1. DISCUSSION OF THE FUTURE DEVELOPMENT OF THE YWCA BUILDING 78 N
DISCUSSION OF THE FUTURE DEVELOPMENT OF THE YWCA BUILDING 78 N. MARENGO BLVD.
City Council
May 22, 2017
Item 14

2. Julie Morgan YWCA
Purpose this evening is to obtain Council direction regarding future development of the YWCA Building
April 3rd Council directed staff to:
Provide greater detail of KHP’s increased costs associated with the proposed hotel project
Evaluate use of building as City offices
Explore what level of subsidy would result in a smaller hotel project

3. Hotel Project Increases
Since 2014, a number of factors have caused project costs to increase from $53.89 million to nearly $81.71 million in 2017, representing an increase of nearly $27.82 million.
Project Design –$1.43 million
Construction Cost - $11.58 million
Soft and Hard Costs Contingency and City Permits - $1.90 million
Debt Fees/Financing Costs - $1.49 million
Hotel and Restaurant Furniture Fixtures and Equipment –$700,000 
Pre-Opening Costs –$700,000 
Prevailing Wage - $8.95 million

4. Hotel Project Increase

5. City Revenues vs. Subsidy Cost
First 20 years of operation
Parking (In City Garage)
Ground Rent

6. Hotel Project Advantages Disadvantages
$14-$16 million investment in the Julia Morgan building
General Fund revenues of $50 million over 20 years
Consistent with zoning, Central District Specific Plan & Bennett Plan
Disadvantages
Controversial in the community
Loss of open space on east side
Scale – Massing
Appropriateness of use in Civic Center
Even with proposed City support project is very thin

7. Other Options Use as City Offices A smaller Kimpton hotel
Undertake a new process to determine most appropriate use/project

8. Current City Leased Space
Department
Address
Sq. Ft.
Total Rent/Yr.
Fire Admin
215 N. Marengo Ave.
6,712
$223,735
Transportation
221 E. Walnut Ave.
11,088
$320,232
Water & Power
150 S. Los Robles Ave.
24,627
$951,457
1055 E. Colorado Blvd.
9,862
$330,594
Housing
649 N. Fair Oaks Ave.
6,266
$172,942
PCAC
5,355
$138,430
TOTAL
63,910
$2,137,390

9. Use as City Offices Estimated new construction of 23,000 square feet
90 space subterranean parking structure to meet 146 demand
Estimated construction cost at least $52 million
Likely to exceed $60 million once fully designed
Annual operating costs $1 million +
Current total rents support $35.5 bond issue
Gap of at least $16.5 million
Not recommended at this time
Many other capital needs e.g. fire stations, community centers, other infrastructure

10. A Smaller Kimpton Hotel
Possible 150 rooms with 70 foot setback from Garfield (alternative 2B in the EIR)
Required subsidy to generate KHP’s target return is 100% of the Transient Occupancy Tax generated for the first 20 years of the ground lease
In addition to the no rent and parking subsidies
Not recommended based on unfavorable economic terms

11. Undertaking a New Process
Develop a new selection process with input from the Economic Development and Technology Committee (EDTECH)
Provide for public input
What should be the desired building envelope/scope for any proposed project?
Should the City’s new solicitation offer any City subsidies?
Are certain uses preferred over others?
Stabilize portions of the building and safeguard it against further deterioration

12. Staff Recommendation Pursue development of the propose Kimpton Hotel
Make requisite CEQA finding
Adopt a motion accepting and approving the Economic Development Subsidy Report pursuant to Government Code Section for a Ground Lease Agreement by and between City of Pasadena and KHP III Pasadena LLC OR
Direct staff to undertake a new Competitive Selection process seeking proposals for the future rehabilitation and redevelopment of the YWCA Building

14. City Process Summary 2012 – 2017 City Council Closed Session – 9 times
Planning Commission – 6 times
Design Commission - 4 times
Edtech and City Council in open session - 4 times
Urban Forestry – 1 time
Historic Preservation Committee – 1 time
Plus
Building Open House and Design Workshops