HomeMy WebLinkAboutMIN JUNE 09 1987 REGULAR SESSION
CITY COUNCIL - CITY OF BEAUMONT
HELD JUNE 9, 1987 - 1:15 P.M.
BE IT REMEMBERED that the City Council of the City of Beaumont, Texas, met in regular
session this the 9th day of June, 1987, with the following present:
HONORABLE: Maurice Meyers Mayor
Bob Lee, Jr. Councilman At Large
Andrew P. Cokinos Councilman At Large
Lulu L. Smith Councilman, Ward I
Mike Brumley Councilman, Ward II
Audwin Samuel Councilman, Ward III
David W. Moore councilman, Ward IV
Albert E. Haines City Manager
Lane Nichols City Attorney
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The Invocation was given by the Reverend E. L. Campbell, pastor of Williams Memorial
Church of God and Christ.
The Pledge of Allegiance was led by Councilman Smith.
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Public comment was called on Agenda Items A through D.
Mr. Ric Warchol, 1155 Interstate 10 South, addressed Council to request that comments
be allowed during presentation concerning a development of an office building and
parking garage on a portion of the Civic Center parking lot.
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The following Consent Agenda item was considered:
Resolution 87-115 authorizing purchasing of three (3) electronic cash registers for
Municipal Court from Malloy-s Cash Register Company, Inc. , of Beaumont at a total cost
of $15,266.00 (these will interface with the IBM System 36 using Municipal Court
software and will allow automatic entry of information such as docket and ticket
numbers, fine amounts, court costs and fees and allowing update of files at the time
of entry when the fine is paid).
The Consent Agenda - Resolution 87-115 - was approved on a motion made by Councilman
Lee and seconded by Councilman Brumley.
Question: Ayes: All Nayes: None
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City Manager Haines reminded City Council of the Budget Workshop scheduled for 8:00
a.m. , Friday, June 12th, to be held in the Miller Branch Library on Dowlen Road.
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Resolution 87-116 awarding a contract to ARLESCO, Inc. , in the amount of $20,370.00
for construction of twenty-nine (29) bus stop benches and ten (10) shelters at
s��ect� points along the transit routes and r�empva and econstruction of brodktn
s IT s an cur s was approve on a motion made y aunci man and secon e y
Councilman Brumley.
Question: Ayes: All Napes: None
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Ordinance No. 87-43 reorganizing the Health Advisory Board (increasing the size from
seven to nine members who are residents of Beaumont and registered voters: three
members from the health care provider community, one from the education profession,
one from labor, two from the medical consumer population and two from minorities to
serve overlapping two-year terms (the initial appointments would be for three years
for three members, two years for another three and one year for the remaining three to
establish the overlapping terms) was considered:
ORDINANCE NO. 87-43
ENTITLED AN ORDINANCE AMENDING CHAPTER 2 OF THE
CODE OF ORDINANCES OF THE CITY OF BEAUMONT BY
ADDING A NEW SECTION 2-11 RELATING TO THE HEALTH
ADVISORY BOARD; PROVIDING FOR SEVERABILITY AND
PROVIDING FOR REPEAL.
The ordinance was approved on a motion made by Councilman Smith and seconded by
Councilman Brumley.
Question: Ayes: Mayor Meyers Nayes: Councilman Samuel
Councilman Lee Councilman Moore
Councilman Cokinos
Councilman Smith
Councilman Brumley
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Mr. Lynn Summerhays of The Boyer Company, Salt Lake City, Utah, proposed to the City
Council that his company was interested in leasing a 1.28 acre portion of the Civic
Center parking lot for the construction of a six-story, 86,000 square foot office
building at an estimated cost of $6.0 to $7.0 million, with the possibility of
including, as an adjunct to the Civic Center facilities, a restaurant, meeting rooms,
and possible dedication of one or two floors for use as a hotel. The City would be
required to furnish 166 covered parking stalls for use by the office building and
proposed construction of a multi-story parking garage with an estimated 580 stalls.
Mr. Ric Warchol, 1155 Interstate 10 South, and Mr. Joe Shamburger, 2575 Pecos and
representing Rogers Brothers Investments, addressed Council in opposition to the
project saying local developers had had no opportunity to assess the feasibility of
such a project and requested time to do so.
After a lengthy discussion, Councilman Cokinos made a motion to delay action on a
resolution authorizing the City Manager to negotiate agreements for the development of
the project for one week; motion was seconded by Councilman Samuel.
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After additional discussion, Councilman Cokinos changed his motion to delay action on
the resolution for two weeks. Councilman Samuel withdrew his second. Councilman
Smith seconded the motion to delay action for two weeks.
Mrs. Delia Harrington, 815 Willow Street, addressed Council in support of the proposed
project and in opposition to the two week delay for action.
Question was called on the two-week deferral of action on the resolution:
Ayes: Councilman Cokinos Nayes: Mayor Meyers
Councilman Smith Councilman Lee
Councilman Brumley Councilman Moore
Councilman Samuel
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Councilmen Lee and Cokinos reminded all that the regular City Council session and Town
Meeting, to be jointly hosted by the At-Large Councilmen, would be held at 7:00 p.m. ,
June 30, 1987, tentatively scheduled to be held in St. Anne's Catholic Church/School
Cafeteria and urged all to attend.
Councilman Lee introduced his daughters, Madea and Mara, who are visiting from San
Antonio.
Councilmen Brumley and Moore spoke of the great success of the first "Concerts on the
Move" festivity that was held Thursday, June 4th, in Alice Keith Park. Music was
provided by two groups: the Beaumont Community Band and a group called "Fresh" with
over 1 ,000 in attendance. It was mentioned that the next "Concerts on the Move" event
would be held on July 9th, beginning at 7:00 p.m. , in Rogers Park with the Jimmy
Simmons Jazz Band providing the entertainment.
Councilman Cokinos mentioned that Councilman Smith had been a "celebrity waitress"
Monday, June 8th, for the Lukemia Benefit. Dr. Smith said that over $11 ,500 was
raised for Lukemia research.
Councilman Samuel mentioned the great fun at "Sunday in the Park" on Riverfront Park
held Sunday, June 7th, which was hosted by the Junior Forum and had "teddy bears" as
its theme.
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Mr. J. W. Kyle, 1250 Coronado Circle, addressed Council to again complain about the
high sewer rates which are currently calculated at 87% of the metered water.
Mr. Henry Dannenbaum, 1567 Wall, addressed Council on many items.
Mr. Jack Farley, 2270 Gladys, addressed Council to say, "When you said anniversary,
you got my attention -- 50 years Juneteenth." In addition, Mr. Farley, a former
member of the Health Advisory Board, pledged his help with the newly formed Board.
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There being no further business, the meeting was recessed before continuing with the
Workshop Session.
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I, Rosemarie Chiappe tta, Secretary in the City Clerk's Office, certify that the above
is a true copy of the Minutes of the regular City Council session held June 9, 1987.
Rosemarie Chiappetta
Secretary
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EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987
CITY MANAGER ALBERT HAINES:
The next item, under Economic Development, is broken into two parts. You have before
you a letter dated June the 5th from a Mr. Lynn Summerhays of the Boyer Company.
Attached to that letter is a proposed option agreement. As part of Item D.3. , we will
be recommending to Council their consideration of adopting a resolution that Mr.
Nichols has drafted and we will distribute to incorporate the provisions of this
proposed option agreement.
COUNCILMAN CORINOS: Is that June the 5th or June the 4th?
CITY MANAGER:
It's dated June the 4th, yes, sir. You should have it there in front of you. Before
we go through the details of the letter and the agreement, we would like to make a
presentation relative to this proposal. And, in introducing this subject, I would call
your attention to your Agenda packet for some history behind the City's general
committment to Downtown.
In 1982, as part of the Land Use Plan, the City Council adopted a goal of making
Downtown Beaumont "the regional center of professional and financial services,
government, entertainment and cultural events." In 1985, a new Downtown Development
Plan included recommendations for a new mixed—use building with improved and expanded
parking facilities in the area of the present Civic Center parking lot and, second, a
hotel would enhance and expand the full use of the City's Connvention Facilities,
specifically, the Civic Center and Julie Rogers Theatre.
Over the course of the past year, and specifically in looking at objectives we felt
could be refined and accomplished, we identified two specific objectives that we wanted
to work toward for 1987. First, that two pieces of properties, specifically the
Szafir's Building and the parking lot adjacent to the Civic Center, could be subject to
better utilization. And, second, approaching the private sector for the development
and expansion of those properties, or at least one of those properties, would certainly
be an enhancement to the Downtown. As you may recall, we are proceeding to negotiate
with Lamar University and others the potential use of the Szafir Building as the home
of a Texas Energy or Texas Oil Museum and, at the same time, at least over the course
of the past four or five months, staff has been working at the potential for
development around the Civic Center area and specifically the parking lot.
I suppose the catalyst for this came about as a result of an inquiry we received some
months ago from a local business looking for space and specifically targeting as their
primary desire for location the area of Main Street between the Gulf States Utilities
building and City Hall. And, it was from that initial discussion that some attempts
were made to identify individuals and/or firms that could give us a . . . at least a
response to our curiosity. We sent packets containing information of the area to a
number of development groups and the one developer, The Boyer Company, has responded
and is prepared today to make a presentation to Council.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 page 2
CITY MANAGER continued:
I would call your attention now to the proposal that is in front of you from Mr.
Summerhays. Specifically, what he will be asking for from the City today is for the
Council to agree to an option of property presently under the ownership of the City of
Beaumont - specifically, they be allowed the right and privilege of leasing property
for a period of six months with an additional six month extender and, secondly, that
the lease terms would be negotiated for a 40-year period with two (2) 20-year options
for renewal, that the City would agree to lease to The Boyer Company approximately 166
covered parking stalls that would run concurrent with the ground lease that The Boyer
Company would pay . . would agree to pay as an annual lease cost for the ground and
parking stalls, $60,000, with appropriate escallations over the term of the ground and
parking leases and the predication of those escallations would be based on a net per-
square-foot-rental income as paid by tenants; then, finally, that upon completion of
the office building, the City would provide 166 covered parking stalls for daytime
use.
I would like to, at this point, now, introduce to you Mr. Lynn Summerhays of The Boyer
Company and ask him to make his presentation and introduce your team. Okay?
MR. LYNN SUMMERHAYS, THE BOYER COMPANY:
Mayor Meyers and members of the Council, I am Lynn Summerhays and I am a partner with
The Boyer Company, which is a real estate development firm headquartered in Salt Lake
City, Utah. Our Texas connections are not substantial. We have though shopping cen-
ters and manage in Lubbock and Amarillo, Texas. Just a brief history, I did give you a
picture brochure that shows some of the projects which we have done that gives you some
familiarity with the scope of real estate development in which we are involved.
We became acquainted with the interest of Beaumont in a potential downtown development
from Mr. Haines. Al previously was the Chief Administrative Officer of Salt Lake City
and we had a fairly high-level of confidence in him and, so, when there was some
preliminary inquiry as to any potential interest, we responded and have since made
three visits to Beaumont; have had several on-going conversations with potential
tenants; have engaged an architectural firm to do a preliminary examination of the
site, it's feasibility and the potential building design; and have moved down the road
quite a ways, in fact, with potential tenants.
The reason why we are here today is that we are basically at a stage where we can move
no further without the ability to reliably produce what we are suggesting to the
interested tenants. We are at a point where we have a timing . . . two issues. One is a
timing issue. The tenants with whom we are now discussing require as part of there
adjustments a January, 1989, occupancy requirement if they are to move into new space,
which has been their interest and they are the precipitating business which has created
the potential for the project. The second is just representation question. We are
hesitant without the sanction of this body obviously to make any representation which
we can't perform on. To this point, they've been discussions. We feel comfortable in
a building design; we feel comfortable in costs; we feel comfortable in the approaches
we've outlined for developing this project; but we can't move any further without being
able to reliably produce results for those we have made representations to. So,
henceforth, our request to you for this option agreement this day.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD .TUNE 9, 1987 Page 3
MR. SUMMERHAYS continued:
Let me make you acquainted with the project we are proposing. I have today here the
architectural team of White, Budd, VanNess - Lynn Harden, principal, and Gil Hoffman,
principal designer on the project. They've been engaged by our firm to do the prelimi-
minary studies of the site. You are acquainted with them because of their association
with the Museum and several other Beaumont projects. I'll work from the site plan ini-
tially. What we are proposing is leasing from the City a parcel, and we have desig-
nated in red attached to that option agreement the pad per se on which we are suggest-
ing a ground lease be negotiated and executed. The site's approximately 1.28 acres of
ground. On that site would be built a six-level, approximately 86,000 square foot,
facility.
The intent of the layout was to produce an extension of the Fannin Street development
matching the entry of the Museum, the porte cochere of the Museum, with a motif that
you'll see familiar with the office building. In fact, they have a very compatible,
aesthetic appearance with the development of the Museum across the street and it is our
intent to provide in engaging this architectural firm, trying to provide some cohesive
sense of master plan to the downtown area.
The other considerations, as we've met with various staff members and with the tenants,
was to try and allow maximum flexibility with the City and for development of the
entire parcel so we've suggested only encumbering that which the designated area shown
in red for the ground lease. That will leave the remaining site.
We've done preliminary investigations as to a larger hotel complex as well. We've
gotten good advice from various local hotel owners and, at this point in time, we are
reluctant, though we have developed and owned hotels and have two Hiltons under our
ownership at this present time, to proceed with a large downtown hotel development and
we can go into detail as to our rationale there. Although we have discussed . . we have
made provision in this arrangement and a site plan has been developed where such a
facility could proceed on a phase basis after this project or could be incorporated as
part of the office development.
One of the inquiries made by Mr. Haines and his staff was to the feasibility of develop-
ing some adjunct, additional adjunct to the Convention Center need - additional meeting
rooms, a restaurant, and some potential overnight usage as part of a portion. . . one or
two floors of the office building. We discussed this with our financing sources and it
becomes, at this point, a feasible alternative and would be willing to entertain some
consideration there. It is not part -of this specific proposal that we are making but
it is an open discussion item and could be an option that the City may exercise and I
think becomes a part of this option agreement which we'll review with you in greater
detail in just a minute. That becomes the site plan.
The parking considerations . . . we are sensitive, too, to the need for parking to sup-
plement this Convention Center requirements. This proposal which we are making would
have . we would be leasing, basically at $16.00 per stall per month, 166 stalls from
the City. It would require the City to build a parking structure of approximately 300
additional stalls. Presently the site has 415 stalls. Our building requires 166 with
300 added and with the parking loss through the building of this building, the sum of
the above is that there would be about 40 . . 30 to 40 additional stalls for daytime use
than are now available for the Convention Center. That's taking into consideration .
subtracting out our needs for this building and would therefore add about 200 stalls .
additional stalls for nighttime use for the Convention, over and above what are now
presently available for the Convention Center and associated conventions.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 4
MR. SUMMERHAYS continued:
I should mention at this time .. let me just first of all give you a feeling for the
building. We've been very pleased with the effort of the architectural team in main-
taining a traditional . . . what, Gil, did one of the students call this approach? Texas
Post-Modern. I'm not sure what that means but the intent is to produce a traditional
feeling for downtown Beaumont, at the same time producing a contemporary feeling with
additional glass, particularly for tenants, are newer Class-A buildings which have a
very different type of mechanical . . When I say very different, with a high emphasis on
aesthetics and particularly in your mechanical and electrical systems your control
systems, a higher exposure of glass is a very desireable thing for tenant use and, so,
it combines a traditional look with the higher glass exposure and this building will
also include the features which are presently available to significantly enhance office
environment for potential tenants. This is the stated desire of this particular tenant
not having such space available in downtown Beaumont, since no such buildings have been
developed downtown in the recent past. I think that summarizes what we are proposing
on this particular site.
