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HomeMy WebLinkAbout11-29-1994 City Council Study Session MINUTES CITY COUNCIL STUDY SESSION CITY OF LAKE ELSINORE 130 SOUTH MAIN STREET LAKE ELSINORE, CALIFORNIA TUESDAY, NOVEMBER 29, 1994 ***************************************************************** - CALL TO ORDER The city council study Session was to order at 8:39 a.m. ROLL CALL PRESENT: COUNCILMEMBERS: ALONGI, BENDER, BRINLEY ABSENT: COUNCILMEMBERS: PAPE, WASHBURN {Both arrived at 8:42 a.m.} Also present were: city Manager Molendyk, Assistant city Manager Rogers, Public Services Director Tecca, community Services Director Sapp, Manager of Special Projects watenpaugh, City Planner Leslie, Special Projects Coordinator Wood and city Clerk Kasad. DISCUSSION ITEM 1. Proposed Lakeshore Marketolace. {F:134.10} City Manager Molendyk explained that this meeting is regarding a proposal from Beverly Hill Enterprises, to look at the possibility of a Lakeshore Marketplace similar to what would be seen at the Orange County Fairgrounds. He noted that it would be set-up and taken down each day. - MAYOR WASHBURN AND COUNCILMAN PAPE ARRIVED AT 8:42 A.M. Mayor Pro Tem Bender asked that the letter recei ved from Steven A. Brown be clarified. Manager of Special Projects Watenpaugh explained that he had received a letter from Steven Brown on November 22, 1994, regarding items in the proposal for which the City Attorney had requested changes. He noted that Lakeshore Marketplace would like to see multiple three year extensions and the City had it set one year extensions; and in Section 3.1, there was a question in regard to the 15% payment to the city and how the revenues would be levied. - Mayor Pro Tem Bender asked if 15% was the standard rate charged per vendor. Manager of Special Projects Watenpaugh stated that it is 15% of the rental for each booth and not 15% of the gross revenue of each booth. He explained that section 3.2, is a deposi t of $3,000 in good fai th and would be reimbursed through the 15% commission to assure that the City would receive the money for daily rentals. Councilman Pape asked if there was going to be a deposit collected for maintenance of the grounds. Manager of Special Projects Watenpaugh explained that this type of fee was not considered for the grounds, because it will be on the exterior of the building and the building will be locked. He explained that Beverly Hills Enterprises is required by contract to clean and leave the facilities as they were found and if this is not done then the City would keep the $3,000 deposit. PAGE TWO - STUDY SESSION - NOVEMBER 29, 1994 City Manager Molendyk indicated that if someone puts a peg through the asphalt, then the hole has to be fixed; and they would be responsible to replace the landscaping if it is damaged. Manager of Special Projects Watenpaugh stated that Section 4.2, was questioned because Beverly Hills Enterprises felt that if there was an activity at the Stadium at 7:00 p.m., they could still have an open air activity until 3:00 p.m. and not be in conflict. He noted that this is done in San Diego __ and in Brea, and explained that this can be done initially and if it is found that it causes a conflict then they will have to reschedule their activities. Manager of Special Projects Watenpaugh explained Section 6.3, and noted that Beverly Hills Enterprises felt that 5 days was not enough for giving notice and it was decided that 10 days would be acceptable. City Manager Molendyk explained that this is proposed as a clear and concise contract and addresses the fact that if Beverly Hills Enterprises does not perform properly then they are gone. Manager of Special Projects Watenpaugh explained that Section 9.1 has not been resolved regarding the responsibility for enforcing the monitoring and collection of fees for City business licenses. He stated that the City's intent is if the vendor shows up and does not have a business license then they cannot sell that day. City Manager Molendyk explained that through past experience and the history of the former swap meet that was in Lake Elsinore, there were many problems and it created a situation -- that the City had to place someone at the site to sell business licenses. He noted that contractors are responsible for being sure that their subcontractors have business licenses and it was felt that Beverly Hills Enterprises should be no different, since they would be acting in the capacity of the contractor. Manager of Special Projects Watenpaugh addressed Section 27.1 in regard to security and explained that the city wants Beverly Hills Enterprises to use the Security which is contracted by the City and it was agreed that Beverly Hills Enterprises would try to coordinate the services directly if at all possible. Councilman Pape asked if there was a reason why it is suggested that they be required to use the Security at the Stadium. Manager of Special Projects Watenpaugh