M-11/26/1968 (2)
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REDEVELOPMENT AGENCY
OF THE
CITY OF SANTA MONICA, CALIFORNIA
November 26, 1968
4:30 P.M.
The Redevelopment Agency of the City of Santa Monica, California, met in
adjourned regular meeting in the City Council Chambers, on November 26, 1968,
at 4:30 P.M.
The Secretary reported that the Notice of Adjournment was posted on the
Council Chamber door on November 19, 1968, and that the affidavit of
posting was on file in the offices of the Redevelopment Agency.
PRESENT:
MEMBERS: J. lee Schimmer, Chairman
B. Thomas Barnard, entered at 4:52 P.M.
Clifford Connelly
Ted Fach
L. Wayne Harding
Mortimer T. Richey
Philip E. Whiting
ABSENT:
MEMBERS: None
ALSO PRESENT:
J. O. Weaver, Tenneco, Inc.
William Balch, Vice President, Kern County land Co.
Jack Fox, Manager, Special Projects, Kern County
land Company
James Hall, Manager, Santa Monica Shores
Mrs. Clo Hoover, Councilwoman-Agency Liaison Member
Eugene B. Jacobs, General Counsel
Greg la Brache, Evening Outlook Reporter
Ray Ripton, los Angeles Times Reporter
Grace Thomas, Executive Director-Secretary
Gary G. Jones, Assistant Executive Director
May Palfrey, Stenographer
APPROVA l OF MINUTES:
The minutes of October 15, 1968 were approved as
mailed.
APPROVAL OF BILLS:
The Secretary reviewed the bi lis as follows:
Harry L. Nourse Audit Company
$867.75 < ~,1I.J r'A.iy dg..tll::'p
John Gray . . . . . .
$210.00 <
~800.00 <
Western Exterminator Company.
TOTAL BILLS. .
~ I r877. 75
Mr. Harding moved, seconded by Mr. Richey, that the bills be paid as
submitted, in the amount of $1,877.75. The motion carried with the following
rol I ca II vote:
AYES:
NOES:
ABSENT:
Schimmer, Connelly, Fach, Harding, Richey, Whiting
None
Ba rna rd
MEMBERS:
MEMBERS:
MEMBERS:
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Minutes - 11/26/68
Page Two
PRO~ECT ACTIONS AND REPORTS:
Project I (a):
Request of Kern County Land ~ompany for Project Signs
The Secretary reported that the Agency had received a request from
Santa Monica Shores for permission to Install two 8' by J61 double-sided
advertising signs, one on Parcel 3 and the other on Parcel 4 of project I(a}.
She presented an exhibit to the Members showing a sketch of the proposed
signs and a map showing the proposed locations of said signs. She added that
in a letter agreement between the Agency and Kern-Webb, the Agency had author-
Ized the developer to USe sign locations for the purpose of advertising the
living units at Santa Monica Shores. Mr, Connelly moved, seconded by Mr. Fach,
that the Agency authorize Kern County Land Company to install two signs in
the Project area for the purpose Of advertising the rentals at Santa Monica
Shores, in accordance with the proposal submitted by Santa Monica Shores,
with the condition that these signs be prepared, maintained and installed
in accordance with City regulations. The motion carried with the following
roll call vote:
AVES:
NOES:
ABSENT:
Schimmer, Connelly, Fach, Harding, Richey, Whiting
None
Barnard
MEMBERS:
MEMBERS:
MEMBERS:
Project I (a):
Report, of Tenneco and, Kern County land Company
Mr. J. D. Weaver, Jr., of Tenneco, Inc., reported on the preliminary
results of their recent studies regarding further development of the Ocean
Park area.
Mr. Barnard entered at 4:52 P.M.