I would note at this point that if we were to make an analogy to an A to Z process,
we're probably at point D. The jury's out as to whether or not this project will
actually occur. Right now, we have interest of about twenty-five percent of the
building - even to get financing, we will have to have this building with a twenty-five
percent pre-committment.
We are encouraged and confident at this point that there's a reliable possibility that
this project could occur based on our discussions with tenants, our preliminary survey
of the needs of the City, and with our perception and experience in doing these
projects in other communities. And, we would invite at this point, your questions and
be anxious to respond to any inquiries you might have regarding our plans or what we
have accomplished or our perceptions.
MAYOR MEYERS: Thank you, Lynn. I will ask now for Council. Mike (Brumley), do you
have any questions?
COUNCILMAN BRUMLEY: The . . . these numbers as it relates to the parking and the
building, are these . . . these aren't numbers that will increase with time or decrease
with time? It's what you see or what the proposal is or the option that we have before
us, are they a fixed number or what is you . . . . . .
MR. SUMMERHAYS:
Let me address that. First of all, our needs of 166 stalls accomodates . is in
excess of Code requirements, number one, any municipal Code requirements. Ours is
based on functional experience. Our tenants require a certain ratio of stalls per
square foot so for the building purposes, for the standard building-use tenant, we see
this as the perpetual need for parking. That can change if you have a very high
density personnel use. There are some uses that would require more parking. This will
be all that we will provide any given tenant on-site. We'll be restricted, of course,
by what the City will lease to us. I should say that for daytime use, I think it's
John's intent to try and lease daytime stalls in addition to those which we are leasing
from the City so I think there's probably more parking there available than what our
needs are. For the Convention, I can't speak to the Convention needs and maybe John
would like to respond to you in that regard related to what he sees as the Convention
need for parking and how this proposal effects that. Would you like him to address
that at this point?
COUNCIL page 5
COUNCILMAN BRUMLEY:
Yes, if he'd like to. I was more concerned with your particular needs as far as our
obligations were concerned under the agreement.
MR. SUMMERHAYS:
Okay, for our needs, this will meet . . . this surpasses Code requirements and meets our
functional needs.
MAYOR MEYERS: Anything else, Mike?
COUNCILMAN BURMLEY: Not right now.
MAYOR MEYERS: Bob (Lee)?
COUNCILMAN LEE:
The plan is, then, as you move through the process of identifying those potential
occupants and possibly getting committments from them, to jointly be investigating the
possibility of developing the garage itself, is that correct?
CITY MANAGER:
Let me at least introduce it and perhaps then call on either Betty or John to fill in
the spaces. What The Boyer Company wants is 166 covered parking stalls. In order for
us to do that, we will have to either do it ourselves or through some contract provide
for a total parking garage facility. At the present time, it looks like the most cost
effective way to do that would be for the City to actually issue bonds, revenue bonds,
on the facility and to contract the construction and operation of it out. We can,
because we can get tax exempt rates, there are a lot of constraints that the private
sector is under in an issuance of this kind. I think, Betty (Dunkerley), if you could
give us an idea of the amount of the issue and then, John (Gorman), the total number of
parking stalls that would be in that facility would cover not only the requirements of
The Boyer Company but also the net loss of parking spaces that that footprint would
take.
MRS. BETTY DUNKERLEY, DIRECTOR OF FINANCE:
On the financing of this facility, we are using an estimate of about $1.2 million as
far as the initial cost of the facility. Now, in order to finance that, we are going to
take the revenue from the ground lease and the parking slots that The Boyer Company
will be leasing, about $60,000 would apply toward the debt service of the parking fa-
cility. In addition to that, John Gorman feels like the additional spaces. . .we will be
able to generate enhanced parking revenues that will also go into this pool for finan-
cing the debt. We plan to use the Tax Increment Financing contribution from this pro-
ject to complete the debt service financing. At the current tax rate, this particular
office building will bring about $57,700 into the Tax Increment Financing Pool. That
will be more than enough to finance the parking facility over either 15 years or 20
years. Now, if by chance we do get a tax decrease with the Sales Tax Option, the income
at that time on the Tax Increment Zone will cover by itself the 20-year financing.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 6
MRS. DUNKERLEY continued:
On the 15-year financing, if we opt to go that way, we would need an additional $6,000
from the TIF Zone in addition to what this project brings in and we have more than
enough money. .we will have more than enough money available at that time to cover
that. Our obligation to the Art Museum will be ended this current year . . I mean the
coming year. So, as far as the financing, even if we've overestimated our enhanced
parking revenues, we will have enough funds in the zone to cover that and I think the
only thing that would need to be done is that the plan . TIF Plan would have to be
amended to include the parking facility, and I don't think it's currently in the plan,
but the Planning Department could look into amending the Plan to cover that facility.
COUNCILMAN BRUMLEY:
So, you are saying $57,000 from the Zone plus the $60,000 from the lease and whatever
the enhancement from the Center would be a 15 or 20 year, which one did you say?
MRS. DUNKERLEY:
Well, I'd probably like to go 15 and . . . but I've put both options down there so that
you can see but there will be enough additional money to cover any, you know, over-
estimates/under-estimates we made that are not committed in that TIF Zone. That
$57,700 just relates to this new construction.
COUNCILMAN LEE: And the parking garage would be constructed to accommodate some 466 to
500 .. . . . .
MR. JOHN GORMAN, DIRECTOR OF CONVENTION FACILITIES:
My understanding at this point is that first of all the existing parking lot, I believe
it has 415 stalls in it now, the office building construction would occupy about 166
spaces. The new parking deck would have in the range of about 275 to 300 total stalls.
That in combination with those stalls remaining that aren't occupied by the office
building, would give us a total 584 or so spaces. There are 166 to be leased during the
daytime period for the office building. That would leave us with a net during the
daytime of just a few More spaces than we have now and then 160 to 170 spaces
additional during the evening. I think we are all aware of the serious parking problem
that we have down here for events and this would go a long way to help correct that.
COUNCILMAN LEE:
So, the plan is not to provide for that many more parking spaces than are currently
available and not build a parking garage for anything more than would accommodate
something that in addition to the surface parking would accommodate about 20 more cars.
CITY MANAGER:
Except for nighttime and— that would essentially balance out the daytime use the way we
have it now and it would bump it up. Our feeling is that we can with the lease rev-
enues from The Boyer Company for the parking and the ground space plus the additional
$50,000 plus that would be generated in property taxes that we feel fairly justified in
coming to you to recommend that increase parking capacity because of the problem we are
having at the Civic Center and this is a way we can get that done without tapping any
general property tax funds and come right out of the project.
EXCERPT FROM REGULAR CITY iUNCIL
SESSION HELD JUNE 9, 1987 page 7
COUNCILMAN LEE:
. . .a great deal on parking. You mentioned that you had 25% . . expressions from people
indicating they might need 25-percent of the space that would be available.
MR. SUMMERHAYS:
We've had expression of interest for about 60% of the space, some of that has declined
since a couple of the tenants were mutually excluded, so we are down to what we feel to
be a fairly reliable 25% interest. They've done a space layout on a given floor.
They've met . we've met with all of the representative decision makers. There's a
pretty reliable feeling about 25% of the building.
COUNCILMAN LEE:
And, the response was or the statement that was made to you from those people who are
interested is that this provides Class A office space that is otherwise not available
in the. downtown area.
MR. SUMMERHAYS: That's right.
MAYOR MEYERS: Andrew (Cokinos)?
COUNCILMAN COKINOS:
I've got several questions that I'd like to ask you, Mr. Summerhays. First of all, I
would like a complete and detailed prospectus of the project, including the long term
financial obligation to the City of Beaumont may have. Is that available?
MR. SUMMERHAYS: I'd be happy to sit down with you and . . . . . .
COUNCILMAN COKINOS: I'm talking about a prospectus.
MR. SUMMERHAYS: We have done a complete financial performance on the project.
COUNCILMAN COKINOS: Have you got it available?
MR. SUMMERHAYS: In a distributable form? No.
COUNCILMAN COKINOS: I would certainly like to have a complete and detailed prospectus
of this project . . . of what long-terra financial obligations the City of Beaumont may
have.
MR. SUMMERHAYS:
Again, the obligations of the City of Beaumont, as I see them, would be to produce a
ground lease for us on which we would pay a fair market value for that ground lease.
You would be obligating yourself for the building of a parking structure and relying
upon our ability to pay for those stalls, but part of the agreement would subordinate
the interest of the lender to the Beaumont position. And, so you'll have us in the way
of any financial concern, and you will have a lender in the way of any fincial
obligation on the part of the City of Beaumont.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 8
COUNCILMAN COKINOS:
I'm kind of surprised that you haven't a complete prospectus for this City Council to
look at on this particular project.
MR. SUMMERHAYS: What do you describe as a . . . . . .
COUNCILMAN COKINOS: Well, I mean, the financial obligation of the City and .. . . . .
MR. SUMMERHAYS: Basically, the City has no financial obligation . . .
COUNCILMAN COKINOS:
and what's the project going to cost, how much the garage is going to cost and I've
got further questions I'd like to ask you.
MR. SUMMERHAYS:
Certainly, I think the garage will cost $1.2 million. The project is between $6.0 and
$7.0 million, none of which is the obligation of the City of Beaumont. The City of
Beaumont would received, based on their $1.2 million parking structure, $60,000 of
income for that $1. 2 million which will be derived from us - additional revenues which
would be derived from retail use of the parking stalls. The other reason why we don't
have completed prospectus is we don't have a completed project.
COUNCILMAN COKINOS:
Well, okay. Let's pursue this a little bit further. I was just making notes while you
were talking. Furthermore, whether or not any lease payment to the City is on a bond-
protection or with a financial institution that has a good record. I mean, fine, you
are saying we are getting $60,000 a year. Is there any bond protection for the City
that we'd be getting this $60,000 a year for the parking lease. There's a lot of
questions that . . . . . .
MR. SUMMERHAYS:
Let me respond to that. If you don't receive ground lease payments, then the lease is
defaulted upon and you own . . . I mean, you end up owning an asset worth between $6.0 to
$7.0 million.
COUNCILMAN COKINOS:
Well, I'm going to pursue that. Now does that mean that the City have to subordinate
the City land to the developers for this development?
MR. SUMMERHAYS: Yes, the City land would need to be subordinated to financing.
COUNCILMAN COKINOS: That's not very good.
MR. SUMMERHAYS: It's a standard practice.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 9
COUNCILMAN COKINOS:
Well, it's a standard practice, but it's not good for the City and I want to understand
the financial arrangements thoroughly and what this project is all about so that means
that we have . . . for you to start this project, we've got to subordinate our claim to
this . . . to you.
MR. SUMMERHAYS:
The ground would have to be subordinated to financing; that's true to developing any
project, whether you develop a parking structure or an office building or anything that
goes on this project, the land would need to be subordinated to those who provide the
financing.
COUNCILMAN COKINOS:
So, that means we at least have a second lien instead of owning the land.
MR. SUMMERHAYS:
That's true. What it means is in order to foster the development of any project on
this ground, you will have either sell or subordinate.
COUNCILMAN COKINOS:
Well, I'm for economic development and I want to see this City progress, but at the
same time, I'd like to see the City of Beaumont and the citizens of Beaumont protected
on the long-term uncertain indebtedness that this City could have and who knows what
the economy will bring. Who knows whether this project is going to get off the ground
or not. And . . . . . .
MR. SUMMERHAYS:
The City would have no payment requirements on the indebtedness.
COUNCILMAN COKINOS:
But we don't have a guarantee for the lease.
MR. SUMMERHAYS:
You have certain guarantees. That's based on the financial strength, you're right, of
the developer and the financing entity.
COUNCILMAN COKINOS:
So we don't have any guarantees as far as the monthly or the yearly income or lease on
the grounds.
MR. SUMMERHAYS:
As good a guarantee as the Nation's largest real estate lender can provide and small
town, at best, developer, but, yet, a developer with some experience and financial
strength.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 10
COUNCILMAN COKINOS:
Well, personally, myself, I cannot in good conscience authorize the City Manager to
obligate the City on a long-term program Which may include unknown financial
obligations for the City to be faced in years to come. I just cannot . . . . .. I cannot
. .. everything . . . there's too many unknowns in this thing.
MR. SUMMERHAYS: What unforeseen financial obligations would the City be incurring?
COUNCILMAN COKINOS: Well, tenants . . . vacancies in the building . . . . . .
MR. SUMMERHAYS: No obligations . . . no obligation.
COUNCILMAN COKINOS:
parking lot, building .. . building a garage. That's a million . . . that's a
obligation there.
MR. SUMMERHAYS: $1.2 million. That is the extent of the City's obligation.
COUNCILMAN COKINOS:
Well, it's . . . . . it's too many unknowns as far as I am concerned.
MR. SUMMERHAYS:
I'll be glad to answer any questions of unknowns in terms of your obligation. I think
you will find the obligation which you possess is the building of the parking structure
and the debt incurred on that and I think Betty's reviewed how you would fulfill that
obligation. There are no other financial obligations into this proposal.
COUNCILMAN COKINOS:
I don't like to subordinate the City land to finance this project and that's a very . . .
that's a very serious thing right there as far as I'm concerned.
MR. SUMMERHAYS:
It's certainly an acceptable viewpoint and to have any development go on the site you
will end up needing to subordinate the ground.
COUNCILMAN MOORE:
I have a couple of questions and members of Council have addressed several of them.
The parking structure you addressed will be $1. 2 million, that's the City's exposure
and, based on the figures I've taken down, about $120,000 of that should come back in
taxes and lease fees for this parking slots. My biggest question is what's . . . What
type of City investment will we have in terms of dollars up to actual time you decide
to build the building? My understanding from the conversation, until 25% of the
building was . . basically, the pre-lease or something, you would not actually start the
construction.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 11
MR. SUMMERHAYS:
That's right. The only obligation of funds to the time in which a ground lease is
executed and the loan is put in place and we encumber the ground, it is ours. The City
has no financial obligation.
CITY MANAGER:
We would not . . . we would not even consider issuing any kind of bond for that parking
garage until we had the assurances from the developer that it was a go project.
MR. SUMMERHAYS:
Your ground lease would require us to have financing in place, an executed ground lease
and all elements of the project firm before you will be committed to any obligation
financially.
COUNCILMAN MOORE:
Okay, to the parking lot again, who will actually do the rate regulation on that? Will
that be the City in regards to what we charge?
MR. SUMMERHAYS: Yes.
COUNCILMAN MOORE:
Would those rates be basically renewed as we changed the rates of our rental . . . lease
spaces around here?
CITY MANAGER:
The only area that would be firm or fixed would be the agreement with the developer for
the 166 stalls at $16.00 a month. All of the others, the parking control would be the
City's.
