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Current Council Agenda and Past Meeting Information

 

REDEVELOPMENT AGENCY AGENDA ITEM NO. 4

Meeting Date: December 13, 2005

Subject/Title: Approve a resolution for a budget amendment and authorize the expenditures necessary to repurchase a parcel at Sunset Industrial Complex owned by Pottery World following the expiration of the building permit issuance deadline

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve a resolution for a budget amendment and authorize the expenditures necessary to repurchase a parcel at Sunset Industrial Complex owned by Pottery World following the expiration of the building permit issuance deadline.

PREVIOUS ACTION
 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 April 13, 2004, the City Council approved the form of Purchase Agreements and Grant Deeds for the property sales, and authorized the City Manager to execute documents necessary to close the transactions.

 The escrow with Pottery World for 2.0 acres at Sunset Industrial Complex closed on July 28 2004, for $479,160.

BACKGROUND
This is a companion staff report to the Council’s consideration and approval to exercise its option to repurchase the Pottery World parcel at Sunset Industrial Complex for failure to perform its obligations as provided in the Purchase Agreement between the City and Pottery World.

If earlier this evening, the Council approves exercising its option to repurchase the parcel owned by Pottery World following the expiration of the building permit issuance deadline of January 28, 2006, then to exercise its right to repurchase the Pottery World parcel, the City shall pay the original purchase price of the site less any liens and unpaid assessments on the site, in accordance with the Purchase Agreement’s terms and conditions.

Staff recommends the Agency approve a resolution amending its 2005/06 Administration Project Fund budget and authorize the appropriation of expenditures necessary to facilitate this transaction.

FISCAL IMPACT
The expenditures and one time budget amendment to the Agency’s 2005/06 Administration Project Fund necessary to facilitate this transaction is approximately $514,000.

The purchase price to buy back this property is $479,160, less liens and unpaid assessments, plus miscellaneous legal, escrow and title costs. The cost of the repurchase is estimated at $510,000, and shall be funded by the Redevelopment Agency’s Administration/Project Fund from the original sale proceeds.

It is anticipated that the parcel will be resold, using the original solicitation and ranking system, at a price higher than the initial $5.50 per square foot. An appraisal of the property, at a cost of approximately $4,000, will be performed to determine fair market value for the resale, and shall be funded by the Redevelopment Agency’s Administration/Project Fund.

It is anticipated that the sale of the parcel will not only recoup the repurchase and appraisal costs, but will add another $250,000 to $350,000 in sale proceeds for the project. The sale proceeds will first be used to repay the Agency its costs to fund this repurchase, and any excess sales proceeds shall be shared between the City and Agency in accordance with the Reimbursement Agreement for Sunset Industrial Complex.

Attachment:
Resolution

RESOLUTION NO. RDA-

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD APPROVING A BUDGET AMENDMENT AND AUTHORIZING THE APPROPRIATION OF EXPENDITURES NECESSARY TO REPURCHASE A PARCEL AT SUNSET INDUSTRIAL COMPLEX OWNED BY POTTERY WORLD FOLLOWING THE EXPIRATION OF THE BUILDING PERMIT ISSUANCE DEADLINE.

WHEREAS, City Council authorized the purchase of approximately 40 acres of property located at the northeast corner of Tresch and Sunset Roads; and

WHEREAS, 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; and

WHEREAS, on April 13, 2004, the City Council approved the form of Purchase Agreements and Grant Deeds for the property sales, and authorized the City Manager to execute documents necessary to close the transactions; and

WHEREAS, the escrow with Pottery World for 2.0 acres at Sunset Industrial Complex closed on July 28 2004, for $479,160; and

WHEREAS, the Purchase Agreement between the City and Pottery World for 2.0 acres at Sunset Industrial Complex, dated January 15, 2004, includes Section 3.01 that allows the City the right, at its option, to repurchase the site if the purchaser fails to obtain building permits for construction of the proposed business operation within eighteen (18) months after issuance of building permits; and

WHEREAS, at its meeting of December 13, 2005, the Council approved exercising its option to repurchase the parcel owned by Pottery World following the expiration of the building permit issuance deadline of January 28, 2006, and directed staff to take actions and authorized the City Manager to draft and execute documents necessary for this transaction; and

WHEREAS, to exercise its right to repurchase the Pottery World parcel, the City shall pay the original purchase price of the site less any liens and unpaid assessments on the site, in accordance with the Purchase Agreement’s terms and conditions; and

WHEREAS, the expenditures and one time budget amendment to the Agency’s 2005/06 Administration Project Fund necessary to facilitate this transaction is approximately $514,000.

NOW, THEREFORE BE IT RESOLVED the Redevelopment Agency of the City of Brentwood approves a budget amendment and authorizes the appropriation of expenditures necessary to repurchase a parcel at Sunset Industrial Complex owned by Pottery World following the expiration of the building permit issuance deadline.

PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Brentwood at a regular meeting held on the13th day of December, 2005 by the following vote:
 

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