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SR-506-004-04 (3)~~~ . . City Council Report ~ c~cy or Santa Monica~ City Council Meeting: December 5, 2006 Agenda Item: _~ To: Mayor and City Council From: Martin Kennerly, Acting Resource Management Director Subject: Approval of a Conveyance Agreement of a Sewer Easement from FelCor Hotel Assets Company LLC at 120 Colarado Avenue for the Colorado/Ocean Avenue Relief Sewer Project Recommended Action Staff recommends that the City Council: 1. authorize preparation and execution of a Conveyance Agreement for a sewer easement from FelCor Hotel Assets Company LLC at 120 Colorado Avenue for the Colorado/Ocean Avenue Relief Sewer Project; 2. authorize the City to pay $171,000 for the easement; and 3. cancel the December 12, 2006, hearing to consider adoption of a Resolution of Necessity to acquire the easement through eminent domain. Executive Summary An existing sewer main in Colorado Avenue handles two-thirds of all wastewater flows in the City. The sewer line runs southerly under the western portion of the Ho{iday Inn site at 120 Colorado Avenue, then under the I-10 Freeway, crosses beneath the former RAND Corporation property and connects to a recently completed sewer main in Ocean 1 Avenue. This sewer line was damaged during the Northridge earthquake in 1994 and as a result, rehabilitation is needed. Rehabilitation of the existing line can only be done during a shut-down of the line, thus necessitating that a relief sewer first be constructed. This relief sewer in the long term will provide redundancy and additional capacity to meet existing and future needs for 2/3 of the City. The proposed relief sewer alignment runs under the eastern portion of the property at 120 Colorado Avenue, occupied by the Holiday lnn. Council authorized negotiations with the owner of the property, FelCor Hotel Assets Company, LLC, ("FelCor") to acquire the new sewer easement. The City and FelCor have been in negotiations, but have not agreed on the amount of just compensation. In lieu of initiating eminent domain proceedings at this time,.FelCor is willing to grant the easement to the City and accept the City's offer of $171,000 (the "Offered Amount"), while negotiations continue. The Agreement will state that after one year, with 30-days notice, either party may terminate negotiations at which time the City will conduct a hearing to initiate eminent domain proceedings with the date of value of the easement being the date on which the Offered Amount was paid to FelCor. (An eminent domain proceeding that goes to trial would result in the valuation being determined by a court.) The Agreement acknowledges that FelCor will waive all claims and defenses that could be raised in an eminent domain action, except for the claim of greater compensation. The Agreement clearly states that negotiations regarding the amount of just compensation to be paid for the easement are separate and distinct from any other negotiation or discussion that is 2 or may be taking place befinreen FelCor and the City or Redeveiopment Agency, and are in no way contingent on those discussions. Discussion The City began planning for the Colorado/Ocean Sewer Relief Project ("Project"} in 2004 because there is a need to both increase the capacity of the sewer system to accommodate current and anticipated future flows, as well as provide an additional line in this critical section of the sewer system. Currently, 2/3 of the City's sewage passes through the existing 30" damaged sewer main. The proposed sewer easement will contain one 12" and finro 36" pipes encased in a 96" steel casing which will supplement the existing 30" diameter sewer main. Upon completion of construction of the proposed sewer main and rehabilitation of the original sewer main in the existing sewer easement, the City will be able to divert sewage through both lines and thus provide better assurance that 2/3 of the City's sewage needs can be met and provide redundancy if one line becomes compromised in the future As part of the preliminary design process more than ten different alignments were evaluated. The reasons for rejecting the alternative alignments varied, with the alternatives creating some or all of the folfowing problems: the need for major open cut excavation within Colorado Avenue and Appian Way; the need for a new pump station similar in size to the Moss Avenue Pump Station located across from Santa Monica Place; the potential for substantial odors that would be difficult to mitigate; increased on- 3 going operationalimaintenance costs and energy consumption; and the potential need to relocate affordable housing. The recommended alignment that requires a sewer easement through the property at 120 Colorado Avenue provides the most benefits to the City and was the only alignment that was able to use gravity flow. The alignment provides adequate hydrau{ic head which allows for gravity flow and eliminates the need for a pump station. In addition, the recommended alignment provides ease of access