explained that with the existing security, they have the knowledge of the area, traffic and site; and it was felt that would be best. Councilman Pape suggested that it might be appropriate to go out to open bid. Manager of Special Projects Watenpaugh explained Section 27.3, regarding the restrooms. He addressed Section 30.2, and explained they will have to have painted markers and it is understood that they will restore the parking lot to its original condition at the termination of business, even if it is one year. He explained that in Section 31.1, the City is the governing body and will have the right to clear the use of the facility and that is not the responsibility of the Lessor. ....., PAGE THREE - STUDY SESSION - NOVEMBER 29, 1994 - Councilman Alongi asked if the City is still in negotiation regarding the business license situation. Manager of special project Watenpaugh explained that staff feels that the Stadium Operations Manager should be present to oversee the use of the facility. steve Brown, Beverly Hill Enterprises, introduced the representatives of his firm. He stated that it is not the intent to have a swap meet or flea market. He explained that the concept is based upon the concept of an open air market. He stated that they will be monitoring the quality of merchandise and the vendors are very positive in their attitude. He presented pictures of the type of marketplace they intend to promote. Mayor Washburn asked if there is a si te plan available. Manager of Special Projects Watenpaugh indicated that they do not have a site plan available, but it allows parking in Lot "c" and the marketplace being set up on Lots "A and B". Councilman Pape asked for a review of the 5 year revenue forecast. Mr. Brown explained that when the forecast was created, it was done in the early part of the planning; however, it should be fairly close to the actual amounts. Mr. Brown explained the amounts that are projected and how they were calculated. - Councilwoman Brinley asked how Mr. Brown came up with the figures for the 1% sales tax. Mr. Brown explained the process that was used and explained how Costa Mesa tracked their taxes. Councilwoman Brinley questioned the amount charged to each vendor. Mr. Brown explained that at first the charge will be $20 a day and eventually increase to $40 a day. He explained that the projected firm revenue would be from the 15% and it is the amount that the City can bank on. Councilman Alongi asked if the Storm Team will receive any of the revenue. City Manager Molendyk stated that they would not. Mayor Washburn asked if there is a way to make the vendors report and keep someone from falling through the cracks. Mr. Brown stated that each vendor is required to have a State resale license before they are allowed to be a vendor. Mayor Washburn asked if it is possible to require the vendor to report the type of inventory they have and have it bar-coded and at the end of the day, check the number of bar-codes to know the amount sold. Mr. Brown explained that most of the vendors do not have the equipment for bar-codes and this would be impossible to control or mandate. - Mayor Pro Tem Bender explained that he feels that all five members of Council have a problem with the collection of State Sales Tax since two-thirds of the revenue is based on the sales tax revenue. He noted that the City does need to get the sales tax and there is no method to track sales. Mayor Pro Tem Bender asked how many vendors they will have on parking lots "A" and "B". Mr. Brown explained that they are projecting 450 available rental spaces. Councilwoman Brinley stated that she would also like to see the site plan for the market. PAGE FOUR - STUDY SESSION - NOVEMBER 29, 1994 Mayor Washburn stated that the Stadium is open all day for the persons who wish to go to the gift shop and make purchases and on the game days away, all the players leave their cars at the Stadium; and there are also tail-gate parties with fans arriving earlier on game days. Councilwoman Brinley stated that there are also promotional games where people arrive long before the game starts, sometimes as early as 8:30 a.m. - Mayor Washburn stated that this will create a situation where a row of people are looking for parking places and since they have reserved tickets and parking in lots "A" and "B", the market will still be there and the City will receive heat for them not being able to park in their designated spots. Manager of Special Projects watenpaugh pointed out that the Diamond Club is open and spaces will be blocked off to allow parking for that facility. Councilwoman Brinley asked how many parking places are designated for the restaurant. Manager of Special Projects Watenpaugh stated that the number has not been decided at this time. Mayor Washburn asked about the amount of vendors that would be in parking lot "A" and "B". Mr. Brown stated that about two thirds of the vendors will be in lot "B" and