COUNCILMAN MOORE:
You also address something about if this particular project, based on your projections
you constructed and it was built, and for some reason which we hate to think of . . .
it's not a feasible project to continue and you said it will be about $6.0 or $7.0
million investment, . . . . . .
MR. SUMMERHAYS: That's our investment.
COUNCILMAN MOORE:
. . . your investment. Now, what happens if you decide that you cannot support the
building with the tenants in place?
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 12
MR. SUMMERHAYS:
Well, if for any reason, we were to go out of existence, which has happened, then the
lender would have the position - with typical agreements, the lender would then assume
our position and would have ownership of the project. We've not had any projects that
have done that in our twelve-year history but that is a possibility; but, if we were
not to own it, then the lender who has first lien right would own it and be responsi-
ble for fullfilling the obligations which we committed to, i.e. ground lease payments.
COUNCILMAN MOORE:
So, this is just one of the simple stages that you have to go through before you have a
project and look at completion on it. What time frame are you looking at? Say, for
instance, this was a positive type of negotiations with this Council, how many more
steps . . . how much longer would people actually be waiting and percentage . . . you may
decide then not to do it at all?
MR. SUMMERHAYS:
Well, this agreement contemplates a six-months option . . . initial option and it's I
think it's fairly reliable to include that within that six months we will know whether
there's a project or not.
COUNCILMAN MOORE:
I have a couple more questions. The construction of that particular project - would
you do that construction locally?
MR. SUMMERHAYS: Yes.
COUNCILMAN MOORE: You would do it with local firms here.
MR. SUMMERHAYS:
Yes. Either here or Houston-based contracting firms or Dallas-based contracting firms
that have done work here in the Beaumont area. It's the size of the building where
there are a limited number of contractors that could handle this type of project and be
bondable and in order to get the proper distribution of bids, we may need to engage
what could be termed, I guess, peripheral-local contracting entities.
COUNCILMAN MOORE:
You also addressed some feasible or alternative for additional construction space
apparently between the facility in the back of the Civic Center or . . . ? I didn't
quite understand that.
EXCERPT FROM REGULAR CITY UNCIL
SESSION HELD JUNE 9, 1987 Page 13
MR. SUMMERHAYS:
Let me mention what that was. This site plan shows the proposed project. Here on this
side is the Civic Center. We are only leasing this portion of ground, which leaves the
City total latitude on what to do within the remaining portion of ground you can
construct. The only requirement we have of the City is the producing 166 covered
parking stalls at $16.00 per stall per month. Whether you build a hotel, whether you
build a 5-level parking structure, 2-level parking structure, whether you expand the
Civic Center, that's all in your control. We end up controlling this pad of 1.28 acres
on which you will require us to build an office building as described and shown. You
will have restrictions on what we do on that site and . . . there would be a cross-
easement agreement so all access points and easements are maintained and so those types
of agreements are regularly worked out.
COUNCILMAN MOORE:
You've basically answered most of my questions. I think the building and its pro-
jected appearance 'looks great. I guess I only have one other question to you and the
only reason I'm asking this question because if the City participates and that's a sum
of money that all the citizens participated in for the parking structure regardless
what the return is. I've looked at your clients here - a long list of creditable
people. I guess my next question would be to your company itself and its practices and
policies - how it addresses Affirmative Action. do you have a program in place? Is
that even considered, knowing that you're from Salt Lake City and know what the
population percentages are there but that is a concern. That operation operating here
and you would be the managing group, what would be your practice in place there?
MR. SUMMERHAY S:
We do not have an Affirmative Action policy as a company. We are very small. In fact,
I think if you looked at the last page, you will see the number of employees which we
have. We are extremely open and amenable to recommendations on how we conduct our
business in that regard here in Beaumont.
COUNCILMAN MOORE:
In looking at your flyers, one of the things that prompted me asking that question and
it would certainly be something I would be extremely sensitive to in hoping that you
would correct and address.
MR. SUMMERHAYS: -
We would be delighted to. We have very little selection possibilities in Salt Lake
City regarding Affirmative Action at the moment in terms of certain minority groups.
Certain others, I think our women outnumber our men in terms of our population both in
terms of secretarial as well as administrative and management roles.
COUNCILMAN MOORE: Thank you.
MR. SUMMERHAYS: Thank you.
MAYOR MEYERS: Audwin (Samuel)?
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 14
COUNCILMAN SAMUEL:
Before I make my questions, what exactly is being asked of Council today?
CITY MANAGER:
You'll be asked to adopt by resolution authorizing the Manager to negotiate an option
agreement that is . . that carries with it these stipulations: specifically, that you
are willing to subordinate the City's interest in approximately 1.28 acres of ground
based on a lease . . . fair-market lease agreement of 30,000 . .40,000, whatever it is . . .
MR. SUMMERHAYS: . . . $32,000 . . .
CITY MANAGER:
. . . $32,000; secondly . . . a year. Secondly, if this project works, that you will
commit to lease back to him 166 stalls, parking stalls at $16.00 per month. Total
revenue to the City of $60,000 for lease and parking. In return, the City subordinates
its interest in those two things. There is one other thing we talked about, Lane.
MR. SUMMERHAYS:
The option for the City to . . . . . .
CITY MANAGER:
Oh, that's right . to allow the City to negotiate f r additional s r ace fo r djunct
uses for the Civic Center, such as a restaurant, meet ng rooms and/o overngit
accommodations.
COUNCILMAN LEE:
Is that in addition to the property of 1.2 (acres) we are talking about here?
CITY MANAGER: No, that's on that 1.2 acres . . . . ..
COUNCILMAN LEE:
Wggg eitj.acres is defined by the perimeter that you outlined . . . . . . the triangular
MR. SUMMERHAYS: It's defined on your exhibit in red. That's right. That's correct.
CITY MANAGER:
Essentially, then, Councilman, what we would do is we would take these stipulations,
these terms and conditions and negotiate a firm agreement with them. Assuming that
they fullf ill their side of the bargain, then we would come back and negotiate the long-
term lease agreement.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 15
COUNCILMAN SAMUEL:
Before any funds are expended from the City, would it be brought back before the
Council or would this be the last opportunity.
CITY MANAGER:
No, it will come . . . the bond . . . the funding expenditure of the City will be in the
form of a parking bond issue. That will have to come back to the Council. The lease
agreement, I think, too, Counsellor, would come back to Council; however, you would be
obligated if The Boyer Company fullfills its part of the option agreement, and there
are no changes to that, then the obligation is to Council to essentially adopt both the
lease agreement and the issuance.
COUNCILMAN SAMUEL:
Okay, the two concerns that I have . . . most of the questions that I had written have
been answered . . . . . . (tape turned) . . . as far as finance in the event that your
company is not able to continue on the project. That's the first thing. That's
unanswerable at this time.
MR. SUMMERHAYS:
Well, I think it is answerable in terms of the way this agreement is structured to
protect the City and that would be the worst thing, I suppose, that could happen to the
City . . . . . . let's take "worst case" and let's think out loud together; but I think
this is accurate and will welcome any additional input. The worst possible option is
that the parking structure is built, we construct the building and don't fill it up
with tenants and therefore . . . and we expend all of our asset that we have as a company
to make it survive and the lender, and let's call it Metropolitan Mortgage, in this
instance, and Metropolitan Life Insurance is the institutional lender then who provided
the construction financing, build the building. We go out of existance. They own the
project. They are obligated to make to the City lease payments. Let's suppose
Metropolitan . . . the lenders are always, again, insured by the Government. You'd have
to go through a long line of defaults to ever get to the point . . . the worst possible
things I guess if everybody defaulted was that you could have a $7.0 million building
sitting on a site and not be receiving any income on it but not obligated for any
payment on it. Your limit of your obligation is the parking structure.
COUNCILMAN SAMUEL:
Okay, but that is the worst case scenario that I had in mind. That's the first
question. Second question was on the line of Councilman Moore. When I picked up the
brochure, I didn't see any sign of minority participation in the Company. I understand
population of Salt Lake City; however, I know that employment is not confined to the
area in which you are located, so my concern would be your committment to adhere to our
attitude as a City toward minority development.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 16
MR. SUMMERHAYS:
I think you will find us very amenable to your interests. Interested in a good project
manager's role? No, excuse me. I didn't mean . . . didn't mean to jest; but, yes, Mr.
Samuel, I think you will find that we have a very . . . will be extremely good to work
with and we will be delighted to have as a restriction of the ground lease some type of
Affirmative Action requirements on our part in terms of our conduct here in Beaumont
and we would invite working that out with you. We would be delighted to have that as a
part of the restriction of approval.
COUNCILMAN SAMUEL: I'll go with that.
MAYOR MEYERS:
Audwin, anything else? Lu (Smith).
COUNCILMAN SMITH:
The $60,000 for the lease for the parking stalls, does that include the execution of
the ground lease.
MR. SUMMERHAYS: Let me mention how that mention was derived.
COUNCILMAN SMITH: Yes, I'd like to know how that figure was derived.
MR. SUMMERHAYS:
This, again, was a negotiated session with most of the City staff present. The ground
lease based itself on the amount of acreage we are leasing times an appraised . . . it's
taken at its appraised value, in fact the ground lease that we are suggesting is a
little bit higher than the appraised value of the total site. I think the total site
appraised for about $4.60 something a square foot. We recommended a $5.00 a square
foot value times 10% so we pay 10% of that value per year, which is . . . which is the
same things as if we . . . we'd buy it at that if we could but the City has represented
it is not in their interest. We'd buy the ground, I guess is what we are saying, Dr.
Smith, at fair market value but the City is unwilling to sell it to us at fair market
value; therefore, we will lease it on the exact same terms. So, that's about . it's
either the 28 or the 32 . . .
MRS. DUNKERLEY: . . . 28 . . .
MR. SUMMERHAYS: . . . 28, okay, that's $28,000 . . . . . .
COUNCILMAN SMITH:
That's what I figured out was 22 . . . because the other figures out to about 32 . . .
MR. SUMMERHAYS:
. . . then the parking amount is $16.00 a stall per month . . .
CITY MANAGER:
That's based on the time, the hours of the day that they will be using it.
EXCERPT FROM REGULAR CITY QUUNCIL
SESSION HELD JUNE 9, 1987 Page 17
COUNCILMAN SMITH:
That just seems a little low for that property but I didn't know what the value .
What is that 1.28 acres valued at?
MR. SUMMERHAYS: It would be five times 43,560 times 1.28 acres.
CITY MANAGER: Our appraisal was $4.65 a foot.
COUNCILMAN SMITH: Well, I don't know how many square feet are in a . . . . . .
MR. SUMMERHAYS: Well, again, it's . . . . . .
COUNCILMAN SMITH: I don't have my calculator.
MR. SUMMERHAYS: I don't either sitting back there; but, the value of that land would
be that acreage - there's 43,560 square feet in an acre, then the ground is appraised
at $4.65. We're asking . . recommending the value at $5.00.
COUNCILMAN SMITH: I think the other questions were answered.
MAYOR MEYERS:
Having gone around . . . do you have another question, Andrew?
COUNCILMAN COKINOS:
I have one more question. Mr. Mayor, I feel that on such an important financial
obligation of the City, we are just now beginning to get to the tip of the iceberg on
this project, I'd like to postpone taking action on this resolution for at least a week
so we can all . . . so I can and the City Council can fairly understand what this
financial obligation is that we are faced with and I would like to at least have a one
more week so I can understand what's . . . what we are faced with here and I would like
very much at least another week to let all this soak in before we take action so
quickly and everything right here that I have ever known about this project is in the
last thirty minutes.
MAYOR MEYERS:
I'm sure Council's willing to entertal n your thought. Anybody else have any other
questions. Then I would ask you to make a motion if you want to, Councilman.
COUNCILMAN LEE:
I have one more question. Do you have the number of square feet that The Boyer Company
has developed and is in your portfolio of the same sort of office space?
MR. SUMMERHAYS:
We've done downtown office space in excess 1.3 million at least.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 18
COUNCILMAN LEE:
And, of that 1.3 million that have been developed in downtown areas, that is Class A
office space, not strip centers or anything else, what percentage of that 1.3 million
square feet is occupied currently, would you say?
MR. SUMMERHAYS:
We presently have in excess of 90% occupancy in all of our office buildings which for
Salt Lake City with a close to 20% vacancy rate is pretty healthy. I'd be delighted to
give you a rundown of all of our buildings and their occupancy as well.
COUNCILMAN COKINOS: What's the financial strength of Boyer and Company?
MR. SUMMERHAYS:
We have asset . . . I guess the best thing for me to do is send you a financial
statements, if that would be all right, for your personal view or any of the Council.
COUNCILMAN COKINOS:
Well, I would suggest you send it to all, not personally to me, but all members of the
City Council. I feel certain that they would like to know what the financial strength
of The Boyer Company is.
MR. SUMMERHAYS: We will be delighted to send you our financial statements.
COUNCILMAN COKINOS:
Now there wasn't assurance from any . . . the City that they would pre-lease any space
from your building . . . . . .
MR. SUMMERHAYS: That is correct.
COUNCILMAN COKINOS:
. . . as . . . prior to another project that we had here in Beaumont.
MR. SUMMERHAYS: That's correct. We're on our own.
COUNCILMAN COKINOS:
. . .and, I would . . . this is why I'm asking the Mayor and City Council to . let's
postpone this so that I can get your financial structure and financial strength and
postpone this thing for a week and I'd really like to have that, Mayor.
MAYOR MEYERS:
Well, in a moment, I'll let you put that in the form of a motion, Councilman, but let's
make sure all our questions are answered. I have a few but I'd like to run back
through. Mike, do you have any other notes you've made?
COUNCILMAN BRUMLEY: I'm fine.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 19
MAYOR MEYERS:
Betty, you ran out, obviously, the debt service on 15 and 20 years. Do you have that
figure?
CITY MANAGER: Yes, Carol (Flatten), why don't you go ahead and make distribution of
that . . . . . .
MAYOR MEYERS:
Lynn, I was pleased to hear you state that the indications are that it's feasible to
include hotel rooms within that building.
MR. SUMMERHAYS:
I know you've been a strong advocate, Mayor, of having that support space for the
Convention facility and when Mr. Haines suggested that to us, there was a . it's not
usual. I mean it is not a normal kind of consideration and it may be difficult to
produce but the Iendors were accommodating . . .
MAYOR MEYERS: Good.
MR. SUMMERHAYS:
. . .and opened the door for it so it is something that . . . . . .
MAYOR MEYERS: Good. They need to be happy.
MR. SUMMERHAYS:
so, again, we are early in this process and there's no guarantee that the project
will move forward at this point.
CITY MANAGER:
Do you want to describe these two options, Betty . . .?
MRS. DUNKERLEY:
Okay, the . . . on the 15-year option, our average debt service is going to be about
$137,700 and that's at an estimated 7-1/2% interest - of course, that will vary
depending on what the market is. What I would like to stress is even {if some of our
$they o�tio s, I mn�n the enhanced pall in rev needs ?r any �IFt�oon thknistRre the new
on c me n exac y on targe , we w ave un s n ou
money that is going in which could be designated to cover, you know, a good portionof
the cost of this facility.
MAYOR MEYERS:
Lynn, within your present operation, do you have adjustments for parking rates based on
adjustments that might occur within your project along the way.
