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Minutes 2010-02-23 MINUTES REGULAR MEETING OF THE CITY COUNCIL /REDEVELOPMENT AGENCY TUESDAY, FEBRUARY 23, 2010 COUNCIL CHAMBERS, 215 EAST BRANCH STREET ARROYO GRANDE, CALIFORNIA 1. CALL TO ORDER Mayor /Chair Ferrara called the Regular City Council meeting to order at 7:01 p.m. 2. ROLL CALL City Council /RDA: Council /Board Member Chuck Fellows, Council /Board Member Ed Arnold, Council /Board Member Joe Costello, Mayor Pro TemNice Chair Jim Guthrie, and Mayor /Chair Tony Ferrara were present. City Staff Present: City Manager Steven Adams, City Attorney Tim Carmel, Director of Legislative and Information Services /City Clerk Kelly Wetmore, Director of Administrative Services Angela Kraetsch, Chief of Police Steve Annibali, Police Commander Chuck Gearhart, Police Commander John Hough, Building Official Johnathan Hurst, Assistant Planner Ryan Foster, and Community Development Director Teresa McClish. 3. FLAG SALUTE Mayor /Chair Ferrara led the Flag Salute. 4. INVOCATION Pastor Randy Ouimette, Saint John's Lutheran Church, delivered the invocation. 5. SPECIAL PRESENTATIONS 5.a. Oath of Office Administered to New Police Officer Francisco Ramirez. Chief Annibali introduced Police Officer Francisco Ramiriez and provided a brief biography of his background; Mrs. Ramirez pinned on Officer Ramirez's new badge; and City Clerk Wetmore administered the Oath of Office. 5.b. Honorary Proclamation Declaring February 23, 2010 as "Spay Day USA ". Mayor Ferrara presented an Honorary Proclamation declaring February 23, 2010 as "Spay Day USA ". Mary Buehnerkemper, accepted the Proclamation on behalf of Feline Network of the Central Coast and various animal rescue organizations. 6. AGENDA REVIEW 6.a. Ordinances Read in Title Only. Council /Board Member Arnold moved, Mayor Pro TemNice Chair Guthrie seconded, and the motion passed unanimously that all ordinances presented at the meeting shall be read by title only and all further readings be waived. Minutes: City Council/Redevelopment Agency Meeting Page 2 Tuesday, February 23, 2010 7. CITIZENS' INPUT, COMMENTS, AND SUGGESTIONS Otis Page, Myrtle Street, expressed concerns about the City's financial state; commented on the State's declining fiscal status; expressed concerns about the City's proposed expansion project; and requested an independent audit of the City's finances. Michael Teixteira, candidate for Sheriff; expressed concern about gang violence in San Luis Obispo County and pledged resources to address the problem. Nolan Hughes, Canyon Way, read a prepared statement expressing concern that a vote was not taken at the last meeting on the Centennial Plaza project; spoke in opposition to the proposal; and stated this was an inappropriate delay. Ira Hughes, Canyon Way, referred to changes in Item 9.c. since the last meeting and asked if the City could re -open the public hearing without re- noticing the project. 8. CONSENT AGENDA Mayor /Chair Ferrara invited members of the public who wished to comment on any Consent Agenda Item to do so at this time. No public comments were received. Mayor Pro TemNice Chair Guthrie requested Item 8.g. be pulled for clarification. Mayor /Chair Ferrara requested Item 8.1. be pulled for comment. Action: Council /Board Member Fellows moved, and Council /Board Member Arnold seconded the motion to approve Consent Agenda Items 8.a. through 8.m., with the exception of Items 8.g. and 8.1., with the recommended courses of action. The motion passed on the following roll -call vote: AYES: Fellows, Arnold, Guthrie, Costello, Ferrara NOES: None ABSENT: None 8.a. Cash Disbursement Ratification. Action: Ratified the listing of cash disbursements for the period February 1, 2010 through February 15, 2010. 8.b. Consideration of Statement of Investment Deposits. Action: Received and filed the report of current investment deposits as of January 31, 2010. 8.c. Consideration of Acceptance of the Comprehensive Annual Financial Report. Action: Received and filed the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009. 8.d. Consideration of Approval of Minutes. Action: Approved the minutes of the Regular City Council Meeting of January 26, 2010, as submitted. 8.e. Consideration of Amendment to Consultant Services Agreement with Planning Company Associates. Action: Authorized the City Manager to execute an amendment extending the consultant services agreement with the Planning Company Associates for an additional six month period for assistance in obtaining Caltrans approval for a proposal to address deficiencies at the Brisco Road /Halcyon Road — Highway 101 Interchange. Minutes: City Council /Redevelopment Agency Meeting Page 3 Tuesday, February 23, 2010 8.f. Consideration of Amendment to Financing Agreement Between the City and Redevelopment Agency for Costs to Acquire Property at Faeh Street and El Camino Real [COUNCIL/RDA]. Action: Approved an Amendment to the Financing Agreement between the City and the Redevelopment Agency in order to eliminate future interest payments for costs associated with acquisition of the property at Faeh Street and El Camino Real. 8.h. Consideration of Program Supplement Agreement for the West Branch Street Overlay Project PW 2008 -08. Action: 1) Adopted Resolution No. 4257 as follows: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE APPROVING PROGRAM SUPPLEMENT AGREEMENT NO. 008 -N TO ADMINISTERING AGENCY -STATE AGREEMENT FOR FEDERAL -AID PROJECTS NO. 05 -5199R FOR THE WEST BRANCH OVERLAY PROJECT "; and, 2) Directed the City Clerk to submit Program Supplement Agreement No. 008 -N and authorizing Resolution to Caltrans. 