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HomeMy WebLinkAboutItem 3d: Use of Redevelopment Funds to Purchase Property at 19 Lucille StreetDATE: July 20, 2010 TO: Chair and Members of the Agency Board FROM: Jason Kruckeberg, Assistant City Manager /Development Services 3-ix Director By: Jerry Schwartz, Economic Development Manager J,S SUBJECT: AUTHORIZATION TO APPROPRIATE FUNDS FROM REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND RESERVES TO PURCHASE THE PROPERTY AT 19 LUCILLE STREET Recommendation: Approve BACKGROUND During Closed Session at the June 15 City Council Meeting, the Agency Board gave staff parameters to negotiate the purchase of the property at 19 Lucille Street. Staff's representative was successful at negotiating a purchase agreement within the given parameters. The Agency Board needs to authorize the budget expenditure to allow this purchase to be completed. DISCUSSION STAFF REPORT Arcadia Redevelopment Agency The Agency Board authorized staff to negotiate at up to a certain price to acquire this residential site. The site is of interest to the Agency because it already owns the adjacent property at 15 Lucille on which it has been seeking developer interest in building affordable housing. Adding 19 Lucille would enlarge the overall site to over 13,000 sq. ft., allowing for a larger project that would be more economically viable for a developer. It would also allow the Agency to create a substantial project that can upgrade the overall neighborhood similar to the impact of the Alta Street Classics. The total expenditure to acquire the property is about $695,000, which includes $650,000 for the site, with the remainder to pay escrow costs and broker fees. Since this property was not on the market, it is appropriate for the Agency to pay these costs. There will be additional costs related to relocation and /or property management prior to any future redevelopment of the site. At this point, the relocation and /or property management cost is unknown. There will also be demolition and site clearance costs. Staff will bring the relocation and demolition costs back for Agency authorization at a future meeting. Since this transaction was not included in the 2010 -2011 Agency budget, the Agency Board needs to appropriate the funds from Agency low /mod housing reserves. CALIFORNIA ENVIORNMENTAL QUALITY ACT (CEQA) The acquisition of 19 Lucille Street 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 low and moderate income housing fund reserves, where there are approximately $5.4 million available, with another $4 million to be deposited in the fund once the Agency bonds close and the outstanding debt is repaid. RECOMMENDATION Authorize the appropriation of $695,000 from the Redevelopment Agency's low and moderate income housing fund reserves to complete the land purchase of 19 Lucille Street. Approved by: Donald Penman, City Manager /Executive Director 19 Lucille St. July 20, 2010 Page 2 of 2