In November 2000, the Garden Grove Agency for Community Development (the "Agency") and the former owner of the property located at 10150 Trask Avenue, JMV’s Family Chevrolet & GEO, entered into a purchase and sale agreement under which the Agency agreed to convey an easement over a portion of the property (the “Site”) upon which the Agency would construct a sign that would advertise and promote the business activities of the Chevrolet dealer (the “Sign”).  The Sign has been used primarily for the advertising of the business conducted by the Chevrolet dealer.  The property and dealership has since been acquired by Simpson Chevrolet.

The easement is provided under an instrument entitled “Sign Easement Grant”, dated January 18, 2001, and recorded among the official land records of the County of Orange on March 22, 2001, as document number 20010165324 (herein, the “Easement Agreement”). A copy is attached to this report.

Under the terms of the Easement Agreement, the Agency was obligated to construct a Sign and thereafter maintain the Sign.  The Agency had also agreed to indemnify the property owner in connection with access to the easement area or damages that might arise in connection with the activities of the Agency under the Easement Agreement.  The Easement Agreement does not provide for any payments to be made by the Dealer to the Agency, and no payments were made to the Agency under the Easement Agreement from its inception until the dissolution of the Agency.  The Agency has had an ongoing obligation to maintain the Sign.  The Sign has been appraised and it has been determined that it is more expensive to repair and maintain the Sign than to demolish the Sign. The cost to demolish the sign is approximately $30,000. The Successor Agency is currently responsible to pay for the Sign’s repair or demolition, but has no source of funds to perform either task. Staff has concluded it would be beneficial for the Successor Agency to release the easement so that it reverts back to the Dealer, and have the Dealer assume financial responsibility to remove the Sign.

Simpson Chevrolet has agreed to pay for all costs associated with the removal of the Sign.  There is no financial impact to the Successor Agency or the City.

It is recommended that the Oversight Board:

• Adopt the attached Resolution approving the Easement Termination Agreement;

• Authorize the Director to execute the Sign Easement Termination Agreement, including any minor modifications as appropriate, and any other pertinent documents necessary to effectuate and/or implement the Agreement, and
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• Authorize staff to transmit the resolution and executed agreement to the State Department of Finance.

By:  Greg Blodgett, Senior Project Manager