1999 AGN SEP 07 I13 - Laserfiche WebLink

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City of Colton Giant RV Agenda Report Meeting of September 7, 1999 Page 2 of 8 Market Conditions/Highest and Best Use: The Cooley Ranch area experienced tremendous commercial development in the late 1980's and early 1990's. More recently, however, the area has suffered a decline in business activity due to various economic factors and changes in market forces. Although recently developed, the area currently suffers from a depressed appearance due to several major business closures that occurred due to possible over building for the market area, economic recession and resulting lower level of commercial activity. The closures of K-Mart and Vons in the area have also impacted many of the smaller businesses that rely upon these anchor tenants to attract customers to the area. Re-use of these major commercial properties appear to be somewhat hindered due to existing long-term leases which are significantly above the current market rents. Recently, however, the area has experienced some new commercial growth including the construction of the Spikes Restaurant and planned re-openings of the old Red Robin and Applebee's restaurants in the area. Based upon the current market conditions, zoning and location of the property, it is staff's opinion that the highest and best use for the subject property is some type of regional or destination retail use such as the use proposed by the Developer. Although the site is highly visible from the I-215 freeway, it is somewhat isolated off the main arterial. Other potential commercial uses such as a neighborhood commercial shopping center and/or o�ce use do not appear to be feasible due to the existing vacancies and the somewhat isolated location. In addition, the Phase II site has several easements that traverse the property which severely limits the building area and development potential. Therefore, the proposed use for vehicle display and storage areas would probably be the highest and best use of the property given its developmental limitations. II. ANALYSIS A. Purpose of the Agreement The purpose of the Agreement for Purchase of Operating Covenant and Operating Covenant (the "AgreemenY') is to facilitate the retention and expansion of an existing business and encourage the development of the new RV dealership in Colton that will increase sales tax revenues for the City of Colton and provide a significant number of job opportunities in the community. The City's goals in negotiating the terms of the Agreement were as foilows: 1. Contribute the minimum amount of financial assistance required to provide a fair and reasonable return to the developer given the level of risk assumed. 2. Minimize the upfront capital contributions necessary by the City and provide financial assistance only to the extent that the City has actually reaiized benefits. 3. Minimize or eliminate City's risk or potential loss by establishing a guaranteed minimum level of revenues to the City before Developer receives any financial assistance. 4. Revitalize Cooley Ranch area by encouraging the development of land uses that will contribute the highest number of jobs and tax revenues to the City. Based upon these goals, the Agreement was negotiated to minimize the initial cost or investment and achieve a minimum base level of benefit to the City while at the same time including a