MR. SUMMERHAYS: Yes.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 20
MAYOR MEYERS:
So, it wouldn't be unreasonable if we were to see interest rates vary to such a degree
that we might look at some adjustment. Would that be unreasonable?
MR. SUMMERHAYS:
In fact, you will have, as part of the ground and parking lease, a regular fixed
formula for increasing parking and ground lease income.
MAYOR MEYERS:
So, the figure that Betty's run here is pretty close to assurance that we will stay
black.
MR. SUMMERHAYS:
There is no provision for decreasing . . .
MAYOR MEYERS: I understand.
MR. SUMMERHAYS:
. . . ground or parking income rates that we pay to you, only a provision increasing . . .
MAYOR MEYERS:
Okay. I think what we are hearing here is that, in response to Audwin's question
earlier about a "worst case" scenario, that through the operation, we would have the
opportunity to assure ourselves that we could cover the debt based on revenues.
COUNCILMAN COKINOS: Providing the revenues will be coming in.
MAYOR MEYERS: Yes, sir. Yes.
COUNCILMAN COKINOS: Now, may I ask one more question?
MAYOR MEYERS: Please. All you would like.
COUNCILMAN COKINOS: Now, will you be renting, leasing the whole . . . the garage that
the City will be building or just part of it or just the ground slots?
MR. SUMMERHAYS:
That will be at the election of the City. The only requirement we have is . I think
the structure itself as presently proposed has 275 stalls in addition to the surface
stalls.
COUNCILMAN COKINOS:
My question is this. Will you be leasing . . . will the Boyer Company be leasing the
garage that the City will be building?
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 21
MR. SUMMERHAYS:
We will be leasing 166 stalls out of all those I was describing.
COUNMCILMAN COKINOS:
Including the ground floor?
MR. SUMMERHAYS:
No.
COUNCILMAN COKINOS:
. . . the slots?
MR. SUMMERHAYS:
Wherever the City designates those stalls. We will work that out with the City.
Somewhere in that . . in those 300 or 400, actually about 400 stalls that are in that
parking structure area, we will have 166 of them. We'll lease 166 of those.
COUNCILMAN COKINOS:
But not the whole structure?
MR. SUMMERHAYS:
No, sir. You'll control the structure. We will be leasing from you as the manager and
owner.
MAYOR MEYERS:
Are there any other questions? If not, Lynn, I am going to ask just for a moment if
you would have a seat and rest a bit and I would take opportunity and honor the request
that was made earlier which is unusual but so is this activity today. I would ask if
there are some in the audience who would want to make a brief comment. For the record,
as always, please give us your name and address, and then briefly state your comment
and feel to say whatever you care to.
RIC WARCHOL:
Ric Warchol, 1155 Interstate 10 South. One of my first questions is that it comes a
total surprise. I don't know of any local contacts that were made when the City
Manager went out looking for a developer of this project and I'd sure like to know
why. We are talking about economic development and we go half way across the Country
before we look in our own backyard. I found it interesting that this was scheduled for
Workshop Session where it would be much easier to comment about and was changed to the
agenda and it appeared to me to be a fairly important item that would normally have
been on a Workshop Session.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 page 22
MR. WARCHOL continued:
We talk about a 25% occupancy in a building before it will go forward. I, for one,
know that 25% won't support the building as it's completed. We do have a substantial
amount of vacant office space within the City, including Class A office space, as well
as projects on the drawing boards of Class A office space that are not able to get 50%
preleasing and are a much smaller size. Parking, All Right, one of the largest parking
contractors in this City, they lease space from me, too. They don't fill up their lots
now within a block of the Civic Center - within a half block of the Civic Center. The
City Manager spoke of a plan from '82 to '85, and I'm only reading from my notes. I'll
try and be brief on it; but, I think it was in 1 985, a new plan objective of
approaching the private sector. It appears to me that- there was substantial information
shared with companies like The Boyer Company that has not been shared with the private
sector in Beaumont, Texas. Subregating the ground lease, I happen to be in discussions
with a gentleman who had a building on City property out at Municipal Airport who is
having one hell of a time getting his financing restructured because the City would not
subregate his ground lease. I don't know what ever came of that but at that time that
was the situation. I 'just find this all kind of interesting today. Like I say, I am
not aware of any local people who have been contacted on this and, if the City decides
to go forward with this project, I agree. I think it's a great project. Are we going
to go out and share all this information with local developers now, too, and give
everbody a shot at it or are we just going to go to Salt Lake City and give Salt Lake
City Boyer Company a shot at it? Thank you.
MAYOR MEYERS: Thank you.
JOE SHAMBURGER:
Joe Shamburger, 2575 Pecos. Mayor, Members of the Council. I'm with Rogers Brothers
Investments here in Beaumont and we have not had a chance to look at this project and
we would like to. We also are very much in favor, as has been noted by the members of
the Council, that downtown development is an important part of the growth of our City.
We would like to be a part of it and we would like to consider this project. I don't
know whether it's economically feasible for us or not but it might be. One of the
things, since we have downtown office buiddings, we do have space available and we can
accommodate some tenants at this point. There are other buildings in town that also
have space in a first class great . . . you know, just fine office building. I think
that the important thing is that we would object to the way this matter has been
handled with an outer state developer without any local people being given the
opportunity to at least look and consider it.
MAYOR MEYERS:
Thank you. If no one else desires to make a comment, I appreciate you made your
request and felt it was important that you had opportunity to speak to Council. Since
we have shifted gears, does Council have any other questions on the subject?
COUNCILMAN LEE:
Is there a time problem relative to a delay of one week . . . . . .
MR. SUMMERHAYS: No.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 23
MAYOR MEYERS: If there are no questions, Councilman, you had a motion.
COUNCILMAN COKINOS:
If there is no problem as far as time is concerned, then, would . . . I would make a
motion that we postpone taking action on this resolution for at least two weeks.
MAYOR MEYERS:
Motion's been made to postpone action . . .
COUNCILMAN COKINOS:
Well, okay, let's make it one week, Mayor, so I can . . . that'll be all right.
MAYOR MEYERS: . . . postpone action on this item before you for one week. Is there a
second?
COUNCILMAN SMITH: Could I . . . . . .?
COUNCILMAN MOORE: I have a question . . . . . . go ahead.
MAYOR MEYERS: Let me see if there's a second, first.
COUNCILMAN SAMUEL: Second.
MAYOR MEYERS: I have a motion and a second. Question?
COUNCILMAN SMITH: Would this . . . will one week give the local people time. I am
concerned . .. I know . . . I knew nothing about this project until I came today. I
rather resent that also. I feel like maybe something could have been put in my packet
so I can appreciate their concerns. Will one week give the local people enough time?
I don't know.
COUNCILMAN COKINOS: I don't think . . . I don't think so, but, if the Councilman Smith
would like for me to change my motion to at least two weeks, I'd be more than happy to
do it. Would that give sufficient time?
COUNCILMAN SMITH: I don't know how much time the local people need.
MAYOR MEYERS: Councilman, I didn't mention this to you?
COUNCILMAN SMITH: You mentioned it to me Friday . . . . . .
MAYOR MEYERS: Okay, I just wanted to be sure . . .
COUNCILMAN SMITH: . . . but I did not have time to look into it . . . . . .
MAYOR MEYERS:
no, I didn't . . . none of us did. I just wanted to be sure I hadn't failed to do
tha t.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 24
COUNCILMAN COKINOS:
What ever time we have, I'd like more time to study this thing and . . . all of this hit
us today and I just feel that it's appropriate that we have time to think about such a
serious financial obligation the City's has and I've alreadyy got a second, Mayor.
MAYOR MEYERS: We have a motion and a second and your motion was for what period of
delay?
COUNCILMAN COKINOS: Let's put it two weeks.
MAYOR MEYERS: Motion's made for two weeks. Is that your second (to Councilman Smith)?
COUNCILMAN SMITH: Yes.
MAYOR MEYERS: Motion and a second .. . . . .
SECRETARY: Councilman Samuel seconded the first motion.
MAYOR MEYERS: Well, do you withdraw your second?
COUNCILMAN SAMUEL: I withdraw my second.
MAYOR MEYERS: Okay. Motion is made to delay action on this item for two weeks;
seconded by Councilman Smith. Are there any other questions or discussion?
COUNCILMAN LEE: Question.
MAYOR MEYERS: Yes.
COUNCILMAN LEE: Was a local developer contacted concerning this project?
CITY MANAGER:
We had preliminary discussion with one developer. One of the reasons we . . . I think
it's important, and Mr. Summerhays, I am sure, I would like him to respond in terms of
why he is even here. I think it's important from our perspective. We did not solicit
Boyer Company. We have not expressed a solicitation for any developer. The question
arose as to whether or not this kind of thing could even work and it was based on that
question that we sent some tentative -inquiries out and just simply asked the question
are we, you know, recognizing the building situation in the State of Texas, the
overbuilt situation in office buildings, at least permeating out of the Houston market,
are we, you know, are we sending up balloons that are not going to go anywhere. We had
three developers who contacted us and one of which, of course, The Boyer Company, went
ahead and proceeded with the deal. I'd have to say, Councilman, I don't mean to be
critical of Mr. Warchol or anyone else. The fact of the matter is that that's property
has been sitting since 1982. The City has expressed an interest for at least five
years for downtown commercial office space development. I can only assume, and perhaps
that was wrong on my part, that, in fact, those kind of things have been discussed. I
would ask Mr. Summerhays, if you don't mind, Councilman, to respond in terms as to how
he even got involved.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 25
MR. SUMMERHAYS:
Well, again, we had a preliminary visit with Mr. Haines in which he asked a general
feasibility question as to having space done in downtown Beaumont. Our initial
reaction was it's a struggle but, based on his feeling of the progressive nature of
Beaumont and the desire to have a building here and the lack of Class A space, we went
ahead and committed time and resources to evaluate it. We've engaged an architect and
we've spent some funds in travel and spent a great amount of time in trying to identify
potential tenants, meet with those tenants and cultivate possible business arrange-
ments. We've used our expertise to try and negotiate ground leases. My obvious reluc-
tance about opening it to everyone at this point, unless it's felt as though there's
been some impropriety conducted, is that everyone from this point on takes advantage of
all of the expertise and energy that we've put into the project to represent their
interest. We've taken our risk capital and thrown it at the Beaumont project at this
point. We don't know whether it's going to work. We are willing to continue to spend
capital to see if a development might go forward at the least possible risk to Beaumont
City and we, frankly, have developed some relationship with . . . relationships with
potential tenants now that the introduction of new parties - certainly it's your
decision, but the introduction of new parties may bring into question the ability to
proceed with the project. Also, in terms of a timing delay, the one tenant requires a
January . . . just so you understand the timing sequence, requires a January, '89,
building to be available. If it goes past that date, he has represented that they are
basically not able to represent an interest in the project. It will take at least a
year to build. It will take at least four months, additional months to design, and it
will take at least a few weeks or several weeks to identify if there is additional
tenant interest in the project to bring it to the 50% requirement which we represented
to you would be necessary to move the project forward, so, I am afraid time is of the
essence. One week is certainly not going to make or break the project but, unless we,
in the next two months, identify additional potential interest in the project and can
secure financing within the following month and commence the project, we face not being
able to meet the timeline of the particular tenant which is presently interested.
MAYOR MEYERS:
Do we have any other questions? Any other discussion?
COUNCILMAN BRUMLEY:
The only question I have applies to the motion as to what is to . . . what is to occur
over this period of time?
MAYOR MEYERS: The motion or what is -to occur?
COUNCILMAN BRUMLEY: I beg your pardon?
MAYOR MEYERS: The motion or what occurs during the time?
COUNCILMAN BRUMLEY: What occurs during this period of time that Mr. Cokinos has asked
for?
MAYOR MEYERS: I think he's asking you that (to Councsilman Cokinos).
COUNCILMAN BRUMLEY: Yes, I'm asking you (to Councilman Cokinos.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 26
COUNCILMAN COKINOS:
Oh, I'm sorry. I think it will give time for anyone to come forward to . . .on this
project and, furthermore, for the City Council, including myself, to understand what
the financial obligation is on the long-term basis. It's that basic and I think
Councilman Smith wanted to know if there was time enough for anybody in Beaumont to
come forward, if two weeks is time enough.
MRS. DELIA HARRINGTON, 815 Willow Street: I guess the time for speaking is over.
MAYOR MEYERS: Yes, ma'am, it is.
MRS. HARRINGTON: It is? . . . not for this old lady, I don't guess.
MAYOR MEYERS: You mean you want to talk on this? I mean you want to talk on this.
MRS. HARRINGTON: Yes.
MAYOR MEYERS: Okay, fine. Go ahead.
MRS. HARRINGTON:
I'm Delia Harrington. I live at 815 Willow Street. We have an opportunity now before
us to present it and I think one week, if we can't get together in one week, it's just
too bad. Even at my age, I think I could kind of come to some understanding within a
week's time and two weeks I think is just a little too long because all of you are
young compared to me and we have an opportunity now. And, Mr. Warchol had a chance to
fix that LaSalle Hotel, 'til yet there's nothing being done, not that I have anything
against him, but I've been watching that building and it's deteriorating by . . . . . .
MAYOR MEYERS: Now, you are going to another subject, Delia . . . . . .
MRS. HARRINGTON:
Well, okay, well, anyway, that's all I have to say. One week is sufficient.
MAYOR MEYERS:
I really don't want to open it up to debate at this point in time, but I would never
deny the microphone to Delia. That would be a terrible mistake. I'm going to hold.
MR. J. W. KYLE: New subject?
MAYOR MEYERS:
No, sir. We've got one right here we're trying to deal with. Do we have any other
questions, any further discussion? The motion as I understand it is to delay action on
this item for two weeks. That was made by Councilman Cokinos and seconded by
Councilman Smith. Sir . . . anything.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 27
COUNCILMAN BRUMLEY:
The only thing that I'd like to say . . . I can appreciate just what's been said
regardless of the time and I can appreciate what Councilman Smith has said as it
relates to when you have these particular black and white facts before you but I think
what he has said has a great dealf of merit. The fact that the longer the period of
time that you wait, sometimes the negative impact that it would have on the potential
of the project and I'd hate to . . . if it's just a period of digestion, you know, I can
understand however long it takes for us to make the decision. If it's an opportunity
for people to maybe come forward in two weeks and say I've got another deal better than
yours or let's work this deal out, then pretty soon we've . . . and we really don't
know. This man . . . The Boyer Company has initiated a project and I would hate for a
substantial amount of confusion to take place with no substantive end, I guess is what
I am saying during that two week delay. If the question is to delay it for two weeks
merely on what is before us as it relates to the ordinance then I don't have any
problems with it. If it's . . . I mean, he's already got one local firm involved in it
before the project's even begun and I just hate for it to mushroom and explode out and
then it become a mass confusion in two weeks. I wouldn't want that. I would think we
would lose an opportunity here. And, the obligation as far as that's concerned, I
think I've got the numbers before me on the obligation and then you'd have to trust
what . . . . . . I'm familiar with what . . . The lease is before us in black and white.
We've got a good idea of what the TIF is going to come out to and then I have pretty
good confidence in what Mr. Gorman's estimates are as it relates to his annual
participation and . . . It seems like a fairly black line payback in this point in time
but I can appreciate your interest to verify these numbers. I just don't want it to
drag the project around.
