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 CITY COUNCIL AGENDA ITEM NO. 04 



Meeting Date: October 8, 2002

Subject/Title: Approve a Resolution Authorizing City Manager to Execute Memorandum of Understanding with Brentwood Ready Mix, and Directing City Attorney to Prepare and Authorizing City Manager to Execute a Purchase and Sale Agreement

Submitted by: Howard Sword, Economic Development Director
Dennis Beougher, City Attorney
Gina Rozenski, Redevelopment Analyst

Approved by: John Stevenson, City Manager


RECOMMENDATION 
Approve a Resolution authorizing the City Manager to execute a Memorandum of Understanding (“MOU”) with Brentwood Ready Mix for the sale of a 2.5-acre site in the Sunset Industrial Complex, and directing the City Attorney to prepare and authorizing the City Manager to execute the Purchase and Sale Agreement consistent with the MOU.

PREVIOUS ACTION
In an effort to revitalize the Brentwood Boulevard corridor and to address incompatible land uses, the City Council identified as a high priority the relocation of Brentwood Ready Mix from its existing location at 6923 Brentwood Boulevard to the Sunset Industrial Complex. During the City’s environmental investigation of the Sunset Industrial Complex, a thorough analysis of a concrete batch plant and its possible environmental impacts were studied. 

On August 13, 2002, the City and Agency approved resolutions approving a Reimbursement Agreement between the City and Agency, in which the Agency agreed to loan $3,000,000 to the City for infrastructure improvements at Sunset Industrial Complex, and the City agreed to reserve 6.5 acres in the Complex for potential relocation purposes.

On June 28, 2002, the City adopted Ordinance 708 to amend the Merged Redevelopment Plans. One of the reasons for the recent adoption of a Plan Amendment to the North Brentwood Redevelopment Plan was to add the Sunset Area for the purpose of providing appropriately zoned land for voluntary relocation of existing incompatible and non-conforming industrial businesses along Brentwood Boulevard. The effort to eliminate the existing conditions of blight and prevent the continuing decline and stagnation of the area is intended to provide opportunities to attract private investment, promote economic stimuli, and redevelop areas to current standards and zoning requirements. 

BACKGROUND
City and Redevelopment Agency staff members have engaged in ongoing dialogue for almost two years with Susan and Niels Larsen, Jr., owners of Brentwood Ready Mix, regarding their voluntary relocation to the Sunset Industrial Complex. The Economic Development and Redevelopment Subcommittees have been routinely apprised of the progress of these negotiations.

The attached Memorandum of Understanding reflects the final agreement between the City, the Agency and the Larsen’s, wherein the Agency agrees to provide funds to the City for the public improvements at Sunset Industrial Complex, and the City agrees to sell 2.5 acres to the Larsen’s as fair and adequate consideration for the conveyance. The cost of the agreement to the City, the Agency and the Larsen’s is as follows:

City:
Actual cost of 2.5 acres $87,120

Agency:
Actual cost of public improvements for 2.5 acres $311,454
Engineering services for site improvements 12,000
Total $323,454

Larsens:
Prior to conveyance:
Land Use Entitlements and Planning Consultant [b(ii)] $105,800
Roadway Dedication [b(iv)] 54,067
After conveyance:
On-site construction and improvements [c] 513,982
Demolition at existing site [d & f] 200,000
Paint and new fence at existing site [e] 6,000
New Concrete Mill & Conveyor 500,500
Total $1,380,349

Under the provisions of the Memorandum of Understanding, and the subsequent Purchase and Sale Agreement, the City will be responsible for conveying the site to the Larsen’s for the purpose of constructing a concrete batch plant in direct consideration for an irrevocable offer of dedication, which is fair and adequate consideration for the conveyance. 

The voluntary relocation and completion of a newly constructed concrete batch plant will accomplish a number of City and Agency objectives:

1. The relocation will remove an existing legal non-conforming land use along Brentwood Boulevard.
2. The project will implement the City’s economic development plan for the Sunset Industrial Complex.
3. Retention of an existing business is important to the City and Agency.
4. The project will eliminate adverse physical conditions by removing dilapidated and abandoned structures.
5. The project will eliminate adverse economic conditions by creating a catalyst to stimulate additional private investment in the North Brentwood Redevelopment Project Area.
6. The project will generate a small amount of new tax increment and sales tax.

