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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 Page 2 of 2