8.i. Consideration of Resolution Authorizing the Community Development Director to Execute Right of Way Certifications for Federal -Aid Projects. Action: Adopted Resolution No. 4258 as follows: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE PROVIDING THE DIRECTOR OF COMMUNITY DEVELOPMENT WITH BLANKET AUTHORIZATION TO EXECUTE RIGHT OF WAY CERTIFICATIONS ". 8.j. Consideration of a Resolution of Application to the Local Area Formation Commission and Plan for Services for the Pearwood Property. Action: Adopted Resolution No. 4259 as follows: "A RESOLUT /ON OF APPL /CAT /ON FROM THE C /TY COUNCIL OF THE CITY OF ARROYO GRANDE APPROV /NG INITIATION OF PROCEED /NGS FOR THE AMENDMENT OF THE SPHERE OF INFLUENCE AND ANNEXAT /ON OF TERRITORY': 8.k. Consideration of Changes to Appointment of Council Members to the San Luis Obispo County Integrated Waste Management Authority (IWMA) Board and the San Luis Obispo Economic Vitality Corporation Board. Action: 1) Appointed Council Member Fellows as the City's primary representative on the San Luis Obispo County IWMA Board of Directors and Council Member Arnold as the Alternate; and 2) Appointed Mayor Pro Tem Guthrie as the City's primary representative on the San Luis Obispo County Economic Vitality Corporation Board and Council Member Arnold as the Alternate. 8.m. Consideration of Appropriation of Funds to Implement Irrigation Audit Recommendations for Wildwood Ranch Residential Development. Action: Appropriated $7,650 from the Water Neutralization Fund to help implement irrigation audit recommendations for the Wildwood Ranch residential development. ITEMS PULLED FROM THE CONSENT AGENDA 8.g. Consideration of Five -Year Radar Speed Survey for Selected City Streets. Recommended Action: Adopt a Resolution certifying the five -year radar speed survey and establishing speed limits on Fair Oaks Avenue, North Elm Street, Traffic Way and West Branch Street. Minutes: City Council/Redevelopment Agency Meeting Page 4 Tuesday, February 23, 2010 Mayor Pro Tem Guthrie noted the supplemental information, which included a modification to the proposed Resolution to extend the 25 mph speed limit northward on North Elm Street from Brighton to the end of the North Elm Street cul-de -sac. Action: Mayor Pro Tem Guthrie moved to adopt a Resolution as follows: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE CERTIFYING THE FIVE -YEAR RADAR SPEED SURVEY AND ESTABLISHING SPEED LIMITS ON FAIR OAKS AVENUE, NORTH ELM STREET, TRAFFIC WAY AND WEST BRANCH STREET" as amended to reflect a 25 mph speed limit on North Elm Street, north of East Grand Avenue. Council Member Arnold seconded, and the motion passed on the following roll -call vote: AYES: Guthrie, Arnold, Costello, Fellows, Ferrara NOES: None ABSENT: None 8.1. Consideration of Recommendation to Caltrans for Test Closure of Los Berros Road to Traffic Way Median Barrier Project. Recommended Action: Authorize the City Manager to submit a letter to Caltrans requesting a test closure of the proposed Los Berros Road to Traffic Way median barrier project. Mayor Ferrara stated he had attended a workshop regarding closure of Los Berros Road at El Campo; provided an overview of the concerns and potential traffic impacts relating to the project; and explained the intent of the proposed letter to be sent to Caltrans. Action: Mayor Ferrara moved to approve staff's recommendation. Mayor Pro Tem Guthrie seconded, and the motion passed on the following roll -call vote: AYES: Ferrara, Guthrie, Costello, Arnold, Fellows NOES: None ABSENT: None 9. PUBLIC HEARINGS: 9.a. Consideration of Final Approval of Proposed Projects to be Funded with the City's Allocation of Community Development Block Grant Funds for Year 2010 and to Approve Reallocation of Prior Years' Outstanding Balances. Community Development Director McClish recommended the Council continue the public hearing to the March 9, 2010 City Council Meeting due to County noticing requirements. Action: Council Member Fellows moved to continue this item to the March 9, 2010 meeting. Council Member Costello seconded, and the motion passed on the following roll -call vote: AYES: Fellows, Costello, Guthrie, Arnold, Ferrara NOES: None ABSENT: None Minutes: City Council /Redevelopment Agency Meeting Page 5 Tuesday, February 23, 2010 9.b. Consideration of Conditional Use Permit 09 -012 to Construct a New 14,468 Square -Foot Police Station at the Northwest Corner of West Branch Street and Rodeo Drive. Associate Planner Foster presented the staff report and recommended the Council: 1) Adopt a Resolution approving Conditional Use Permit 09 -012; 2) Authorize the City Manager to submit a final application to the United States Department of Agriculture for low- interest finances of up to $6 million for the project; and 3) Appropriate $25,000 for the purpose of a design cost efficiency peer review. Staff responded to questions from Council regarding an apparent conflict with Land Use Element goals and objectives as it relates to scale and design of structures in the Village Core and other designated Mixed -Use areas; discussion held at the Planning Commission meeting