Thus, the City and Agency will enter into this Memorandum of Understanding, and the City will enter into a subsequent Purchase and Sale Agreement consistent with the MOU, in order to achieve objectives of removing adverse physical and economic conditions, stimulating economic growth, and implementing a strategy to assist industrial businesses to voluntarily relocate to appropriately zoned land. 

Furthermore, the City nor the Agency embarked on any action to use eminent domain authority for the roadway dedication or blight removal, thereby saving considerable condemnation, legal cost, appraisal, acquisition and escrow costs.

FISCAL IMPACT
The financial arrangements and cost of the agreement to each party is outlined above.

Attachment: Resolution
Memorandum of Understanding w/map










































RESOLUTION NO.


A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD AUTHORIZING CITY MANAGER TO EXECUTE A MEMORANDUM OF UNDERSTANDING WITH BRENTWOOD READY MIX FOR THE SALE OF A 2.5 ACRE SITE IN THE SUNSET INDUSTRIAL COMPLEX AND PREPARATION AND EXECUTION BY THE CITY MANAGER OF PURCHASE AGREEMENT CONSISTENT WITH MEMORANDUM OF UNDERSTANDING

WHEREAS, the City Council has identified as a high priority the relocation of Brentwood Ready Mix from its existing location to the Sunset Industrial Complex; and

WHEREAS, the City studied the possible environmental impacts of a concrete batch plant during its environmental investigation of the Sunset Industrial Complex; and

WHEREAS, the City entered into a Reimbursement Agreement with the Redevelopment Agency of the City of Brentwood in the amount of $3,000,000 for infrastructure improvements at Sunset Industrial Complex; and

WHEREAS, the City agreed to reserve 6.5 acres in the Sunset Industrial Complex for voluntary relocation of industrial business from the Merged Redevelopment Project Areas; and

WHEREAS, the City approved Ordinance No. 708 on June 28, 2002, to expand the North Brentwood Redevelopment Project Area to add the territory known as Sunset Area for the purpose of providing appropriately zoned land for voluntary relocation of existing incompatible and non-conforming industrial business in an effort to eliminate existing adverse physical and economic conditions, to prevent the continuing decline and stagnation of the area, to provide opportunities to attract private investment, to promote economic stimuli, and to redevelop areas to current standards and zoning requirements;

WHEREAS, the City finds that conveyance of the 2.5-acre site to Brentwood Ready Mix for the purpose of constructing a concrete batch plant in direct consideration for an irrevocable offer of dedication is fair and adequate consideration; and

WHEREAS, the City determines that the conveyance of property to Brentwood Ready Mix accomplishes the City’s goal to retain existing businesses, implement the economic development plan for the Sunset Industrial Complex, and assist with removal of legal non-conforming land uses.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood directs as follows:

(1) City Manager is authorized to execute a Memorandum of Understanding, as attached hereto as Exhibit A, with Brentwood Ready Mix for the conveyance of a 2.5-acre site in the Sunset Industrial Complex (“MOU”), and 

(2) City Attorney shall prepare and the City Manager is authorized to execute a Purchase and Sale Agreement that is consistent with the MOU, and the associated Staff Report for this resolution.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on October 8, 2002, by the following vote:

AYES: 
NOES: 
ABSENT: 



_____________________________
Michael A. McPoland, Sr.
Mayor



ATTEST:



__________________________________
Karen Diaz, CMC
City Clerk

Attachment: Memorandum of Understanding with map
























EXHIBIT A




MEMORANDUM OF UNDERSTANDING



This Memorandum of Understanding outlines the conceptual agreement between the CITY OF BRENTWOOD, hereinafter referred to as “City”, the REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD, hereinafter referred to as “Agency”, and SUSAN AND NIELS LARSEN, owners of Brentwood Ready Mix, hereinafter referred to as “Larsen”.

RECITALS

A. The City owns certain real property known as the Sunset Industrial Complex, which is zoned for various industrial uses.

