SR-901-013~~.r
City Cauncil and
~~~./ ~~~y of Redevelopment Agency Repart
Santa Monica~
City Council Meeting: February 27, 2007
Agenda Item; ~~
Ta: Mayar and City Council
Chairperson and Redevelopment Agency
Chairperson and Parking Authority
From: Andy Agle, Director of Housing and Economic Development
Subject: Acquisition of Property Located at 430 Arizona Avenue, 1324 Fifth Street,
1320 Fifth Street and 1321 Fifth Street
Recammended Action
StafF recommends that the City Council:
1. authorize the Gity Manager to execute a ~etter of Intent far the City of Santa
Monica {"City") to acc{uire the property owned by Fifth/Arizona Investors, ~LC and
Bayside Domination, I.LG, located at 430 Arizona Avenue, 1324 Fifth Street,
1320 Fifth Street and 1321 Fifth Street, and to negotiate and execute a Purchase
and ~ale Agreement and other related documents with the praperty owners;
2. adopt a Resolution ~nding the use of funds from the Redevelopment Agency of
the City of ~anta Monica for acquisition of property lacated at 430 Arizona
Avenue, 1324 Fifth S#reet, 1320 Fifth Street and 1321 Fifth S#reet, to be of
benefit to the Earthquake Recovery Redevelopment Projec# Area;
3. authorize preparation and execution by the City Manager of a Cooperation
Agreement between the City, the Parking Authority ar~d the Redevelopment
Agency for the purpose af acquiring property at 430 Arizona Avenue, 1324 Fifth
Street, '1320 Fifth Street and 1321 Fifth Street.
4. amend Sections 1{a} and 2{a) of the Settlement Agreement between the City and
Fifth/Arizona Investors, ~LC, and Taking the Fifth, LLC to extend the date for
expiratian of Administrative Approval No. 05AA-~17 and 05AA-018 fram March
15, 2Q07, to May 15, 20~7.
Staff recommends that the Redevelopment Agency of the City c~f Santa Monica:
1. adop# a Resolution finding the use of funds from the Redevelopment Agency for
acquisition of property lacated at 434 Arizona Avenue, 1324 Fifth Street, 1320
Fifth Street and 1321 Fifth Street to be of benefit to the Earthquake Recovery
Redevelopment Project Area.
2. authorize preparation and executian by the Executive Director af a Caoperation
Agreement between the City of Santa Monica, the Parking Authority and the
Redevelopment Agency to grant fur-ds to the City of Santa Monica for the
acquisition of property located at 430 Rrizona Avenue, 1324 Fifth Street, 1320
Fifth ~treet ar-d 1321 Fifth Street
Staff recommends that #he Parking Authority of the City of Santa Manica authorize
preparation and execution by the Executive Director of a Cooperation Agreement
between the City of Santa Monica, the Parking Authority and the Redevelopment
Agency to grant funds ta the City of Santa Monica for the acquisition of property
located at 430 Arizona Avenue, 1324 Fifth Street, 1320 Fifth Street and 1321 Fifth
Street.
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L
Execu#ive Summary
The ~etter of Intent between #he City and FifthlArizona Investors, L~.C and Bayside
Damination, L.E~C, {"Property Uwners") provides for the City to purchase the property
located at 430 Arizona Avenue, 1324 Fifth Street, 132Q Fifth Street and 1321 Fifth
Street ("Property") for $30,900,000, plus closing casts. The praperty totals 52,500 sq. ft,
Rcquisition of the property is in accardance with the appraved Downtown Parking
Strategy. Funding for the property acquisition is available to the City from the Parking
Authority and from the Redevelopment Agency, provided the City and Redevelopment
A~ency adopt Resolutions making findings that the use of Redevelopment funds for the
acquisi#ion of this Property is of benefit to the Earthquake Recovery Redevelopment
Project Area. The Caoperation Agreement wauld authorize the Redevelapment Agency
and Parking Authority to grant funds to the City to acquire the Property.
Discussion
Backqround
The Properky consists of seven lots that tatal 52,500 sq. ft. Qne of the lots is improved
with a 25,335 sq. ft. building, at 1320 Fifth Street, that the City had leased as the interim
public library. The Property is located within the area identified in the Downtown Parking
~trategy and Environmental Impact Report, certified by the Cauneil May 9, 20Q6, as the
target area for construction of additional parking resources.
