MINUTES OF THE ADJOURNED REGULAR MEETING OF THE CITY COUNCIL of the City of Hermosa Beach, California, held on Monday, June 7, 1999, at the hour of 7:18 P.M.

PLEDGE OF ALLEGIANCE: Julie Oakes, Councilmember

ROLL CALL:

Present: Oakes, Reviczky, Mayor Benz

Absent: Bowler, Edgerton

PUBLIC PARTICIPATION:

No one came forward to address the Council at this time.

1. REVIEW OF CITY APPRAISAL OF OFFICE/RETAIL SPACE AT THE EASTERN SIDE OF THE DOWNTOWN PARKING STRUCTURE.

Community Development Director Sol Blumenfeld presented the staff report and responded to Council questions, noting that the expectation was that the building shell would be completed by January of 2000, but the building would not be occupied until June of 2000. He also corrected the staff report by saying that item seven of the staff recommendation should read west wall rather than east wall. Mr. Blumenfeld noted that two of the design presentations were requesting encroachments for the building, while all three asked for encroachments for dinning seating, and that all three projects envisioned first floor retail with upper floor(s) as office space.

City Manager Stephen Burrell responded to Council questions saying that some issues only come up with the final design of the building and can not be determined at this time. And, that office space lease is in the $1.50 to $2.00 range while retail space goes for $2.50 to $2.80 per square foot.

Coming forward to address the Council was:

Jeffrey Nagasaki - Lea Associates, explained the data that contributed to his appraisal; said that he had used five comparable sites and calculated that the figure of $130 per square foot of land would bring the annual fixed rental to $28,000; responded to Council questions.

2. GROUND LEASE DEVELOPMENT TEAM PRESENTATIONS:

1. GANGI DEVELOPMENT: Frank Gangi, President, explained that this was a family-run company, with a family member overseeing each aspect of the construction/management phase of the business. He said that their proposal was a public/private partnership that offered the City a $24,000 per year minimum base ground lease based on a percentage lease of 20% of gross sales. He also said that his company was looking for an eleven-percent return on its investment.
   Mark Gangi, Architect, showed a scale model of the proposal and several renderings. He said that their design was for a two-story project with three bays on either side of a central entrance/elevator. Mr. Gangi said that the design was meant to be similar to the Bijou building to the south, but not an imitation. He said that they had decided on two stories rather than three to allow high ceilings on the retail ground floor that would make the space more desirable.
   Mark Gangi said that emergency exits could be provided into the parking structure, if needed. He said that the roof of the project had been designed to replicate the ocean's swell with the copper clad vaults obtaining a blue-green patina as they aged, and, noted the southerly outdoor trellis area for shade and banner display.
   
2. PEHA ASSOCIATES/TRIWELL PROPERTIES: Jim Wellbaum, Triwell Properties, said that he thought the combination of a property management company with a local architect was the perfect combination for this project. Mr. Wellbaum stressed his firm's experience and cited the Club Sushi building retrofit and remodel as an example of his partnership with Mr. Peha. He said that they anticipated paying an annual fixed ground lease sum of $18,000 with five-year CPI adjustments.
   Larry Peha, architect, Peha and Associates, showed renderings of the proposed project and noted the exterior design elements that would correspond with the design of the Bijou building to the south. Mr. Peha said that this project would be three stories; have the main entrance on the south end of the building; and, asked for a two-foot plus air-space encroachment into the City right-of-way for the second and third floors.
   
3. ROGER BACON:

Roger Bacon, Ralphs Shopping Center, introduced his son who would be the property manager, his daughter who would be the interior designer; Henry Friel who was the project architect; and, various people who had expressed an interest in leasing a portion of the project.

Henry Friel, architect, showed a scale model of the proposed building and said that it would be three stories with precast exterior panels that replicated the grid pattern of the parking structure. Mr. Friel also said that there would be copper clad planters on the front, tinted glass windows, skylights on the top floor, entrances on both the north and south of the building, all steel construction with double staggered walls and sculpted dolphins on the front of the building.

Roger Bacon said that the top floor would house a radio broadcast booth that would be cantilevered over the City right-of-way and submitted information from KIIS-FM expressing interest in the proposal. Mr. Bacon said he would pay an annual fixed ground lease sum of $19,000.

Action: After Council discussion, the motion was to approve the staff recommendation to:

1. Select the development team of Peha & Associates & Triwell Properties for the property ground lease;
2. Direct staff to negotiate terms for ground lease with selected development team;
3. Require a ground lease term of 50 years;
4. Require a ground lease value commensurate with the fair market appraisal for the property;
5. Require that the public sidewalk adjacent the project site be improved with special paving and landscaping consistent with the Lower Pier Avenue streetscape;
6. Require reimbursement of $2,500 for a lateral sewer line serving the subject property, currently being installed in connection with parking structure construction; and,
7. Require that the exterior of the west wall of the project be contiguous with the exterior of the parking structure and finished and painted to match the parking structure interior.

Motion Oakes, second Mayor Benz. The motion carried, noting the dissenting vote of Reviczky and the absence of Bowler and Edgerton.

CITIZEN COMMENTS:

No one came forward to address the Council at this time.

ADJOURNMENT: The Adjourned Regular Meeting of the City Council of the City of Hermosa Beach adjourned on Monday, June 7, 1999, at the hour of 9:08 P.M. to the Regular Meeting of Tuesday, June 8, 1999, at the hour of 7:10 P.M.

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