one third in lot "A". He stated that if it is not feasible to operate on game days, then it is one of the things that his firm will have to accept. Mayor Pro Tem Bender stated his concerns as follows: 1) Tax collection; 2) length of time on the contract; 3) a deposit - amount which would cover a lack of performance or failure to clean the facilities; 4) used items versus new items for sale; 5) the issue of different security instead of the existing security; 6) the need for an operations manager on the site to insure proper use of the grounds. Mayor Pro Tem Bender explained that overall he was in support of the project. Councilwoman Brinley stated that she would like to have some type of a minimum guarantee for rental which could be answered by a line of credit or a performance bond and if Beverly Hill Enterprises falls short, then the City will have a vehicle to recover the money that is due them. She explained that this is a twenty two million dollar facility and the City is trying to promote and maintain an image. Councilwoman Brinley stated her concern regarding the portable toilets, where they are going to be stored and how they will be cleaned and maintained. She questioned the hours of set-up and operation. She further questioned traffic circulation. Mr. Brown stated that the information regarding the hours and traffic are in the operation procedures. He stated that a local service will be putting up and taking down the toilets each weekend. Councilwoman Brinley asked if Mr. Brown or Ms. Hill have ever been involved in operating an open air market before this proposal. Ms. Hill stated that she has never operated an open air market but she has been involved in the process and has organized several major events. Mr. Brown stated that he has never done this type of project before. -- PAGE FIVE - STUDY SESSION - NOVEMBER 29, 1994 - Councilwoman Brinley stated that she feels that due to the inexperience, a year to see how they will operate the market and give the city the opportunity to do an evaluation of the project and decide if it is appropriate for that site. She explained that even at the Planning Commission level a Conditional Use Permit is granted for only two years and then is brought back before the Commission for review to evaluate the viability of the business. COUNCILMAN PAPE LEFT THE MEETING AT 9:20 A.M. - Councilman Alongi stated that he would like to see a $5,000 deposit given to the City for damages to be used for repairs. He stated that the sanitation is in conflict with the City's Code and needs to be addressed. He asked about the electricity that would be used and how it will be paid for. Mayor Washburn stated that their proposal calls for portable generators. Mr. Brown explained that they do not see any need for the use of electricity from the Stadium and if there is a need for electricity it will be provided by portable generators. Councilman Alongi stated that he would like to see some costs from other operations that are in existence and would like to see a guarantee of $40,000 to the city, and if it exceeds that amount, then the balance can be remitted to the city. He explained that he did not feel that Beverly Hill Enterprises can control the sales tax but he would like to see some type of regulation that each vendor must have a business license and have it openly displayed. He explained that if Code Enforcement does a sweep of the area and a business license is not visible, then they are subject to citation and fines. Councilman Alongi stated that he would like to see Beverly Hill Enterprises work with Spectrum regarding maintenance of the parking lots since they have been the responsible party to date. He explained that this would prevent confusion and assure proper maintenance. Mayor Washburn stated that some of his concerns are: site control; site location; the time to put up and take down the stalls. He explained that he is not in favor of having this event on game days and he has an overall concern regarding the image that could be perceived. Mayor Washburn explained that the Stadium is a first class facility and he does not want the public to feel that the city needs money from a flea market to support this facility. He stated that he felt that it would have been more appropriate to have an open air market in the downtown area to attract more people to that section of town as another form of revitalization. Mayor Washburn stated his concern regarding the fact that the market would have sports wear, such as tee shirts and sweats, and the Storm Team might have a major problem with that issue. - Mr. Brown stated that the market is proposed to have 400 vendors and not 2000, therefore it would not get out of hand and they have the right to refuse any vendor that they do not feel is up to the quality that they are looking for. He explained that he felt that the Storm would profit from the market since it would bring 1000 to 2000 people to the