COUNCILMAN COKINOS:
I don't . . . I don't feel like it's going to be dragged on as long as there's been some
doubt on the City Council's mind. I know it's considerable amount of doubt in my mind
about the financial arrangements cause . . . it would .. . what are you asking for? You
asking for about 10 days? So, two weeks.
COUNCILMAN BRUMLEY: We don't meet in ten days.
COUNCILMAN COKINOS:
Well, he's going to give us . . . give us. .. we don't even have a financial structure of
The Boyer Company. I don't know how -long that's going to take for it to be in the City
Council's hands. What do you estimate that to be?
MR. SUMMERHAYS: It will be in the Administrative Offices on Friday.
COUNCILMAN COKINOS: On Friday, so, two weeks is not bad so we can know what financial
structure and obligations that the City will have. So, two weeks is not a bad . . . . . .
MR. SUMMERHAYS: That will not include any financial obligation . . . . . .
COUNCILMAN COKINOS: I didn't think it was. Thank you very much.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 28
MAYOR MEYERS:
Any other questions or discussion? I am totally comfortable supporting the project
today. I think that it offers a catalyst and an opportunity to move away from the
proprietary interest in the benefit of all of us here and I am very comfortable,
particularly in light of the fact that the construction and the work to be done will be
done with people here, giving them jobs, and I encourage with speed the completion of
the project and I think it would be farsighted and tremendous for our community and for
our City. With that, I would call for the motion. Those in favor, signify . . . yes
David (Moore).
COUNCILMAN MOORE:
Before we do that, I think one thing that could have helped all of us today, you did
mention that you had had discussion and would be talking about this, but if we could
have had some of that information, such as the brochure and maybe the letter, something
of that particular nature, prior to coming into the Council meeting would have helped
me a great deal. I can really respect the fact that the gentleman has invested the
time and the money and wants to become a part of the Beaumont community. I had some
concerns. He answered those for me and as far as the financial impact, I understand
that, based upon Betty's figures, is that we are covered based upon the caliber of this
project, that it will work. But, I think that would have helped me coming here today
being a little bit better prepared and have had opportunity . . . maybe have had some
outside discussion regarding local developers. With local developers, as you say that
project . . . that property has been there for a long length of time and that efforts
have been made to get hotels down here and everything else, so I am not totally in
favor of the time just for them to make a bid now because the opportunity has afforded
itself.
COUNCILMAN SMITH:
I agree with David. I feel like the information was there. It could have been
available to us and we could have looked at this over the last few days before we came
to Council. I have no problem with the basic project. I will do my own investigation
of Boyer because I have seen a lot of real estate go belly up bigger than Boyer. I
don't know what sort of impact that will have. We could have a white elephant and we
don't want that. That's my only concern, the financial stability of Boyer.
COUNCILMAN COKINOS:
And, my thoughts also, it shouldn't h-•t this City Council with such a tremendous impact
all of a sudden. They should have advised us who was behind the project and a good
prospectus from the Company would have enhanced my thoughts about this project. I
still think it's good for Beaumont. It's going . . . it's going to add to downtown
Beaumont but I want . . . I want some time to think about this. What it's going to be on
the long-term basis.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 29
MAYOR MEYERS:
Any other comments? Motion and a second to delay the action for two weeks. Those in
favor signify by saying Aye. (Councilmen Cokiaos, Smith, Brumley and Samuel. )
Opposed? (Mayor Meyers, Councilmen Lee and Moore. )
(Motion to delay carried. )
END OF EXCERPT.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987
CITY MANAGER ALBERT HAINES:
The next item, under Economic Development, is broken into two parts. You have before
you a letter dated June the 5th from a Mr. Lynn Summerhays of the Boyer Company.
Attached to that letter is a proposed option agreement. As part of Item D.3. , we will
be recommending to Council their consideration of adopting a resolution that Mr.
Nichols has drafted and we will distribute to incorporate the provisions of this
proposed option agreement.
COUNCILMAN COKINOS: Is that June the 5th or June the 4th?
CITY MANAGER:
It's dated June the 4th, yes, sir. You should have it there in front of you. Before
we go through the details of the letter and the agreement, we would like to make a
presentation relative to this proposal. And, in introducing this subject, I would call
your attention to your Agenda packet for some history behind the City's general
committment to Downtown.
In 1982, as part of the Land Use Plan, the City Council adopted a goal of making
Downtown Beaumont "the regional center of professional and financial services,
government, entertainment and cultural events. " In 1985, a new Downtown Development
Plan included recommendations for a new mixed-use building with improved and expanded
parking facilities in the area of the present Civic Center parking lot and, second, a
hotel would enhance and expand the full use of the City's Connvention Facilities,
specifically, the Civic Center and Julie Rogers Theatre.
Over the course of the past year, and specifically in looking at objectives we felt
could be refined and accomplished, we identified two specific objectives that we wanted
to work toward for 1987. First, that two pieces of properties, specifically the
Szafir's Building and the parking lot adjacent to the Civic Center, could be subject to
better utilization. And, second, approaching the private sector for the development
and expansion of those properties, or at least one of those properties, would certainly
be an enhancement to the Downtown. As you may recall, we are proceeding to negotiate
with Lamar University and others the potential use of the Szafir Building as the home
of a Texas Energy or Texas Oil Museum and, at the same time, at least over the course
of the past four or five months, staff has been working at the potential for
development around the Civic Center area and specifically the parking lot.
I suppose the catalyst for this came about as a result of an inquiry we received some
months ago from a local business looking for space and specifically targeting as their
primary desire for location the area of Main Street between the Gulf States Utilities
building and City Hall. And, it was from that initial discussion that some attempts
were made to identify individuals and/or firms that could give us a . at least a
response to our curiosity. We sent packets containing information of the area to a
number of development groups and the one developer, The Boyer Company, has responded
and is prepared today to make a presentation to Council.
.. „W„ err
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 2
CITY MANAGER continued:
I would call your attention now to the proposal that is in front of you from Mr.
Summerhays. Specifically, what he will be asking for from the City today is for the
Council to agree to an option of property presently under the ownership of the City of
Beaumont - specifically, they be allowed the right and privilege of leasing property
for a period of six months with an additional six month extender and, secondly, that
the lease terms would be negotiated for a 40-year period with two (2) 20-year options
for renewal, that the City would agree to lease to The Boyer Company approximately 166
covered parking stalls that would run concurrent with the ground lease that The Boyer
Company would pay . . would agree to pay as an annual lease cost for the ground and
parking stalls, $60,000, with appropriate escallations over the term of the ground and
parking leases and the predication of those escallations would be based on a net per-
square-foot-rental income as paid by tenants; then, finally, that upon completion of
the office building, the City would provide 166 covered parking stalls for daytime
use.
I would like to, at this point, now, introduce to you Mr. Lynn Summerhays of The Boyer
Company and ask him to make his presentation and introduce your team. Okay?
MR. LYNN SUMMERHAYS, THE BOYER COMPANY:
Mayor Meyers and members of the Council, I am Lynn Summerhays and I am a partner with
The Boyer Company, which is a real estate development firm headquartered in Salt Lake
City, Utah. Our Texas connections are not substantial. We have though shopping cen-
ters and manage in Lubbock and Amarillo, Texas. Just a brief history, I did give you a
picture brochure that shows some of the projects which we have done that gives you some
familiarity with the scope of real estate development in which we are involved.
We became acquainted with the interest of Beaumont in a potential downtown development
from Mr. Haines. Al previously was the Chief Administrative Officer of Salt Lake City
and we had a fairly high-level of confidence in him and, so, when there was some
preliminary inquiry as to any potential interest, we responded and have since made
three visits to Beaumont; have had several on-going conversations with potential
tenants; have engaged an architectural firm to do a preliminary examination of the
site, it's feasibility and the potential building design; and have moved down the road
quite a ways, in fact, with potential tenants.
The reason why we are here today is that we are basically at a stage where we can move
no further without the ability to reliably produce what we are suggesting to the
interested tenants. We are at a point where we have a timing . two issues. One is a
timing issue. The tenants with whom we are now discussing require as part of there
adjustments a January, 1989, occupancy requirement if they are to move into new space,
which has been their interest and they are the precipitating business which has created
the potential for the project. The second is just representation question. We are
hesitant without the sanction of this body obviously to make any representation which
we can't perform on. To this point, they've been discussions. We feel comfortable in
a building design; we feel comfortable in costs; we feel comfortable in the approaches
we've outlined for developing this project; but we can't move any further without being
able to reliably produce results for those we have made representations to. So,
henceforth, our request to you for this option agreement this day.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 3
MR. SUMMERHAYS continued:
Let me make you acquainted with the project we are proposing. I have today here the
architectural team of White, Budd, VanNess - Lynn Harden, principal, and Gil Hoffman,
principal designer on the project. They've been engaged by our firm to do the prelimi-
minary studies of the site. You are acquainted with them because of their association
with the Museum and several other Beaumont projects. I'll work from the site plan ini-
tially. What we are proposing is leasing from the City a parcel, and we have desig-
nated in red attached to that option agreement the pad per se on which we are suggest-
ing a ground lease be negotiated and executed. The site's approximately 1.28 acres of
ground. On that site would be built a six-level, approximately 86,000 square foot,
facility.
The intent of the layout was to produce an extension of the Fannin Street development
matching the entry of the Museum, the porte cochere of the Museum, with a motif that
you'll see familiar with the office building. In fact, they have a very compatible,
aesthetic appearance with the development of the Museum across the street and it is our
intent to provide in engaging this architectural firm, trying to provide some cohesive
sense of master plan to the downtown area.
The other considerations, as we've met with various staff members and with the tenants,
was to try and allow maximum flexibility with the City and for development of the
entire parcel so we've suggested only encumbering that which the designated area shown
in red for the ground lease. That will leave the remaining site.
We've done preliminary investigations as to a larger hotel complex as well. We've '
gotten good advice from various local hotel owners and, at this point in time, we are
reluctant, though we have developed and owned hotels and have two Hiltons under our
ownership at this present time, to proceed with a large downtown hotel development and
we can go into detail as to our rationale there. Although we have discussed . . we have
made provision in this arrangement and a site plan has been developed where such a
facility could proceed on a phase basis after this project or could be incorporated as
part of the office development.
One of the inquiries made by Mr. Haines and his staff was to the feasibility of develop-
ing some adjunct, additional adjunct to the Convention Center need - additional meeting
rooms, a restaurant, and some potential overnight usage as part of a portion. . .one or
two floors of the office building. We discussed this with our financing sources and it
becomes, at this point, a feasible alternative and would be willing to entertain some
consideration there. It is not part of this specific proposal that we are making but
it is an open discussion item and could be an option that the City may exercise and I
think becomes a part of this option agreement which we'll review with you in greater
detail in just a minute. That becomes the site plan.
The parking considerations . . . we are sensitive, too, to the need for parking to sup-
plement this Convention Center requirements. This proposal which we are making would
have .. . we would be leasing, basically at $16.00 per stall per month, 166 stalls from
the City. It would require the City to build a parking structure of approximately 300
additional stalls. Presently the site has 415 stalls. Our building requires 166 with
300 added and with the parking loss through the building of this building, the sum of
the above is that there would be about 40 . . 30 to 40 additional stalls for daytime use
than are now available for the Convention Center. That's taking into consideration .
subtracting out our needs for this building and would therefore add about 200 stalls, . .
additional stalls for nighttime use for the Convention, over and above what are now
presently available for the Convention Center and associated conventions.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 4
MR. SUMMERHAYS continued:
I should mention at this time . . let me just first of all give you a feeling for the
building. We've been very pleased with the effort of the architectural team in main-
taining a traditional . . . what, Gil, did one of the students call this approach? Texas
Post-Modern. I'm not sure what that means but the intent is to produce a traditional
feeling for downtown Beaumont, at the same time producing a contemporary feeling with
additional glass, particularly for tenants, are newer Class-A buildings which have a
very different type of mechanical . . When I say very different, with a high emphasis on
aesthetics and particularly in your mechanical and electrical systems your control
systems, a higher exposure of glass is a very desireable thing for tenant use and, so,
it combines a traditional look with the higher glass exposure and this building will
also include the features which are presently available to significantly enhance office
environment for potential tenants. This is the stated desire of this particular tenant
not having such space available in downtown Beaumont, since no such buildings have been
developed downtown in the recent past. I think that summarizes what we are proposing
on this particular site.
I would note at this point that if we were to make an analogy to an A to Z process,
we're probably at point D. The jury's out as to whether or not this project will
actually occur. Right now, we have interest of about twenty-five percent of the
building - even to get financing, we will have to have this building with a twenty-five
percent pre-committment.
We are encouraged and confident at this point that there's a reliable possibility that
this project could occur based on our discussions with tenants, our preliminary survey
of the needs of the City, and with our perception and experience in doing these
projects in other communities. And, we would invite at this point, your questions and
be anxious to respond to any inquiries you might have regarding our plans or what we
have accomplished or our perceptions.
MAYOR MEYERS: Thank you, Lynn. I will ask now for Council. Mike (Brumley), do you
have any questions?
COUNCILMAN BRUMLEY: The . . . these numbers as it relates to the parking and the
building, are these . . . these aren't numbers that will increase with time or decrease
with time? It's what you see or what the proposal is or the option that we have before
us, are they a fixed number or what is you . . . . . .
MR. SUMMERHAYS:
Let me address that. First of all, our needs of 166 stalls accomodates . is in
excess of Code requirements, number one, any municipal Code requirements. Ours is
based on functional experience. Our tenants require a certain ratio of stalls per
square foot so for the building purposes, for the standard building-use tenant, we see
this as the perpetual need for parking. That can change if you have a very high
density personnel use. There are some uses that would require more parking. This will
be all that we will provide any given tenant on-site. We'll be restricted, of course,
by what the City will lease to us. I should say that for daytime use, I think it's
John's intent to try and lease daytime stalls in addition to those which we are leasing
from the City so I think there's probably more parking there available than what our
needs are. For the Convention, I can't speak to the Convention needs and maybe John
would like to respond to you in that regard related to what he sees as the Convention
need for parking and how this proposal effects that. Would you like him to address
that at this point?
COUNCIL Page 5
COUNCILMAN BRUMLEY:
Yes, if he'd like to. I was more concerned with your particular needs as far as our
obligations were concerned under the agreement.
MR. SUMMERRAYS:
Okay, for our needs, this will meet . . . this surpasses Code requirements and meets our
functional needs.
MAYOR MEYERS: Anything else, Mike?
COUNCILMAN BURMLEY: Not right now.
MAYOR MEYERS: Bob (Lee)?
COUNCILMAN LEE:
The plan is, then, as you move through the process of identifying those potential
occupants and possibly getting committments from them, to jointly be investigating the
Possibility of developing the garage itself, is that correct?
CITY MANAGER:
Let me at least introduce it and perhaps then call on either Betty or John to fill in
the spaces. What The Boyer Company wants is 166 covered parking stalls. In order for
us to do that, we will have to either do it ourselves or through some contract provide
for a total parking garage facility. At the present time, it looks like the most cost
effective way to do that would be for the City to actually issue bonds, revenue bonds,
on the facility and to contract the construction and operation of it out. We can,
because we can get tax exempt rates, there are a lot of constraints that the private
sector is under in an issuance of this kind. I think, Betty (Dunkerley), if you could
give us an idea of the amount of the issue and then, John (Gorman), the total number of
parking stalls that would be in that facility would cover not only the requirements of
The Boyer Company but also the net loss of parking spaces that that footprint would
take.