and constructability. The minimal impacts that the recommended alignment creates on existing utilities and traffic are two additional reasons that support this alignment as preferred over all other options. The recommended alignment is the least costly of all the other afternatives with pretiminary engineering estimates ranging from $8-$10 million, versus $15-$20 million for all other alternatives studied. The process followed in the preliminary design stage included calculation of future flows in the affected area, including verification of the capacity of the existing and proposed sewer; alternate alignments including the pros and cons for each route; obtaining feedback from affected agencies; and final plan changes incorporating comments and recommendations on the preferred design alternative. Once the new line is operational, the existing main will be rehabilitated so that both sections can work in tandem or singularly if either should become compromised. The easement needed for this Project runs under the parking lot of the property at 120 Colorado Avenue, just east of the Holiday Inn hotel building. The easement is 25 feet wide and 85 feet long. 4 Previously Council authorized negotiations for the acquisition of the easement and staff presented to FelCor a written offer on March 7, 2006, and an updated offer on July 12, 2006. The purchase offer was based on an appraisal of the sewer easement's fair market value. Unfortunately, the City and FelCor did not agree on the amount of just compensation. However, FelCor is willing to grant the easement to the City through a Conveyance Agreement so that construction can commence while negotiations continue. The terms of the Conveyance Agreement will require the City to pay FelCor $171,000, the City's Offered Amount based on its determination of just compensation. However, the Conveyance Agreement will give both parties the right to continue negotiations and after one year of negotiations, to terminate negotiations with 30-days written notice. If negotiations terminate without reaching agreement on the amount of just compensation, the Agreement provides for the City to conduct an eminent domain hearing and freezes the date of valuation for purposes of the eminent domain action to be the date on which the Offered Amount was paid to FelCor. (Eminent domain proceedings that go to trial will result in the value of the easement being determined by a court.) The Agreement also makes clear that negotiations over the amount of just compensation is separate and distinct from any other negotiations or discussions that are or may be taking place between FelCor and the City and/or the Santa Monica Redevelopment Agency with regard to redevelopment of the site. Finally, the agreement also reserves the right of the City to madify or expand the size af the easement, if deemed necessary. 5 Previous Council Actions On February 28, 2006, Colorado/Ocean Avenue Relief Sewer Council authorized negotiations for the acquisition of the sewer easement. Environmenta{ Analysis The Project is categorically exempt from CEQA and NEPA and a Notice of Exemption was filed on August 28, 2006. Budqet/Financial Impact The Federal Emergency Management Agency provided funds for various upgrade projects throughout the City as a result of the 1994 Northridge Earthquake. These projects are 95% compfete with balances remaining. Authorization was received from FEMA to utilize a portion of the remaining balance for the Colorado/Ocean Avenue Relief Sewer Project. Sufficient budgeted funds to pay the Offered Amount of $171,000 are available at account E130873.555010.40000. Prepared by. Miriam Mack, Economic Development Manager Aqaroved: Forwarded to Council: f~ ' . Y~ . ~p~- _....- f~^ ~ ., ~ ~° ~_~-•'a'~'''2 , . ._ ~ .,~.c~ r F Martin Kenne~ly ~~~~ ~~ P. Lamont Ewell Acting Director, Resource Ma agement Ci~~-~7lanager Department ATTACHMENTS: Attachment A: Sewer Easement Location 6 ~ ~ ~ 44` ~ ~t~9Q STRE~T ATTACHMENT A ~'~R ~FS ~ ! 0 ~~ ~Ali~ STREE~' ~~~ _ ~ ~ -- r„ ~~ U V ~ ~ Q`~ ~L Q VAR POINT aF J~~~C}~`~ ~~ BEGINNiNG Q ~ g`76'22" ~ .~".."'e~'_,~,; - 61.74 --- S_._3g'7 &'22„ ~~ 85:27' ~ -~-~.~. ~ ~ f CV O ~ v' J ~~1 ~' ~~~~~r~U ~ ~ ~ 0 ~ ~-INST. N0, Q4- z v e I~ ao' ao' ~ ~ry ~~~'~~~1 ~~i 8Q, ~ ~ W ~ ARY 5~WER ~ASEMENT ~~~~~ ~{ ~ ~~~r ~ ~ \~ a ~ ~ ~ ~~~~~y~s ~ J - ,3~ I ~1_ _ ~ \ONp,~ LAN ~ ~~~~~ ~~ 1 F ~ ~ o . 1 ~ ~ , OC~~4N ~ ~° .a 0 _Q AV~NUE~- ~~-'~ v:~r~ c i r y o f Santa Mouica .,'"',y,. ,C:^s:M'.': ."::: ~"°~`°~~ 3~~ Civil Engineering & Archi~erture ~~ 1919 MlJN SiREEi. SU17E 30Q, S.tN1A YQNICA, CA.9W05 w,s:°.%r.u:~5~^" rt: SEI. f 31Q ) 458-8721 EAK. ( J1D )]9~-Si29 - smanq~neerlnq6aatto-manlcaorq ~9~C /~~~ ~~ rl/a ~ ~o~~ ~ Colorado Ocean Reiief Sewer (SP1984) Mop Showing 25' 1Nide Easement across Holiday fnn Praperty loc~tec~ at 12Q Coforado Avenue far Sewer Purpases SUBA41FiE0 BY ~~ySOMAS ~ R£FERENCf :}CSM~ZO2{~~ ORAWIhtC N0. APPRQYcO BY : OAiE: . _ .. . 2ppg ~ES4GRCBY : OR G~GY . ~~j~ ~ f (:HtCKtU tlT : - CIiY ENCiNEER .~QC ~ ~ e erence onve ance reemen o. .