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Current Council Agenda and Past Meeting Information



Meeting Date: January 25, 2005

Subject/Title: Report on status of purchase agreements at Sunset Industrial Complex and direct staff to extend the closing date for one escrow by 75 days.

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Community Development Director

Accept report on status of purchase agreements at Sunset Industrial Complex and direct staff to extend the closing date for one escrow by 75 days.

 City Council authorized the purchase of approximately 40 acres of property located at the northeast corner of Tresch and Sunset Roads.

 City Council authorized various consultant contracts to master-plan and prepare environmental documents for approximately 132 acres of city owned land northeast of Tresch and Sunset Roads to include a 49.2 acre Wastewater Treatment Plant, 2.7 acre Solid Waste Plant, 37.7 Sports Park, 13.3 acre Corporation Yard and a 28.4 acre Industrial Complex.

 On March 9, 2004, the City Council received, as an informational item, the Final Map for Subdivision 8588.

 On April 13, 2004, the City Council approved the form of Purchase Agreements and Grant Deeds for the first phase of 12 sales, and authorized the City Manager to execute documents necessary to close the transactions.

 On June 7, 2004, the second Final Map for Subdivision 8842 Sunset Industrial Complex was recorded.

 From April 2004 to September 2004, eleven escrows closed.

 On September 14, 2004, the City Council approved the configuration for subdividing the northerly portion of Sunset Industrial Complex, and directed staff to draft Purchase Agreements with Pizzagoni Towing, Delta Fence and Town & Country Roofing.

 On September 28, 2004, the City Council approved the sale of Lot 4 to Vornhagen Body & Paint.

At the request of Mayor Swisher, staff has prepared this report on the status of the Purchase Agreements for Sunset Industrial Complex.

The first phase of twelve sales was initiated in December 2003 by the execution of Memorandums of Understanding that outlined the intent of the City and the Purchasers. In January 2004, the Council approved the Purchase Agreements, deposits were made, and escrows were opened. City staff then took the necessary steps for final map approvals, preparation of new legal descriptions, and creation of benefit assessment districts and covenants and restrictions on the properties. Installation of the necessary infrastructure by the City for the complex was completed, and PGE is currently in the field to boost electrical and gas services.

Eleven of the original twelve escrows have closed as follows:

Purchaser Parcel Size Close Date

Town & Country Roofing 1.0 acre April 26, 2004
Town & Country Roofing 2.0 acres April 26, 2004
Woodmore Painting 1.0 acre June 29, 2004
California Stone 1.0 acre June 29, 2004
Henson Plumbing 1.0 acre July 2, 2004
R Brothers Concrete 1.5 acres July 7, 2004
Thorpe Design 1.0 acre July 9, 2004
HFW Construction 1.0 acre July 28, 2004
Pottery World 2.0 acres July 29, 2004
Eco Water 1.15 acres October 5, 2004
5 Star Plumbing 1.15 acres October 15, 2004

The remaining Purchase Agreement that has not closed is Brockman Engineering Center (BEC) at the corner of Sunset Road and Elkins Way on 2.5 acres. The City was ready to execute escrow papers in Summer 2004 with the anticipation of closing no later September. However, the Purchaser has not yet closed on this property.

The qualifications and identities of the Purchasers were of particular concern to the City, and it is because of such qualifications and identities that the City entered into the Purchase Agreements with the selected Purchasers. As condition of the purchase, the Purchasers were required by the City to provide evidence of equity and mortgage financing commitments necessary to acquire the property, pay development fees and complete construction of the improvements for the business operation on the property. Brockman provided this evidence in March 2004 to the satisfaction of the City.

Mr. Brockman recently advised the City that his financing commitment of March 2004 is no longer valid, and he is looking for other sources of funding. Brockman advised that he plans to close escrow shortly and has financing necessary to acquire the property. Staff recently requested Brockman to provide the City with an updated verification of financing commitments from his new lender sufficient to acquire the property, pay the development fees and complete the construction of the BEC Center.

The City has made a good faith effort to comply with its obligations as provided in the Agreement, including a non-written extension of nine months for the close of escrow. Staff requests direction and approval from the Council to further extend the closing date for the Brockman escrow by another 75 days, no later than April 15, which is approximately one year from the intended close date of April 2004.

None at this time.

City Administration
City of Brentwood City Council
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Brentwood, CA 94513
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