concerning the use of metal roofs; clarification regarding the drainage plans as it relates to the use of swale designs; and clarification regarding the use permit approval process as it relates to the ability to make future design modifications. Craig Atkinson, bfgc Architects, gave a presentation which included responses to concerns and suggestions proposed by Mark Vasquez; and an overview of the proposed site plan, conceptual landscape plan, preliminary grading plan, preliminary utility plan, first and second floor plans, and an overview of various architectural style studies. Brief discussion ensued regarding the potential for trash trucks having to back up into Rodeo Drive and providing a method for bringing the trash receptacle closer to the street. Mayor opened the public hearing, and upon hearing no comments, he closed the public hearing. Council comments ensued regarding concern for the design; whether the future Community Recreation Center may tie in with the project; final design to go to ARC and PC, should come back to Council; elimination of sharp corners and batwings;$25,000 for peer review is appropriate. Action: Council Member Costello moved to approve a Resolution as follows: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPT /NG A MITIGATED NEGAT /VE DECLARATION AND APPROVING CONDITIONAL USE PERMIT 09 -012; LOCATED AT THE NORTHWEST CORNER OF WEST BRANCH STREET AND RODEO DRIVE; APPLIED FOR BY THE CITY OF ARROYO GRANDE "; and Mayor Pro Tem Guthrie seconded the motion to approve, with the recommended course of action. The motion passed on the following roll -call vote: AYES: Costello, Guthrie, Arnold, Fellows, Ferrara NOES: None ABSENT: None Action: Council Member Costello moved to authorize the City Manager to submit a final application to the USDA for low- interest finances of up to $6 million for the project; appropriate $25,000 for the purpose of a design cost efficiency peer review; and that the final design and approval would come back to the Council. Mayor Pro Tem Guthrie seconded, and the motion passed on the following roll call vote: AYES: Costello, Guthrie, Arnold, Fellows, Ferrara NOES: None ABSENT: None Minutes: City Council/Redevelopment Agency Meeting Page 6 Tuesday, February 23, 2010 Mayor Ferrara called for a break at 8:00 p.m. The Council reconvened at 8:10 p.m. 9.c. Consideration of Redesign of Short Street to be One -Way and a Purchase and Sale and Improvement Agreement with NKT Commercial for Acquisition of Property at 300 East Branch Street and Sale and Development of City Property at 200 and 208 East Branch Street and the Adjacent Parking Area. City Manager Adams provided brief introductory comments regarding cost efficiency efforts relating to the project; acknowledgement regarding concerns expressed about spending money; and that the proposal is an approach to restructure services as a result of the Citywide reorganization that has been implemented. He then presented the staff report and recommended the Council: 1) Adopt a Resolution adopting a Negative Declaration with mitigation measures; 2) Approve Short Street and Centennial Park preliminary design concepts and direct staff to prepare conceptual design drawings; 3) Approve a Purchase and Sale and Improvement Agreement with NKT Commercial for acquisition of property at 300 East Branch Street, sale of City property at 200 East Branch Street, 208 East Branch Street and the parking area in between, development of a 5,700 square foot commercial building at Short Street and East Branch Street, and adaptive reuse of the 208 East Branch Street building; 4) Authorize the City Manager to execute documents to obtain debt financing of up to $1.2 million for costs associated with acquisition of the 300 East Branch Street property through the United States Department of Agriculture (USDA) Rural Development Community Facilities low- interest loan program; and 5) Award a bid in the amount of $39,991 for construction of a fire sprinkler system in the 300 East Branch Street building. Jeff Ferber, RRM Design, provided an overview of the proposed Short Street and Centennial Park Enhancements conceptual plan. Mayor Ferrara referred to the last meeting where discussion was held concerning the status and potential sale of the current City Hall building, concerns about space, the feasibility of locating all staff to the Farm Credit building and inquired whether the Council would need to direct staff to bring this issue back on a future Council agenda. Brief discussion ensued with regard to the previous analysis and evaluation concerning this matter and City Manager Adams indicated that there was nothing in staff's recommendation that would preclude the Council from moving forward with the proposed purchase agreement since sale of the City Hall property would have to be considered separately. Mayor Ferrara opened the public hearing. Carol Florence, Oasis and Associates, representing NKT Commercial, thanked the Council for providing direction at the last meeting, stated they met quickly thereafter on a revised design for Short Street and tried to balance the direction for a one -way street with the applicant's desire for a fully functional exterior space for the proposed restaurant area; thanked Gary Scherquist and RRM Design for responding to all concerns; confirmed City Manager Adam's response regarding the applicant's acceptance of this