District (CBD): Railroad Ave- nue to the Alley; Cherry Street east to 200 feet east of the centerline of Lincoln Street. APPLICANT: City of Port Angeles. All interested parties may appear at the hearing and express their opinion on this proposal. DATE: May 18, 1989. Michelle Maike City Clerk Pub.: May 26, 1989. NOTICE IS HEREBY GIVEN that the PORT ANGELES CITY COUNCIL will hold a public hearing on JUNE 6, 1989, at 7:00 P.M., or as soon there- after as possible, in the City Council Chambers, 321 East Fifth Street, Port Angeles, Washington, to consider an amendment to Ordinance 01709, as amended, the Port Angeles Zoning Ordinance, pertaining to the use of out- side utility hookups for Re- tail Stands. LOCATION: City -wide in commercial districts. APPLICANT: City of Port Angeles. STATE ENVIRONMENTAL PO- LICY ACT (SEPA): A Determi- nation of Non Significance has been filed for this proposal. All interested parties may appear at the hearing and express their opinion on this proposal. DATE: May 18, 1989. Michelle Maike City Clerk Pub.: May 26, 1989.