B. The City, Agency and Larsen wish to participate in the voluntary relocation of the Larsen’s existing concrete batch plant located at 6923 Brentwood Boulevard to a 2.5-acre site in the Sunset Industrial Complex (“Site”), as depicted in Figure 2-3 dated May 22, 2001, the northerly portion of Lot 9, attached and incorporated herein.

C. A Financial Feasibility Analysis, dated March 26, 2002, performed by Agency staff reflects an estimated cost to Larsen for on-site construction and improvements of a concrete batch plant on the Site of $794,782. 

D. City, Agency and Larsen find the Recitals stated above are true and correct. 

NOW, THEREFORE, City, Agency and Larsen agree that the participation by the parties shall be subject to conditions as specified below: 

a. The Agency shall provide funds to the City for the public improvements at Sunset Industrial Complex.

b. City shall convey the Site to Larsen provided Larsen completes the following as fair and adequate consideration for the conveyance:

i. Provide evidence of equity or mortgage financing commitments necessary to complete construction on the Site in a form acceptable to the City. 

ii. Receive development entitlements from the City and other government agency approvals, and pull building permits for the construction of the concrete batch plant on the Site. Pay all City application and development fees and other government agency fees for the Site. 

iii. Provide evidence of a signed agreement with building contractor to complete construction of the plant on the Site.

iv. Execute an irrevocable offer to dedicate 25’ along the existing property’s frontage on 6923 Brentwood Boulevard, prior to conveyance of Site, and deposited into escrow.

c. Larsen agrees to complete construction of new concrete batch plant on the Site, evidenced by a certificate of occupancy, within 180 days from conveyance of Site by City (reasonable extensions due to force majeure events shall be allowed).

d. Within 60 days following the 180-day construction period, as evidenced by a certificate of occupancy, whichever occurs first, Larsen shall remove from the Brentwood Boulevard site the following: 

i. Concrete mill, batch plant, conveyors, and all accessory equipment.
ii. All concrete rubble, gravel and sand.
iii. Bunkers.
iv. Roof sign and wall sign from front cinder-block building.
v. Sign from northeast corner of parcel near road.
vi. All building materials and debris.

e. Within 60 days following the 180-day construction period, as evidenced by a certificate of occupancy, whichever occurs first, Larsen shall:

i. Paint the cinder-block office/warehouse building at the Brentwood Boulevard site and erect a new address sign on the building. 
ii. Erect a new chain line fence, posts and gate along the Brentwood Boulevard frontage.

f. Notwithstanding any other provision of this Memorandum of Understanding, Larsen shall demolish the cinder-block office/warehouse building, the concrete-wall warehouse building, the carport-type structure, and all other buildings and accessory garages and clear the entire Brentwood Boulevard site of all structures, debris, concrete, signs (except a for-sale sign no larger than 24 square feet) and building materials, no later than January 1, 2005. 

g. The City shall have the right, at its option, to repurchase the Site if, after conveyance of title, Larsen:
i. Abandons or substantially suspends construction of the approved improvements on the Site for a period of three (3) months after written notice of such abandonment or suspension from the City.


ii. Without the prior written consent of the City, Larsen sells, assigns, disposes, or transfers any portion of or any interest in the Site prior to completion of the approved improvements. 
To exercise its right, the City shall pay to Larsen in cash an amount equal to:
a. The costs incurred by Larsen for on-site labor and materials for the construction of the improvements existing on the Site at the time of repurchase, less
b. Any gains or income withdrawn by Larsen from the Site or the improvements thereon, less
c. Any liens on the Site and any unpaid assessments. 

The City and Larsen agree to enter into a Purchase and Sale Agreement with the terms and conditions set forth in this Memorandum of Understanding prior to the conveyance of the Site from the City to Larsen. 

The City, Agency and Larsen agree that these terms and conditions are acceptable as evidenced by signatures below.




_____________________________ ______________________________
SUSAN LARSEN “Larsen” JOHN STEVENSON,
City Manager, “City”

____________________________ ______________________________
NIELS LARSEN, “Larsen” JOHN STEVENSON,
Executive Director, “Agency”



Dated: ______________________ Dated: ________________________



















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