design; and requested approval of the proposal. Pete Giambalvo, Arroyo Grande In Bloom and Police Department Volunteer, and long time resident, stated he was disappointed that the last plan was abandoned; liked the alternative plan which would improve the Village; and spoke in support of the project as proposed. Minutes: City Council/Redevelopment Agency Meeting Page 7 Tuesday, February 23, 2010 Kristen Barneich, Canyon Way, spoke in favor of not tearing down but adaptively reusing the building at 200 East Branch Street; displayed photos of the building which is 1950's architecture and suits the Village; stated it could be expanded while maintaining the scale and saving the front facade; supported relocating the public restrooms; and displayed additional photos of the building from 1955 and 1958 Arroyo Grande High School yearbooks which show the building unchanged; stated it would be a tribute to the Village to save and reuse the building; and urged the Council to save the building and help preserve the charm of the Village. Judith Bean, President and CEO of the Arroyo Grande Chamber of Commerce, stated the Chamber consists of over 400 small business owners who live, volunteer, and vote here; donate money to local beautification efforts and charities; and sponsor many City events and programs. She spoke in favor of the proposed project and commented on the declining economic business climate, and supported efforts to create and maintain a vibrant downtown and provide additional parking to assist the business merchants in the Village. Bob Lund, Project Coordinator, Arroyo Grande In Bloom, was sorry to see the Centennial Square project go away; however, he recognized the needs of the community and spoke in support of the proposed alterative. He expressed concern about the impacts to the City and the community if the project was not approved. Gary Scherquist urged the Council to reconsider its decision regarding the building at 200 East Branch Street; believed the building to be of historical importance and that it should be retained. Shirley Gibson, Halcyon, provided a visual history by displaying photos dating back to 1958 showing the various uses of the building at 200 E. Branch Street and stated the City should not destroy its history. Patty Welsh, Pradera Court, thanked the Council for keeping Short Street open; questioned whether the City is compensating business owners for the parking spaces used for Farmer's Market; inquired whether the City would outgrow the Farm Credit building; and stated she would have liked to have had a public workshop regarding this project. Manetta Bennett, Allen Street, stated Farmer's Market is in a poor place and should be moved back to its original place; would like to see the 200 East Branch Street building preserved; that we are not a grand City so there is no need for a grand City Hall; the small buildings need to be preserved in the Village; and stated the finances for the NKT Commercial development need to be reviewed further. Greg Steinberger, Village business owner, stated that change can enhance a community and still preserve its historic character. He spoke of the remodel of his business in the Village; reiterated that change can be good and still preserve the historic nature and character of the Village while making changes; referred to the new bandstand and new street trees that were added to enhance the community. Tim Brown, Allen Street, thanked the Council for the additional time to review the proposal; would support whatever decision is made; expressed concerned about City Hall and how the required retrofit would be funded; commented on space needs; and requested more discussion on this matter as it relates to the overall decision. Tim Moore, Fair Oaks Avenue, quoted from a Times Press Recorder article by City Manager Adams regarding parking spaces and availability and noted that the 24 spaces at the Farm Credit building already exist and are not new. He also stated that if Olahan Alley crosswalks are closed for special events, it becomes a public safety issue. Ron DeCarli, Executive Director of the San Luis Obispo Council of Governments (SLOCOG) and former Arroyo Grande resident, stated SLOCOG is not directly involved in the proposed project, but was highly interested in the project; have advocated similar types of projects such Minutes: City Council /Redevelopment Agency Meeting Page 8 Tuesday, February 23, 2010 as public - private partnerships and more walkable communities; have funded major improvements in the Village area including the creekside path, the parking lot, bridge railings, and Village streetscape; have been reviewing the project to see if they can provide additional support; commented on the staff report as it relates to financial impacts, the closure of Short Street, traffic impacts, truck delivery and turning radius, and parking; stated it was a good proposal; and supported the project. Nolan Hughes, referred to a letter from the Law Offices of Babak Naficy and inquired whether the Council had reviewed it and requested that the City Attorney respond to it. Ira Hughes, Canyon Way, commented on the Chamber of Commerce's efforts to support the project; those from the Chamber who were opposed to the project; stated that the City has many vacant commercial properties that the City could rent for a specific period of time to see if growth