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
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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
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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-
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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.
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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.
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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:
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Martin Kenne~ly ~~~~ ~~ P. Lamont Ewell
Acting Director, Resource Ma agement Ci~~-~7lanager
Department
ATTACHMENTS:
Attachment A: Sewer Easement Location
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Colorado Ocean Reiief Sewer (SP1984)
Mop Showing 25' 1Nide Easement across
Holiday fnn Praperty loc~tec~ at
12Q Coforado Avenue far Sewer Purpases
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