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Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 8

Meeting Date: January 24, 2006

Subject/Title: Approve Resolution authorizing City Manager or her designee to execute amendments to Purchase Agreements for two sales at Sunset Industrial Complex to extend closing dates.

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve Resolution authorizing City Manager or her designee to execute amendments to Purchase Agreements for two sales at Sunset Industrial Complex to extend closing dates.

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 the 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 first phase of sales and authorized the City Manager to execute documents necessary to close the transactions.

 On September 14, 2004, the City Council authorized the City Manager to execute Purchase Agreements for the sale of Lots 22 and 23 to Pizzagoni Towing and Delta Fence.

 On September 28, 2004, the City Council authorized the City Manager to execute a Purchase Agreement for the sale of Lot 4 to Vornhagen Body & Paint.

BACKGROUND
The first phase of 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.

Thirteen 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
Brockman Engineering 2.50 acres February 14, 2005
Town & Country Roofing 0.51 acres June 10, 2005

Four remaining Purchase Agreements that have not yet closed include:
Brentwood Ready Mix (2.5 acres). This Purchase Agreement contains different triggers for closing escrow than the standard purchase agreement used for all other buyers. To assure the City of the batch plant’s commitment to voluntarily relocate from Brentwood Boulevard to Sunset Industrial Complex, the Purchase Agreement provides closing escrow when Brentwood Ready Mix is issued either a grading or building permit. The grading plans received three rounds of review by the Engineering Department, and staff expects issuance of a grading permit in February 2006. The Purchase Agreement contains no specific closing date; therefore, there is no need for an amendment to extend the closing date. Staff expects this escrow to close in February 2006.
Pizzagoni Towing (3.7 acres). As a condition of purchase, buyers are required to provide evidence of financing sufficient to acquire the property, pay development fees and complete construction of the improvements for the business operation on the property. Staff has received assurances from Pizzagoni’s lender that such a letter is forthcoming, but not until the Planning Commission approves the design review. The design review application has been delayed at Pizzagoni’s architect’s office for the past several months, and has not yet been received by the Planning Division. Buyer has advised staff that her architect intends to submit an application by January 31, 2006.
Delta Fence (2.5 acres). The City has received the buyer’s evidence of financing, and this escrow is ready to close. However, completion of the improvements to Iparq Way will require a temporary construction easement on the Delta Fence property. The buyer and staff have agreed to close escrow immediately after the roadway improvements are complete, rather than closing escrow now and buyer granting a temporary construction easement back to the City during the roadway construction period. Further, buyer is aware of the requirement to pull a building permit within 18 months of closing escrow, but has not yet submitted a design review application for City review and approval. Buyer has advised staff that he intends to submit an application within 90 days. Amendment No. 1 to Purchase Agreement and City’s Option to Repurchase has not been signed by Delta Fence and is pending. Staff will return to Council for separate approval to execute the amendment to the Purchase Agreement at a later date.

Vornhagen Body & Paint (1.0 acre). Mr. Vornhagen received design review approval from the Planning Commission in September 2006. The City has received the buyer’s evidence of financing, and this escrow is ready to close. However, the buyer is interested in submitting a proposal to purchase the 2-acre site abandoned by Pottery World when that opportunity presents itself. Rather than closing, Mr. Vornhagen is proposing to leave the escrow open until his proposal for the 2-acre site is either accepted or denied by the City Council. If accepted, Mr. Vornhagen will release the 1-acre site on Carrol Court; if denied, Mr. Vornhagen will close on the Carrol Court site.

The qualifications and identities of the buyers 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 buyers. Relocation of industrial employers from areas within the Merged Redevelopment Project Areas received additional points during the purchaser selection process by the Council. Three of the remaining open escrows are voluntarily relocating from Brentwood Boulevard, which in turn opens future redevelopment opportunities as the City re-invents the boulevard into a gateway. The fourth buyer is relocating from Harvest Business Park, also within the Merged Redevelopment Project Areas. All four are prime examples of the type of businesses that the City envisioned for Sunset Industrial Complex.

The City and buyers have made good faith efforts to comply with our respective obligations as provided in the Purchase Agreements. Staff requests approval from the Council to extend the closing date for two of the four remaining escrows as follows:

Pizzagoni Towing May 1, 2006
Vornhagen Body & Paint June 1, 2006
Delta Fence Pending

FISCAL IMPACT
None at this time.

Attachments:
Resolution
Amendments (2)

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AND AUTHORIZING THE CITY MANAGER OR HER DESIGNEE TO EXECUTE SEPARATE AMENDMENTS TO EXTEND THE CLOSING DATES TO THE PURCHASE AGREEMENTS FOR SUNSET INDUSTRIAL COMPLEX, FOR KEVIN VORNHAGEN AND KRISTINA PIZZAGONI REYNOLDS OR THEIR DESIGNEES, AND TO EXECUTE SUCH OTHER DOCUMENTS AS MAY BE NEEDED TO COMPLETE THE TRANSACTIONS.

