Edmund F. Sotelo City Manager City Manager's Office*

More than 40 years ago the California State Legislature delegated to cities and counties powers to be used by local redevelopment agencies to eliminate blight from designated urban areas in their communities. Response: Concur.

RDAs have broad property management powers, including the authority to acquire property, sometimes by eminent domain, and to sell, lease, clear or develop real property in the project area(s). Response: Concur.

The Brown Building is either within, or adjacent to, the CCRP project and the HERO project areas of development and revitalization. The building is located in what is referred to as the Central District Business Zone, which is now undergoing extensive expansion and development causing property values in the area to rise rapidly. Response: Concur in part. The Brown Building is located within the CCRP. The Brown Building is not in the HERO project area. The Brown Building is in the Central Business District ("CBD") of the City. The area is undergoing redevelopment, which is intended to cause property values to rise and property values have risen.

According to plans reviewed by the Grand Jury and statements made by the Community Development Director before city council meetings and to the press, some of the allowable uses for the building include restaurants, financial institutions, galleries, bookstores and a funeral home. Response: Concur. Honorable Bruce A. Clark August 20, 2004

The means by which the CDC is considering offers from interested investors who will purchase and develop the property is through the use of Exclusive Negotiation Agreements (ENAs). These ENA responses from prospective investors must include specific development plans that include blueprints, drawings, specifications and the exact ultimate usage for the Brown Building. All materials produced to be presented to the commission for consideration must be prepared by the investor(s) at their own expense. Response: Concur in part. The CDC often uses exclusive negotiation agreements to define the parameters of agreements for the disposition and development of property owned by the CDC. The agreements contain specific guidelines for negotiation and contain development goals. The agreements usually contain specific guidelines for permissible uses of the property involved. The exclusive negotiation agreements do not typically include blueprints or detailed specifications. Detailed site plans and elevations may be included in a disposition and development agreement. As a general rule, materials produced by the developer in connection with the negotiation of a disposition and development agreement pursuant to an exclusive negotiation agreement would be prepared by a developer at its own expense, however, there could be occasions when materials to be prepared by developer could be of independent use or value to the CDC. An exclusive negotiation agreement could contain provisions for reimbursement if the CDC could appropriate the materials to its own use. In the case of the Brown Building, the CDC entered into two exclusive negotiation agreements with Guadalupe Martinez, and negotiated with Guadalupe Martinez pursuant to those agreements. The agreements are dated November 18, 2003 and March 23, 2004 and are on file in the office of the Oxnard City Clerk. The agreements contain guidelines for negotiation and for use of the property. The agreements do not contain blueprints, drawings, or detailed specifications.

On November 20, 2002, the CDC received an offer from Al Barkley of Barkley Insurance Agents & Brokers. On July 14, 2003, Mr. Barkley withdrew his offer. Response: Concur.

On July 8, 2003, Strand Cinemas, developer of the 14-screen Plaza cinema and Shopping Complex currently being built approximately four blocks from the Brown Building, was given an ENA for the building that was scheduled to last for 90 days, and possibly extended to 270 days. On August 22, 2003, Strand Cinemas withdrew its offer for the purchase and development of the Brown Building. Response: Concur in part. Strand Cinemas was a party to an exclusive negotiation agreement which included the Brown Building. Strand Cinemas did not make an offer to purchase the Brown Building. On or about Honorable Bruce A. Clark August 20, 2004 August 22, 2003, Strand Cinemas indicated to the CDC in writing that it was not interested in negotiating for the purchase of the Brown Building.

In July of 2003, the owners of Ruby's Café in Santa Barbara, California, were denied a special use permit by the City's planning commission to open a restaurant at 9th and A Streets near downtown Oxnard that would serve alcoholic beverages. Reasons for the denial were the lack of parking and the Oxnard Police Department's opposition to the permit due to the existence of several establishments in the area that have liquor licenses. The commission's view was that another business with a liquor license in the area might increase crime. Response: Concur in part. On June 5, 2003, the Planning Commission denied a special use permit for the proposed Ruby's Café location at 852 S. "A" Street. On July 22, 2003, after granting an appeal of the Planning Commission's decision, the City Council granted a special use permit for on site consumption, for a night club and for use of 33 on-street public parking spaces in conjunction with a restaurant to be located at 852 S. "A" Street.

