Signal Hill approves two development negotiations

Agreements with SHP, Vestar would develop sites for retail, residential uses at Heritage Square and 700 E. Spring St

Courtesy City of SH
At its May 8 meeting, the Successor Agency to the Signal Hill Redevelopment Agency approved an exclusive right-to-negotiate agreement with retail developer Vestar to develop two sites along Spring Street (pictured above as Site A and Site B) for hotel, retail and restaurant uses.

At its May 8 meeting, the Signal Hill City Council, acting as successor agency to the defunct Signal Hill Redevelopment Agency, approved two exclusive right-to-negotiate agreements (ERTN) with Signal Hill Petroleum (SHP) and retail developer Vestar for mixed-use development at two sites. The council also approved renovating the Bixby Ridge Community Trail, a contract for environmental engineering services and a date for appointing City commissioners.

SHP agreement
In their capacity as successor agency to the Signal Hill Redevelopment Agency, council members agreed to extend by another year a restated exclusive agreement to negotiate (REAN) with SHP to develop an almost eight-acre area along Gardena Avenue into Heritage Square, a retail and residential complex, across the street from the recently opened Mother’s Market.

The successor agency had entered into a six-month ERTN with SHP on Feb. 28, 2017 and extended it until Jan. 27, 2018 so SHP could continue studying the site for development. The agency agreed on May 8 to amend and extend that agreement for another 12 months to allow additional time for SHP to complete the provisions of the original ERTN.

Elise McCaleb, the City’s redevelopment and economic development manager, said that SHP has completed many aspects of project development.

“During the negotiating period, Signal Hill Petroleum […] completed […] a site plan, seismic survey [and] Mother’s Market,” she said. “They also began their neighborhood meetings for this project.”

McCaleb further stated that the City is pleased with the SHP’s site-plan details.

“It features 42,800 square feet of retail, including restaurants and retail space, 199 apartments, four single-family residences facing Rose Avenue– providing a transition between the project and the Crescent Heights historic district– a parking structure, Main Street, outdoor plaza and community gathering space for community events like a farmer’s market or movies in the park,” she said.

The REAN includes a schedule for SHP to refine project plans for Heritage Square, conduct community outreach and ensure CEQA (California Environmental Quality Act) compliance. According to the schedule, SHP is also responsible for demolishing existing warehouses on the site by the beginning of August.

City Attorney Dave Aleshire said that the City’s costs may increase as the project develops to cover such things as environmental concerns. He also stressed that the project was not set in stone and the planning commission, city council and the public would have the opportunity to provide input.

“We need a few more months to finalize what the [financial] understanding might be [with SHP], but then there’s going to be a very comprehensive, detailed public process,” Aleshire said. “Through that public process, obviously, the project might be revised and altered.”

Vestar agreement
The successor agency also approved an ERNA between the agency and Vestar, a retail development and management firm, to develop about 13 acres known as the 700 E. Spring St. site, bounded by E. Spring Street, Atlantic Avenue, E. 29th Street and California Avenue.

City Manager Charlie Honeycutt explained that the land was formerly the site of oil wells and, beginning in 2008, the redevelopment agency had purchased the property piecemeal and cleansed it of pollutants. The agency had envisioned selling the site to a developer for retail and residential use.

“They envisioned to include retail uses such as general goods, grocers and ancillary retail such as dry cleaners, food service and a drug store,” he said. “Due to the site’s proximity to Long Beach Memorial Hospital and the I-405 Freeway, development of the site would include at least one hotel to serve hospital visitors as well as business travelers. The site may include office space for medical and administrative offices. Residential uses may also be pursued. Open space and trails are also envisioned.”

In order to move forward with development, however, Vestar must also maintain an agreement with SHP, which owns the surface rights to that land.

“Vestar was selected to negotiate with the successor agency on 700 E. Spring St. site because of its experience, financial strength and professional capacity in developing shopping centers,” Honeycutt said. “It was vital in selecting Vestar that they were willing to make Signal Hill Petroleum a 50/50 partner with Vestar being the lead.”

The ERTN includes a 180-day initial term with a potential 180-day extension.

Currently, Vestar has put together two optional site plans for 700 E. Spring St., both of which include two hotels and retail and restaurant space, and one that also includes a four-story apartment building.

Vestar has also presented site plan options for another, smaller area north of Spring Street, adjacent to the new dog park, all three including retail and restaurant space and one that includes a movie theater.