facility and provide the opportunity for them to promote storm merchandise. Councilman Alongi stated that he would not like to see the market in operation on game days and possibly Beverly Hill Enterprises should reexamine their schedule. PAGE SIX - STUDY SESSION - NOVEMBER 29, 1994 Mr. Brown stated that it is being considered that certain times during the summer that they would not be open due to weather. He stated that if it was going to be too much of a headache for the vendors to work around the game days, then he feels that it would be better not to open at all. Councilwoman Brinley stated that she would like to see them operate during the summer. Councilman Alongi questioned the advantage of operating their __ businesses, since they are used to paying 6 months in advance knowing that 30% to 40% of the time the games are on the weekends and that the market would not be able to operate. He stated that he does not want to see a conflict between the ball team and Beverly Hill Enterprise. Mayor Pro Tem Bender stated that it is not just the vendors, but the customers who bank on coming to the market and not knowing when they will be open, however he does not want to see a conflict with the ball team. Councilman Alongi stated that he would like to see a site plan and schedule of operations to check how much potential conflict there could be between the ball team and the market; a guarantee in the contract of the type of merchandise which will be displayed and how it will be displayed; and if the merchandise is not displayed properly who will pay the penalty. Councilman Alongi stated that he is very particular about what will be offered at the market, since the stadium is a first class facility. Mayor Pro Tem Bender stated that he has a problem with the markings on the parking lot and asked if it would be feasible to operate this market during the off season as a trial and see how it goes, such as September through April. This would __ give Beverly Hill Enterprises and the City the opportunity to see how the market would work. Mr. Brown stated that option is possible and if they were to start in February, then with the baseball schedule they could be in operation on the days that the ball team will not be playing home games. Mayor Pro Tem Bender stated that he felt that if they were open for the first two months before the baseball season and then had to close on game days they would not get the consistency of customers that would promote a regular clientele. Councilwoman Brinley indicated that was why she felt that the contract should be only for a year, so both parties can see how this operation will work at the facility. She further stated that she also felt that was why there should be a letter of credit or a deposit in order to guarantee that the City also met its monthly debt. Mayor Pro Tem Bender stated that the whole purpose of this meeting was to consider a business that would generate revenue, and if it does not generate revenue, then the City should not be involved. - Mayor Washburn asked if other open air markets use alternate sites. City Manager Molendyk stated that in Orange County I i PAGB SEVBN - STUDY SBSSION - NOVEMBBR 29, 1994 - they use the Orange Fairgrounds and they do have an alternate site however they have the parking available and the city does' not have that type of alternate facility or site for this facility. Mayor Washburn asked if there was a difference in Market Places. Wendy Brown explained the breakdown of the marketplace and how they decide where to place them. Mr. Brown explained that they scatter their vendors to encourage and increase the opportunity for sales and provide more for the customer. councilwoman Brinley questioned the insurance and how much coverage the City will receive. Mr. Brown stated that it would be the minimum requirements of the city and is the same as Orange and costa Mesa require. He explained that each vendor is charged as they enter to cover a blanket insurance policy. Mayor Washburn questioned the type of equipment the vendors will be using. Mr. Brown stated that they will be requiring equipment to meet certain criteria in order to sell at the marketplace. councilwoman Brinley asked how they will monitor the food preparation. Mr. Brown stated that they will have to meet all the state requirements, as well as meeting their criteria. Councilwoman Brinley asked if they would be monitoring them on a daily basis. Mr. Brown assured her that they would. - city Manager Molendyk stated that staff is concerned about the site plan; and the operations manager on site to make decisions and protect the City'S investments. He stated that he felt that a minimum marketplace should be established in order to open. city Manager Molendyk stated that Beverly Hill Enterprises wanted a multi-year contract to protect their investments and if the Council wishes to grant a trial period of a year, then he felt that it was fair to both parties