Negotiations with the Property C?wners began in October 2006, and resulted in the Offer
Letter from the Property Owners #o sell the Property #a the City. The offer to sell states
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that the transaction will contain a right in favor of one or mare of the Gwners under
Sec#ion 1033 of the Internal Revenue Code and under Section ~8 of the Revenue and
Taxation Code. Following execution of the ~etter of Intent, the City and the Property
Owners will negotiate a Purchase and Sale Agreement. Escrow is to open within 30
days of signing the Letter of 1n~ent.
As part of its due diligence, staff will conduct a Phase I environmer~tal assessment of
the property. If the tests reveal conditions that are unacceptable to the City, the City
may cancel its escrow and its good faith deposit will be returned.
The Letter of Intent also amends the terms of a~e#tlement Agreement between the Gity
and the Owners to pravide for an extension on the time af building permits for approved
projects at 430 Arizona and 1320 5~" Street, from March ~~, 2007, to May 15, 2Q07.
Previous Council Actions
Council authorized staff ta initiate negotiations with the property owner at its meeting of
Octaber 24, 20QC, when it approved a Settlemen# Agreement with the Praperty C~wners.
Environmental Analysis
The Prop~rty is located within an area studied in the Qowntown Parking EIR, certified by
the City Council on May 9, 200fi, for the development of new parking resources, A copy
of thrs EIR will be available on the dais at the City Council hearing on this matter and
can be viewed online. Nane of the conditions described in CEQA Guidelines Section
15162 and 151C3 have occurred which would necessitate additional ertvirartmental
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review. As appropriate, further CEQA analysis may occur Qnce a specific project far the
Praperty is identified.
Redevelopment Considerations
Althaugh no decision an the use{s} of the Property has been made, the City has beer~
pursir~g property for a variety of patential uses, including, among other reasons, for the
possible purpose of adding public parking resaurces within the area bounded by
Wilshire Boulevard on the north, Colarada Rvenue on the south, 4t"' Court on the west
and 6"' Court on the east. To authorize the use of Redevelopment funds, the City
Council and Agency must make the appropriate determinations. The attached
Ftesalutions {Attachments A and B} determine and find that the Project is of benefit to
the Earthquake Reeovery Redevelopment Project Area; no ather reasonable means of
financing the Praject are availabfe to the community; the payment of funds for the
Project will assist in elimination of one or more blighting canditions inside the Project
Area by assisting in the eliminatian af one or mare of the conditions resulting from the
1994 Northridge Earthquake disaster; and the payment of funds for the Project is
consistent with the Redevelopment Agency's Five-Year Implementation Plan in that it
helps achieve the Disaster Prevention and Mitigation and Cammercial Revitaliza#ion
goals as set forth in this Plan.
BudccetlFinancial Impact
The Caoperation Agreement will pravide a grant to the City fram the Redevelopment
Agency in the amount of $27,940,000 and from the Parking Authority in the amount af
$3,400,000. The funds are available from the Redevelapment Agency at Account #
C'1?{~621.5$9000 in the amount of $1~4,900,000 and Account No. C170776.5890Q0 in
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#he amount of $13,000,40C}. Funds are available from the Parking Authority at Account
No. C770776.589000 in the amount of $3,000,000
Prepared by:
Miriam Mack, Economic Development Manager
Approved: Forwarded to Council:
Andy Agle,
Director, Resou
Management
P
~ont Ewell ~ -
anager ~
Attachments:
At#achment A: Resolution of The City CJf Santa Manica Consenting ta the Use of
Agency Funds for the Acquisi#ion of Properky ~ocated afi 43C} Arizana and 1324 Fifth
Street, 1320 Fifth Street and 1321 Fifth Street and Making Certain Findings Pursuant To
Health And Safety Code Section 33445
A#tachment B: Resolution of The Redevelopment Agency Conser~ting to the Use Of
Agency Funds for #he Acquisi#ion of Property Located at 430 Arizona and 1324 Fifth
Street, 1320 Fifth Street and 1321 Fifth Street and Making Certain Findings Pursuant to
Health And Safety Code ~ection 33445
Attachment C: Property Map
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Reference Contract No.
8691 CCS Contract No.
,
8692 CCS PAS RAS ~
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Amended Contract No.
8137 CCS ~ & Amended
~
Contract No. 8649 CCS .
Reference Resolution No.
10201 CCS & Resol ution
No.500 RAS