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HomeMy WebLinkAbout03-11-1993 Adjoourned City Council MinutesMINUTES ADJOURNED REGULAR CITY COUNCIL MEETING CITY QF LARE ELSINORE 3S31S CHANEY STREET LARE ELSINORE~ CALIFORNIA THURSDAY~ MARCH 11~ 1993 **~*********r***************~*~**~~*r******~**********r****r*****~ Note - This meeting was originally scheduled for Tuesday, March 9, 1993, however pursuant to City Council Policy, the meeting was continued to this date due to the lateness of the hour. CALL TO ORDER The Adjourned Reqular City Council Meeting was called to order by Mayor Washburn at 5:03 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: ALONGI, CHERVENY, DOMINGUEZ, WASHBURN, WINKLER ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Molendyk, Assistant City Manager Rogers, City Attorney Harper, Administrative Services Director Boone, Community Development Manager shear, Community Services Director Sapp, City Planner Christen, Public Services Director Tecca, Special Projects Coordinator Wood, Manager of Special Projects Watenpaugh, City Treasurer Pape and City Clerk Kasad. THE CITY COUNCIL MEETING WAS RECESSED TO THE REDEVELOPMENT AGENCY MEETING AT 5:04 P.M. JOINT PUBLIC HEARING 1. C1tV Center T]avalnnmcnt _ - Resolution No. 93-4. (F:134.7)(X:134.10) Councilwoman Cherveny called for a point of order concerning the legality of this meeting as noticed. City Attorney Harper explained the statutes related to this issue, and clarified that the City Council meeting was adjourned to this specific place and time with one item remaining, being this item. He further clarified that the Redevelopment Agency meeting was never called to order. He explained that the same rules are applicable for the Redevelopment Agency as are for the City Council. Councilwoman Cherveny questioned the adoption of a similar time limitation Resolution by the Redevelopment Agency. City Attorney Harper clarified that the this particular Resolution was adopted by the City Council; and when the Redevelopment Agency was formed a resolution was adopted which stated that the same rules apply to the Redevelopment Agency and the City Council. He advised that in addition, the Redevelopment Agency meeting was not called to order and in essence adjourned for lack of a quorum to this date and time. +.: PAGE TWO - CITY COUNCIL MINUTES - MARCH il~ 1993 City Manager Molendyk introduced this item noting the location of the proposed project. He clarified that this proposal includes Walmart advancing $2.2 million, Oak Grove Equities advancing $1.8 million, with repayment to occur over a period of time. He further clarified that the repayment would occur with the first $200,000 of sales tax coming to the City, the second $200,000 to the debt service for the development and the additional dollars being split between the City and the development. He stressed the City's economic program to draw jobs and revenue to the community; and suggested that this was an avenue to help off-set the cuts made by the State. The City Clerk reported 5 pieces of correspondence, 3 in support and 2 in opposition. Chairman Winkler opened the joint public hearing at 5:15 p.m., asking those person interested in this item to speak. The following people spoke: Charles March, representing Looking Good Beauty Supply, commented that he was in favor of the Walmart project, but not in favor of paying for them to develop here. Kevin Pape, City Treasurer, commented on the cuts made by the State in the last few years. He stressed that this project could potentially generate $464,000 over the next year alone. He noted a petition presented by local business people indicating that the 22 businesses represented on that petition generate only $26,OOO in sales taxes per year. He further stressed the need to compete with the other local communities for this type of development. He noted a situation with Walmart in the Claremont/Upland area noting that based on the stance of one city the other received the store. He suggested that the impact of Walmart on other local businesses would be similar to the impact when Builder's Emporium, Thrifty or K- Mart were built. He also stressed the jobs this project would generate, particularly for the young residents. He stressed the need to look at what is best for the community as a whole. :ti Kay Koehn, 151 S. Torn Ranch Road, advised that she is a sales associate at the Walmart in Redlands. She commented on the benefits Walmart provides to the Community such as jobs for people from teenagers to senior citizens; active participation in the Community; contributions to local charities and scholarships to local students. She noted that she had worked for K-Mart prior to Walmart, and stressed the good quality of jobs they provide. She further noted that she was not speaking