CITY COUNCIL AGENDA ITEM
Meeting Date: July 25, 2006
Subject/Title: Approve the sales price, method to select buyer, and sales
strategy criteria for 385 Carrol Court at Sunset Industrial Complex; direct
staff to proceed with approved method to select buyer
Prepared by: Gina Rozenski, Redevelopment Manager
Submitted by: Howard Sword, Community Development Director
Approve the sales price, method to select buyer, and sales strategy criteria
for 385 Carrol Court at Sunset Industrial Complex; direct staff to proceed
with approved method to select a buyer for 385 Carrol Court, a one-acre lot.
• City Council authorized the purchase of approximately 40 acres of property
located at the northeast corner the Tresch and Sunset Roads to master-plan
an expansion of the Sunset Sports Park and to create the Sunset Industrial
• On June 4, 2002, the Planning Commission certified the Environment Impact
Report for the Sunset Industrial Complex, and on June 6 the Notice of
Determination was filed with the County.
• On July 23, 2002 the City Council adopted Ordinance 710 approving the
Planned Development 56 Zoning for Sunset Industrial Complex, and also
awarded the construction contract for the Sunset Industrial Complex
Improvements Project (CIP No. 336-3128) to Teichert Construction.
• On November 26, 2002 the City Council approved a sales strategy for
property located at the Sunset Industrial Complex and adopted criteria for
the selection of successful candidates to purchase the subject property.
• On October 28, 2003, the City Council selected the successful buyers based
on the approved ranking system and approved the preliminary lot layout which
included the cul-de-sac site plan.
• On January 27, 2004, the City Council amended Planned Development Zone 56
to allow for an increase in the square footage designated for retail uses
within Subareas A and B, and to allow smaller lot sizes in Subarea C, in the
Sunset Industrial Complex.
• On April 13, 2004, the City Council approved the Purchase Agreements for
the first phase of sales.
• On September 28, 2004, the City Council selected Mr. Vornhagen as the
buyer of 385 Carrol Court at Sunset Industrial Complex based on the approved
ranking system (this lot was available due to its original buyer choosing to
• Since April 2004, fifteen escrows have closed.
• On December 13, 2005, the City Council authorized staff to exercise the
City’s option to repurchase 2010 Elkins Way owned by Pottery World following
the expiration of the building permit issuance deadline.
• On December 13, 2005, the City Council adopted Ordinance 819 amending
Planned Development Zone 56 to allow for indoor recreational uses in SubArea
• In March 2006, the City closed escrow for 2010 Elkins Way and is currently
• On April 25, 2006, the Council approved the sales price, the method to
select the buyer and adopted a sales strategy to sell 2010 Elkins Way,
located in SubArea A.
• On June 20, 2006, the Economic Development/Redevelopment Subcommittee met
to review the purchase proposal rankings, and recommended Mr. Vornhagen as
the buyer for 2010 Elkins Way based on the approved ranking system.
• On July 11, 2006, the Council selected Vornhagen Body & Paint as the buyer
for 2010 Elkins Way.
The Sunset Industrial Complex was an economic development strategy
envisioned by the City and Redevelopment Agency to voluntarily relocate
members of the redevelopment project areas, our business community and
surrounding areas to a more appropriate location zoned for light and medium
With the Council’s selection of Vornhagen Body & Paint as the buyer for 2010
Elkins Way, Vornhagen canceled his escrow for 385 Carrol Court. It is timely
for the City Council to consider the sale of 385 Carrol Court including 1)
the sales price, 2) the method of selecting a buyer, and 3) sales strategy
criteria to rank the purchase proposals.
Approval of Sales Price
According to a recent professional appraisal, the real property valuation of
385 Carrol Court is $294,030 or $6.75 per square foot. Staff recommends that
the City Council sell 385 Carrol Court for the appraised value of $6.75 per
square foot for two reasons. The first reason is that the end of 2005
brought several court rulings filed by the State Department of Industrial
Relations (DIR) involving government agencies and prevailing wages. The DIR
is carefully reviewing cases where government agencies transfer property for
less than fair market value to private parties and determined that when this
occurs, prevailing wages for on-site improvements are mandated. After
diligent judicial process, DIR has received several court rulings in favor
of their position that prevailing wages are required. Payment of prevailing
wages for on-site construction and improvements will, in all likelihood,
make a development financially infeasible, and cause the City’s economic
development strategy for Sunset Industrial Complex to collapse. It is
recommended that the City avoid a review and legal challenge from the DIR by
selling the property for its appraised fair market value. A second reason to
sell 385 Carrol Court at the appraised value is to avoid any appearance of a
gift of public funds.
