3B Public Hearing 2012 0521 - Laserfiche WebLink

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File Number: 12 -258 underperformance. In 2007, Norcal filed a series of lawsuits against the City contending that various planning and zoning actions related to the City's approval of the Transit Oriented Development Strategy violated its constitutional rights or were otherwise contrary to law. In 2008, the City Council placed a priority on resolving the litigation due to the prominence of the Site and the blight created by the store vacancy. On April 20, 2009, the City Council voted unanimously to approve settlement terms, which included the Redevelopment Agency's purchase of the Site for 6.175 million dollars and Norcal's demolition of the building prior to close of escrow. The settlement price was deemed reasonable based upon executed Letters of Intent for reuse of the building. The Redevelopment Agency recognized at the time that the requirement that Norcal demolish the existing approximately 26,000 square foot building was in fact demolishing part of the asset that it was purchasing. When the Agency took ownership of the Site, its value had been significantly decreased. In exchange for this loss, the Agency gained substantial control over the nature of future development. Instead of a single- tenant building behind a field of parking, the Agency could require a development consistent with the vision of the TOD Strategy. The write down of property value in order to create a development that would be a catalyst for change is one vital role that Redevelopment Agencies used to play. Additionally, the acquisition of 1550 East 14th Street enabled the Redevelopment Agency to mitigate parking problems during the construction of the downtown parking garage. In September 2009, the Redevelopment Agency entered into an Exclusive Negotiating Rights Agreement (ENRA) with Innisfree Ventures II for the Site and the triangle- shaped block bounded by East 14th Street, Hays Street, and Davis Street, known as "Town Hall Square." These locations were identified as two of the three key opportunity sites for development in the City's Transit Oriented Development Strategy. The opportunity is based on their ability to serve as development catalysts. Both sites are currently being used for temporary replacement parking until the Downtown garage reopens, which is scheduled to occur in September 2012. Staff worked closely with Innisfree and the community through the TOD Strategy, a downtown retail web survey and a retail attraction letter writing campaign, to create the Village Marketplace project. It will include the following features: • Quality retailers and a specialty grocery store • Outdoor dining opportunities and a generous plaza for people to gather • Retail activity along East 14th Street with parking behind the buildings • Superior architecture, building materials, landscaping and a public art component • Off -site improvements including pedestrian friendly streetscape and angled public parking. The proposed tenants with signed Letters of Intent are: • Fresh & Easy Neighborhood Market - twenty year ground lease with four, 5 -year options. Innisfree will lease the land to Fresh & Easy; Fresh & Easy will build its own building on the southern portion of the site. • Peet's Coffee & Tea - ten year lease with two 5 -year options. • Chipotle - ten year lease with four 5 -year options. City of San Leandro Page 2 Printed on 511512012