On August 23, 2003, the CDC instructed its director to enter into an ENA with the owners of Ruby's Café for the Brown Building. On March 23, 2004, the vice chairman of the CDC executed the ENA with the owners at Ruby's Café for the purchase and development of the Brown Building. Response: Concur in Part. In a meeting held on August 26, 2003, CDC staff requested direction from the CDC Commissioners as to disposition of the Brown Building. The CDC Commissioners instructed the director to continue discussions with the owners of Ruby's Café. Exclusive negotiation agreements dated November 18, 2003 and March 23, 2004, were executed as a result of those discussions.

As of the end of April 2004, no sale of the Brown Building has been finalized, and no remodeling or renovation work on the structure has begun. Response: Concur. As of the date of this response, negotiations have been finalized. On August 3, 2004, the CDC approved an agreement for disposition, development and operation of the Brown Building by Guadalupe Martinez. Conclusions C-01 Community Development Commission and Community Development Department staff control agency agendas and recommend actions. Commission members, who are also elected city council members, tend to rely on staff decisions more than on their own judgment. Though Honorable Bruce A. Clark August 20, 2004 simple in principle, redevelopment is sometimes presented as too complex for some ordinary officials and citizens to understand. (F-01, F-02). Response: Concur in part, disagree in part. CDC and Community Development Department staff seek through the Executive Director and City Manager to place items on the CDC and City Council agendas. The Executive Director and City Manager have the authority to place items on agendas. CDC Commissioners and Councilmembers also may request that items be placed on agendas. The CDC and City Council have developed procedures to consider such requests. Councilmembers and CDC Commissioners consider agenda reports prepared by staff. CDC Commissioners and Councilmembers rely upon the information in the staff reports, as well as information which may be provided by the public, and other information which comes to their attention in making decisions on matters brought before the CDC and City Council. Staff's responsibility is to present information in staff reports and make recommendations. The legislative bodies' role is to make decisions based upon available information. Staff does not control agendas. Councilmembers and CDC Commissioners may consider staff recommendations, but ultimately exercise their own discretion and judgment. Some portions and parts of redevelopment law and policy are complex, however, CDC staff seeks in its agenda reports pertaining to redevelopment issues to present information in a manner which the public will understand. C-02. Because of the proximity of the Brown Building to already developed projects like the Transportation Center and future projects such as the Plaza Cinema (Strand), the value of the building will most probably go up. However, the lack of sale of the building and its long-term vacancy has resulted in the loss of revenue to the City. (F-03, F-04, F-10). Response: Concur in part. The CDC has suffered a loss of revenue due to the fact that the Brown Building has not been on the real property tax rolls. Since the property is in a redevelopment area, the revenue would have been received by the CDC not the City. C-03. The use of ENAs to come to terms with potential investors interested in surplus property and property available for resale is well within the laws and rules governing the Community Redevelopment Act that is being utilized by the city under the CDC. The ENA provides the necessary controls on who the owner or tenant will be and the ultimate use of the property, assuring that the property's usage will conform with the rest of the development in the area. (F- 05, F-07, F-09). Response: Concur. Honorable Bruce A. Clark August 20, 2004 C-04. Even though the owners of Ruby's Café were denied a use permit for a restaurant that would serve alcoholic beverages in one area of the City, and now are being considered as potential owners and operators of a restaurant in the Brown Building in another part of the City, there appears to be no conflict or special interest in the decision. What becomes of the Brown Building is the sole, exclusive choice of the CDC and the Oxnard City Council, which have common members. (F-08, F-09). Response: Concur. As noted above, the City Council on July 22, 2003 approved the special use permit in question. Recommendations The CDC and the Oxnard City Council should provide more information on the general