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HomeMy WebLinkAboutAgenda Report - November 18, 2020 C-20AGENDA ITEM (!on Z o CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Authorize City Manager to sign Letter of Intent to Assist in Hotel Development Effort for Post Office Plaza MEETING DATE: November 18, 2020 PREPARED BY: Community Development Director RECOMMENDED ACTION: Authorize City Manager to sign Letter of Intent to Assist in Hotel Development Effort for Post Office Plaza. BACKGROUND INFORMATION: Pacific Development Group (Pacific), a long time Lodi business headed by Dave Michael who formerly operated PAM (Professional Apartment Management) in Lodi approached City staff with a proposal to build a hotel in Downtown Lodi at the location of the current Post Office. The proposal calls for the relocation of the post office to a site as yet unknown, the retention of the historic Post Office Building as a hotel lobby and the construction of a new hotel and parking garage on site. The Post Office is open to a discussion of the project but has indicated it would only proceed if it was an economic development project supported by the City. The project is obviously in its earliest of phases and the Council cannot commit to supporting the project unconditionally and perform its required review of the project as it moves through the approval process. In recognition of that limitation Staff worked with Pacific to create a Letter of Intent, expressing the City's non-binding support for the economic development concepts supported by the project for Council consideration. The Letter of Intent does not commit the City to any course of action other than to support the preliminary efforts o the developer to negotiate an relocation of the Post Office with the Federal Government. A current conceptual rendering of the hotel project is attached to this staff report. If Council supports the project in concept, Staff requests that Council Authorize the City Manager to sign the attached Letter of Intent. FISCAL IMPACT: None at this stage. FUNDING AVAILABLE- Not Applicable JDM//kjc Attachments: 6 John . Della Monica Jr. Comr unity Development Director APPROVED:_91V ep en Sc r, City Manager LETTER OF INTENT TO REDEVELOP THE LODI POST OFFICE PROPERTY November 5, 2020 United States Postal Service Attn: Ken Boyd Facilities: Customer Relations Manager 11255 Rancho Carmel Dr. San Diego, CA 92197-0100 Dear Mr. Boyd: The purpose of this Letter of Intent ("LOP') is to explore a new use for a portion of downtown Lodi currently occupied by the United States Postal Service ("USPS") post office ("Property" or "Post Office") located at 120 S. School Street, Lodi, CA, 95240. Although the project requires further review, we believe the proposed use will provide a mutually beneficial outcome for USPS, Post Office employees, patrons of the Lodi Post Office, and the City of Lodi. The proposal provides for the relocation of the Lodi Post Office to a new facility, enabling the Post Office to better serve the Lodi community while simultaneously making the Property available for a new hotel that will enhance the local Lodi economy. The following are compelling reasons to relocate the Post Office that benefit USPS, its employees and patrons: ■ The proposed hotel project will add parking downtown. The increased parking is expected to ease traffic congestion, reduce complaints, and allow for more patrons to access downtown businesses. ■ The improved and upgraded facility will be correctly sized for sorting and processing mail. ■ The new location will be situated in the area of Lodi that will see the most growth over the next twenty years providing better access for users to the Post Office, as well as better provisioning of mail service. ■ The new site will provide substantially improved parking for USPS employees and customers. ■ The flow of traffic around the Post Office will be improved for both customers and carriers. ■ Improved technology will be included for more efficient mail processing. ■ The new facility will have lower maintenance costs compared to the existing, outdated facility. ■ The new site and building will be constructed with energy efficient infrastructure that is cost effective and better for the environment. ■ The new site is proposed to be located on a main thoroughfare adjacent to commercial centers and surrounded by new housing. PACIFIC DEVELOPMENT GROUP J Mr. Ken Boyd Page 2 of 5 November 5, 2020 Compelling reasons to relocate that benefit the City of Lodi: ■ The increased available parking in the downtown area will facilitate a new commercial use, ease local traffic, reduce complaints, allow for more patrons, and increase local business. ■ The new commercial use will provide downtown businesses with physical improvements consistent downtown design guidelines. ■ Meeting and convention spaces for business, City, and private events will be introduced downtown that do not currently exist. ■ The City's tax revenues from hotel, sales tax and retail space leasing will increase. ■ The Property location sits within walking distance of dining, shopping, a movie theatre, and bowling. The Project sequence would tentatively be: 1. Parties execute Letter of Intent. 2. Developer's Inspection Period. 