on behalf of the company, only herself. Phil Williams inquired whether Mr. Winkler intended to abstain on this item. Chairman Winkler advised that he had a written opinion that there was no confliot on this item. Phil Williams indicated that he was now representing 70 businesses including: Big A Auto Parts, Orange Credit Service, Big 0 Tires, Busy Bodies, Looking Good Beauty Supply, AJ's Bicycles, Pet Center, JNB Truckworks, Chevron Food Mart, Sun City Optical, Elsinore Big Value.Variety & Crafts, Stadium Sports, Interstar Management Inc.', Fashion Art, Shoe Palace, PAGE THREE - CITY COUNCIL MINOTES - MARC$ 11~ 1993 141 North Main Street';'Antique Emporium, Main Street Furniture Company, Hannon's Happy Hunting Grounds, Tiffany's Hallmark, Stones Western Wear, Tropical Eleqance, Radio Shack, Carousel Cards & Gifts, Jamar Performance, Pioneer Lumber, Mel's Radio & TV, Sav-on Drug Store, Elsinore Pipe & Supply, Seers Lumber, Kentucky Fried Chicken, K.C. Discount Carpets, Ortega Stationers, Mission Optometric Eye Care Center, GEN-RX Pharmacy, Gearhart's Service Station & Garage, Kuka Bear's, TNT Costume & Thrift Shop, Sincere Sewing Machine & Vacuum, Shear Madness, Elite Hair Design, State Farm Insurance, Contemporary Escrow, Party Decor, Realty World, Lake Elsinore k: Tool Company, sears Center, Town Center Glass & Screen, Class Travel, New Trends Hair Studio, Lakeview Inn, Upmost Post & Parcel Center, Doggie Styles, Angelica's Upholstering, Nature's Sunshine, Lake Front Florist & Gift, Elsinore Overhead Door Co., Angel's Home Maintenance, Pizza Bowl, Little Caesars, International Tools, Lamb of God, Papi's Mexican Food, Empire Door & Hardware, Town & Country Towing, Elsinore Ready Mix, R.S. Instruments, R& B Investors, Century 21 Goldenwest, City Auto Wrecking, Mayhall Printinq, Larabee Lumber, R& N Equipment Rental, Kartland INC, Mission Trail Deli. He stressed that these are the people who put the Council in office and act as sponsors to many local events and organizations. He indicated that they are not opposed to Walmart, however, they would want them to take the same risks these businesses have and stand on their own. Dale Dennis advised that she would trust the~ decisions of Boardmembers Dominguez, Washburn and Winkler, but requested that consideration be given to the result of similar businesses such as Two Guys, Fedco, etc. She further commented on the jobs provided and questioned the future for those employed with Walmart and the potential for..reduced hours, etc. She questioned what Walmart would really do for the Community. Leon Strigotte, 216 Chaney Street, addressed the previous comments and noted business which have come to town under similar protest. He stressed that the Downtown Business Association has fought every one of them even though several did not receive financial assistance, such as Albertsons, Builders Emporium, etc. He indicated that gossip had gone around town that businesses would fail, but all have been prosperous businesses. He noted the Outlet Center and its success. He stressed the free enterprise system and noted the improvements to Main Street with no pay back by the Downtown Business Association. He commented that he was puzzled by the business community's concern with Walmart. Ben Butterfield, general manager of Sav-on, spoke against Walmart based on a number of disturbing issues. He stressed the problems associated with Walmart in Ridgecrest and the impact on that Citg. He advised that a Councilmember of that community had commented that the City revenues were down 420 and 90 to 100 stores had closed. He indicated that while Walmart hires many employees, most jobs are minimum wage and minimum hours. He indicated he would have no problem with Walmart when the population is large enough to support it. He further indicated that his concern was with the tax dollars involved and the expense of moving a mountain to build the store. PAGE FOIIR - CITY COUNCIL MINUTES - MARCH 11~ 1993 Chris Hyland, 15191 Wavecrest, submitted a citizens petition with just over 100 signatures against Walmart, against paying sales tax for 20 years and opposed to Redevelopment Agency money qoing to Walmart. Lori Rubin, Looking Good Beauty Supply, indicated she had been a small business owner in this Community for 5-1/2 years. She questioned the difference between the negotiations here and in Temecula. She questioned the payment of $4 million to bring Walmart to Lake Elsinore. She stressed other needs in the community such as a Denny's, theater, golf course, etc. She indicated that there was no reason to pay the richest retailer in the Country to come to the City. She further indicated that the City needs upgrading to draw more industry. She noted the impact of the Levi's Outlet on Miller's Outpost and requested a no vote from the