CITY COUNCIL AGENDA ITEM
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
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
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
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.