MRS. BETTY DUNKERLEY, DIRECTOR OF FINANCE:
On the financing of this facility, we are using an estimate of about $1.2 million as
far as the initial cost of the facility. Now, in order to finance that, we are going to
take the revenue from the ground lease and the parking slots that The Boyer Company
will be leasing, about $60,000 would apply toward the debt service of the parking fa-
cility. In addition to that, John Gorman feels like the additional spaces. . .we will be
able to generate enhanced parking revenues that will also go into this pool for finan-
cing the debt. We plan to use the Tax Increment Financing contribution from this pro-
ject to complete the debt service financing. At the current tax rate, this particular
office building will bring about $57,700 into the Tax Increment Financing Pool. That
will be more than enough to finance the parking facility over either 15 years or 20
years. Now, if by chance we do get a tax decrease with the Sales Tax Option, the income
at that time on the Tax Increment Zone will cover by itself the 20-year financing.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 6
MRS. DUNKERLEY continued:
On the 15-year financing, if we opt to go that way, we would need an additional $6,000
from the TIF Zone in addition to what this project brings in and we have more than
enough money. .we will have more than enough money available at that time to cover
that. Our obligation to the Art Museum will be ended this current year . . I mean the
coming year. So, as far as the financing, even if we've overestimated our enhanced
parking revenues, we will have enough funds in the zone to cover that and I think the
only thing that would need to be done is that the plan . . . TIF Plan would have to be
amended to include the parking facility, and I don't think it's currently in the plan,
but the Planning Department could look into amending the Plan to cover that facility.
COUNCILMAN BRUMLEY:
So, you are saying $57,000 from the Zone plus the $60,000 from the lease and whatever
the enhancement from the Center would be a 15 or 20 year, which one did you say?
MRS. DUNKERRLEY:
Well, I'd probably like to go 15 and . . . but I've put both options down there so that
you can see but there will be enough additional money to cover any, you know, over-
estimates/under-estimates we made that are not committed in that TIF Zone. That
$57,700 just relates to this new construction.
COUNCILMAN LEE: And the parking garage would be constructed to accommodate some 466 to
500 . . . . . .
MR. JOHN GORMAN, DIRECTOR OF CONVENTION FACILITIES:
My understanding at this point is that first of all the existing parking lot, I believe
it has 415 stalls in it now, the office building construction would occupy about 166
spaces. The new parking deck would have in the range of about 275 to 300 total stalls.
That in combination with those stalls remaining that aren't occupied by the office
building, would give us a total 584 or so spaces. There are 166 to be leased during the
daytime period for the office building. That would leave us with a net during the
daytime of just a few more spaces than we have now and then 160 to 170 spaces
additional during the evening. I think we are all aware of the serious parking problem
that we have down here for events and this would go a long way to help correct that.
COUNCILMAN LEE:
So, the plan is not to provide for that many more parking spaces than are currently
available and not build a parking garage for anything more than would accommodate
something that in addition to the surface parking would accommodate about 20 more cars.
CITY MANAGER:
Except for nighttime and— that would essentially balance out the daytime use the way we
have it now and it would bump it up. Our feeling is that we can with the lease rev-
enues from The Boyer Company for the parking and the ground space plus the additional
$50,000 plus that would be generated in property taxes that we feel fairly justified in
coming to you to recommend that increase parking capacity because of the problem we are
having at the Civic Center and this is a way we can get that done without tapping any
general property tax funds and come right out of the project.
EXCERPT FROM REGULAR CITY %_ �NCIL
SESSION HELD JUNE 9, 1987 Page 7
COUNCILMAN LEE:
. . .a great deal on parking. You mentioned that you had 25% . . expressions from people
indicating they might need 25-percent of the space that would be available.
MR. SUMMERHAYS:
We've had expression of interest for about 60% of the space, some of that has declined
since a couple of the tenants were mutually excluded, so we are down to what we feel to
be a fairly reliable 25% interest. They've done a space layout on a given floor.
They've met . . . we've met with all of the representative decision makers. There's a
pretty reliable feeling about 25% of the building.
COUNCILMAN LEE:
And, the response was or the statement that was made to you from those people who are
interested is that this provides Class A office space that is otherwise not available
in the downtown area.
MR. SUMMERHAYS: That's right.
MAYOR MEYERS: Andrew (Cokinos)?
COUNCILMAN COKINOS:
I've got several questions that I'd like to ask you, Mr. Summerhays. First of all, I
would like a complete and detailed prospectus of the project, including the long term
financial obligation to the City of Beaumont may have. Is that available?
MR. SUMMERHAYS: I'd be happy to sit down with you and . . . . . .
COUNCILMAN COKINOS: I'm talking about a prospectus.
MR. SUMMERHAYS: We have done a complete financial performance on the project.
COUNCILMAN COKINOS: Have you got it available?
MR. SUMMERHAYS: In a distributable form? No.
COUNCILMAN COKINOS: I would certainly like to have a complete and detailed prospectus
of this project . . . of what long-term financial obligations the City of Beaumont may
have.
MR. SUMMERHAYS:
Again, the obligations of the City of Beaumont, as I see them, would be to produce a
ground lease for us on which we would pay a fair market value for that ground lease.
You would be obligating yourself for the building f a
upon our ability o g parking structure and relying
y pay for those stalls, but part of the agreement would subordinate
the interest of the lender to the Beaumont position. And, so you'll have us in the way
of any financial concern, and you will have a lender in the way of any fincial
obligation on the part of the City of Beaumont.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 8
COUNCILMAN COKINOS:
I'm kind of surprised that you haven't a complete prospectus for this City Council to
look at on this particular project.
MR. SUMMERHAYS: What do you describe as a . . . . . .
COUNCILMAN COKINOS: Well, I mean, the financial obligation of the City and . . . . . .
MR. SUMMERHAYS: Basically, the City has no financial obligation . . .
COUNCILMAN COKINOS:
. . . and what's the project going to cost, how much the garage is going to cost and I've
got further questions I'd like to ask you.
MR. SUMMERHAYS:
Certainly, I think the garage will cost $1.2 million. The project is between $6.0 and
$7.0 million, none of which is the obligation of the City of Beaumont. The City of
Beaumont would received, based on their $1.2 million parking structure, $60,000 of
income for that $1. 2 million which will be derived from us - additional revenues which
would be derived from retail use of the parking stalls. The other reason why we don't
have completed prospectus is we don't have a completed project.
COUNCILMAN COKINOS:
Well, okay. Let's pursue this a little bit further. I was just making notes while you
were talking. Furthermore, whether or not any lease payment to the City is on a bond-
protection or with a financial institution that has a good record. I mean, fine, you
are saying we are getting $60,000 a year. Is there any bond protection for the City
that we'd be getting this $60,000 a year for the parking lease. There's a lot of
questions that . . . . . .
MR. SUMMERHAYS:
Let me respond to that. If you don't receive ground lease payments, then the lease is
defaulted upon and you own . . . I mean, you end up owning an asset worth between $6.0 to
$7.0 million.
COUNCILMAN COKINOS:
Well, I'm going to pursue that. Now does that mean that the City have to subordinate
the City land to the developers for this development?
MR. SUMMERHAYS: Yes, the City land would need to be subordinated to financing.
COUNCILMAN COKINOS: That's not very good.
MR. SUMMERHAYS: It's a standard practice.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 9
COUNCILMAN COKINOS:
Well, it's a standard practice, but it's not good for the City and I want to understand
the financial arrangements thoroughly and what this project is all about so that means
that we have . . . for you to start this project, we've got to subordinate our claim to
this . . . to you.
MR. SUMMERHAYS:
The ground would have to be subordinated to financing; that's true to developing any
project, whether you develop a parking structure or an office building or anything that
goes on this project, the land would need to be subordinated to those who provide the
financing.
COUNCILMAN COKINOS:
So, that means we at least have a second lien instead of owning the land.
MR. SUMMERHAYS:
That's true. What it means is in order to foster the development of any project on
this ground, you will have either sell or subordinate.
COUNCILMAN COKINOS:
Well, I'm for economic development and I want to see this City progress, but at the
same time, I'd like to see the City of Beaumont and the citizens of Beaumont protected
on the long-term uncertain indebtedness that this City could have and who knows what
the economy will bring. Who knows whether this project is going to get off the ground
or not. And . . . . . .
MR. SUMMERHAYS:
The City would have no payment requirements on the indebtedness.
COUNCILMAN COKINOS:
But we don't have a guarantee for the lease.
MR. SUMMERHAYS:
You have certain guarantees. That's based on the financial strength, you're right, of
the developer and the financing entity.
COUNCILMAN COKINOS:
So we don't have any guarantees as far as the monthly or the yearly income or lease on
the grounds.
MR. SUMMERHAYS:
As good a guarantee as the Nation's largest real estate lender can provide and small
town, at best, developer, but, yet, a developer with some experience and financial
strength.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 10
COUNCILMAN COKINOS:
Well, personally, myself, I cannot in good conscience authorize the City Manager to
obligate the City on a long-term program which may include unknown financial
obligations for the City to be faced in years to come. I just cannot . . . . . . I cannot
. . . everything . . . there's too many unknowns in this thing.
MR. SUMMERHAYS: What unforeseen financial obligations would the City be incurring?
COUNCILMAN COKINOS: Well, tenants . . . vacancies in the building . . . . . .
MR. SUMMERHAYS: No obligations . . . no obligation.
COUNCILMAN COKINOS:
parking lot, building . . . building a garage. That's a million . . . that's a
obligation there.
MR. SUMMERHAYS: $1.2 million. That is the extent of the City's obligation.
COUNCILMAN COKINOS:
Well, it's . . . . . it's too many unknowns as far as I am concerned.
MR. SUMMERHAYS:
I'll be glad to answer any questions of unknowns in terms of your obligation. I think
you will find the obligation which you possess is the building of the parking structure
and the debt incurred on that and I think Betty's reviewed how you would fulfill that
obligation. There are no other financial obligations into this proposal.
COUNCILMAN COKINOS:
I don't like to subordinate the City land to finance this project and that's a very . . .
that's a very serious thing right there as far as I'm concerned.
MR. SUMMERHAYS:
It's certainly an acceptable viewpoint and to have any development go on the site you
will end up needing to subordinate the ground.
COUNCILMAN MOORE:
I have a couple of questions and members of Council have addressed several of them.
The parking structure you addressed will be $1. 2 million, that's the City's exposure
and, based on the figures I've taken down, about $120,000 of that should come back in
taxes and lease fees for this parking slots. My biggest question is what's . . . What
type of City investment will we have in terms of dollars up to actual time you decide
to build the building? My understanding from the conversation, until 25% of the
building was . . basically, the pre-lease or something, you would not actually start the
construction.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 11
MR. SUMMERHAYS:
That's right. The only obligation of funds to the time in which a ground lease is
executed and the loan is put in place and we encumber the ground, it is ours. The City
has no financial obligation.
CITY MANAGER:
We would not . . . we would not even consider issuing any kind of bond for that parking
garage until we had the assurances from the developer that it was a go project.
MR. SUMMERHAYS:
Your ground lease would require us to have financing in place, an executed ground lease
and all elements of the project firm before you will be committed to any obligation
financially.
COUNCILMAN MOORE:
Okay, to the parking lot again, who will actually do the rate regulation on that? Will
that be the City in regards to what we charge?
MR. SUMMERHAYS: Yes.
COUNCILMAN MOORE:
Would those rates be basically renewed as we changed the rates of our rental . . . lease
spaces around here?
CITY MANAGER:
The only area that would be firm or fixed would be the agreement with the developer for
the 166 stalls at $16.00 a month. All of the others, the parking control would be the
City's.
COUNCILMAN MOORE:
You also address something about if this particular project, based on your projections
you constructed and it was built, and for some reason which we hate to think of .
it's not a feasible project to continue and you said it will be about $6.0 or $7.0.
million investment, . . . . . .
MR. SUMMERHAYS: That's our investment.
COUNCILMAN MOORE:
. . . your investment. Now, what happens if you decide that you cannot support the
building with the tenants in place?
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 12
MR. SUMMERHAYS:
Well, if for any reason, we were to go out of existence, which has happened, then the
lender would have the position - with typical agreements, the lender would then assume
our position and would have ownership of the project. We've not had any projects that
have done that in our twelve-year history but that is a possibility; but, if we were
not to own it, then the lender who has first lien right would own it and be responsi-
ble for fullfilling the obligations which we committed to, i.e. ground lease payments.
COUNCILMAN MOORE:
So, this is just one of the simple stages that you have to go through before you have a
project and look at completion on it. What time frame are you looking at? Say, for
instance, this was a positive type of negotiations with this Council, how many more
steps . . . how much longer would people actually be waiting and percentage . . . you may
decide then not to do it at all?
MR. SUMMERHAYS:
Well, this agreement contemplates a six-months option . . . initial option and it's I
think it's fairly reliable to include that within that six months we will know whether
there's a project or not.
COUNCILMAN MOORE:
I have a couple more questions. The construction of that particular project - would
you do that construction locally?
MR. SUMMERHAYS: Yes.
COUNCILMAN MOORE: You would do it with local firms here.
MR. SUMMERHAYS:
Yes. Either here or Houston-based contracting firms or Dallas-based contracting firms
that have done work here in the Beaumont area. It's the size of the building where
there are a limited number of contractors that could handle this type of project and be
bondable and in order to get the proper distribution of bids, we may need to engage
what could be termed, I guess, peripheral-local contracting entities.
COUNCILMAN MOORE:
You also addressed some feasible or alternative for additional construction space
apparently between the facility in the back of the Civic Center or . . . ? I didn't
quite understand that.
EXCERPT FROM REGULAR CITY k ,A CIL
SESSION HELD JUNE 9, 1987 Page 13
MR. SUMMERHAYS:
Let me mention what that was. This site plan shows the proposed project. Here on this
side is the Civic Center. We are only leasing this portion of ground, which leaves the
City total latitude on what to do within the remaining portion of ground you can
construct. The only requirement we have of the City is the producing 166 covered
parking stalls at $16.00 per stall per month. Whether you build a hotel, whether you
build a 5-level parking structure, 2-level parking structure, whether you expand the
Civic Center, that's all in your control. We end up controlling this pad of 1,28 acres
on which you will require us to build an office building as described and shown. You
will have restrictions on what we do on that site and . . . there would be a cross-
easement agreement so all access points and easements are maintained and so those types
of agreements are regularly worked out.
COUNCILMAN MOORE:
You've basically answered most of my questions. I think the building and its pro-
jected appearance looks great. I guess I only have one other question to you and the
only reason I'm asking this question because if the City participates and that's a sum
of money that all the citizens participated in for the parking structure regardless
what the return is. I've looked at your clients here - a long list of creditable
people. I guess my next question would be to your company itself and its practices and
policies - how it addresses Affirmative Action. do you have a program in place? Is
that even considered, knowing that you're from Salt Lake City and know what the
population percentages are there but that is a concern. That operation operating here
and you would be the managing group, what would be your practice in place there?