Council. Beverly Stone, Gen RX Druqs, indicated that as a small business owner she is opposed to Walmart. She explained that her business was started with no assistance from the City and opposed the tax incentives offered to Walmart. She noted recent news stories about Walmart and products manufactured outside the U.S. and child labor law violations. She addressed possible conflicts of interest by the Council. Rick Zwiefel commented that he is not against Walmart, only the incentives being offered. He indicated he felt Walmart could afford to come to the Community on their own. He questioned the availability of similar incentives if a different site were chosen. He suggested that two Councilmembers businesses are in conflict with this consideration. He addressed the comments of Mr. Strigotte indicating that the businesses on Main Street did not ask for the improvements. He indicated that Main Street was Mr. Dominguez~s project. He suggested that the money contemplated for this project be used for increased police services. Edith Stafford, 54 Elm Street, commented on the walmart and suggested that the proposed site is a bad location. She expressed concern with the expenditure of $4 million to move a mountain. She indicated she felt Walmart could find a flat piece of land and suggested that the City should be run like a business. She suggested that Walmart be required to pay their own way. She indicated that while she was not opposed to Walmart coming to the Community, she was not opposed to driving to another community to shop there. She suggested that the $4 million be used to provide improved police protection, rather than giving it to the richest retailer in :K American. She requested that the Council vote no on this item noting other areas of need in the Community. She questioned the gradinq being done on this site without a City permit. Ace Vallejos, 15231 Cove Creek, outside the City because his tract did not receive a higher wall, indicated that his wife supports the Walmart project. He commented that Redevelopment Agency funds seem to be used on projects other than necessity. He stressed the need to keep the budget in the black and suggested that this might not be the best location for the project. He indicated that Redevelopment Agency funds should be used to tear down slums: PAGE FIVE - CITY COUNCIL MINUTES - MARCH 11~ 1993 Mark Ostoich; Gresham; Varner, Savage; advised that he was attending on behalf of Walmart and offered to answer questions. Frank Gatlin, Gatlin Development, expressed concern that the speakers at this meeting did not understand the request. He noted that the impression seems to be that the City is being requested to write a check; he explained that there is no up front money required and the mountain does not represent the bulk of the costs. He indicated that no other suitable site with infrastructure in place to do this development. He indicated that a number of fees are included in the request. He commented on the ability to go outside the City limits and explained their willingness to let the City know the problems and allow them to make the decision. He inquired if the City wants the development to occur. He indicated that Walmart does much good across the County and can go elsewhere if necessary. He questioned what is the best alternative for the entire community. He detailed tenants in other areas who are doing well in spite of Walmart. He requested favorable consideration and noted that the Temecula site included several million dollars of infrastructure. The joint public hearing was closed at 6:08 p.m. MOVED BY WINKLER, SECONDED BY DOMINGUEZ TO APPROVE THE PROJECT AS PRESENTED AND INSTRUCT STAFF TO FINALIZE THE NECESSARY DOCUMENTS INCLUDING RESOLUTION NO. 93-4, THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND WALMART.STORES, INC. AND THE OWNER PARTICIPATION AGREEMENT WITH OAK GROVE EQUITIES. Councilwoman Cherveny addressed City Treasurer Pape and concurred that this project would provide additional jobs, but expressed concern with which jobs will be provided for the investment. She indicated that part time jobs are needed, but the higher level jobs will not be provided. She further indicated that the City needs to bring good paying jobs in as well. She noted a news article from the Community Redevelopment Agency seminar and commented that the Walmarts in Barstow and Upland received no incentives. She questioned why Temecula can draw them for $500,000 or $900,OO0 and this City is still at $4 million. She suggested that it might be necessary to find another site with the infrastructure in place. She expressed concern with similar discount stores which have gone and this year's loss of property taxes. She expressed further concern that the Redevelopment Agency is already subsidizing the City