Others Present: Pasmant, Alvarez-Glasman, Fields, Samaniego, McIsaac, Chung, Lee, Freeland, Yauchzee, Bachman, Sindelar, McDonald, Anderson, Rush

Chairman Sanderson brought forward Item IIC, Affordable Housing Study.

IIC Community Development Director Chung introduced the subject matter and introduced Ray Silva of Rosenow Spevacek Group (RSG), a consulting firm retained to identify various affordable housing programs within other communities and to identify what West Covina is doing in comparison. Silva presented a PowerPoint presentation, which provided a summary of various affordable housing programs in Southern California.

Motion Motion by Miller and seconded by Wong to receive and file the report.

Commissioner Hernandez requested options and funding sources be brought back that would help aid the redevelopment staff with housing development due to their current understaffing. Hernandez further requested that funding options not include general fund but housing and Community Development Commission funding.

Action Motion carried 5-0 to receive and file.

Recess Chairman Sanderson recessed the CDC meeting to continue with the regular City Council meeting at 11:16 p.m. The CDC meeting reconvened at 11:50 p.m. with all members present.

CONSENT CALENDAR Prior to moving forward with consent calendar action, General Counsel Alvarez-Glasman stated a late correspondence was received from the attorneys of K-Mart opposing item IB.

The Commission concurred to address each consent item separately.

I-B Charles Company Exclusive Negotiating Agreement for Development of K-Mart/Credit Union Site

Max Chiang Max Chiang, attorney for owner of K-Mart property site, expressed owners willingness to cooperate with the CDC, but also expressed concern with the process and the little notice for preparation.

Vice Chairman Wong expressed his concern with not being able to review the correspondence prior to tonight’s meeting. General Counsel stated the correspondence was received at 6:15 this evening.

Following Commission dialogue regarding time to review the correspondence from the representative of K-Mart, Community Development Director explained that the CDC had gone through the owner/participation process and K-Mart as a tenant was advised verbally they need to discuss their tenant/landlord issue with their landlord.

Motion Motion by Wong and seconded by Miller to hold this item over in order to review and for legal counsel to respond to correspondence.

Substitute Motion Commissioner Hernandez offered substitute motion to move forward with approving the Exclusive Negotiating Agreement with Charles Company for the potential development of a 120,783 square foot commercial retail project on a 12.3-acre site and also provide legal response as requested by Vice Chairman Wong. Motion seconded by Herfert. Motion carried 3-2 with Wong and Miller voting no.

I-A Charles Company — Extension to the Exclusive Negotiating Agreement (700 Pad)

Mark Gabay Mark Gabay, representing Charles Company, requested the Commission grant the extension to the Exclusive Negotiating Agreement and looked forward to furthering their interest in the City.

Motion by Wong and seconded by Hernandez to extend the 700-Pad Exclusive Negotiating Agreement with Charles Company for an additional 180-days. Motion carried 5-0.

II-A Amended and Restated Disposition Development and Owner Participation Agreement and Resolution of Disputed Claims (Hassen Imports Partnership and West Covina Motors, Inc.,) ("First Amendment")

Finance Director Bachman presented the staff report along with a PowerPoint presentation, which identified the major points of the proposed agreement.

General Counsel Alvarez-Glasman stated that two additional sentences were added to the agreement earlier in the day, which clarify that in the event the benchmark thresholds [$1.1 million yearly with escalators] are not met, the $700,000 is still an obligation due to the Community Development Commission.

Vice Chairman Wong stated for clarity purposes, that the $700,000 settlement amount would be paid to the City before any assistance is provided from the 60/40 tax revenue share. City Manager Pasmant confirmed.

Chairman Sanderson requested the City Manager explain how the tax revenue sharing is structured. City Manager Pasmant stated Mr. Alhassen is required to meet a sales tax revenue threshold of $1.1 million, escalating with an inflation factor each year. The $700,000 owed will be paid from revenues above the threshold.

Chairman Sanderson inquired as to whether the previous thresholds of have been meet. Finance Director Bachman stated there is not currently a $1.1 million threshold to be met but various sales tax guarantees for the dealerships.

John Scheuplein, West Covina resident, suggested the Commission accept the recommendations of staff and move forward.

Commissioner Hernandez left the dais at 12:28 a.m.

Commissioner Miller requested to make a PowerPoint presentation. Following objection to a PowerPoint presentation by Chairman Sanderson, Vice Chairman Wong made a motion to allow the presentation. Motion seconded by Miller and passed 3-1. (Sanderson voting no and Hernandez absent from dais).

Commissioner Herfert informed the Chairman, that he also has a PowerPoint presentation.

Commissioner Miller presented his PowerPoint presentation, which highlighted his three objective of his motion on March 1, 2005. The presentation included highlights of the new proposal including the structure of the tax rebate Mr. Alhassen would receive. Mr. Miller described this as not a loan to Mr. Alhassen but a tax rebate. Mr. Miller’s presentation also included how the new proposed agreement resolves the past obligations. Commissioner Miller concluded his presentation by stating his support of the staff recommendation to approve the First Amendment.

Commissioner Hernandez returned to the dais at 12:35 a.m.

Commissioner Herfert presented a brief PowerPoint presentation which highlighted uncompleted dealership construction and debt owed to the City by Mr. Alhassen. Commissioner Herfert stated that the new proposed agreement will not generate new revenue. Mr. Herfert stated the previous assistance and forgiveness constitutes a gift of public funds and he will not support the proposed amendment.

Vice Chairman Wong stated that he was in support of incentives provided to Mr. Alhassen to increase sales tax and stated the tax sharing structure is similar to what has been provided to other dealerships.

Commissioner Hernandez felt a performance-based proposal is good for the City because without performance Mr. Alhassen will not receive any assistance. Mr. Hernandez requested a legal opinion from General Counsel regarding Penske Jaguar leaving the City per provisions of the operating covenant.

Ziad Alhassen, responded to comments made by a previous speaker commented on certain aspects of his development.

Motion by Miller and seconded by Hernandez to approve staff recommendation to approve the First Amendment and to include the additional changes as identified by General Counsel following the staff report presentation. Motion carried 3-2 (Herfert and Sanderson voting no).

II-B West Covina Heights S.C., LLC — Request to Change Tenant from WinCo Foods to Target Stores

City Manager Pasmant stated that Commission action is required to approve the developers change of a tenant from WinCo to Target at the development site.

John Scheuplein, West Covina resident, supported the recommendation to approve the change of tenant, but with compensation.

Motion by Herfert and seconded by Miller to approve the change of tenant as recommended by staff from WinCo Foods to Target. Motion carried 5-0.

ADJOURNMENT Motion by Wong and seconded by Hernandez to adjourn at 12:50 a.m. Motion carried 5-0.