occurs; commented that so much has transpired since October regarding this project; and expressed concern about financial impacts to the City. Steve Hollister, former manager of the Farm Credit building, spoke in support of the proposal by NKT Commercial and stated it would be a good addition to the City. Mike McConville, E. Branch Street, asked if anyone tracked how many speakers are for and against the project; how many letters were received in support or opposition; stated he has a problem with outdoor restaurant seating and that if it is not leased to the restaurants, it is a taking of public land; a town hall meeting should have been conducted; Short Street should be left open; and need to further review costs. Patty Christian, E. Branch Street, stated Farmer's Market is taking over many parking spaces that are impacting their customers and it should be relocated to the park by the bandstand. Susan Flores, E. Branch Street, anticipated seeing a cost sheet for the City Hall project and plaza; where are funds coming from; quoted from May 2007, January 2007, and October 2007 Stagecoach Express articles regarding identified City needs; opposed the use of local sales tax funds for the project; and expressed concern over the shortfall in the FY 2009 -10 budget. Manetta Bennett, Allen Street, stated that notice of the meeting was published in The Tribune. Tony Cochiolo, stated his son owns a trucking company and referred to information he submitted about truck access on Short Street and stated he could answer questions about circulation in this area. Henry Gonzales spoke in opposition to changes in the Village; however, he appreciated Nick Tomkins' willingness to work with him. Camay Arad, Village business owner, expressed concern about the scale of the building; supported keeping the facade; wants to see more financial information; and encouraged the Council to take all these things into consideration. Greg Steinberger stated that following the applause that resulted from people not wanting change, that perhaps he should apologize to the City for making changes to a business in the Village that was not surviving and people were not frequenting. Mayor Ferrara closed the public hearing. Mayor Ferrara provided the following comments: - Responded to public comments at the beginning of meeting and apparent unfounded accusations concerning the project's development process; stated the process has been very transparent regarding financial aspects; that staff has provided exact budget information related to City finances for the project; and that this information is open to the public at any time; Minutes: City Council /Redevelopment Agency Meeting Page 9 Tuesday, February 23, 2010 - Stated he believes the Council is representing all of the City's citizens and that many comments were received from people who did not attend the meetings; - Addressed concerns expressed regarding the approach to the project; that assumptions were made regarding the closure of Short Street as it was tied to the entire project; and that this was previously identified as and intended to be Phase 2 of the East Branch Streetscape project; and referred to several public workshops which were held and televised, but were sparsely attended; - Acknowledged the state of the economy and concern about public perception of government; - Referred to the temporary closure of Short Street to study traffic circulation, not economic impact; - Referred to examples of projects from other cities and agreed that the City is unique and not like other cities, however, he believed the City has the ability to learn from challenges in other jurisdictions; - Addressed the need for economic development efforts so businesses in the Village can be successful; - Acknowledged Ron DeCarli and the City's relationship with SLOCOG; the benefits of pedestrian oriented areas in a downtown core to draw business away from big box centers; - Believed the proposal to be a compromise as it relates to traffic circulation and a one -way street; - Stated he was not going to deny the project because trucks have to adjust their delivery routes; - Referred to and commented on a letter received concerning the historic designation criteria and process as it relates to the "malt shop" building at 200 E. Branch Street; - Quoted from letters received about Short Street and the building on the corner from people who did not believe the sites to be historic; stated the notion of mid - century modern is not in the General Plan or Village Design Guidelines; there is no interpretation in the historic designation criteria; does not believe there is a CEQA issue and does not want to re -open the decision made regarding the status of the Building Department building; - Appreciated comments regarding real estate and fiscal concerns of the proposal which can be complicated; stated there is a need to take advantage of this opportunity; - Commented on the economy as a whole; not confident it is looking up; referred to petition for ballot measure to protect local resources from the State; noted that the City has done a good job managing its budget; - Noted that these funding opportunities will be lost and it will cost City much more to accomplish similar projects in the future; - With regard to the local sales tax, he referred to the Annual Report which shows that local sales tax has been allocated to all identified