Mr. Weaver read the following report from Tenneco and Kern County land
Company:
"Mr. J. lee Schlrnmer, Cr.ai rman,
and Members of the Rede\~lopment Agency
of the City of Santa Monica
J685 Main Street, Room 302
Santa Monica, Califofnia 90401
The Ocean Park Redevelopment Project, together with the entire
surrounding area, has been studied and analyzed by two groups, each
working completely 11dependent of the other. The purpose of their
studies was to dete"mine the highest and best use of the remaining
unimproved land and the economics of various types of further
development of thi! unimproved land.
The Jnvestment Research Corporation made an indepth study of
the Santa Monica market and the real estate markets which would
have a direct bearing on the pr~perty under investigation. The
other organization made their analysis strictly from the viewpoint
of an jnvestmer~ developer. This organization has a background of
real estate development on the West Coast, principally los Angeles
and San Francisco, and has extensive holdings In other major cities.
The conclusions of each organization were almost identical.
This fact is \ery unusual since there was no consultation between
the groups during the analysis. It has been proven beyond a reason-
able doubt that the Santa Monica area is not ready to accept the
highrise apqrtment concept. The market demand is for garden-type
apartments. This situation will change as the available land for
development reaches a price where it is not economically feasible
to construct garden-type apartments. It is estimated that we are
five to seven years, at least, from this point in time.
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Minutes - 11/26/68
Page Three
Five projections were made on construction of garden-type
apartments on Parcels 2, 3 and 4 of I (a) using varying rental rates
and varying land costs. Only two approaches were economically
feasible--one pricing the land at $4.00/foot, and the other using
a leasehold concept at a ground rent factor of Sf%.
The fallacy, however, in these two approaches which made them
economically feasible waS to compute rental income at a rate above
what the market would accept. The analysis made establishes a
rental rate In the area under study of from 24C to 27c per square
foot, whereas we used 32~ in our projections. Additionally, the
land cannot be acquired at $4.00 per square foot, nor can it be
leased at a ground rent factor of S~.
Our analysis of these reports establishes that the highest
and best use of the unimproved fand now held by the Redevelopment
Agency, would be for highrise office buildings, professional buildings,
and a major hotel. To establish this type of program, it would be
necessary for the City of Santa Monica to redesignate the use of
the remaining 20 acres in Projects I(a) and I(b) and to acquire
additional property to the north and east of the present redevelop-
ment project. This acquisition must also include the Pacific Ocean
Park. The Pacific Ocean Park is a key piece of real estate with
respect to the over-all development.
The City of Santa Monica is almost 10~~ developed. Therefore,
to underimprove this prime piece of real estate would be injurious
to the future growth of this city. A major step was taken to
establish the redevelopment program, and to make the mistake of
not obtaining the maximum benefits from subject real estate would
not only be adverse to the City but to the organization undertaking
the development.
J. D. Weaver, Jr.
Tenneco, I nc.
Jack Fox
Kern County Land Company"
Discussion followed, in which the Members posed questions to Mr. Weaver
regarding Tenneco's plans. The following persons addressed the Members
regarding the Ocean Park Redevelopment Projects:
Mr. Jack Morehart
Mr. tJe I I Stone
Hr. Ju I Ian Amber
Mr. Palmer Madden
The Chairman stated that the Agency was willing to take Tenneco1s
proposal into consideration and to work together with the Redeveloper as
soon as possible. Upon Mr. Barnard's suggestion, the Members agreed to
hold a study session immediately following their next regular meeting on
December l7. 1968.
~ontract No. 82
The Secretary requested authorization to extend Contract No. 82 with
Robert B. Filley, for consultation services, to assist the Agency in their
analysis of the current and proposed projects. Mr. Barnard moved, seconded
by Mr. Harding, that Contract No. 82 with Robert B. Fil ley be amended, with
an additional compensation not to exceed $500.00. The motion carried with
a unanimous voice Yote.
There being no futher business to be brought before the Members, Mr. Richey
moved, seconded by Mr. Connelly, that the meeting be adjourned. The w.oti01
carried with a unanimous voice Yote. The meeting adjourned at 5:53 P.M.
~J~~-
Grace Thomas
Secretary
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