Loading...
SR-012709-8bCity Council Meeting: January 27, 2009 Agenda Item: ~L ~j To: Mayor and City Council/Chairperson and Redevelopment Agency From: Andy Agle, Director of Housing and Economic Development Subject: Acquisition of Property at 1334 Stn Street in accordance with the Downtown Parking Strategy Recommended Action Staff recommends that the City Council: 1. authorize the City Manager to execute a Letter of Intent for the City of Santa Monica ("City") to acquire the property owned by the Sunnyside Group; located at 1334 5th Street, and to negotiate and execute a Purchase and Sale Agreement and other related documents with the Sunnyside Group; 2. adopt a Resolution finding the use of funds from the Redevelopment Agency of the City of Santa Monica for acquisition of property located at 1334 5th Street to be of benefit to the Earthquake Recovery Redevelopment Project Area; and 3. authorize preparation and execution by the City Manager of a Cooperation Agreement between the City and the Redevelopment Agency for the purpose of acquiring the property at 1.334 5th Street; Staff recommends that the Redevelopment Agency of the City of Santa Monica: 1. adopt a Resolution finding the use of funds from the Redevelopment Agency for acquisition of property .located at 1334 5th Street to be of benefit to the Earthquake Recovery Redevelopment Project Area; and 2. authorize preparation and execution by the Executive Director of a Cooperation Agreement between the City of Santa Monica and the Redevelopment Agency to grant funds to the City of Santa Monica for the acquisition of property located at 1334 Stn Street. Executive Summary The Letter of Intent between the City and the Sunnyside Group provides for the City to purchase the property located at 1334 5th Street for $5,000,000, plus the City's share of closing costs. The property is 7,500 sq. ft. and improved with a building of 9,943 sq. ft. Acquisition of the property is in accordance with the approved Downtown Parking Strategy. Funding for the property acquisition is available to the City from the Redevelopment Agency,. provided the City and Redevelopment Agency adopt Resolutions making, findings that the use of Redevelopment funds for the acquisition of this property is of benefit to the Earthquake Recovery Redevelopment Project Area. The Cooperation Agreement would authorize the Redevelopment Agency to grant funds to the City to acquire the property located at 1334 5'h Street. Acquisition of the property was considered as part of the CEQA analysis for the Downtown Parking Strategy EIR and no additional environmental analysis is required. Discussion Background The property at 1334 5ih Street is 7,500 sq. ft. and is improved with a 9,943 sq. ft. building occupied by .Hershey Associates, a firm whose (ease expires December 31, 2012, and Ezai Florists, a shop which is on a month-to-month lease. The property is located within the area identified in the Downtown Parking Strategy and Environmental Impact Report, certified by the Council on May 9, 2006, as the target area for construction of additional parking resources. Negotiations with the property owner began in August 2006, and resulted in an Offer Letter from the Sunnyside Group to sell its property to the City. The offer to sell states that the transaction is made in lieu of the City's exercise of the power of eminent domain and will contain a right in favor of one or more of the Sellers under Section 1033 of the Internal Revenue Code. Following execution of the Letter of Intent, the City and the Sunnyside Group will negotiate a Purchase and Sale Agreement. The City would purchase the property subject to the existing leases. As part of its due diligence, staff will complete a Phase I environmental assessment of the property, now in progress. If the report identifies the need for further environmental or soils review through a Phase II investigation, the due diligence period will be extended by an amount of time necessary to complete the analysis. If the tests reveal conditions that are unacceptable to the City, the City may cancel its escrow and its good faith deposit in the amount of $100,000 will be returned. 2 Previous Council Actions Council approved the Downtown Parking Strategy on May 9, 2006, following a series of community workshops and review by the Bayside District Board and Planning Commission. The strategy identifies the need to acquire properties on Fifth Street to serve as interim parking while the downtown parking structures are reconstructed. The strategy also anticipates that the properties could serve as long-term parking resources. Environmental Analysis The property is located within an area studied in the Downtown Parking Strategy EIR, certified by the City Council on May 9, 2006, for the development of new parking resources. A copy of this EIR will be available on the dais at the City Council hearing on this matter and can be viewed at (EIR).. None of the conditions described. in CEQA Guidelines Section 15162 and 15163 have occurred which would necessitate additional environmental review. Redevelopment Considerations The City has been pursuing property acquisition for the purpose of adding public parking resources within the area bounded by Wilshire Boulevard on the north, Colorado Avenue on the south, 4th Court on the west and 6th Court on the east. To authorize the use of Redevelopment funds, the City Council and Agency must make the appropriate determinations. The attached Resolutions (Attachments A and B) determine and find that the Project is of benefit to the Earthquake Recovery Redevelopment Project Area; no other reasonable means of financing the Project are available to the community; the payment of funds for the Project will assist in elimination of one or more blighting conditions inside the Project Area by assisting irrthe elimination of one or more 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 Commercial Revitalization goals as set forth in this Plan. 3 Financial Impacts & Budget Actions The Cooperation Agreement will provide a grant to the City from the Redevelopment Agency in the amount of $5,000,000 and the City's share of closing costs. Funds for the grant to pay for acquisition and closing costs are available at Account No. C 170776.589009. Prepared by: Miriam Mack, Economic Development Manager Approved: Forwarded to Council: Andy Agle, Director a nt Ewell Housing and Economic Development Ci anager Attachments: Attachment A: Resolution of the City of Santa Monica Consenting to the Use of Agency Funds for the Acquisition of Property Located at 1334 5th Street and Making Certain Findings Pursuant to Health and Safety Code Section 33445 Attachment B: Resolution of the Redevelopment Agency of the City of Santa Monica Consenting to the Use of Agency Funds for the Acquisition of Property Located at 1334 5"' Street and Making Certain Findings Pursuant to Health and Safety Code Section 33445 4 Reference Contract Nos. 9030 (CCS) and 9031 (CCS/RAS); reference Resolution Nos. 10378 (CCS) and 514 (RAS)