MR. SUMMERHAYS:
We do not have an Affirmative Action policy as a company. We are very small. In fact,
I think if you looked at the last page, you will see the number of employees which we
have. We are extremely open and amenable to recommendations on how we conduct our
business in that regard here in Beaumont.
COUNCILMAN MOORE:
In looking at your flyers, one of the things that prompted me asking that question and
it would certainly be something I would be extremely sensitive to in hoping that you
would correct and address.
MR. SUMMERHAYS:
We would be delighted to. We have very little selection possibilities in Salt Lake
City regarding Affirmative Action at the moment in terms of certain minority groups.
Certain others, I think our women outnumber our men in terms of our population both in
terms of secretarial as well as administrative and management roles.
COUNCILMAN MOORE: Thank you.
MR. SUMMERHAYS: Thank you.
MAYOR MEYERS: Audwin (Samuel)?
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 14
COUNCILMAN SAMUEL:
Before I make my questions, what exactly is being asked of Council today?
CITY MANAGER:
You'll be asked to adopt by resolution authorizing the Manager to negotiate an option
agreement that is . . that carries with it these stipulations: specifically, that you
are willing to subordinate the City's interest in approximately 1 .28 acres of ground
based on a lease . . . fair-market lease agreement of 30,000 . .40,000, whatever it is . . .
MR. SUMMERHAYS: . . . $32,000 . . .
CITY MANAGER:
. $32,000; secondly . . . a year. Secondly, if this project works, that you will
commit to lease back to him 166 stalls, parking stalls at $16.00 per month. Total
revenue to the City of $60,000 for lease and parking. In return, the City subordinates
its interest in those two things. There is one other thing we talked about, Lane.
MR. SUMMERHAYS:
The option for the City to . . . . . .
CITY MANAGER:
Oh, that's rigght to allow the City to negotiate for additiona]� space ford djunct
uses for the Civic�Center , such as a restaurant, meeting rooms an /or overn git
accommodations.
COUNCILMAN LEE:
Is that in addition to the property of 1.2 (acres) we are talking about here?
CITY MANAGER: No, that's on that 1.2 acres . . . . . .
COUNCILMAN LEE:
That Jt2 t2 acres is defined by the perimeter that you outlined . . . . . . the triangular
MR. SUMMERHAYS: It's defined on your exhibit in red. That's right. That's correct.
CITY MANAGER:
Essentially, then, Councilman, what we would do is we would take these stipulations,
these terms and conditions and negotiate a firm agreement with them. Assuming that
they fullfill their side of the bargain, then we would come back and negotiate the long-
term lease agreement.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 15
COUNCILMAN SAMUEL:
Before any funds are expended from the City, would it be brought back before the
Council or would this be the last opportunity.
CITY MANAGER:
No, it will come . . . the bond . . . the funding expenditure of the City will be in the
form of a parking bond issue. That will have to come back to the Council. The lease
agreement, I think, too, Counsellor, would come back to Council; however, you would be
obligated if The Boyer Company fullfills its part of the option agreement, and there
are no changes to that, then the obligation is to Council to essentially adopt both the
lease agreement and the issuance.
COUNCILMAN SAMUEL:
Okay, the two concerns that I have . . . most of the questions that I had written have
been answered . . . . . . (tape turned) . . . as far as finance in the event that your
company is not able to continue on the project. That's the first thing. That's
unanswerable at this time.
MR. SUMMERHAYS:
Well, I think it is answerable in terms of the way this agreement is structured to
protect the City and that would be the worst thing, I suppose, that could happen to the
City . . . . . . let's take "worst case" and let's think out loud together; but I think
this is accurate and will welcome any additional input. The worst possible option is
that the parking structure is built, we construct the building and don't fill it up
with tenants and therefore . . . and we expend all of our asset that we have as a company
to make it survive and the lender, and let's call it Metropolitan Mortgage, in this
instance, and Metropolitan Life Insurance is the institutional lender then who provided
the construction financing, build the building. We go out of existance. They own the
project. They are obligated to make to the City lease payments. Let's suppose
Metropolitan . . . the lenders are always, again, insured by the Government. You'd have
to go through a long line of defaults to ever get to the point . . . the worst possible
things I guess if everybody defaulted was that you could have a $7.0 million building
sitting on a site and not be receiving any income on it but not obligated for any
payment on it. Your limit of your obligation is the parking structure.
COUNCILMAN SAMUEL:
Okay, but that is the worst case scenario that I had in mind. That's the first
question. Second question was on the line of Councilman Moore. When I picked up the
brochure, I didn't see any sign of minority participation in the Company. I understand
population of Salt Lake City; however, I know that employment is not confined to the
area in which you are located, so my concern would be your committment to adhere to our
attitude as a City toward minority development.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 16
MR. SUMMERHAYS:
I think you will find us very amenable to your interests. Interested in a good project
manager's role? No, excuse me. I didn't mean . . . didn't mean to jest; but, yes, Mr.
Samuel, I think you will find that we have a very . . . will be extremely good to work
with and we will be delighted to have as a restriction of the ground lease some type of
Affirmative Action requirements on our part in terms of our conduct here in Beaumont
and we would invite working that out with you. We would be delighted to have that as a
part of the restriction of approval.
COUNCILMAN SAMUEL: I'll go with that.
MAYOR MEYERS:
Audwin, anything else? Lu (Smith).
COUNCILMAN SMITH:
The $60,000 for the lease for the parking stalls, does that include the execution of
the ground lease.
MR. SUMMERHAYS: Let me mention how that mention was derived.
COUNCILMAN SMITH: Yes, I'd like to know how that figure was derived.
MR. SUMMERHAYS:
This, again, was a negotiated session with most of the City staff present. The ground
lease based itself on the amount of acreage we are leasing times an appraised . . . it's
taken at its appraised value, in fact the ground lease that we are suggesting is a
little bit higher than the appraised value of the total site. I think the total site
appraised for about $4.60 something a square foot. We recommended a $5.00 a square
foot value times 10% so we pay 10% of that value per year, which is . . . which is the
same things as if we . . . we'd buy it at that if we could but the City has represented
it is not in their interest. We'd buy the ground, I guess is what we are saying, Dr.
Smith, at fair market value but the City is unwilling to sell it to us at fair market
value; therefore, we will lease it on the exact same terms. So, that's about . it's
either the 28 or the 32 . . .
MRS. DUNKERLEY: . . . 28 . . .
MR. SUMMERHAYS: . . . 28, okay, that's $28,000 . . . . . .
COUNCILMAN SMITH:
That's what I figured out was 22 . . . because the other figures out to about 32 . . .
MR. SUMMERHAYS:
. . . then the parking amount is $16.00 a stall per month . . .
CITY MANAGER:
That's based on the time, the hours of the day that they will be using it.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 17
COUNCILMAN SMITH:
That just seems a little low for that property but I didn't know what the value .
What is that 1.28 acres valued at?
MR. SUMMERHAYS: It would be five times 43,560 times 1.28 acres.
CITY MANAGER: Our appraisal was $4.65 a foot.
COUNCILMAN SMITH: Well, I don't know how many square feet are in a . . . . . .
MR. SUMMERHAYS: Well, again, it's . . . . . .
COUNCILMAN SMITH: I don't have my calculator.
MR. SUMMERHAYS: I don't either sitting back there; but, the value of that land would
be that acreage - there's 43,560 square feet in an acre, then the ground is appraised
at $4.65. We're asking . . recommending the value at $5.00.
COUNCILMAN SMITH: I think the other questions were answered.
MAYOR MEYERS:
Having gone around . . . do you have another question, Andrew?
COUNCILMAN COKINOS:
I have one more question. Mr. Mayor, I feel that on such an important financial
obligation of the City, we are just now beginning to get to the tip of the iceberg on
this project, I'd like to postpone taking action on this resolution for at least a week
so we can all . . . so I can and the City Council can fairly understand what this
financial obligation is that we are faced with and I would like to at least have a one
more week so I can understand what's . . . what we are faced with here and I would like
very much at least another week to let all this soak in before we take action so
quickly and everything right here that I have ever known about this project is in the
last thirty minutes.
MAYOR MEYERS:
I'm sure Council's willing to entertain your thought. Anybody else have any other
questions. Then I would ask you to make a motion if you want to, Councilman.
COUNCILMAN LEE:
I have one more question. Do you have the number of square feet that The Boyer Company
has developed and is in your portfolio of the same sort of office space?
MR. SUMMERHAYS:
We've done downtown office space in excess 1.3 million at least.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 18
COUNCILMAN LEE:
And, of that 1.3 million that have been developed in downtown areas, that is Class A
office space, not strip centers or anything else, what percentage of that 1.3 million
square feet is occupied currently, would you say?
MR. SUMMERHAYS:
We presently have in excess of 90% occupancy in all of our office buildings which for
Salt Lake City with a close to 20% vacancy rate is pretty healthy. I'd be delighted to
give you a rundown of all of our buildings and their occupancy as well.
COUNCILMAN COKINOS: What's the financial strength of Boyer and Company?
MR. SUMMERHAYS:
We have asset . . . I guess the best thing for me to do is send you a financial
statements, if that would be all right, for your personal view or any of the Council.
COUNCILMAN COKINOS:
Well, I would suggest you send it to all, not personally to me, but all members of the
City Council. I feel certain that they would like to know what the financial strength
of The Boyer Company is.
MR. SUMMERHAYS: We will be delighted to send you our financial statements.
COUNCILMAN COKINOS:
Now there wasn't assurance from any . . . the City that they would pre-lease any space
from your building . . . . . .
MR. SUMMERHAYS: That is correct.
COUNCILMAN COKINOS:
. . . as . . . prior to another project that we had here in Beaumont.
MR. SUMMERHAYS: That's correct. We're on our own.
COUNCILMAN COKINOS:
. . .and, I would . . . this is why I'm asking the Mayor and City Council to . . . let's
postpone this so that I can get your financial structure and financial strength and
postpone this thing for a week and I'd really like to have that, Mayor.
MAYOR MEYERS:
Well, in a moment, I'll let you put that in the form of a motion, Councilman, but let's
make sure all our questions are answered. I have a few but I'd like to run back
through. Mike, do you have any other notes you've made?
COUNCILMAN BRUMLEY: I'm fine.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 19
MAYOR MEYERS:
Betty, you ran out, obviously, the debt service on 15 and 20 years. Do you have that
figure?
CITY MANAGER: Yes, Carol (Flatten), why don't you go ahead and make distribution of
that—. . . . . .
MAYOR MEYERS:
Lynn, I was pleased to hear you state that the indications are that it's feasible to
include hotel rooms within that building.
MR. SUMMERHAYS:
I know you've been a strong advocate, Mayor, of having that support space for the
Convention facility and when Mr. Haines suggested that to us, there was a . it's not
usual. I mean it is not a normal kind of consideration and it may be difficult to
produce but the lendors were accommodating . . .
MAYOR MEYERS: Good.
MR. SUMMERHAYS:
. . .and opened the door for it so it is something that . . . . . .
MAYOR MEYERS: Good. They need to be happy.
MR. SUMMERHAYS:
so, again, we are early in this process and there's no guarantee that the project
will move forward at this point.
CITY MANAGER:
Do you want to describe these two options, Betty . . .?
MRS. DUN_KERLEY:
Okay, the . . . on the 15-year option, our average debt service is going to be about
$137,700 and that's at an estimated 7-1/2% interest - of course, that will vary
depending on what the market is. What I would like to stress is even thin some of our
a
the o do s, I m n the enha ced pariGJn rev?nueds yr any �IFt u°nd thin shire the new
on c�me n exac �y on targe , we w Rave un s n ou
money that is going in which could be designated to cover, you know, a good portionof
the cost of this facility.
MAYOR MEYERS:
Lynn, within your present operation, do you have adjustments for parking rates based on
adjustments that might occur within your project along the way.
MR. SUMMERHAYS: Yes.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 20
MAYOR MEYERS:
So, it wouldn't be unreasonable if we were to see interest rates vary to such a degree
that we might look at some adjustment. Would that be unreasonable?
MR. SUMMERHAYS:
In fact, you will have, as part of the ground and parking lease, a regular fixed
formula for increasing parking and ground lease income.
MAYOR MEYERS:
So, the figure that Betty's run here is pretty close to assurance that we will stay
black.
MR. SUMMERHAYS:
There is no provision for decreasing . . .
MAYOR MEYERS: I understand.
MR. SUMMERHAYS:
. . . ground or parking income rates that we pay to you, only a provision increasing . . .
MAYOR MEYERS:
Okay. I think what we are hearing here is that, in response to Audwin's question
earlier about a "worst case" scenario, that through the operation, we would have the
opportunity to assure ourselves that we could cover the debt based on revenues.
COUNCILMAN COKINOS: Providing the revenues will be coming in.
MAYOR MEYERS: Yes, sir. Yes.
COUNCILMAN COKINOS: Now, may I ask one more question?
MAYOR MEYERS: Please. All you would like.
COUNCILMAN COKINOS: Now, will you be renting, leasing the whole . . . the garage that
the City will be building or just part of it or just the ground slots?
MR. SUMMERHAYS:
That will be at the election of the City. The only requirement we have is . . . I think
the structure itself as presently proposed has 275 stalls in addition to the surface
stalls.
COUNCILMAN COKINOS:
My question is this. Will you be leasing . . . will the Boyer Company be leasing the
garage that the City will be building?
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 21
MR. SUMMERHAYS:
We will be leasing 166 stalls out of all those I was describing.
COUNMCILMAN COKINOS:
Including the ground floor?
MR. SUMMERHAYS:
No.
COUNCILMAN COKINOS:
. . . the slots?
MR. SUMMERHAYS:
Wherever the City designates those stalls. We will work that out with the City.
Somewhere in that . . in those 300 or 400, actually about 400 stalls that are in that
parking structure area, we will have 166 of them. We'll lease 166 of those.
COUNCILMAN COKINOS:
But not the whole structure?
MR. SUMMERHAYS:
No, sir. You'll control the structure. We will be leasing from you as the manager and
owner.
MAYOR MEYERS:
Are there any other questions? If not, Lynn, I am going to ask just for a moment if
you would have a seat and rest a bit and I would take opportunity and honor the request
that was made earlier which is unusual but so is this activity today. I would ask if
there are some in the audience who would want to make a brief comment. For the record,
as always, please give us your name and address, and then briefly state your comment
and feel to say whatever you care to.
RIC WARCHOL:
Ric Warcho.l, 1155 Interstate 10 South. One of my first questions is that it comes a
total surprise. I don't know of any local contacts that were made when the City
Manager went out looking for a developer of this project and I'd sure like to know
why. We are talking about economic development and we go half way across the Country
before we look in our own backyard. I found it interesting that this was scheduled for
Workshop Session where it would be much easier to comment about and was changed to the
agenda and it appeared to me to be a fairly important item that would normally have
been on a Workshop Session.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 22
MR. WARCHOL continued:
We talk about a 25% occupancy in a building before it will go forward. I, for one,
know that 25% won't support the building as it's completed. We do have a substantial
amount of vacant office space within the City, including Class A office space, as well
as projects on the drawing boards of Class A office space that are not able to get 50%
preleasing and are a much smaller size. Parking, All Right, one of the largest parking
contractors in this City, they lease space from me, too. They don't fill up their lots
now within a block of the Civic Center - within a half block of the Civic Center. The
City Manager spoke of a plan from '82 to '85, and I'm only reading from my notes. I'll
try and be brief on it; but, I think it was in 1985, a new plan objective of
approaching the private sector. It appears to me that there was substantial information
shared with companies like The Boyer Company that has not been shared with the private
sector in Beaumont, Texas. Subregating the ground lease, I happen to be in discussions
with a gentleman who had a building on City property out at Municipal Airport who is
having one hell of a time getting his financing restructured because the City would not
subregate his ground lease. I don't know what ever came of that but at that time that
was the situation. I just find this all kind of interesting today. Like I say, I am
not aware of any local people who have been contacted on this and, if the City decides
to go forward with this project, I agree. I think it's a great project. Are we going
to go out and share all this information with local developers now, too, and give
everbody a shot at it or are we just going to go to Salt Lake City and give Salt Lake
City Boyer Company a shot at it? Thank you.
