Barstow Negotiating With Builder Over Developing Old Hospital Site

(July 24)  BARSTOW—The Barstow City Council this week took a tentative step toward transforming the dormant space at the old Barstow Hosptial into a senior housing complex that will feature medical and commercial offices.
The council okayed a preliminary study of a proposal by Valley Affordable Builders, in which Valley Affordable has agreed to provide the city with an initial deposit of $10,000 to be used to defray the city’s costs of exploring the option. In return, Valley Affordable has been given an exclusive negotiating position with regard to project proposals at the property, located at 555 South Seventh Avenue.
Assistant city manager Oliver Chi said the $10,000 will be used to cover the city’s costs related to the project, such as appraisal fees.
While Valley Affordable has a number of options with regard to transforming the property, the one most favored by the city council is one that has as its main component affordable senior housing.
Under the terms of the agreement, beginning as of July 21 and extending at least until January 31, the city and developer are to negotiate in good faith a disposition and development agreement for the site. If satisfactory terms to both parties are not achieved though the negotiations, the agreement will automatically terminate, with no need for notice. Upon termination, the developer will have no further rights under the agreement regarding the site or the development.
Chi told the Sentinel, “At this point we are exploring whether or not a project is feasible. Monday night the city council approved an exclusive negotaiting agreement with Valley Affordable Builders through January 2015. The developer has agreed to pay all of the city’s costs in trying to find if the deal is fessible. The $10,000 is intended to cover staff time spent on the analysis to see if the project is feasible.”
As to how the project will be financed and whether the city might itself participate in the project or otherwise subsidize the undertaking, Chi said, “We haven’t gotten that far in the analysis. There are a lot of different components relating to how the development might shape out. That is why we entered into this agreement, to see if it is fessible. The city hasn’t committed to any type of development here. One possibility is the concept of a senior housing project. As we continue to negotiate with the developer we will look at the funding available toward senior housing. Depending on what sources are available, we may facilitate the application for that financing. As this point the city has not committed to providing any funding.

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