priorities; stated that because City facilities were identified as a low priority does not mean the City should not take advantage of this opportunity; - Talked about purchase of City Hall building and would support reviewing further to see if that might work; - Stated the Farm Credit building would serve the public better by consolidating development services; stated that staff growth or reduction is based on the budget and Council has to approve based on workload in the community; - Commented on ADA compliance issues in the existing City Hall building and explained that if the rule of common sense is applied from a practical approach, this project gives the City Minutes: City Council /Redevelopment Agency Meeting Page 10 Tuesday, February 23, 2010 an opportunity to manage liability by acquiring a building that can better accommodate special needs; - Stated that this proposal was delayed and continued to achieve a compromise; supported the project as proposed; will provide staff with a safe, healthy, working environment; and concluded by assuring that nothing has gone on behind the scenes. Council Member Costello provided the following comments: - Stated he has asked for an option to keep Short Street open so he could support the project; - Stated this is a complex set of proposals that are tied together; that due to shrinking government, a strategy has been implemented for the City to stay on budget which included a restructuring and reduction of staff to consolidate services; - Stated this proposal is the most cost efficient solution; there is a very low rate of interest on loan; savings in the budget will offset those costs; - If City tries to retrofit and repair existing buildings, would be much more costly; - If City sells the buildings, the buyer would inherit the problems that they have and they would not generate the revenue; - Leasing another location is not the most efficient way to solve this problem; - The proposed approach maintains City services in a central location; - Not necessarily in favor of selling the City Hall building now and does not consider as part of this proposal; - The solution to move most of the City functions into the Farm Credit building makes sense; and would like to get staff out of the existing Engineering Building as soon as possible; - With regard to renovating City Hall, there is a plan in place that includes upgrades to the building to be funded over the next two to three years; - There are costs involved if this project does not move forward in order to solve a lot of problems; - Received numerous public comments about the project outside of the meeting, which are divided 50 -50 in support and opposition; at last meeting, most of the opposition was closure of Short Street; - Acknowledged comments about impact on existing Village businesses from Farmer's Market; suggested exploring solutions to keep the Market within the Village; - Acknowledged that progress is going to happen and change is going to occur; - Supported project as proposed and redesigned; - Would like to see the 200 E. Branch building relocated and maintained somewhere if possible; accepts that it would be difficult to be adaptively reused. Council Member Arnold provided the following comments: - Questioned the cost of leasing the Farm Credit building; referred to the USDA loan and inquired whether there were restrictions that would prevent purchase of the building only; - Acknowledged community /business interest in acquisition of 200 and 208 East Branch Street buildings and inquired whether anyone else has come forward; - Inquired about costs to continue operating and maintaining the current City Hall; - Has heard and listened to all public comments; - Had concerns initially about the Centennial Park /Square and closure of Short Street; believes that the revised proposal is much better than what was originally proposed; traffic Minutes: City CounciURedevelopment Agency Meeting Page 11 Tuesday, February 23, 2010 flow will be better; design is flexible so that it can be converted to pedestrian space in future; - Understands that the applicant is not willing to adaptively reuse the buildings at 200 E. Branch Street or have Short Street remain as two lanes; - Could approve portion of project proposed for Short Street/Centennial Square; - Does not support expanding office space beyond the Farm Credit building; believes that the project is only viable if City Hall building is sold; provided estimated comparison of costs; - Does not consider the 200 East Branch Street building as historic; is a good example of 1950's architecture which is not necessarily compatible with the Village; - Believes the historic designation process is flawed; - With regard to ADA compliance issues with City Hall versus the Farm Credit building, there is no elevator access at the Farm Credit building, however, it solves a lot of the ADA issues; - Can support locating all City staff in the Farm Credit building and purchasing the building outright; however, he is concerned about whether or not this project should be approved or the existing buildings be saved; would consider continuing to a future date to determine whether City Hall could be sold; - At this time, could support the Centennial Square and related street improvements, buying the Farm Credit building, and the investigation of selling the other properties; wants to