Tue07292014

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The First and Main chronicles

As a special online feature, the Town Crier recounts the 17-year history of development - or non-development - regarding land use discussion of city-owned property at the corner of First and Main streets in downtown Los Altos. Our timeline begins here.

Chronology of the First and Main property

It's safe to say that few, if any properties in Los Altos, have undergone such a tumultuous history as the .078-acre site at the corner of First and Main streets. The property has a history of active public debate over its use, from parking, hotel and theater and housing to retail and office development. It's been the subject of frustrating on-again, off-again negotiations over a seven-year period with developer Roxy Rapp. And its latest sale has been called into question over whether the city was transparent with the public. The following is a timeline that covers many, if not most, of the trials and tribulations surrounding the property.

November 1995: City acquires property at Main and First streets, ostensibly with the intention of providing 58 public parking stalls.

May 1996:
Kentucky Fried Chicken officials decide to close their outlet at First and Main streets. The move paves the way for city plans to feature the property as a "gateway" location.

January 1997: Home Consignment Center occupies former KFC site.

October 1997: San Francisco developer Norman Rosenblatt proposes an upscale two-story inn for the city-owned property at First and Main streets, formerly occupied by a Kentucky Fried Chicken restaurant. Plans fizzle with news that the city signed the consignment center and dry cleaners to a long-term lease.

January 1999: City council members give the go-ahead for the city to craft request for proposals (RFPs) for developing the site.

May 1999: City receives eight proposals from developers, ranging hotel/restaurant proposals to housing plans.

September 2000: The Town Crier reports "a movie theater, a hotel or a combination of both will more than likely mark the western gateway to downtown Los Altos." The council asks three developers to submit proposals for development that would include some sort of combination of a movie theater, a hotel or housing.

October 2000: The council ditches plans to place a theater-hotel complex and opts to move forward with simpler plans.

February 2001: Residents threaten a citywide referendum unless the council rejects the city staff's recommendation to place a hotel on the site and seek public input for the addition of a movie theater.

March 2001: Council approves a resolution that would allow staff to use condemnation to take over the leased businesses. The consignment store and dry cleaners have options to renew their leases through 2006.

June 2001: Plans to place a boutique hotel on the city-owned lot at the corner of First and Main streets in downtown Los Altos beat out the proposal for a six-screen movie theater. The Los Altos City Council votes 3-2 during a standing-room-only meeting June 12 to begin negotiations with developer Roxy Rapp/Innkeepers Associates.

August 2001: Johnny Crowell, co-owner of Home Consignment Center, states in newspaper ads, "We are NOT leaving." Unless a developer makes him an offer to relocate the business, he said he plans to stay put. He notifies the city of his intention to take the five-year option on his lease.

September 2001: Rapp says he wouldn't update design plans until he receives a signed agreement from Los Altos officials and a clear understanding of when the property will be available. The council halts negotiations for the proposed 90-room Apricot Inn.

November 2002: The council sets down the guidelines for another round of project bids for the First and Main streets property - this time with an eye on housing and retail. This is the second time city officials solicit Request For Proposals for the site. Rapp's project will still remain an option, the council said.

May 2003: The council breaks off negotiations with Apricot Inn Associates May 27 after the development company rejects the city's final lease terms.

July 2003: Not a single developer has accepted Los Altos' invitation to built a hotel on the city-owned land at the corner of First and Main streets, officials confirm. City staff sent out Request for Proposals to eight select hoteliers across the country to gauge the interest in building a hotel at the site following severed negotiations with Rapp.

January 2004: The council moves to reopen negotiations with Rapp, who has steadfastly maintained interest in working with the city on a hotel at the site.

March 2004: The council asks the city attorney to investigate the legal process for selling the public property. The council announces its intent to sell the .78-acre piece of "surplus" land.

April 2005: The land is set to go on the market, nearly a decade after city leaders purchased it with the goal of adding more parking.

February 2007: After nearly six years of discussion, Los Altos is one step closer to breaking ground for a downtown hotel. City officials are confident that a final sale agreement with real estate developer Roxy Rapp for the $3 million hotel site will be settled by March 31. The agreement would enable Rapp to finalize the design. Construction could begin 12-18 months after the approval, according to staff.

May 2007: Two new investors may be adding their names to the downtown hotel sale agreement, delaying the Los Altos City Council's approval of the sale of the property at First and Main streets and the construction of the proposed hotel at least until Aug. 31. Rapp cited higher construction costs for the decision to join forces with Peter Pau of Sand Hill Property Management Co. and Los Altos resident John Challas.

September 2007: The council officially announces the demise of a downtown hotel, concluding a multiyear saga of city negotiation with local developers. Mayor Curtis Cole said the city's negotiations with developer Roxy Rapp, which had been extended several times, had been terminated by the city.

Late-2008: The city publishes an RFP to solicit offers for purchasing the property.

