| | | | | | | | Agenda Item - 3.a.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles, Director
| From: | Lisa L. Kim
| | Dept.: |
| Dept.: | Economic Development
| | Subject: | Adoption of a Resolution authorizing the sale of real property to the Orange County Transit District consisting of Assessor Parcel Numbers: 133-091-45, 133-111-43, and 133-123-02. (Action Item) | Date: | 6/13/2018 |
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| | | | | | | | OBJECTIVE
The purpose of this report is to request the Oversight Board for the City of Garden Grove as Successor Agency to the Garden Grove Agency for Community Development (“Successor Agency”) consider and adopt a resolution authorizing the sale of certain real property to the Orange County Transit District ("OCTD”), including Assessor Parcel Numbers: 133-091-45, 133-111-43 and 133- 123-02 that are commonly referred to as P/E Right-of-Way near Chapman/Bixby/Brookhurst (together, “Properties”). |
| | | | | | | | BACKGROUND
The Successor Agency is performing its functions under Parts 1.8 and 1.85 of the California Health and Safety Code, enacted by Assembly Bill x1 26, as thereafter amended by Assembly Bill 1484 and other subsequent legislation (together, “Dissolution Law”[1]), to administer the enforceable obligations and otherwise unwind the affairs of now dissolved Garden Grove Agency for Community Development (“Former Agency”), all subject to the review and approval by the Oversight Board (“Oversight Board”). As background, as required by Sections 34181, 34191.5, and 34179.7, the Successor Agency prepared and approved, then the Oversight Board reviewed and approved, and then the State of California, Department of Finance (“DOF”) approved the Long Range Property Management Plan (“LRPMP”) by letter dated March 7, 2014, which LRPMP addresses the disposition and use of the Former Agency’s real property. Under Section 34191.3, this approved LRPMP governs the disposition of property and supersedes other statutes that might otherwise be applicable to the disposition of property, including that sale of the subject Properties does not require a formal bidding process or request for proposal. In the Successor Agency’s approved LRPMP the subject vacant parcels are listed as Items 50, 51 and 52 “Properties to be Sold”: (i) Item 50 - a parcel near Chapman Avenue, approximately 69,696 square feet, APN 133-091-45; (ii) Item 51 - a parcel near Bixby Avenue, approximately 143,748 square feet (APN 133-111-43); and, (iii) Item 52 - a parcel near Brookhurst Street, approximately 15,889 square feet (APN 133-123-02). Each of the Properties was originally acquired by the Former Agency from the Orange County Transportation Authority (predecessor to the OCTD) for redevelopment/economic development public purposes; however, due to dissolution the Properties must be sold by the Successor Agency. In compliance with the Dissolution Law, the Successor Agency intends to sell the Properties for not less than appraised value, which fair market value was determined by an independent appraiser, Lidgard and Associates, at One Million Five Hundred Thousand ($1,500,000). [1] All statutory references in this report are to the Dissolution Law unless otherwise stated. Further, under Section 34173(g), the Successor Agency is a separate public body and entity from the City of Garden Grove (“City”). |
| | | | | | | | DISCUSSION
Successor Agency and OCTD representatives have negotiated the terms of a Purchase and Sale Agreement (“PSA”) for disposition of the Properties for a purchase price of $1,500,000 for OCTD’s future transit, public transportation purposes. The OCTD governing board has approved the PSA (Attachment 1); and, also agreed to allow the City of Garden Grove to improve and use a portion of the Properties for a bike path under a license agreement to be negotiated and entered into between the City and OCTD.
The salient deal points to the PSA include:
- “Final Approval Date” of the PSA means the date on which the Oversight Board approves the agreement in compliance with Sections 34179 and 34181 and in implementation of the LRPMP;
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All cash purchase price of $1,500,000 to be paid by OCTD, as Buyer, to the Successor Agency for the Properties;
- Escrow will open five (5) days after Final Approval Date; and
- Escrow will close within ninety (90) days.
The Successor Agency is required to give OCTD prompt notice once the Oversight Board takes action, and if approved, that will be the defined Final Approval Date. Buyer or Seller each have the right to terminate the PSA by written notice to the other at any time prior to the Final Approval Date, in which event the Initial Deposit would be returned to OCTD by the Successor Agency. As required by the Dissolution Law, the proceeds of the sale (net costs of sale) will be remitted by the Successor Agency to the Orange County Auditor-Controller for distribution to the affected taxing entities, including the City. The City’s General Fund will be allocated approximately $195,000 from such Auditor-Controller distribution.
In connection with presenting the PSA to the Oversight Board, staff caused to published and posted a notice of Public Hearing, and the Public Hearing will be conducted as a part of this agenda matter.
Under Section 34181(f), the Oversight Board will review, consider and take action on the PSA, and, if approved, that date will be the Final Approval Date. Further, Section 34191.5(f) provides that: “Actions to implement the disposition of property pursuant to an approved long-range property management plan [LRPMP] shall not require review by the department [DOF].” Therefore, the PSA is not subject to submittal to, or further review and approval by the DOF because the PSA carries out the DOF-approved LRPMP as part of the “Properties to be Sold” and DOF previously approved the LRPMP in compliance with the Dissolution Law, including Sections 34179, 34181 and 34191.4(c). OCTD has agreed to allow the city to enter into a License Agreement for a bike path on a portion the right of way after OCTD escrow closes on this transaction. |
| | | | | | | | FINANCIAL IMPACT
As noted, under the Dissolution Law, the affected taxing entitles will be allocated the net sale proceeds, including the City’s share of approximately $195,000 of the total proceeds. |
| | | | | | | | RECOMMENDATION
It is recommended that the Oversight Board:
- Adopt the Resolution (Attachment 2) authorizing the sale of the Properties (APNs 133-091-45, 133- 111-43 and 133-123-02) to the Orange County Transit District; and
- Authorize the Director to execute and the Secretary to attest the PSA (Attachment 1) with minor modifications if necessary.
By: Greg Blodgett, Sr. Project Manager
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