1990 APR 17 REG MIN - Laserfiche WebLink

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lated improvements. At this Hearing all persons who wish to speak for or against the proposed acquisition and sale will have an opportunity to speak. Chairperson Cisneros called upon Staff for summary of K Mart Disposition and Development Agreement and proposed acquisition and disposition. Economic Development Director Jennifer Thornberry reported on the Dis- position and Development Agreement between the Redevelopment Agency and K Mart Corporation, and a summary report on the proposed acquisition and sale of real property by the Agency to K Mart Corporation. Mrs. Thornberry stated the major points of the Agreement are: 1. K Mart Corporation agrees to construct a new 105,000 square foot Store together with a garden shop and related parking and land- scaping improvements at the northwest corner of Mt. Vernon Avenue and Washington Street. This Store will be the largest built by K Mart and is expected to provide $250,000 in sales tax revenue to the City each year. 2. The Agency agrees to acquire a ten -acre site from Colton, Ltd. for a purchase price in the amount of $4.4 million and agrees to sell the site to K Mart for a total sum of $3.6 million. The disposi- tion of the site to K Mart will be concurrent with the Agency's acquisition of the site and requires an $800,000 cash contribution by the Agency to K Mart for the purchase of the property. 3. K Mart Corporation agrees to continuously operate and maintain, for a period of ten (10) years, a K Mart store or one of its retail sub- sidiaries. 4. K Mart Corporation agrees that liquidated damages be paid to the Agency as a result of its failure to perform. a. A Good Faith Deposit of $50,000 provided by K Mart to the Agency will be retained by the Agency if K Mart fails to close escrow. b. Following the close of escrow and prior to completion of the required improvements, K Mart agrees to pay to the Agency damages in the amount of $800,000 for failure to perform. Additionally, the Agency retains the Good Faith Deposit. c. In the event K Mart violates the ten year operating covenant, K Mart agrees to pay to the Agency damages equal to $800,000 principal, plus interest at a rate of eight percent (8%) per year from the date of the close of escrow. K Mart and the Agency agree to reduce the principal amount by $80,000 per year for a period of ten (10) years. 5 �art ArR 17 199