Meeting Date: March 14, 2018

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1 Town of Moraga Ordinances, Resolutions, Requests for Action Agenda Item 11. B Meeting Date: March 14, 2018 TOWN OF MORAGA STAFF REPORT_ To: Honorable Mayor and Councilmembers From: James Holgersson, Interim Town Manager Subject: Consideration of Approval of Resolution Approving a Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in The Town of Moraga between The Town of Moraga and Mahesh Puri ( MOU ) Request Consider approving a MOU between Mahesh Puri the owner of property at Park Street and the Town of Moraga relating to the transfer of ownership of the Rheem Theatre to the Moraga Community Foundation ( Foundation ) and processing of development and subdivision applications for properties located at Park Street, Moraga, California. Discussion There has been discussion about the long term preservation of the Rheem Theatre as a locally owned community asset for many years. Throughout those years, both Town staff and elected officials have attempted to negotiate a solution with the property owner, Mahesh Puri, the Theatre operator and the Moraga Community Foundation. A few days before the recent temporary closure of the Rheem Theatre, talks were once again initiated between the Mayor and Vice Mayor, Town staff and Mr. Puri for the purpose of determining whether any options were available to continue operations at the Rheem Theatre. During numerous discussions, the concept of transferring ownership of the Rheem Theatre to the Foundation was raised as a means to allow it to remain open and in full operation. Mr. Puri also discussed his desire to pursue development of the parcel west of the Rheem Theatre ( Vacant Parcel ). Mr. Puri had secured the services of an architect who had drawn up designs (attached as an exhibit to the MOU) which depicted development of a residential housing project of 48 units plus two commercial spaces on the Vacant Parcel ( Project ). After review of the designs and further negotiations, an agreement was reached which culminated in the drafting of the attached MOU for Town Council approval. OAK # v1 1

2 The MOU commits Mr. Puri, within 10 days of execution of the MOU, to re-enter into a lease with the prior operator of the Rheem Theatre so as to make that facility available for operation of a movie theatre for a period of at least two years. Mr. Puri also agrees that he will transfer ownership of the Rheem Theatre to the Foundation in the event the Town Council ultimately approves 1) the proposed development of the Vacant Parcel by way of general plan and zoning amendments and conceptual and general development plan approvals ( Land Use Entitlements ); and 2) a minor subdivision of the parcel currently containing the Rheem Theatre ( Rheem Theatre Parcel ) into two parcels ( Minor Subdivision ). The Town in turn would agree to cooperate with Mr. Puri in the timely processing of 1) the Land Use Entitlements which would also include a transfer of development rights from the Rheem Theatre Parcel to the Vacant Parcel, and 2) the Minor Subdivision. Approval of the Land Use Entitlements would require future discretionary approval by the Town Council of both General Plan and zoning amendments and approvals of conceptual and general development plans. However, it is important to emphasize that by execution of this MOU the Town is not committing itself to or agreeing to approve any applications being submitted by Mr. Puri. The MOU explicitly provides that the Town and Mr. Puri understand and acknowledge that the Town retains its legal right, as a part of the development and entitlements process, to reasonably exercise its discretion in approving, denying or conditioning any permit or other approval in connection with development of the Vacant Parcel. The Town has received numerous comments from the community regarding its concerns with the closing of the historic Rheem Theatre. Town staff, officials and the Foundation wanted to work together to develop a strategy and action plan for reopening the theatre as well as reinvesting in the structure and enhancing activities and use of the Rheem Theatre. In addition to providing a permanent home for the historic Rheem Theatre, another added benefit of the 48 proposed residential units is that ultimate approval of this development would assist the Town in meeting its State requirements for housing. As described above, a series of meetings were arranged between The Mayor, Vice-Mayor, Town staff and Mr. Puri who all showed a strong interest in working toward a solution. Coincidentally, Mr. Puri had begun a process for developing his vacant site next to the Rheem Theatre. All parties worked together to develop the proposed MOU that will provide the opportunity for each party to achieve their goals. Fiscal Impact There would be a positive fiscal impact with the reopening of the Rheem Theatre and related activity. Development of the vacant parcel would provide enhanced property value as well as additional consumers for the retail in the area. There is no cost to the Town relative to the transfer of Theatre, as the Foundation is providing the funding for any future transfer of ownership. There will be minimal costs involved in processing the Minor Subdivision application which are not expected to exceed $5,000. Alternatives Adopt the attached Resolution Approving the MOU which would lay the ground work for reopening the Rheem Theatre and the future transfer of ownership of the Rheem OAK # v1 2

3 Theatre to the Foundation, and begin processing of development applications for the Vacant Parcel. Do not adopt the Resolution approving the MOU which would leave the status quo. Recommendation Adopt the Resolution approving the Memorandum of Understanding between Mahesh Puri and the Town of Moraga. Report reviewed by: Michelle Marchetta Kenyon, Town Attorney Karen W Murphy, Town Attorney Attachments: A. Resolution No Approving Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in the Town of Moraga between the Town of Moraga and Mahesh Puri B. Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in the Town of Moraga OAK # v1 3

4 ATTACHMENT A Resolution No Approving Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in the Town of Moraga between the Town of Moraga and Mahesh Puri

5 BEFORE THE TOWN COUNCIL OF THE TOWN OF MORAGA In the Matter of: A Resolution of the Town Council for the Town of Moraga Approving Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in the Town of Moraga between the Town of Moraga and Mahesh Puri ) ) ) ) ) ) ) ) Resolution No WHEREAS, the Town Council wishes to enter into a Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in the Town of Moraga ( MOU ), with Mahesh Puri, an individual; WHEREAS, the MOU relates to the transfer of ownership of the Rheem Theatre to the Moraga Community Foundation ( Foundation ) and processing of development and subdivision applications for properties located at Park Street, Moraga, California. NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Moraga that the Town Council authorizes and approves the MOU attached hereto as Exhibit A. BE IT FURTHER RESOLVED that the Town Manager is authorized and directed to execute the Agreement for and on behalf of the Town of Moraga. PASSED AND ADOPTED by the Town Council of the Town of Moraga at a regular meeting held on March 14, 2018 by the following vote: AYES: NOES: ABSTAIN: ABSENT: Attest: David Trotter, Mayor Marty C. McInturf, Town Clerk Resolution No. XX March 14, 2018 OAK # v1

6 ATTACHMENT B Memorandum of Understanding Regarding Leasing, Transfer, Subdivision and Development of Certain Real Property Located in the Town of Moraga

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