MAYOR MEYERS: Thank you.
JOE SHAMBURGER:
Joe Shamburger, 2575 Pecos. Mayor, Members of the Council. I'm with Rogers Brothers
Investments here in Beaumont and we have not had a chance to look at this project and
we would like to. We also are very much in favor, as has been noted by the members of
the Council, that downtown development is an important part of the growth of our City.
We would like to be a part of it and we would like to consider this project. I don't
know whether it's economically feasible for us or not but it might be. One of the
things, since we have downtown office buidlings, we do have space available and we can
accommodate some tenants at this point. There are other buildings in town that also
have space in a first class great . . . you know, just fine office building. I think
that the important thing is that we would object to the way this matter has been
handled with an outer state developer without any local people being given the
opportunity to at least look and consider it.
MAYOR MEYERS:
Thank you. If no one else desires to make a comment, I appreciate you made your
request and felt it was important that you had opportunity to speak to Council. Since
we have shifted gears, does Council have any other questions on the subject?
COUNCILMAN LEE:
Is there a time problem relative to a delay of one week . . . . . .
MR. SUMMERHAYS: No.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 23
MAYOR MEYERS: If there are no questions, Councilman, you had a motion.
COUNCILMAN COKINOS:
If there is no problem as far as time is concerned, then, would .. . I would make a
motion that we postpone taking action on this resolution for at least two weeks.
MAYOR MEYERS:
Motion's been made to postpone action . . .
COUNCILMAN COKINOS:
Well, okay, let's make it one week, Mayor, so I can . . . that'll be all right.
MAYOR MEYERS: . . . postpone action on this item before you for one week. Is there a
second?
COUNCILMAN SMITH: Could I . . . . . .?
COUNCILMAN MOORE: I have a question . . . . . . go ahead.
MAYOR MEYERS: Let me see if there's a second, first.
COUNCILMAN SAMUEL: Second.
MAYOR MEYERS: I have a motion and a second. Question?
COUNCILMAN SMITH: Would this . . . will one week give the local people time. I am
concerned . . . I know . . . I knew nothing about this project until I came today. I
rather resent that also. I feel like maybe something could have been put in my packet
so I can appreciate their concerns. Will one week give the local people enough time?
I don't know.
COUNCILMAN COKINOS: I don't think . . . I don't think so, but, if the Councilman Smith
would like for me to change my motion to at least two weeks, I'd be more than happy to
do it. Would that give sufficient time?
COUNCILMAN SMITH: I don't know how much time the local people need.
MAYOR MEYERS: Councilman, I didn't mention this to you?
COUNCILMAN SMITH: You mentioned it to me Friday . . . . . .
MAYOR MEYERS: Okay, I just wanted to be sure . . .
COUNCILMAN SMITH: . . . but I did not have time to look into it . . . . . .
MAYOR MEYERS:
. no, I didn't . . . none of us did. I just wanted to be sure I hadn't failed to do
that.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 24
COUNCILMAN COKINOS:
What ever time we have, I'd like more time to study this thing and . . . all of this hit
us today and I just feel that it's appropriate that we have time to think about such a
serious financial obligation the City's has and I've alreadyy got a second, Mayor.
MAYOR MEYERS: We have a motion and a second and your motion was for what period of
delay?
COUNCILMAN COKINOS: Let's put it two weeks.
MAYOR MEYERS: Motion's made for two weeks. Is that your second (to Councilman Smith)?
COUNCILMAN SMITH: Yes.
MAYOR MEYERS: Motion and a second . . . . . .
SECRETARY: Councilman Samuel seconded the first motion.
MAYOR MEYERS: Well, do you withdraw your second?
COUNCILMAN SAMUEL: I withdraw my second.
MAYOR MEYERS: Okay. Motion is made to delay action on this item for two weeks;
seconded by Councilman Smith. Are there any other questions or discussion?
COUNCILMAN LEE: Question.
MAYOR MEYERS: Yes.
COUNCILMAN LEE: Was a local developer contacted concerning this project?
CITY MANAGER:
We had preliminary discussion with one developer. One of the reasons we . . . I think
it's important, and Mr. Summerhays, I am sure, I would like him to respond in terms of
why he is even here. I think it's important from our perspective. We did not solicit
Boyer Company. We have not expressed a solicitation for any developer. The question
arose as to whether or not this kind of thing could even work and it was based on that
question that we sent some tentative inquiries out and just simply asked the question
are we, you know, recognizing the building situation in the State of Texas, the
overbuilt situation in office buildings, at least permeating out of the Houston market,
are we, you know, are we sending up balloons that are not going to go anywhere. We had
three developers who contacted us and one of which, of course, The Boyer Company, went
ahead and proceeded with the deal. I'd have to say, Councilman, I don't mean to be
critical of Mr. Warchol or anyone else. The fact of the matter is that that's property
has been sitting since 1982. The City has expressed an interest for at least five
years for downtown commercial office space development. I can only assume, and perhaps
that was wrong on my part, that, in fact, those kind of things have been discussed. I
would ask Mr. Summerhays, if you don't mind, Councilman, to respond in terms as to how
he even got involved.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 25
MR. SU MMERHAYS:
Well, again, we had a preliminary visit with Mr. Haines in which he asked a general
feasibility question as to having space done in downtown Beaumont. Our initial
reaction was it's a struggle but, based on his feeling of the progressive nature of
Beaumont and the desire to have a building here and the lack of Class A space, we went
ahead and committed time and resources to evaluate it. We've engaged an architect and
we've spent some funds in travel and spent a great amount of time in trying to identify
potential tenants, meet with those tenants and cultivate possible business arrange-
ments. We've used our expertise to try and negotiate ground leases. My obvious reluc-
tance about opening it to everyone at this point, unless it's felt as though there's
been some impropriety conducted, is that everyone from this point on takes advantage of
all of the expertise and energy that we've put into the project to represent their
interest. We've taken our risk capital and thrown it at the Beaumont project at this
point. We don't know whether it's going to work. We are willing to continue to spend
capital to see if a development might go forward at the least possible risk to Beaumont
City and we, frankly, have developed some relationship with . . . relationships with
potential tenants now that the introduction of new parties - certainly it's your
decision, but the introduction of new parties may bring into question the ability to
proceed with the project. Also, in terms of a timing delay, the one tenant requires a
January . . . just so you understand the timing sequence, requires a January, '89,
building to be available. If it goes past that date, he has represented that they are
basically not able to represent an interest in the project. It will take at least a
year to build. It will take at least four months, additional months to design, and it
will take at least a few weeks or several weeks to identify if there is additional
tenant interest in the project to bring it to the 50% requirement which we represented
to you would be necessary to move the project forward, so, I am afraid time is of the
essence. One week is certainly not going to make or break the project but, unless we,
in the next two months, identify additional potential interest in the project and can
secure financing within the following month and commence the project, we face not being
able to meet the timeline of the particular tenant which is presently interested.
MAYOR MEYERS:
Do we have any other questions? Any other discussion?
COUNCILMAN BRUMLEY:
The only question I have applies to the motion as to what is to . . . what is to occur
over this period of time?
MAYOR MEYERS: The motion or what is to occur?
COUNCILMAN BRUMLEY: I beg your pardon?
MAYOR MEYERS: The motion or what occurs during the time?
COUNCILMAN BRUMLEY: What occurs during this period of time that Mr. Cokinos has asked
for?
MAYOR MEYERS: I think he's asking you that (to Councsilman Cokinos).
COUNCILMAN BRUMLEY: Yes, I'm asking you (to Councilman Cokinos.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 26
COUNCILMAN COKINOS:
Oh, I'm sorry. I think it will give time for anyone to come forward to . . .on this
project and, furthermore, for the City Council, including myself, to understand what
the financial obligation is on the long-term basis. It's that basic and I think
Councilman Smith wanted to know if there was time enough for anybody in Beaumont to
come forward, if two weeks is time enough.
MRS. DELIA HARRINGTON, 815 Willow Street: I guess the time for speaking is over.
MAYOR MEYERS: Yes, ma'am, it is.
MRS. HARRINGTON: It is? . . . not for this old lady, I don't guess.
MAYOR MEYERS: You mean you want to talk on this? I mean you want to talk on this.
MRS. HARRINGTON: Yes.
MAYOR MEYERS: Okay, fine. Go ahead.
MRS. HARRINGTON:
I'm Delia Harrington. I live at 815 Willow Street. We have an opportunity now before
us to present it and I think one week, if we can't get together in one week, it's just
too bad. Even at my age, I think I could kind of come to some understanding within a
week's time and two weeks I think is just a little too long because all of you are
young compared to me and we have an opportunity now. And, Mr. Warchol had a chance to
fix that LaSalle Hotel, 'til yet there's nothing being done, not that I have anything
against him, but I've been watching that building and it's deteriorating by . . . . . .
MAYOR MEYERS: Now, you are going to another subject, Delia . . . . . .
MRS. HARRINGTON:
Well, okay, well, anyway, that's all I have to say. One week is sufficient.
MAYOR MEYERS:
I really don't want to open it up to debate at this point in time, but I would never
deny the microphone to Delia. That would be a terrible mistake. I'm going to hold.
MR. J. W. KYLE: New subject?
MAYOR MEYERS:
No, sir. We've got one right here we're trying to deal with. Do we have any other
questions, any further discussion? The motion as I understand it is to delay action on
this item for two weeks. That was made by Councilman Cokinos and seconded by
Councilman Smith. Sir . . . anything.
.. ,, VW
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 27
COUNCILMAN BRUMLEY:
The only thing that I'd like to say . . . I can appreciate just what's been said
regardless of the time and I can appreciate what Councilman Smith has said as it
relates to when you have these particular black and white facts before you but I think
what he has said has a great dealf of merit. The fact that the longer the period of
time that you wait, sometimes the negative impact that it would have on the potential
of the project and I'd hate to . . . if it's just a period of digestion, you know, I can
understand however long it takes for us to make the decision. If it's an opportunity
for people to maybe come forward in two weeks and say I've got another deal better than
yours or let's work this deal out, then pretty soon we've . . . and we really don't
know. This man . . . The Boyer Company has initiated a project and I would hate for a
substantial amount of confusion to take place with no substantive end, I guess is what
I am saying during that two week delay. If the question is to delay it for two weeks
merely on what is before us as it relates to the ordinance then I don't have any
problems with it. If it's . . . I mean, he's already got one local firm involved in it
before the project's even begun and I just hate for it to mushroom and explode out and
then it become a mass confusion in two weeks. I wouldn't want that. I would think we
would lose an opportunity here. And, the obligation as far as that's concerned, I
think I've got the numbers before me on the obligation and then you'd have to trust
what . . . . . . I'm familiar with what . . . The lease is before us in black and white.
We've got a good idea of what the TIF is going to come out to and then I have pretty
good confidence in what Mr. Gorman's estimates are as it relates to his annual
participation and . . . It seems like a fairly black line payback in this point in time
but I can appreciate your interest to verify these numbers. I just don't want it to
drag the project around.
COUNCILMAN COKINOS:
I don't . . . I don't feel like it's going to be dragged on as long as there's been some
doubt on the City Council's mind. I know it's considerable amount of doubt in my mind
about the financial arrangements cause . . . it would .. . what are you asking for? You
asking for about 10 days? So, two weeks.
COUNCILMAN BRUMLEY: We don't meet in ten days.
COUNCILMAN COKINOS:
Well, he's going to give us . . . give us. . . we don't even have a financial structure of
The Boyer Company. I don't know how long that's going to take for it to be in the City
Council's hands. What do you estimate that to be?
MR. SUMMERHAYS: It will be in the Administrative Offices on Friday.
COUNCILMAN COKINOS: On Friday, so, two weeks is not bad so we can know what financial
structure and obligations that the City will have. So, two weeks is not a bad . . . . . .
MR. SUMMERHAYS: That will not include any financial obligation . . . . . .
COUNCILMAN COKINOS: I didn't think it was. Thank you very much.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 page 28
MAYOR MEYERS:
Any other questions or discussion? I am totally comfortable supporting the project
today. I think that it offers a catalyst and an opportunity to move away from the
proprietary interest in the benefit of all of us here and I am very comfortable,
particularly in light of the fact that the construction and the work to be done will be
done with people here, giving them jobs, and I encourage with speed the completion of
the project and I think it would be farsighted and tremendous for our community and for
our City. With that, I would call for the motion. Those in favor, signify . . . yes
David (Moore).
COUNCILMAN MOORE:
Before we do that, I think one thing that could have helped all of us today, you did
mention that you had had discussion and would be talking about this, but if we could
have had some of that information, such as the brochure and maybe the letter, something
of that particular nature, prior to coming into the Council meeting would have helped
me a great deal. I can really respect the fact that the gentleman has invested the
time and the money and wants to become a part of the Beaumont community. I had some
concerns. He answered those for me and as far as the financial impact, I understand
that, based upon Betty's figures, is that we are covered based upon the caliber of this
project, that it will work. But, I think that would have helped me coming here today
being a little bit better prepared and have had opportunity . . . maybe have had some
outside discussion regarding local developers. With local developers, as you say that
project . . . that property has been there for a long length of time and that efforts
have been made to get hotels down here and everything else, so I am not totally in
favor of the time just for them to make a bid now because the opportunity has afforded
itself.
COUNCILMAN SMITH:
I agree with David. I feel like the information was there. It could have been
available to us and we could have looked at this over the last few days before we came
to Council. I have no problem with the basic project. I will do my own investigation
of Boyer because I have seen a lot of real estate go belly up bigger than Boyer. I
don't know what sort of impact that will have. We could have a white elephant and we
don't want that. That's my only concern, the financial stability of Boyer.
COUNCILMAN COKINOS:
And, my thoughts also, it shouldn't hit this City Council with such a tremendous impact
all of a sudden. They should have advised us who was behind the project and a good
prospectus from the Company would have enhanced my thoughts about this project. I
still think it's good for Beaumont. It's going . . . it's going to add to downtown
Beaumont but I want . . . I want some time to think about this. What it's going to be on
the long-term basis.
EXCERPT FROM REGULAR CITY COUNCIL
SESSION HELD JUNE 9, 1987 Page 29
MAYOR MEYERS:
Any other comments? Motion and a second to delay the action for two weeks. Those in
favor signify by saying Aye. (Councilmen Cokinos, Smith, Brumley and Samuel. )
Opposed? (Mayor Meyers, Councilmen Lee and Moore. )
(Motion to delay carried. )
END OF EXCERPT.