City Council Agenda and Packet 2015 09 01

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SUBJECT: 550 SOUTH MCCASLIN BLVD. URBAN RENEWAL PLAN DATE: SEPTEMBER 1, 2015 PAGE 2 OF 13 Section 2/.2 is amended to say, "...it is the intent of the City Council in adopting this Plan that LRC shall have the authority to exercise powers herein authorized to be exercised by LRC under the Urban Renewal Law and which are necessary, convenient or appropriate to accomplish the objectives of this Plan. It is the intent of this Plan that LRC shall have the authority to exercise all such powers as may now be possessed or hereafter granted to LRC for the elimination of qualifying conditions within the Plan Area. Any exercise of such powers shall be in accordance with the Urban Renewal Law and the provisions of this Plan and applicable Cooperation Agreements." Council asked for information regarding Albertsons Counsel's statement that Albertsons has received no offers to remove the restrictive covenants. Regarding this issue, Centennial Valley Investments has told staff that they have not made offers to Albertsons to remove their restrictive covenant. However, they have made three different offers to Albertsons to purchase the property outright from Albertsons. The most recent offer was during a July 16, 2015 meeting attended by Albertsons /Safeway Senior Real Estate Manager Lynn Miller, Centennial Valley Investments representative Rick Dunn, and City staff Aaron DeJong and Malcolm Fleming. Rick Dunn has told staff that Albertsons has not responded to any of the three offers. Centennial Valley Investments and Albertsons may have further information on this topic. Council also asked about prospective tenants for the property. Staff is aware of entities that have expressed interest in the property but are precluded from operating there because of the restrictive covenants. If Council approves the Urban Renewal Plan it would facilitate the LRC issuing a request for proposals and responses to that RFP from specific parties, which would outline the terms, conditions and timeline for occupying the property and the specific tenants involved. Finally, Council asked about staff's offers to the potential buyer before they purchased the property regarding actions to remove restrictive covenants. To address this issue, staff has attached a copy of the January 6, 2014 letter from City Manager Fleming to Centennial Valley Investments, as well as an August 24, 2012 letter from City Manager Fleming to Walmart Realty, which was referenced in the January 6, 2014 letter. Both letters note the negative impact of use restrictions on the property as well as other significant issues contributing to the difficulty of attracting new tenants. The August 24, 2012 letter to Walmart Realty states, "...the City is exploring all options to allow for a new owner to purchase the property without the use restrictions ". The January 6, 2014 letter to Centennial Valley Investments lists several factors, including restrictive use covenants, contributing to the difficulty of attracting new tenants or new ownership for the property and states, "City staff and I are willing to recommend to the Louisville City Council actions to alleviate these factors if it would result in appropriate new tenants for the property. Of course, any decision to approve, decline, or request changes to any proposed economic development agreement is at the discretion of City Council." COUNCIL COMMUNICATION 50