Item 3A: Approval of City Council Minutes

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Mr. Braud said the staff recommendation was to consider using the existing urban renewal and CDBG loan programs to provide ORI financing in the range of $2 million, assuming that ORI can demonstrate that the remaining gap of $3.2 million is filled within a reasonable period of time. Mayor Piercy called for council questions and comments. Ms. Bettman noted that the ORI project fulfilled many objectives and was the epitome of sustainable business. She said the City had every reason to support the project and felt the recommendation did not go far enough. She would amend the proposed motion once it was on the table. She said the project had a vast and demonstrable public benefit. Mr. Kelly echoed Ms. Bettman’s remarks about the value of ORI to the community and the building’s enhancement of downtown. He was interested in doing what was necessary to make the project happen but was frustrated by the number of extensions, changes and missed deadlines. He said the project needed to come to closure in one way or another in the near future. He asked if the two loan programs recommended by staff currently had $2.5 million between them. Mr. Braud explained that the total Business Development Fund (BDF) portfolio was about $2.5 million with $500,000 available for the project, although that fund revolved quickly with short-term loans; there was about $2 million currently available in the Downtown Revitalization Loan Program. Mr. Kelly said he was nervous about tying up a majority of funds in those programs for a significant period time. Mr. Kelly said he was interested in motion language that would require any financing package from the City to return to the council for review and approval of terms and conditions before being finalized. He also wanted to see a projection of ORI’s reasonable expectation to repay the loan and over what period of time. Mr. Papé agreed with comments about the value of ORI to the community and would have been more favorably inclined towards the financing options if the discussion was being held in April or May of 2003. He cited Ms. Bettman’s motion on May 12, 2003, regarding ORI’s purchase of the Sears site. He felt the motion should have included a requirement that the site was under contract at the end of six months. He also felt that information had been hidden from the council. He cited council minutes from a June 2004 Urban Renewal Agency meeting regarding the consequences if the deal with ORI fell through and asked about the status of the provisions requiring ORI to reimburse the City for all costs. Mr. Braud replied that a repurchase option was included in the purchase agreement requiring ORI to reimburse for costs, but would have occurred after closing of the sale and in the event ORI did not move forward with the project. He said the sale had not been closed so the repurchase option was not in effect. Mr. Papé commented that the City’s investments in the site were not recoverable. Mr. Braud said the City had added value to the site by demolishing the building. Ms. Solomon stated that she saw no reason to continue with the transaction as the City had done all of the work to-date and had nothing to show for its efforts. She said that ORI should reconsider the size and scope and possibly location of its project if it could not obtain financing. She preferred to see the City start over with another request for proposals (RFP). Ms. Solomon, seconded by Ms. Ortiz, moved to direct the City Manager to pursue a combination of Downtown Revitalization Loan Program and Business Develop- ment Fund financing to provide financing in the range of $2 million for the ORI project, and to encourage ORI to work with its developer and investors to close the remaining financing gap in a timely manner.