Method of Selecting a Buyer
There are two options available to the Council for the selection of a buyer
for 385 Carrol Court.
1. The first is to return to the list of 2004 where three candidates remain,
and select the next highest ranking with the condition that the sales price
is $6.75 per square foot and with the condition that the candidate re-affirm
its proposal so that the original points can be validated a second time to
assure their ranking has not changed. The ranking is shown below. If the
first candidate does not accept the offer, then an offer will be made to the
next candidate and so forth. The risk with this option is that if higher
ranking candidates do not accept the sales offer, another candidate with low
points may receive an offer to buy the 1 acre site. If the Council selects
Option 1 above and none of the remaining businesses accept the sales offer
or because reaffirmation of their original points results in
disqualification, then Option 2 will automatically be implemented.
2 Kendall Auto Repair 1.0 35 points
3 ASAP Glass 1.0 28 points
4 Tidelands Construction 1.0 22 points
2. The second option is to advertise the availability of the one-acre site
at 385 Carrol Court and send out fresh requests for purchase proposals at
the appraised sales price, with intent to rank the proposals for Council
selection. This process is similar to the first three offerings prepared by
the City for Sunset Industrial Complex.
If option 2 is selected, upon receipt of the purchase proposals, the scoring
and ranking will be prepared by staff, and brought to the Economic
Development/Redevelopment Subcommittee for a recommendation to the Council.
This is the same process used in the previous three rounds.
Sales Strategy Criteria
The qualifications and identities of the buyers are of particular concern to
the City. For that reason, the City adopted a sales strategy ranking system
to fairly and objectively select qualified buyers that meet the economic
development objectives of Sunset Industrial Complex. The purchase proposals
are evaluated and scored to determine the successful candidates by assigning
points based on several factors including existing business location,
business type, business operation, job generation and economic impacts. If
the Council selects Option 2 above or if Council selects Option 1 above and
none of the remaining businesses accept the sales offer, then staff
recommends the Council direct staff to use the sales strategy criteria it
approved in April 2006, attached, for 385 Carrol Court.
Staff recommends the City Council:
1) Approve the sales price of $6.75 per square foot for 385 Carrol Court.
2) Direct staff to proceed with Option 1 or Option 2 to select the buyer of
385 Carrol Court.
3) Direct staff to use the approved April 2006 sales strategy criteria to
evaluate and score the submitted purchase proposals.
Setting the sales price for 385 Carrol Court at the appraised value of $6.75
per square foot will result in a sale of $294,030, less escrow fees. The
estimated sales impact is approximately $1.25 per square foot more than the
original sales offering in 2004.
1) Sales Strategy Criteria
2) Map identifying 385 Carrol Court
SUNSET INDUSTRIAL COMPLEX
SALES STRATEGY CRITERIA
(38 possible points)
Existing Business Location Priorities (10 Possible Points)
Relocation from Brentwood Redevelopment Agency’s Project Areas. (10
Relocation from the City of Brentwood not within the Redevelopment
Agency’s Project Areas (5 Points)
Relocation of businesses that have moved out of Brentwood within the past
four years due to the lack of a suitable building site in the City. (5
Relocation from unincorporated areas surrounding the City of Brentwood as
defined by the attached map listed as Figure 2 and titled Brentwood Planning
Area in the Brentwood General Plan, 2001 – 2021. (3 Points)
Relocation from Far East Contra Costa County as defined as lands to the
south and east of Somersville Road. (1 Point)
Business Types (5 Possible Points)
Industrial business operations not conducive or desirable in business or
high tech parks. (5 Points)
Business with limited permitted locations in Brentwood. (4 Points)
Business providing support services not available to local businesses. (3
Business Operation (8 Possible Points)
Owner-occupied business that will conduct primary operation from the
property. (8 Points)
Business with long term pre-lease that accomplishes other criteria
objectives. (5 Points)
Business that will conduct satellite operation from the Site. (3 Points)
Employment Impact (5 Possible Points)
Number of jobs that are reported to the State Franchise Tax Board as
located in the City of Brentwood. (0 - 5 Points Possible)
Fiscal Impact (10 Possible Points)
Sales tax generated by business. (0 - 5 Points Possible)
Property tax increment generated by improvements to the property. (0 - 5