October 17, 2008: City entered into a brokerage agreement to lease 400 Main St. A "For Lease" sign is put on the property.

October 31, 2008: Bids are due in RFP process. The city receives five proposals. The Council authorizes negotiations with the party submitting the most
favorable proposal. Soon after, negotiations ceased with the economic downturn.

October 2009: The city begins talks with developer Jeff Morris about the property, independent of the RFP process.

November 2, 2009: Jeffrey A. Morris Group, Inc. submitted "Letter of Intent to
Purchase" First and Main, which does not mention the RFP. Contrary to a provision of the RFP that "[t]he properties will be sold as "no commission" to procuring broker," the
Jeffrey A. Morris Group "Letter of Intent to Purchase" provides for a commission with buyer and seller each agreeing to pay 50 percent of the brokerage commission at close of escrow.

November 2009 - February 2010: The council holds six closed session meeting to consider the Jeffrey Morris Group proposal. All of the Notices (except the last) of these
Sessions reference the First and Main Property "Under Negotiation" was "Lease and Terms." The city later acknowledged its mistake.

Late 2009 - February 2010: According to downtown property owner Kim Cranston, another developer has meetings with Schmitz and other staffers, inquiring about development opportunities. The developer is not told about the availability of the First and Main property.

February 2010: Despite residents' support for deferring a decision on the future of the city-owned property at the corner of First and Main streets, the council Feb. 23 authorizes Mayor David Casas to sign an Exclusive Right to Negotiate Agreement with a single developer, the Jeffrey A. Morris Group, for up to 120 days for sale or lease of the land.

July 2010: Buildings on the First and Main property are scheduled for demolition. The structures formerly housed the Home Consignment Center (400 Main at the east end) and Nielsen Dry Cleaners (239 First at the west end. The property is zoned to accommodate a two-story building with a 30-foot height limit for commercial or retail use. The Home Consignment Center closed in 2007. Nielsen Dry Cleaners is relocating across the street to a remodeled space at 227 First St. The demolition takes place in August.

September 2010: After months of closed sessions and exclusive negotiations with a single developer, the city is set to reveal a plan for the razed 0.78-acre property. The city and the Jeffrey A. Morris Group entered into a 120-day Exclusive Right to Negotiate Agreement Feb. 23, extended it by 60 days June 22 and by another 30 days Aug. 24. As reported at the time by the Town Crier, several residents, business owners and community groups disapprove of the seemingly secretive manner in which negotiations have been conducted. The city's decision to engage with a single developer behind closed doors for the property does not align with its intention to solicit citizen input, residents said.

September 2010: The council approves the $3.1 million sale of land at First and Main streets to Morris.

December 2010: Initial studies for the gateway property are available for public review.

April 2011: The council finalizes a development agreement between the city and the Jeffrey A. Morris Group for the property located at 230 First and 400 Main streets. Prior to the vote, a representative from Passerelle Investment Company urges councilmembers to consider building a long-span underground parking garage from the First and Main intersection to the Safeway site along First. Safeway officials stated they were not interested in the underground garage and the idea never comes to fruition.

December 2011: Morris submits plans for a mixed-use development at the corner of First and Main streets. The project includes two buildings: one a 41-foot-high, three-story structure and the other a single-story building. The completed project will total approximately 31,000 square feet of retail and office space. In addition, the development will include 125 parking spaces, 89 at basement level, and 36 at ground level. The proposal also features a courtyard lined with cafe tables and chairs between the two buildings.

April 2012: Both boards of the Los Altos Chamber of Commerce and the Los Altos Village Association give a unanimous thumbs-up to support the latest plans for a pair of two-story buildings connected by second-floor span at First and Main streets.

May 2012: Cranston files a lawsuit against the city of Los Altos seeking the release of city staff communication records regarding discussions over the sale of city-owned land at First and Main streets to Jeffrey A. Morris. The lawsuit alleges that the city violated the California Public Records Act when it denied Cranston's public records request to view a February 2010 memorandum from former Los Altos Economic Development Coordinator Anne Stedler to former City Manager Doug Schmitz and current Assistant City Manager James Walgren.

July 2012: Morris say he considered adding a third story and two levels of underground parking previously, but the city discouraged that idea. That prompted his two-story plan to ensure compliance and a smooth path through the city's approval process.

August 2012: The city's Planning and Transportation Commission recommends approval of the Morris project.

October 2012: The council unanimously approves the project.

November 2012: The city releases the Stedler memo, essentially ending its legal battle with Cranston to make it public. Councilmembers said they wanted to eliminate the issue potentially being "a distraction" for the new council. For a look at the memo, click here.

January 2013: The city of Los Altos and Kim Cranston reach a settlement agreement in the lawsuit Cranston filed to force release of the memo. The settlement included $12,500 to cover Cranston's attorney's fees and other expenses, as well as acknowlegment by the city that the memo is a public record.

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