by $2 million per year. She indicated she has no problem with Walmart, but is concerned with the expenditures and site. She noted that a large portion of the fees are to the Water District. She addressed the Outlet Center which has done well and questioned the need for Walmart when the outlet Center is not quite paying for itself yet. She indicated she is very concerned with the sales tax revenue and the continuing payment to oak Grove Equities. She noted her campaign literature and reminded the community that she said she would work for the people, increase police protection and help small business. She questioned the ability of other Councilmembers to vote on this item and hoped they would vote in good conscience. ,:: PAGE 3IX - CITY COUNCIL MINUTES - MARCH 11~ 1993 Councilman Alongi commented that it is refreshing to see the Community come together on an issue such as this. He commented on the correspondence received from Stephanie Smith. He questioned the tax and the percentage breakdown. Administrative Services Director Boone presented an overhead chart. Mr. Alongi indicated that this document did not match those he received. He, questioned how much of the $464,000 figure is property tax. Mr. Boone indicated that approximately $175;000 is property tax. Mr. Alongi questioned a series of dollar amounts and stressed the importance of working from the same documents. He questioned whether these would really be new tax dollars or just shifted from businesses that close. He indicated he would not have a problem with Walmart if they could guarantee that they would not build another store within 30 or 40 miles of this store. He questioned the jobs it would provide and the impact on small business, as well as guarantees that City residents would be the first considered for the jobs. He questioned the willingness of Walmart to supply Little League and other organization sponsorships when the smaller businesses are gone. He questioned the cost of moving the mountain. Mr. Gatlin indicated it was approximately $1 million and stressed that there was no other site appropriate for this development. Councilman Alongi questioned the site and indicated he has a letter indicating this would be the most undesirable site because of the grading involved. He suggested that this retailer was welcome to come to the community, but also welcome to pay their fair share. He i.^.uicated he would be willing to assist with tax increment. He commented on the E.V.M.W.D. fees and questioned why they should not be the ones financintj that portion. He addressed City Treasurer Pape indicating he was elected to protect the people's interest and dollars no matter how much it draws in. Iie stressed what it will take away from the community. He suggested that the Treasurer needs to think of job opportunities in relationship to the housing available. He addressed the Temecula negotiations noting that the off-sites were put in and will be paid back interest free, indicating he would have no problem with that type of investment if the funds are available. Mayor Pro Tem Dominguez indicated that he had run for this office as a progressive member of the community, and he feels that his seven years on the Council have made a difference. He noted the advise of professional staff inembers on what is a good deal and what is not a good deal for the community. He noted that the Outlet Center drew criticism and it worked out ,s fine. Ae indicated that his only concern with Walmart is that they are coming in at the wronq time and it is being made a political issue rather than a business deal. He commented that he has experienced changes in the community and is willing to continue to progress with anything that is good for the community. Mayor Washburn addressed an article he had read and inquired whether Walmart in fact provides assistance to businesses to fine tune their operations. Mr. Gatlin indicated they would assist through the provision of seminars. He further indicated that loyal customers will`'oontinue to frequent their PAGE SEVEN - CITY COUNCIL MINUTES - MARCH 11~ 1993 regular stores. He' indicated that most cities find 100~ positive response to Walmart when it is opened. He stressed that Walmart would have similar impacts to those of K-Mart, ;l Target, etc. and this community has already felt that , impact. Mayor Washburn addressed a survey by the Chamber of Commerce with 15 Chambers of Commerce with stores open more than a year, indicating favorable with few impacts on existing stores. He addressed comments regarding locating near the Outlet Center and indicated that they have different trade ~: areas, noting that the Outlet Center trade area is approximately 100 miles. He further indicated that investment has paid off. He expressed ooncern that with comments on population