Member Edward Wilson stressed that the location of the 700 E. Spring St. site offers a unique opportunity to draw more visitors to Signal Hill and suggested that its development should be innovative, such as a premium outlet-mall concept and view-oriented restaurants.

“This is an extremely important project for the City. It is the last big space,” he said. “One of the things we have to also look at is not what is currently being done elsewhere.”

He noted the location’s proximity to several freeways, the Long Beach Airport, the ports and its location along the route to two planned football stadiums.

“One of the things we should […] be doing is visioning what this is going to be,” he said. “I think this is going to be more than a local Signal Hill development.”

Chair Tina Hansen said that, regardless of the final details, she hoped for SHP’s continued participation since both projects are a boon to the City.

“If you haven’t looked at Signal Hill before, you’ve got to come look at us now,” she said of how the development impact. “We are really going to make a name and a mark for ourselves with these projects.”

Bixby Ridge
At the same meeting, the city council authorized a change order for $94,000, including a contingency of $22,880, for DD Systems, Inc. to renovate the Bixby Ridge Community Trail.

“The Bixby Ridge trail improvement will renovate all the trails located within the Bixby Ridge homeowners’ association private property,” said Grissel Chavez, deputy director of Public Works.

Chavez said that the project is fully funded by a grant from the Los Angeles County Regional Parks and Open Space District’s Proposition A. The City had rejected the trail-renovation bids it had received in September 2017 since all were above estimates and the grant budget.

L.A. County Regional Parks then authorized the City to allow a change order for DD Systems rather than seek rebids. DD Systems had recently completed construction of the new dog park and agreed to honor its pricing for park materials, particularly decomposed granite, in renovating the trail.

Per terms of the grant, renovation of the six community trails in Bixby Ridge must be completed by the end of September, but Chavez said it might be completed earlier.

“DD Systems can start the work by early June, and completion is anticipated by the end of July or early August,” she said.

Engineering services
The council also approved renewing its contract with John L. Hunter and Associates for environmental engineering services. The contract is for an amount not to exceed $324,765 over a three-year term.

The company currently helps the Public Works Department with inspections of industrial waste and stormwater pollutants in order to meet the State’s regulation limits and compliance deadlines.

“Failure to meet deadlines or exceeding the numeric limits can subject the City to mandatory penalties, which can be anywhere from $3,000 per day to $24,000 per day,” Chavez said.

She added that, while the total cost for these environmental services is covered by the City’s budget, about 65 percent of it is offset by fees paid by private businesses and developers for inspection services specific to their sites.

Commissioners
The council agreed to June 12 as the meeting date during which to conduct candidate interviews and appoint commissioners to the Civil Service Commission, which has two open seats, and the Parks and Recreation Commission, which has one open seat.

These seats have remained open since last May, when the council disagreed about the commissioner-appointment method. As reported by the Signal Tribune, then-mayor Wilson had followed the City charter in making appointments, which authorizes him to nominate candidates for council approval and, if he chooses, allow no other nominations.

“In any application process, there are people that get voted on the commission, and there are people that don’t,” Wilson had said during the May 2017 meeting. “We cannot appoint everybody that applies.”

Wilson had suggested at the time that he might make further nominations from the pool of applicants if he could recommend candidates to commissions other than those to which they’d applied, which the council had earlier voted against allowing.

However, most of the other council members had wanted to continue their more informal method of allowing all council members to nominate further applicants until all commission seats were filled. At the next meeting in June 2017, the council voted to postpone remaining commissioner appointments until Hansen, who supported the informal process, rotated in as mayor this year.

In the meantime, staff reported Tuesday that, since they had not been replaced, Commissioners Paul Patterson and Steve Strichart have continued to serve on the Civil Service Commission, ensuring a quorum. Gary Dudley had continued to serve on the Parks and Recreation Commission until he resigned in December 2017, citing disappointment over a public issue surrounding Wilson.

“On Dec. 21, I resigned from my position on the [Signal Hill] Parks and Recreation Commission in protest to the city council’s refusal to censure Mayor Wilson’s involvement in alleged domestic-violence abuse,” Dudley wrote in a letter to the editor of the Signal Tribune in January.

Once appointed, Honeycutt explained, new commissioners would begin service on July 1 and continue to May 30, 2021, completing the remaining three years of each appointment’s four-year term. Recruitment opens May 11.

The next Signal Hill City Council meeting will take place Tuesday, May 22, at 7pm in the council chamber at 2175 Cherry Ave.

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