consolidate staff into one building. - Noted that if the public bathrooms are moved, it could be a better project. City Manager Adams briefly responded to questions regarding relocation of the public restrooms; the potential for implementing future phases of the project; the reappraised value of the Farm Credit building; an employee space needs analysis; and selling the City Hall building. Council Member Fellows provided the following comments: - Stated there was not enough time allocated for public comment tonight and there should be no set time limit; - Acknowledged letter submitted by Donna Shook expressing concern about the costly changes in this economic environment and that the Village park should remain as it is; - Stated he had previously referred to General Plan and Land Use Element policies and objectives and the General Plan Survey responses, and that they are a matter of record; - With regard to City Hall working conditions, looked at space limitations again and agreed that there are some areas that are crowded; - Would like to see staff have enough room to work effectively within two buildings if economically feasible; - Does not support selling City Hall, and noted that the building is on the local historic register; - With regard to acquiring the Farm Credit building, he would be more supportive in a better economic climate because it would provide the extra space while bringing the existing City Hall up to date; - Noted that the staff report itself states the City is in the midst of a downturn economic environment and indicators point to a continued decline; property and sales tax revenues are declining and it could get worse; - Cannot support buying the building with borrowed money; Minutes: City Council /Redevelopment Agency Meeting Page 12 Tuesday, February 23, 2010 - Not comfortable with the proposal as presented; public perception demands more transparency, not less; - Commented that the City is selling assets in a declining real estate market; could sell other City properties in order to buy an asset; - Regarding the 200 East Branch Street building; expressed concern that it is not mentioned in the Initial Study /Mitigated Negative Declaration; - Local experts and members of the Historic Resources Committee mentioned the building is part of the Village environment and part of the Historic Overlay and is worth saving; - Stated the City hired a historic consultant who concluded that the building was not eligible for the State register, but that it could be eligible for the local historic register; - Cannot approve demolition of any one of the old, historic, or vintage buildings that are part of the historic downtown; - Disagreed with findings in the Initial Study /Mitigated Negative, specifically Section I. (Aesthetics), Section V (Cultural Resources), and Section XVII (Mandatory Findings of Significance); - Does not believe the 200 E. Branch Street building can be relocated without being destroyed and taking it out of the Village removes it as a contributor and puts it somewhere where it provides false history; - There is no compelling reason for a Centennial Park; it is worth celebrating the City's Centennial but not at this expense; only private funds should be used; - Acknowledged Gary Scherquist's pro -bono work; - Should keep Short Street as is; if plan is approved now or in the future, there should be strict limitations on the number of days the bollards can be used to close the street; - Stated he is not against development; stated the Conrad house (Engineering Building) could be used for restaurant or small office use; the "malt shop" (200 East Branch Street building) could be sold with a condition that it maintain its outward appearance; part of the parking lot could be left for parking and part of the parking lot could be used for expansion of the "malt shop" building; - Parking behind the Council Chambers building is on a slope and not convenient; - Any development in the Village in the Historic Overlay District cannot result in false history; - Cannot support the proposal as presented. Mayor Pro Tem Guthrie provided the following comments: Stated the project overall is a good one; - Need to honor the historic designation process in which the Building Department building was not deemed historic; have been told the building can't be reused in this proposal; - Noted that the Council is entrusted to make decisions based on recommendations from the advisory bodies and based on design guidelines that are in place; - Believed there was a need for an alternative financing plan; stated the City Manager had developed a financial plan and felt that it would be more expensive to remodel City Hall to accommodate staff, although he didn't believe it would be quite that expensive; acknowledged that the project could not be completely funded from the General Fund; - Could support the project side of this proposal; public came out strongly about not closing Short Street; believed that the traffic study was accurate as far as traffic studies go; agreed that Short Street needs to stay open; Minutes: City Council /Redevelopment Agency Meeting Page 13 Tuesday, February 23, 2010 - He voted against this proposal at least three times based on the fact he does not believe that the City should be spending money at this time, specifically local sales tax funds; also would be creating too much space; - Stated