that they be given the opportunity to be exclusive if they choose to renew for a set amount of time. He explained that he would like to see a budget shared with council giving them an idea of what this will mean financially to the corporation and how the money will be spent in regard to advertising and market plan. City Manager Molendyk stated that food is a concern as well as the availability of alcoholic beverages. He stated that the City would like to explore avenues regarding keeping the sales tax in the City and not going somewhere else. City Manager Molendyk explained that he would like to see a maintenance schedule and what that maintenance means. He noted that standards of food preparation will have to be addressed. He explained the responsibility of the Council to the public, and if the operation does not meet with the image that the public expects at the Stadium they are the ones that will be hearing about problems. City Manager Molendyk stated that this study Session was intended to raise questions in order to address concerns and adjust the proposed contract accordingly. Councilwoman Brinley asked that signage be made a part of the contract. be Councilman Alongi asked if vehicles will allowed in the market area. Mr. Brown stated that they will not be allowed, PAGE EIGHT - STUDY SESSION - NOVEMBER 29, 1994 except that they will be kept for merchandise which will be stored inside the vehicles. Mayor Washburn asked why they could not condition the vehicles to be removed from the site. Ms. Hill stated that she has seen it done both ways, but it is less dangerous and easier for the vendor to keep his vehicle on site in a designated space. Mayor Washburn asked if there is a way to classify the type of vehicle which would be allowed to remain in the market area. Mr. Brown stated that it is safer to keep the vehicles on site, for traffic control. __ Councilman Alongi stated that the pictures do not reflect the vehicles on site, and because it is a first class facility, he stated that he would have problems with keeping the vehicles within the marketplace for a professional appearance. City Manager Molendyk stated that the concern of Council is maintenance and the potential damage and stain to the asphalt. Mayor Pro Tem Bender asked why the lower parking lot had not been considered. He stated that it is graveled and would not create a traffic or parking problem. Mr. Brown stated that part of the draw for the better vendors is the pavement and the ability to display their products in a clean environment. Mayor Pro Tem Bender stated that the purpose of this study Session is to inform staff of Council's concerns and allow them to negotiate on behalf of the City considering Council's wishes. Councilwoman Brinley concurred with Mayor Pro Tem Bender. Mayor Washburn stated that he had strong reservations in regard to having the market during baseball season. He stated ...., that he would not have a problem with the market being there during off-season and an alternate site during baseball season. Councilman Alongi stated that the one year term for the contract will give the City the ability to see if this type of enterprise will generate the type of revenue necessary to allow it to continue to operate. Mayor Washburn asked if Beverly Hill Enterprises could pay a flat fee to off-set the possible loss of sales tax. Ms. Hill explained that a lot of vendors come the first few times to test the waters; and she felt that a set fee would affect their decision to come to Lake Elsinore. She explained the State has certain criteria that the vendor must follow. Councilman Alongi stated that there is no way to track the amount of sales tax generated, and that is why it is an advantage to have a minimum amount that the city would accept as a deposit. Councilwoman Brinley stated that is why she has suggested a line of credit, so that the City would be guaranteed a set amount of money per month. ...., Mayor Pro Tem Bender stated that the tax revenue is being counted on as being a major part of the City's revenue. He explained that it might be better to give up the sales tax and have a bigger fee. He noted that this would make the corporation more diligent in regard to the tax revenue. PAGE NINE - STUDY SESSION - NOVEMBER 29, 1994 --- Councilman Alongi stated that there could be a minimum fee set and if the market makes more than anticipated, then the market has made them money, and if it is less the corporation must make up the difference. Councilwoman Brinley stated that staff should look into the best way to guarantee revenue for the City. Mr. Brown explained that they still have some concerns themselves in regard to this enterprise and one is the control of sales tax. - Mayor Washburn explained that the City did have a swap meet which was a problem for the city and it is an image that the City does not want to promote. Ms. Hill stated that she would not lend her name to a enterprise