HomeMy WebLinkAboutMinutes - 11-25-09 Regular MeetingMINUTES OF THE
CITY COUNCIL OF THE CITY OF DOWNEY
ADJOURNED REGULAR MEETING
NOVEMBER 25, 2009
The City Council of the City of Downey held an Adjourned Regular Meeting at 2:01 p.m.,
November 25, 2009, in the Council Chamber of the Downey City Hall, 11111 Brookshire Avenue,
Downey, California, Mayor Mario A. Guerra presiding.
PRESENT:Council Members:
Mario A. Guerra
Anne M. Bayer
Luis H. Marquez
Roger C. Brossmer
David R. Gafin
Mayor
Mayor Pro Tem (absent/excused)
ALSO PRESENT:Gerald M. Caton, City Manager
Lee Powell, Assistant City Manager
Edward W. Lee, City Attorney
Kathleen L. Midstokke, City Clerk
Mark Sauter, Deputy City Manager/Emergency Services
Scott K. Pomrehn, Assistant Deputy City Manager
John Perfitt, Economic Development Director
Joyce Doyle, Chief Deputy City Clerk
Other City Staff
The Invocation was delivered by Mayor Guerra. The Flag Salute was led by City Clerk
Midstokke.
1.APPROVED A MEMORANDUM OF UNDERSTANDING FOR THE DEVELOPMENT OF
REAL PROPERTY LOCATED AT 12224 LAKEWOOD BOULEVARD BY AND BETWEEN
THE CITY OF DOWNEY AND INDUSTRIAL REALTY GROUP, LLC, TO ASSIST IN THE
PROPOSED USE OF REAL PROPERTY BY TESLA MOTORS: Administration.
City Manager Caton presented the staff report noting that the City has been working for the
past six months with the property owner of Downey Studios, IRG, to bring Tesla Motors to the site.
He said Tesla Motors hopes to construct an electric car manufacturing assembly plant that would
create 1,200 new jobs. City Manager Caton advised the City Attorney prepared the draft
Memorandum of Understanding (MOU) with IRG that sets forth the terms of an economic
development package to facilitate the project with Tesla Motors.
Mr. Caton went over five major points of the MOU. (1 ) Rent forgiveness in which the City and
RG will enter into an amendment to the eHsting Ground Lease providing IRG a waiver of future rent
payments for 15 years on the Citys 20 acres, amounting to a $6.9 million subsidy (2) The City will
relieve IRG of its obligation to provide a 40,000 square foot learning center on the property. (3) IRG
is currently storing the full-size shuttle mock-up, but will be required to relocate and restore it at a
new City provided location. The City’s cost for the new shelter for the shuttle mock+IP is estimated to
be $250,000. (4) Requires the City to utilize $1.8 million in Federal Section 108 loan funds to
reimburse IRG for the cost of repairing buildings and the roofs of existing buildings that Tesla will
occupy. (5) Development Agreement that will complete the nerra Luna Specific Plan process with
agreed upon land use options.
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Mr. Caton explained the fiscal impacts, with the City investing $8,950,000 with a return in
direct City revenue in the amount of $11,760,000 in current dollars; and with an investment of
$15,350,000 with a return in the amount of $21,825,000 in constant dollars (adjusted for inflation). He
noted $10,000,000 in indirect benefits to the City and the area during the 15 year period.
He concluded by noting that there is a history of innovation at this property site, which will be
continued by the manufacturing of electric vehicles.
Mayor Guerra noted that former Presidents Nixon and Reagan visited this site, every NASA
astronaut until 1999 also visited the site, and that this project will create 1,200 green jobs and will be
one of the greenest manufacturing sites in the United States.
It was moved by Mayor Guerra, seconded by Council Member Gafin and unanimously carried
(4/0) to approve the Memorandum of Understanding with Industrial Realty Group, LLC to
facilitate Tesla Motors moving to the Downey Studios site.
Prior to the vote, Council Member Brossmer noted that this is a no nsk project, with the worst
case scenario of the City breaking even and the creation of highly technical jobs in the City
continuing the legacy of this property.
Council Member Gafin expressed that the City is investing $9,000,000 to make $22,000,000
over fifteen years which includes an onsite job factor of 1 ,200.
Council Member Marquez noted agreement with his colleagues, that this is a huge project for
not only Downey, but the entire Gateway region (with a 15% unemployment rate), creating high tech
quality green jobs. He commended staff for bringing these jobs to the City.
Mayor Guerra mentioned that the City has had a vision for many years and reached out early
to locate this project in Downey. He pointed out the history of the redevelopment of the site,
beginning with NASA/Boeing leaving in 1999 and the hard work of the City including the master
planning for future development. He noted the creation of 3,800 jobs with the Kaiser facility opening,
the retail center success and the Phoenix Award received for the environmental cleanup of the site.
At this time, the following persons spoke in favor of the approval of the MOU:
Tom Messmer, Senior Vice President, IRG
Harold Tseklenis, resident of Downey
Robert Zavala, President, Chamber of Commerce
Chuck Ana, resident of Downey
Kirk Cartozian, Downey business owner
Carlos Galvan, resident of Downey
NON-AGENDA PUBLIC COMMENT: No one came forward to speak.
ADJOURNMENT:
The meeting adjourned at 2:31 p.m. to 6:00 p.m., December8, 2009.
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