that staff had previously analyzed whether staff could fit into one building and was rejected, maybe too quickly; - Stated that he had three fundamental problems with the project: 1) it is too big; 2) would require spending local sales tax funds; and 3) does not address current ADA issues at City Hall; - Said the City must meet this need to address facility deficiencies; - Believed that current staff could fit into the Farm Credit building; - Could support going forward on two conditions: 1) do not finance this with local sales tax funds, should come out of other General Funds; 2) take a serious look at what current needs really are; - Would like to determine how to conduct a needs analysis of City Hall as well as the potential for selling the City Hall building; - Could move forward with the proposal if we can bring these issues back for consideration; - Questioned whether funds could be borrowed to make improvements; - Likes both projects, but does not really like moving into a third building and would like to see staff relocate to a single building. Mayor Ferrara referred to discussions with the Finance Director regarding anticipated projections for transient occupancy tax and sales tax revenue and noted that the City is currently maintaining its budget reserve goal even in these economic times. Brief discussion ensued about the City budget, how the local sales tax is administered in the budget; and the potential for leasing the City Hall building. Mayor Pro Tem Guthrie suggested a subcommittee be formed to do a space and needs assessment. Further discussion ensued with staff and the applicant concerning options and how best to proceed. City Manager Adams requested a brief break to confer with the City Attorney and to formulate a revised recommendation for Council consideration. Mayor Ferrara called for a break at 11:15 p.m. The Council reconvened at 11:31 p.m. City Attorney Carmel explained the Council could approve the project with contingencies and provided a draft motion for discussion and consideration. Action: Mayor Pro Tem Guthrie moved to approve staff recommendations 1, 2 and 3, which include adoption of a Resolution as follows: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING A MITIGATED NEGATIVE DECLARATION, INSTRUCTING THE CITY CLERK TO FILE A NOTICE OF DETERMINATION, AND APPROVING CONCEPT DESIGNS FOR SHORT STREET /CENTENNIAL PARK AND DEVELOPMENT AND REDEVELOPMENT OF 200 AND 208 E. BRANCH STREET PROJECT APPLIED FOR NKT COMMERCIAL "; approval of Short Street and Centennial Park preliminary design concepts and directing staff to prepare conceptual design drawings; and approve a Purchase and Sale and Improvement Agreement with NKT Commercial for acquisition of property at 300 East Branch Street, sale of City property at 200 East Branch Street, 208 E. Branch Street and the parking area in between, development of a 5,700 square foot commercial building at Short Street and East Branch Street, and adaptive reuse of the 208 E. Branch Street Minutes: City Council/Redevelopment Agency Meeting Page 14 Tuesday, February 23, 2010 building; subiect to the following contingencies: 1) Within 45 days, the Council shall determine whether to maintain, lease or sell the City Hall building; 2) The Council shall identify specific funding sources and a financing plan to acquire the Farm Credit Building; and 3) Designate two Council Members (Guthrie and Arnold) to work with staff to determine staffing and operational capacities of the Farm Credit and City Hall Buildings. It was further moved to schedule a Special City Council Meeting on Monday, March 29, 2010 at 6:00 p.m. Council Member Arnold seconded, and the motion passed on the following roll -call vote: AYES: Guthrie, Arnold, Costello, Ferrara NOES: Fellows ABSENT: None 10. CONTINUED BUSINESS: None. 11. NEW BUSINESS: None. 12. CITY COUNCIL REPORTS Mayor Ferrara requested, and the Council concurred, that City Council Reports be postponed until the next Council meeting. 13. CITY COUNCIL MEMBER ITEMS: None. 14. CITY MANAGER ITEMS: None. 15. COUNCIL COMMUNICATIONS: None. 16. STAFF COMMUNICATIONS: None. 17. COMMUNITY COMMENTS AND SUGGESTIONS: Shirley Gibson, Halcyon, read from the Agenda where it states that personal remarks against any Council Member or member of the audience shall not be permitted. She expressed dismay that her mother, Manetta Bennett, was singled out by name in a condescending way during the Mayor's presentation. Tim Brown, Allen Street, referred to the preservation and relocation of the Stilwell house to Allen Street and noted that the City is requiring $40,000 in fees to move the building from its current location. He hoped the Council would consider a waiver of some or all of the fees in order to save the house. Mayor Ferrara responded to Ms. Gibson's comments and noted that throughout the process, he had met with Gordon and Manetta Bennett, he respects them, and has gone to great lengths to understand their position. He believed that there was mutual respect between himself and the Bennetts, there had been no malice or disrespect, and that the statements are not true or valid. Minutes: City CounciURedevelopment Agency Meeting Page 15 Tuesday, February 23, 2010 18. ADJOURNMENT Mayor /Chair Ferrara adjoumed the meeting at 11:40 p.m. Tony Fer ayor/Chair ATTEST: G��� tts2o Kelly W e or lCity Clerk (Approved at CC Mtg 3 -23 - at' (O )