3. Developer presents Proposed New Commercial Use Plan to Postal Office and City. 4. City conceptually approves New Commercial Use Plan. 5. City and Developer work with Post Office to locate and secure new site for Lodi Post Office based upon Developer provided USPS program requirements. 6. Developer initiates entitlement and permitting for new site and construction of Post Office. 7. Post Office relocates to temporary facility for approximately 24 months and deeds current property to agreed entity. City will work with Developer (private work) towards permit issuance for related tenant improvements, based upon selected site and Developer provided USPS program requirements. 8. Developer demolishes structure on Post Office's old site and initiates new development project while maintaining the historic lobby and incorporating it into the new project. 9. Developer initiates construction of Post Office permanent site. 10. Post Office moves into new facility. The responsibilities of the Developer will include the following: ■ Prepare site plan, market study and feasibility study for the proposed hotel project. ■ Prepare a project development timeline. ■ Coordinate pre -project activities for the new use including design, permitting, consultant oversite, financing and construction analysis. ■ Work with the lender to secure project financing. ■ Consult with City to develop structures for Developer to finance and title, e.g., tax-exempt bond issuance and/or a non-profit 501(c)3 entity. ■ Work with the Post Office to satisfy the LOI's terms, locate the new site, as well as develop its design and construction. ■ Work with the City to secure all entitlements and approvals as well as site and building design specifics, except if jurisdictionally exempt from related approval processes. PACIFIC DEVELOPMENT GROUP Mr. Ken Boyd Page 3 of 5 November 5, 2020 ■ Consult with City to create additional downtown public parking on the Property, beyond those required for planned hotel guests, conference use and employee count. The City's potential assistance may include the following: Consider in its sole discretion approval of the various applications for environmental review, zoning, building and other entitlement improvements. Advise Developer in identifying and securing approval for the relocation of the Post Office. The Parties to this LOI acknowledge that state law requires the City to review projects under their independent judgement. Nothing in this LOI shall be interpreted as providing Developer with a vested or entitled right to develop the proposed hotel project described in this LOI. Subject to the execution of a definitive and mutually acceptable agreement as outlined in this LOI, the Parties offer to perform with diligence the development of the new commercial use of the Subject Property in accordance with the following terms and conditions: 1. SUBJECT PROPERTY: The "Subject Property" shall include the land and improvements located at 120 S. School Street in the City of Lodi, San Joaquin County, State of California, commonly known as a section of Block 17 in downtown Lodi, APN 043-045-210, and further described in Exhibit "A" attached hereto, together with all rights of ingress and egress, easements and leases affecting the Subject Property, if any, and generally all rights and benefits that pertain or relate to the Property's land and improvements located thereon. 2. THE PARTIES: A. City of Lodi, Attn: Steve Schwabauer, City Manager, 221 W. Pine Street, Lodi, CA 95240 (209) 333-6700. B. Developer: Pacific Development Group, Attn. David Michael, 1820 W. Kettleman Lane, Suite D, Lodi, CA 95242, (209) 473-9700. C. U.S.P.S.: Attn: Ken Boyd, Facilities: Customer Relations Manager, 11255 Rancho Carmel Dr., San Diego, CA 92197-0100. 3. INSPECTION PERIOD: This LOI provides for an "Inspection Period" of ninety (90) days from the date of execution and further provides for two (2) ninety (90) day written extensions at the mutual option of the Parties, if needed. During the Inspection Period, Developer shall inspect the Subject Property to determine if the Subject Property is acceptable to Developer, in its sole and absolute discretion. Developer may, at Developer's sole risk and expense, access the Subject Property to perform preliminary investigation following the execution of this LOI, and give the Parties at least three (3) business days' notice of the date it intends to enter the Subject Property to make any inspections. The Developer shall provide periodic updates to the Parties. The updates shall include activities associated with investigating and putting the Subject Property to new use including issues and/or concerns raised by potential uses and by the Parties. 