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CITY COUNCIL AGENDA ITEM NO. 29

Meeting Date: November 13, 2007
Subject/Title: Adopt a Resolution authorizing an expenditure from the City’s Agricultural Land Trust Fund 263 in the amount of $688,140 for the purchase of agricultural conservation easements for 6700 Balfour Road and 6740 Balfour Road as recommended by the standing Agricultural Enterprise Committee.

Prepared by: Linda Maurer, Economic Development Manager

Submitted by: Howard Sword, Director of Community Development

RECOMMENDATION
Adopt a Resolution authorizing an expenditure from the City’s Agricultural Land Trust Fund 263 in the amount of $688,140 for the purchase of agricultural conservation easements for 6700 Balfour Road and 6740 Balfour Road.

PREVIOUS ACTION
On September 18, 2001, the City Council adopted Ordinance 683, which established the Brentwood Agricultural Enterprise Program. This program was designed to protect and conserve agricultural lands located within the Brentwood Planning Area and the County’s Agricultural Core. The program establishes a number of requirements and procedures to determine which land is best suited for conservation.

BACKGROUND
On January 5, 2007, BALT entered into a letter of intent with Neil and Glenda Cohn, the property owners of 6700 and 6740 Balfour Road (APN’s 011-140-024 and 25) for the purpose of proceeding ahead with an agricultural conservation easement transaction.

Following the signing of the letter of intent, BALT ordered the appraisal for the Cohn properties for the purpose of valuing the conservation easement. The appraisal set forth two values for the property: (i) the fair market value of the property “as is”; and (ii) the fair market value of the property encumbered by the conservation easement. The appraisal, conducted by Edwards & Lien, placed the net value of the easement on the two parcels totaling 80.19 acres at $720,000, creating a per acre value of $9,000. The appraisal summary is attached as Exhibit A to this report. Since that appraisal, the Cohn’s and BALT have agreed to larger building site envelopes within the easement totaling 3.54 acres for the two parcels, which has decreased the value of the easement to $688,140.

The BALT Board of Directors approved the easement transaction at their board meeting on May 2, 2007. On May 15, 2007, the Agricultural Enterprise Committee, comprised of Vice Mayor Robert A. Brockman and Council Member Erick Stonebarger, reviewed the request for funding from BALT for this easement transaction. The Committee voted to recommend the easement to the full Council for consideration.

The property, located in the Brentwood Planning Area, is home to Hannah Nicole Vineyards, a single family residence for the Cohn’s, as well as planted vineyards on a majority of the acreage. The Cohn’s are constructing a new winery and related uses on the property, contributing to the economic vitality of the agricultural core.

The Cohn property meets the criteria established in section 17.730.050 of the City’s municipal code. More specifically, the property has the adequate water supply necessary to support agricultural use and it is of adequate size, configuration and location to continue to remain viable agricultural land.

Further, the City has reviewed the Deed of Perpetual Agricultural Conservation Easement and has determined that the easement agreement meets with the requirements set forth in Brentwood’s Municipal Code, Section 17.730.060, including having the City named as a beneficiary to any easement instrument, unless waived by Council. Staff is recommending that the City be named as a beneficiary.

Staff is seeking Council approval to expend $688,140 from the Agricultural Land Fund 263 for the purchase of the two agricultural conservation easements at 6700 and 6740 Balfour Road. The Council’s authorization of funds is contingent on the approval and execution of the easement transaction.


FISCAL IMPACT
If the resolution is adopted by the City Council, an expenditure in the amount of $688,140 from Fund 263 will be made to Old Republic Title. Old Republic Title is handling the conservation easement sale for the Cohn property. Staff has attached the Estimated Closing Settlement Statement (Exhibit B) from Old Republic Title as evidence of the easement transaction. There is sufficient funds allocated in Fund 263 to cover the purchase of the easement and the amount was included in the approved 2007/08 Operating Budget.

As of June 30, 2007, the balance in the Agricultural Land Fund 263 was $8.63 million dollars.



Attachments:
Resolution
Exhibit A: Appraisal summary for 6700 and 6740 Balfour Road
Exhibit B: Estimated Closing Settlement Statement from Old Republic Title


RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD AUTHORIZING AN EXPENDITURE FROM THE CITY’S AGRICULTURAL LAND TRUST FUND 263 IN THE AMOUNT OF $688,140 FOR THE PURCHASE OF AN AGRICULTURAL CONSERVATION EASEMENT AT 6700 AND 6740 BALFOUR ROAD

WHEREAS, on September 18, 2001, the City Council adopted Ordinance 683 establishing the Brentwood Agricultural Enterprise Program. This program was designed to protect and conserve agricultural lands located within or adjacent to the Brentwood Planning Area or its approved Sphere of Influence; and

WHEREAS, the Brentwood Agricultural Land Trust (BALT), a non-profit organization, was established in 2001 for the purpose of acquiring agricultural conservation easements; and

WHEREAS, on January 5, 2007, BALT entered into a letter of intent with the property owners of 6700 and 6740 Balfour Road (APN’s 011-140-024 and 25) for the purpose of proceeding ahead with an agricultural conservation easement transaction; and

WHEREAS, the Brentwood Agricultural Land Trust ordered and received an appraisal from Edwards & Lien that placed the net value of the easement without housing restrictions on the 80.19 acre parcel at $720,000, equaling approximately $9,000 per acre; and

WHEREAS, the Cohn’s and BALT have agreed to a lesser amount of acreage in the easement, which dropped the easement value to $688,140; and

WHEREAS, the property at 6700 and 6740 Balfour Road meets the criteria established in section 17.730.050 of the City’s Municipal Code; and

WHEREAS, the City has reviewed the Deed of Perpetual Agricultural Conservation Easement and has determined that the easement agreement meets with the requirements set forth in Brentwood’s Municipal Code, Section 17.730.060; and

WHEREAS, the BALT Board of Directors approved the easement transaction at their board meeting on May 2, 2007.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood authorizes an expenditure from the City’s Agricultural Land Trust Fund 263 in the amount of $688,140 payable to Old Republic Title for the purchase of an agricultural conservation easement at 6700 and 6740 Balfour Road.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 13th day of November 2007 by the following vote:

AYES:
NOES:
ABSENT:
ABSTAIN:
 
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