HomeMy WebLinkAboutItem 3c: Use of Redevelopment Funds to Purchases Properties at 101-111 North Santa Anita and 121-159 North Santa Anita AvenueDISCUSSION
BACKGROUND
STAFF REPORT
Arcadia Redevelopment Agency
DATE: July 20, 2010
TO: Chair and Members of the Agency Board
FROM: Jason Kruckeberg, Assistant City Manager /Development Services
Director
By: Jerry Schwartz, Economic Development Manager �( )
SUBJECT: AUTHORIZATION TO APPROPRIATE FUNDS FROM
REDEVELOPMENT AGENCY RESERVES TO PURCHASE
PROPERTIES AT 101 -111 NORTH SANTA ANITA AVENUE AND
121 -159 NORTH SANTA ANITA AVENUE
Recommendation: Approve
During Closed Session at the May 4 City Council Meeting, the Agency Board gave staff
parameters to negotiate to purchase the adjoining commercial properties at 101 -111
North Santa Anita Avenue and 121 -159 North Santa Anita Avenue. Staff was
successful at negotiating purchase agreements for both properties within the given
parameters. The Agency Board needs to authorize the budget expenditures to allow
these purchases to be completed.
The Agency Board authorized staff to negotiate with the current owners of 101 -111 and
121 -159 North Santa Anita Avenue at up to ten percent (10 %) above the appraised
value on each of the two commercial properties. This allowed the Agency to
incorporate the broker's fee into each transaction, which is appropriate since the
properties were not on the market. Based on these parameters, staff negotiated
purchase agreements on both sites and has opened escrow for each transaction. On
both properties, the brokers have been cooperative with staff in providing leases,
relevant property information, and arranging access for our environmental consultant
and site inspection. Escrow is scheduled to close on August 6 for 121 -159 North Santa
Anita Avenue and on August 20 for 101 -111 North Santa Anita Avenue.
The total expenditure to acquire the two properties is $3,332,500. The properties are in
good shape, but the inspection revealed that there are a few issues regarding drainage,
electrical wiring, and mechanical equipment. These repairs and any touching up to the
exterior may cost as much as $25,000. The Agency will be acquiring 34,750 square
feet of land area that fronts on Santa Anita Avenue and is currently improved with
approximately 18,076 of gross leasable building area. It would give the Agency
ownership of two sites with Santa Anita Avenue frontage which could be combined with
the old church site at 21 Morlan Place as part of a potential future deal with Rusnak
Mercedes Benz or could create a very desirable commercial site with frontage on Santa
Anita Avenue. The Agency has the funds available to complete these transactions,
both from the $3.5 million loan that the City made to the Agency or from bond proceeds
once the Agency closes its tax allocation bond issue. Since these transactions were not
included in the Agency's 2010 -2011 budget, the Agency Board needs to appropriate the
funds from Agency reserves.
CALIFORNIA ENVIORNMENTAL QUALITY ACT (CEQA)
The acquisition of the properties at 101 -111 North Santa Anita Avenue and 121 -159
North Santa Anita Avenue is exempt from CEQA because it is not considered a project
per Section 15061 (b) (3) of the CEQA guidelines.
FISCAL IMPACT
The appropriation would be taken from the Agency's undesignated reserves where
there are funds available. The Agency has $3.5 million from the General Fund loan,
and $3.1 million in 2010 -2011 reserves.
RECOMMENDATION
Authorize the appropriation of $3,357,500 from Redevelopment Agency reserves to
complete the land purchase transactions at 101 -111 and 121 -159 North Santa Anita
Avenue and complete relevant repairs and exterior improvements.
Approved by:
Donald Penman, City Manager /Executive Director
ARA Staff Report
July 20, 2010
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