4. PROPOSED DEVELOPMENT PLAN: Upon completion of the Inspection Period, or Developer's actual inspection if earlier, the Developer shall, within ninety (90) days, present a "Proposed Development Plan" by Developer to the City for City's approval in the City's sole discretion. If the City approves the "Proposed Development Plan", it shall hereinafter be the "Development Plan". If the City rejects the approval, Developer and City may attempt to negotiate an acceptable plan. If the differences are not resolved and no mutually agreed extension is granted, this LOI shall terminate without liability to any Party to the other. State law requires the City to review projects under its PACIFIC DEVELOPMENT GROUP Mr. Ken Boyd Page 4 of 5 November 5, 2020 independent judgement. Nothing in this LOI shall be interpreted as an approval of the proposed development or as providing Developer with a vested or entitled right to develop the proposed hotel project as described in this LOI. 5. DUE DILIGENCE PERIOD: If the City approves the new Development Plan pursuant to this LOI, the Parties shall proceed to the Due Diligence Period. During the Due Diligence Period at Developer's request and at Developer's expense, City and USPS shall cooperate in achieving any necessary governmental approvals for Developer's intended use of the Subject Property. Zoning consideration shall not occur until the project has met full design requirements and preliminary engineering requirements. City, in its sole discretion, reserves the right to postpone zoning consideration and any redevelopment agreement based upon the use, design, access, terms of the Development Plan, or engineering issues. Developer's submissions shall comply with the City's applicable Zoning Ordinance. The Due Diligence Period shall be one hundred twenty (120) days from approval of the Development Plan. 6. TRANSFER AGREEMENT: At the time the proposed hotel project is mutually agreeable to the Parties, a Transfer Agreement may be entered into between the Developer and USPS establishing the transfer of the Subject Property by USPS to an acceptable entity in consideration of the City approving USPS' new location and facilities acceptable to the USPS. City and Developer shall use reasonable efforts to assist USPS in locating and securing approval of a new site in Lodi for USPS to move its existing operations from its current location. 7. DEVELOPMENT AGREEMENT: If the proposed hotel project is mutually agreeable to the Parties, the City and Developer may enter into a Development Agreement for the Subject Property, subject to the City's rights to reject the Project as set forth above. The Development Agreement shall include performance benchmarks for final zoning and subdivision actions. The Development Agreement by and between City and Developer shall contain the terms outlined in this LOI and such other terms and conditions as are customary and as the Parties may mutually agree on. 8. OTHER REASONABLE PROVISIONS: The Transfer Agreement and/or Development Agreement may contain other provisions such as, but not limited to, attorney's fees, notices, mutual indemnifications, and the like. Any and all documentation provided by City or USPS to Developer shall be returned upon cancellation of this Project. 9. AUTHORIZED SIGNATORIES: It is hereby warranted, that the person signing this LOI on behalf of each Party as the case may be is authorized to sign on behalf of such Party and to enter into this LOI and upon execution hereof this LOI shall be binding on the Parties hereto. 10. ACKNOWLEDGEMENTS: All Parties agree to proceed in accordance with terms and conditions outlined in this Letter of Intent. The Parties understand the purpose of this Letter of Intent is to allow further investigation by the Parties into the feasibility of entering into formal agreements in the future. If the Transfer Agreement and/or Development Agreement is not mutually executed within the stated timeframe for any reason whatsoever or no reason at all, this Letter of Intent shall expire and no Party shall have any further rights or duties hereunder. City of Lodi, a municipal corporation Dated: By: Approved by to form: Stephen Schwabauer, City Manager Janice D. Magdich, City Attorney [Signatures continue on the next page.] PACIFIC DEVELOPMENT GROUP Mr. Ken Boyd Page 5 of 5 November 5, 2020 Pacific Development Group Dated: By: United States Postal Service Dated: By: PACIFIC DEVELOPMENT GROUP ■ ■ ( �iLr�(// Til/ DEVELOPMENT GROUP 11.6.2019 120 S SCHOOL ST . LODI CALIFORNIA 150' P.L, 1 it - 1 REIFAIL i RETAIL - 15T FLR. P 10 I i 1 ONE-STORY 41 OAK ST PROJECT DATA PROJECT ADDRESS 120 SOUTH SCHOOL STREET LODI, CALIFORNIA 95241 9 ASSESSOR'S PARCEL NO. APN 043-045-21 t SITE AREA 94, 525 sq ft = 2.17 Acres 5% landscape t 5% landscape =4,727 sf a ZONING CLASSIFICATION DOWNTOWN MIXED-USE I • r . .r r ZONING HEIGHT LIMIT 6 -STORIES, MAX. 75 FEET EXISTING BUILDING HISTORIC POST OFFICE approx. square feet CL t ;, : 4 r ONE STORY a/ BASEMENT 4,000 SF F&B confirmation require 4,800 SF New outdoor event space rfl N' �' NEW BUILDING AREA - SF KEYS Includes12.000 st Retail + TOTAL AREA FIRST LEVEL 24,300 Meeting. Lounge+Fdness SECOND LEVEL 20,800 46 0'+*. THIRD LEVEL FOURTH LEVEL 20,800 46 20.800 46 3elevators wood structure o/ concrete r,. �., ' I70_ r FIFTH LEVEL 20,800 46 podium .L. � � � _ � SUB -TOTAL SIXTH LEVEL - VIP 107,500 184 11,600 16 Suites y. TOTAL 119,100 200 SURFACE PARKING 72 SPACES Include 6 ADA spaces PATI O I . ONE LEVEL ABOVE GRADE 78 SPACES Elevated deck 140 If x 230 it .---- -- TWO LEVEL ABOVE GRADE 34 SPACES Elevated deck 70 it x 230 it ✓ TOTAL PARKING 184 SPACES 1 elevator Z ,id ( W Q LAMM- POOL _ Q IJ - - — -- ICL1 Al — IN I 1 - 1 PARKING SITE PROGRAMMING STUDY- ONEJA) '0 I 04 1 1 � 1 ' x /d 920 rembrandt drive . laguna beacl- ralifnrnia 92651 • 949 613 4745 0 aca@summit7d.com