noting that it is necessary to grow with the population. He noted that while all of the jobs are not in the higher brackets, they will be helpful as second income jobs for families. Councilman Winkler addressed agreements by other communities for commercial development and the types of assistance contemplated and the competition between communities for businesses. He indicated that he wants to see this site developed with a large retailer. He stressed that Lake Elsinore is not only a city of 22,b00, but there are plans approved with development agreements and the population will increase to over 100,000 very soon. He indicated that there are really only two appropriate freeway off-ramps for this type of major retailer. He indicated that the State tax system has caused this competition between communities for tax dollars. He addressed the improvements to Railroad Canyon Road and indicated that they were intended to draw commercial development to this area. He noted that much of the-dirt to be moved from this site will assist other projects in the community and questioned the use for the inflow channel. City Manager Molendyk stressed the amount of dirt available for other projects. Public Services Director Tecca indicated that 3 or 4 sites had been picked out in the floodplain areas where there are permits and detailed the locations. Councilwoman Cherveny inquired whether this would need a 404 permit. Mr. Tecca indicated that Eastlake has a 404 permit to place it above 1465~. Councilman Alongi inquired who owns the property. Mr. Tecca indicated that it is owned by Mr. Lehr and the City holds an option. Mr. Alongi questioned the ability for Eastlake to have a 404 permit on property owned by Mr. Lehr. Councilman Winkler indicated that the most important issue for him is to make off-ramp locations key areas for high profile commercial development. He indicated that it would draw more traffic and commercial activities in the area. He noted a previously submitted plan to use sales tax, and indicated that this plan offers the use of tax increment rather than giving up sales tax, which is his preference. He noted that it was his understanding that this plan was encouraged by Boardmembers Alongi and Cherveny in setting up PAGE EIGHT - CITY COUNCIL MINUTES - MARCH 11~ 1993 a reasonable plan; he noted a shift in position on this formula during the process. He noted candidate profiles from April, 1992; indicating that Councilman Alongi felt that business should be made a priority and incentives should be offered. Mr. Winkler noted correspondence he had received from Chamber President Hundshamer regarding a survey done by the chamber and detailed the findings. He noted that the results were approximately 60% yes to 40~ no from the first survey. A second survey was done including questions regarding the impact on other businesses. He detailed those findings. Mr. Winkler noted additional correspondence he has personally received in support and opposition to this project. He stressed the need to entice business to this major intersection. Councilwoman Cherveny indicated that question of this meeting is not whether the community wants Walmart, anymore than the question of whether they want a theater; rather a questioned of how much they are willing to pay for a Walmart or a theater. She stressed the current status of the economy. She questioned the recent changes which would make Mr. Washburn eligible to vote on this item. Councilman Alongi addressed comments by Councilman Winkler regarding the April, 1992, Sun-Tribune article and suggested that the Sun-Tribune has a habit of editing people~s comments. He questioned Councilman Winkler<s partnership in this property that Walmart wants to build on. He stressed the need for this to be a business decision as to whether the community is large enough to support it and whether Walmart will generate enough tax to compensate for businesses it may destroy. :.~ Councilman Winkler called for the question. City Attorney Harper requested that three votes be taken. RESOLUTION N0. 93-4 WAS APPROVED BY A VOTE OF 4 TO 1 WITH CHERVENY CASTING THE DISSENTING VOTE. TI-IE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND WALMART STORES INC. WAS APPROVED BY A VOTE OF 4 TO 1 WITH ALONGI CASTING THE DISSENTING VOTE. THE OWNER PARTICIPATION AGREEMENT WITH OAK GROVE EQUITIES WAS APPROVED BY A VOTE OF 4 TO 1 WITH CHERVENY CASTING THE DISSENTING VOTE. City Attorney Harper noted that the CEQA findings had been approved as part of the Resolution. Councilwoman Cherveny indicated that she had voted yes to allow her to bring the matter back for reconsideration. ADJOURNMENT THE MEETING WAS DECLARED ADJOURNED CHAIRMAN WINKLER AT '7:35 P,M. ~'~ ~/~/~~ GARY M WASH URN, MP,yOR ES : CITY LAKE ELSINORE 2 D, CIT CLERK CITY OF LAKE ELSINORE