WHEREAS, on January 12, 1999, City Council authorized the purchase of approximately 40 acres of property located at the northeast corner of Tresch and Sunset Roads; and

WHEREAS, on February 8, 2000, City Council authorized the master-plan and environmental documents for approximately 132 acres of City-owned land northeast of Tresch and Sunset Roads to include a Wastewater Treatment Plan, Solid Waste Plan, Sports Park, Corporation Yard and Industrial Complex; and

WHEREAS, on July 23, 2002, the City Council adopted Ordinance No. 710 approving the Planned Development Zoning for Sunset Industrial Complex; and

WHEREAS, on September 14, 2004, the City Council authorized the City Manager to execute the Purchase Agreement for Kristina Pizzagoni Reynolds (Pizzagoni Towing). The Purchase Agreement was executed on October 12, 2004 ; and

WHEREAS, on September 28, 2004, the City Council authorized the City Manager to execute a Purchase Agreement with Kevin Vornhagen (Vornhagen Body & Paint). The Purchase Agreement was executed on September 28, 2004; and

WHEREAS, the qualifications and identities of the buyers are 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 buyers; and

WHEREAS, voluntary relocation of industrial employers from areas within the Merged Redevelopment Project Areas received additional points during the purchaser selection process by the Council, will open future redevelopment opportunities at vacated sites by the buyers, and all three buyers are prime examples of the types of businesses envisioned by the City for Sunset Industrial Complex; and

WHEREAS, the City and buyers have made good faith efforts to comply with their respective obligations as provided in the Purchase Agreements.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brentwood hereby approves and authorizes the City Manager or her designee to execute separate amendments to extend the closing dates to the Purchase Agreements for Sunset Industrial Complex for Kevin Vornhagen, and Kristina Pizzagoni Reynolds, or their designees, and to execute such other documents as may be needed to complete the transactions.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 24th day of January 2006 by the following vote:

Amendment No. 1 to Purchase Agreement and City’s Option to Repurchase
(Pizzagoni Family, Inc.)

This Amendment No. 1 is entered into and effective as of the ____ day of ___________ 2006, amending the Purchase Agreement and City’s Option to Repurchase dated October 12, 2004 (the “Agreement”) by and between the City of Brentwood, a municipal corporation, (“City”), and Pizzagoni Family, Inc. (“Purchaser”) (collectively, the “Parties”) for the purchase and option to repurchase certain real property (the “Property”) situated in the City of Brentwood.

Recitals

A. As a condition of purchase, Purchaser is required to provide evidence of financing sufficient to acquire the Property, pay development fees and complete construction of the improvements for the business operation on the Property.

B. Staff has received assurances from Purchaser’s lender that such a letter is forthcoming, but not until the City Planning Commission approves the design review.

C. The design review application has been delayed at Purchaser’s architect’s office for the past several months, and has not yet been received by the City Planning Division.

D. Purchaser has advised staff that her architect intends to submit an application by the end of January 2006.

E. The Parties desire to amend the Agreement to extend the period of time in which to close escrow on the Property.

F. City and Purchaser have made good faith efforts to comply with their respective obligations as provided in the Agreement.

G. The Parties have reached agreement on specific language for the amendment and desire to memorialize it herein.

Now, therefore it is agreed as follows:

1. That the first paragraph of Section 1.03 of the Agreement is hereby amended in its entirety as follows:

1.03 Escrow. The City has opened an escrow with North American Title Company, as escrow agent (the “Escrow Agent”) in Brentwood, California. The date of opening of escrow (“Opening Date”) is the date the City deposited the Deposit with the Escrow Agent. The close of escrow shall mean the recordation of the grant deed (“Closing Date”). The Closing Date shall occur by May 1, 2006.

2. All other provisions of the Agreement will remain in full force and effect.

3. The individuals executing this Amendment No. 1 and the instruments referenced in it on behalf of Purchaser represent and warrant that they have the legal power, right and actual authority to bind Purchaser to the terms and conditions of this Amendment No. 1.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed by their respective representatives thereunto duly authorized.
CITY OF BRENTWOOD PURCHASER:
PIZZAGONI FAMILY, INC.

Donna Landeros, City Manager
Kristina Reynolds

ATTEST:

Margaret Wimberly, City Clerk

APPROVED AS TO FORM:

Damien B. Brower, City Attorney

Amendment No. 1 to Purchase Agreement and City’s Option to Repurchase
(Kevin Vornhagen)

This Amendment No. 1 is entered into and effective as of the ____ day of ___________ 2006, amending the Purchase Agreement and City’s Option to Repurchase dated September 28, 2004 (the “Agreement”) by and between the City of Brentwood, a municipal corporation, (“City”), and Kevin Vornhagen (“Purchaser”) (collectively, the “Parties”) for the purchase and option to repurchase certain real property (the “Property”) situated in the City of Brentwood.

Recitals

A. As a condition of purchase, Purchaser is required to provide evidence of financing sufficient to acquire the Property, pay development fees and complete construction of the improvements for the business operation on the Property.

B. Purchaser received design review approval from the City Planning Commission in September 2005.

C. City has received Purchaser’s evidence of financing, and this escrow is ready to close. However, Purchaser is interested in submitting a proposal to purchase a larger site near the Property when that opportunity presents itself.

D. Rather than closing on the Property, Purchaser is proposing to leave the escrow open until his proposal for the other site is either accepted or denied by the City Council.

E. If accepted, Purchaser will release the Property to the City. If denied, Purchaser will close escrow on the Property.

Now, therefore it is agreed as follows:

1. That the first paragraph of Section 1.03 of the Agreement is hereby amended in its entirety as follows:

1.03 Escrow. The City has opened an escrow with North American Title Company, as escrow agent (the “Escrow Agent”) in Brentwood, California. The date of opening of escrow (“Opening Date”) is the date the City deposited the Deposit with the Escrow Agent. The close of escrow shall mean the recordation of the grant deed (“Closing Date”). The Closing Date shall occur by June 1, 2006.

2. All other provisions of the Agreement will remain in full force and effect.

3. The individuals executing this Amendment No. 1 and the instruments referenced in it on behalf of Purchaser represent and warrant that they have the legal power, right and actual authority to bind Purchaser to the terms and conditions of this Amendment No. 1.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed by their respective representatives thereunto duly authorized.
CITY OF BRENTWOOD PURCHASER

Donna Landeros, City Manager Kevin Vornhagen

ATTEST:

Margaret Wimberly, City Clerk

APPROVED AS TO FORM:

Damien B. Brower, City Attorney
 

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