06/25/1980 Meeting - Laserfiche WebLink

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. e Ms. Smith moved, seconded by Mr. Lieuallen, that the bill be read the second time by council bill number only, with the unanimous consent of the council, and that enactment be considered at this time. Roll call vote; motion carried unanimously. CB 2161 was read the second time by council bill number only. Ms. Smith moved, seconded by Mr, Lieuallen, that the bill be approved and given final passage. Roll call vote; all councilors present voting aye, the bill was declared passed and numbered 18669. 3. Hi lton Hotel/Conference Center Agreement (memo and addit ional information distributed) Mr. Henry stated that the time element is critical on this issue and a decision on the development agreement must be reached by Friday. Several meetings among ERA staff, developers, and the City Attorney have been held. He introduced Joe Richards, Attorney for ERA, to discuss the key issues, objectives, and concerns, and Charles Kupper, HCC, to discuss cost figures and economic impact. Mr. Kupper stated that negotiations on some eTements of the contract were still being held just prior to the council meeting and that Mr. Richards would speak to the concerns raised in the memo from Stan Long. Mr. Richards stated the City Attorney's office saw a draft in late May. He e expressed appreci ation for the attorney's efforts and suggestions. In th e attorney's memo, it is noted that in this kind of negotiation what should be done is not necessarily what can be done, due to economic factors. It is true that the developer will have primary use of the main conference space. It is true that public use of the parking facility is not to conflict with use by the hotel arid conference center patrons. It is also true that substantial equipment repair should be, expected over the years. This is a 75-yearagreement with the main agreement being 55 years in length followed by two 10-year options. The only criteria for picking up the options is that the hotel not be in default at the time they chose to exercise the options. There is no way of knowing whether the percentage rental will cover conference center operating expenses. Mr, Richards feels that whether expenses will or will not be covered by rental fees must be compared to the total benefit the City will receive. Operating costs are going up less than five percent per year. Also, if rental revenues were to be low because of lower hotel use, then operating expenses would also be lower. Mr, Richards stated this is not the same kind of test that would be applied to a private development, since there are additional public benefits. A reuse appraisal was obtained from Keyser/Marston Associates of San Francisco. They were asked for two things: the fair reuse value of the parcel that is being sold and rental value of the conference center and parking. He ment ioned five of the factors that had been taken into account including the high risks . of this development. The appraisal reported that in the fourth year, when 6/25/80--5