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TO: REDEVELOPMENT AGENCY Cost
. � _
FROM: PHIL BATCHELOR, EXECUTIVE DIRECTOR wL
DATE: JANUARY 15, 1987 C
SUBJECT: LETTER OF INTENT REGARDING TAYLOR/WARD PROPERTIES IN THE PLEASANT HILL BART
PROJECT
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDED ACTION
Approve in concept and authorize the Executive Director, or his designee, to sign a Letter
of Intent with Taylor/Ward Properties and. Sonspirit Properties for the Agency to lease
certain property in the Pleasant Hill BART Station Area.
FINANCIAL IMPACT
The Letter of Intent outlines a financial arrangement between the Agency and the Developer
which the Agency would "invest" up to $1.5 million .in the Project in the form of a lease.
The Agency would be repaid- following development of the property by receiving 20% of the
net cash flow from the development for a specified period of time.
The arrangement would require the expenditure of $1.5 million in Agency funds over an 18
month period. However, the investment would produce an income stream to the Agency over
and above tax increment revenues. Such income could be used by the Agency for virtually
any purpose it desires and would not be subject to most of the limitations imposed on tax
increment expenditures.
BACKGROUND/REASONS FOR RECOMMENDATION
Redevelopment Agencies, like other local governmental agencies, have been seriously
impacted by limitations on the ability to raise sufficient revenue. Proposition 13 having
imposed the most serious .limitations.. Agencies have had to be more imaginative and
creative in putting together fundable projects.
The ideas engendered in the 'attached , Letter of Intent represent an entrepreneurial ap-
proach to project financing. Not only will this approach raise additional capital for
project costs but it will create a source of funds free of some of the restrictions placed
on tax increment financing.
The Agreement may also have the added benefit of metering some of the development approved
for the Pleasant Hill BART Area. Since office absorption has been somewhat slower in
recent months, it may be beneficial to keep some development off the market temporarily.
An affirmative action by the Agency at this point will allow the staff to proceed with
negotiations toward a detailed agreement. The transaction will not be consummated or in
effect until a final agreement has been reached and approved by the Agency.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
_ RECOMMENDATION OF EXECUTIVE DIRECTOR _ RECOMMENDATION OF AGENCY COMMITTEE
APPROVE OTHER
SIGNATURE(S): _
ACTION OF AGENCY ON ranuar 0 198 7 APPROVED AS RECOMMENDED x OTHER
VOTE OF COMMISSIONERS
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS (ABSENT 3 ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE
ABSENT: ABSTAIN: REDEVELOPMENT AGENCY ON THE DATE SHOWN.
cc: Redevelopment Agency ATTESTED January 20 , 1987
PHIL BATCHELOR,
AGENCY SECRETARY
ADMINISTRATO
BY " DEPUTY
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