that was not first class. She explained how she would judge the type of vendors that her company would consider and what she will expect from them. Ms. Hill stated that she feels that they have the marketing ability to draw people to Lake Elsinore. Mayor Washburn asked that Mr. Brown highlight a few of the concerns that they have. Mr. Brown stated that the majority of their concerns they will resolve with Manager of special Projects Watenpaugh, but one of the concerns he would like to address with Council is the one year test period. He explained that they are investing a lot of money and would like to see their company make the initial investment with the potential for a multiple year renewable contract. Mr. Brown stated that he has a problem with the business license portion, since they want people to come to the marketplace to sell and they need the opportunity to see that their business can be profitable in Lake Elsinore and a business license would not be appropriate until they wish to stay. He asked that the City make a special provision to allow them to sell since the City would still be making a profit on the rental. Mayor Washburn stated that there is not a member on Council that would allow them to operate without a business license. Manager of Special projects Watenpaugh stated that a six month business license would cost $36 with a $32 handling fee. He explained that other communities have a limited vendors license which limits the number of days, i.e. $5 a day for three to six days, but not beyond that. Mayor Washburn stated that he is not negotiable with regard to changing the business license requirement. - Mr. Brown stated that he has polled several cities and there is are special provisions regarding marketplace business licenses. He explained that San Diego requires that every vendor must have a business license, however they do not require the promoter of their three open air market places to be responsible for that. He stated that it is the responsibility of the promoter to inform the vendors that they must have a business license in the City of San ~iego, after they have done business for six days and the promoter provides a list to San Diego, of the vendors who have been doing business. Councilman Alongi stated that if the city choose to take that avenue then the City would have a problem with th~ other PAGE TEN - STODY SESSION - NOVEMBER 29, 1994 vendors in the City who are required to obtain business licenses. Mr. Brown explained that every City has special provisions to allow the vendor to do business in an open air marketplace. Manager of Special Projects Watenpaugh stated that at this time the city does not have a day use business license fee. Mr. Brown stated that their only other major concern is the $30 an hour Operations Manager, which equates to $4,000 a month and provides very Ii ttle service. He stated that _ maintenance personnel at $12 an hour would be more acceptable. Mayor Pro Tem Bender stated that he was under the impression that the agreement called for a maintenance man and not an Operations Manger. Mr. Brown explained the responsibilities of the promoter to the open air market. Mayor Washburn asked if the employees of the promoter could be identified by uniform or in some other manner. Mr. Brown stated that they would be wearing tee shirts which would identify them. Councilman Alongi stated that if the City had a budget showing the operating expense and what the cost of the market would be to the promoter; he would like to see someone from the City on site who can make decisions and if Spectrum will place a maintenance worker in charge, then he does not have a problem with that position being available. Mr. Brown stated that the biggest concern is the business license. Councilman Alongi stated that it is a six month deal and will open too many problems for the City if it is not enforced. He explained that he cannot see treating anyone differently because it is a marketplace. He noted that it is still a place of business and is the same as other businesses. - Mr. Brown stated that the City of Palm Desert collects a revenue of $2 a day and generates approximately $28,000 of revenue each year. Mayor Washburn stated that this should be discussed with staff. Ms. Hill expressed concern that if a vendor decides to move location and come to Lake Elsinore to sell and drives 150 miles to get here and gets in line, then they must turn him away if he does not have a license. Councilman Alongi asked if this will be done through advertisement. Ms. Hill stated that it would. He then suggested that the requirement for a business license be included in the advertisement. She stated that a $2 fee per business per day could be collected by them and remitted to the city. Mayor Washburn wished to have it made clear in the agreement that certain uses will not be allowed by the City. ADJOURNMENT The meeting was adjourned at 10: ~ - Fi/aL . WASHBURN, MAYOR