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HomeMy WebLinkAboutItem 1a: Resolution No. 6843 approving a Purchase and Sale Agreement with Sunny Construction for City-owned property on Corto Road. r of ARe v~4 �y •Iur ar•SrT; �'� ' Auu S,1903 °��°°'`y°s�°�`5 STAFF REPORT Development Services Department DATE: August 21, 2012 TO: Honorable Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director ,K By: Jerry Schwartz, Economic Development Manager SUBJECT: ADOPT RESOLUTION NO. 6843 APPROVING A PURCHASE AND SALE AGREEMENT WITH SUNNY CONSTRUCTION FOR CITY- OWNED PROPERTY ON CORTO ROAD, ASSESSOR PARCEL NUMBER 5777-002-900 Recommendation: Adopt SUMMARY The City owns property on Corto Road in the Lower Rancho Homeowners Association area. At one time, there were water wells on the site that were used by the Public Works Services Department for monitoring purposes, but they became unnecessary. As a surplus site in a single family neighborhood, the appropriate use is a single family home. City staff issued a Request for Proposal to home builders and realtors that work in Arcadia and surrounding cities. Nine qualified proposals were received, and, after review, Sunny Construction ranked first. A Purchase and Sale Agreement has been prepared and represents the first step in selling the property to Sunny Construction. BACKGROUND The City-owned site on the north side of Corto Road, Assessor Parcel Number (APN) 5777-002-900, is 13,000 square feet, which is similar in size to most lots on that street. The property had been used by the Public Works Services Department for water purposes. The one remaining well, which was used for monitoring by the City for the Raymond Basin Management Board, is no longer needed. It has been destroyed, making the site ready for development. The City Council directed that the property be sold through a Request for Proposals (RFP) process that would be handled by staff instead of paying an outside broker to find potential buyers. The City issued the RFP for development of the site with a single family home in keeping with the surrounding neighborhood. The property is zoned R-O, single family residential, and the General Plan designation is single family residential. Adoption of Resolution No. 6843 August 21, 2012 Page 2 of 3 Proposals were due on June 19. Respondents were to provide a letter that gave the price that they would pay for the property, suggested design approach for the new home, a timeline for the project, their credentials as a buyer of the site including providing their experience building new homes in Arcadia and in the region, and a conceptual design for the new home, including an elevation and a suggested size and style of the home. These elements required respondents to have thought about the site and the neighborhood before submitting a proposal. The RFP also made it clear that, if selected, the proposed project would need to go through the design review process of the Lower Rancho Homeowners Association. Staff received nine qualified responses, and reviewed and ranked the proposals. The City Council discussed the proposals and negotiation strategy during Closed Session at its July 3rd meeting. Based on the direction provided by the City Council, staff has proceeded with the recommended developer, leading to tonight's action. DISCUSSION The nine qualifying bids received were as follows: Respondent Purchase Price Sunny Construction $900,000 Coldwell Banker (Jillian Pidlaoan) $890,000 Goodyear Investments Inc. $881,000 Bowden Development $825,000 Dexter Corporation $820,000/$670,000* Franklin Homes $810,000 Mursol Development $805,000 Toledo Homes $727,000 Steven Phillips Architect $608,000 *Dexter offered $820,000 if could build two story and $670,000 if one story. The review process was based on several factors, including quality of proposal, experience building in Arcadia, and land price. It was not solely based on the respondent that offered the most money for the property. Sunny Construction ranked first during the review process and was selected to purchase the property and pursue their proposed project. Sunny Construction is located in Arcadia and has built many single family homes in town, including several in the Lower Rancho HOA area. Overall, they have built more than 200 single family homes in Arcadia and surrounding cities. Sunny Construction is familiar with the Lower Rancho Design Review process and has worked with the Lower Rancho Architectural Review Board (ARB). The President of the Lower Rancho HOA and the Chair of the Lower Rancho ARB are aware that Sunny Construction is the selected buyer for this site. ` Adoption of Resolution No. 6843 August 21, 2012 Page 3 of 3 Sunny Construction has proposed to build a 2-story, 4-bedroom, cottage style home that will be harmonious with the neighborhood. The site currently has 18 trees, and Sunny Construction is proposing to remove only one tree, leaving 17 on the site, many of which are at the rear of the property and will provide a buffer for the adjoining neighbors behind this site. Sunny Construction has been including solar panels in several of its newer homes in Arcadia and proposes to include a solar panel system on the Corto Road project. The panels will be located so that they are not visible from the street. Sunny Construction is paying $900,000 for the property, which will be all cash to the City of Arcadia, including $100,000 deposited at the opening of escrow with the remainder a few days before closing. The proposed agreement between the City of Arcadia and Sunny Construction is a standard California Association of Realtors purchase agreement. The agreement includes an additional provision requiring that the project essentially be built in the style and time frame in the proposal subject to the Lower Rancho Homeowners Association ARB review. The City and Sunny Construction will share the escrow costs equally, and the City will pay for a California Land Title Association (CLTA) title policy and for the documentary transfer tax at closing. Once these documents are executed by the City Manager, escrow will open within several days, and is slated to close in 45 days. FISCAL IMPACT The purchase price for the property is $900,000. The City's share of closing costs is estimated to be approximately $10,000 - $12,000, thus the City will net approximately $890,000. The sale proceeds received by the City will be placed in the CIP fund to fund future capital projects in the City. RECOMMENDATION It is recommended that the City Council adopt Resolution No. 6843 approving the Purchase and Sale Agreement with Sunny Construction for the City-owned property on Corto Road, APN 5777-002-900, and authorize the City Manager to sign this agreement and all documents necessary to complete the sale of the property. Approved: r Dominic Lazza City Manager Attachment: Resolution No. 6843 RESOLUTION NO. 6843 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, APPROVING A PURCHASE AND SALE AGREEMENT WITH SUNNY CONSTRUCTION FOR CITY-OWNED PROPERTY ON CORTO ROAD WHEREAS, the City of Arcadia owns a 13,000 square foot site on Corto Road (APN 5777-002-900) (the "Property") in the Lower Rancho Homeowners Association Area; and WHEREAS, the Property was once used by the Public Works Services Department but is now no longer needed; and WHEREAS, the Property is zoned R-O, single family residential, and the General Plan designation is single family residential; and WHEREAS, the City Council authorized and directed staff to issue a request for proposals ("RFP") to purchase the Property from the City; and WHEREAS, the RFP was issued and nine qualified responses were received; and, WHEREAS, based on the evaluation criteria, the proposal from Sunny Construction was ranked first; and, WHEREAS, staff has proceeded to work with Sunny Construction on the preparation of a purchase and sale agreement for the Property. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS: SECTION 1. The recitals set forth above are true and correct and are incorporated into this Resolution by this reference. 1 SECTION 2. The City Council hereby approves the Purchase and Sale Agreement with Sunny Construction for the sale of the Corto Road property as on file in the Office of the City Clerk, together with such non-substantive or minor changes as may be deemed reasonable and appropriate by the City Manager and the City Attorney. SECTION 3. The City Council authorizes and directs the City Manager to sign the Purchase and Sale Agreement on behalf of the City of Arcadia, as well as any and all other documents necessary to complete the purchase and sale of the Property. SECTION 4. This Resolution shall take effect immediately. SECTION 5. The Mayor is hereby authorized to and directed to sign the Resolution and the City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this day of , 2012. Mayor of the City of Arcadia ATTEST: City Clerk APPROVED AS TO FORM: Stephen P. Deitsch City Attorney 2