| | | | | | | | Agenda Item - 5.b.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Lisa L. Kim
| From: | Craig Beck
| | Dept.: | City Manager
| Dept.: | Economic Development
| | Subject: | Approval of a Purchase and Sale Agreement with LT Properties, LP for the purchase of property located at 12966 Euclid Street. (Cost: $12,189,000) (Action Item) | Date: | 8/8/2023 |
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| | | | | | | | OBJECTIVE
For City Council to consider approval of the Purchase and Sale Agreement with LT Properties, LP for the acquisition of 12966 Euclid Street, Garden Grove. |
| | | | | | | | BACKGROUND
Through an expression of interest, LT Properties, LP inquired if the City of Garden Grove would be interested in acquiring the property located at 12966 Euclid Street (the "Property"). The property is improved with a five-story office building containing 64,402 rental square feet. The building was originally constructed in 1985 and has a surface parking lot containing approximately 160 parking stalls. Per the Assessor's mapping, the Assessor Parcel Number is 090-164-41 and the lot size is 2.014 acres or 87,730 square feet. |
| | | | | | | | DISCUSSION
Price and Conditions
Staff and LT Properties, LP negotiated to arrive at mutually acceptable terms for the purchase of the property by the City. The terms of the Agreement (Attachment No. 1) outlines a negotiated purchase price of $12,189,000. Following Council consideration this evening, coordination with the escrow company and title officer will be underway. The general terms and conditions of the purchase are as follows:
- Purchase Price of $12,189,000.
- Buyer shall pay all cash at closing.
- Closing Contingency Date is October 1, 2023.
- The City will retain a consultant who will prepare a due diligence inspection and prepare a report identifying the building's condition and conduct an Environmental Phase I analysis.
- The City will retain MV5 to prepare an ALTA and Topography Survey.
- The City may retain financial advisors to review the lease agreements, income, and expenses.
- The City will be conducting due diligence work on the building and parking lot to determine costs associated with any repair and maintenance work.
Environmental Review
The acquisition of the property is exempt from CEQA pursuant to sections 15301 [Existing Facilities - negligible or no expansion of use] and 15061(b)(3) [The activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA]. The City intends to continue to use the building and property in its current use, and no construction other than maintenance and internal tenants improvements will be performed. |
| | | | | | | | FINANCIAL IMPACT
The cost to acquire the Property is $12,189,000, and will be funded by the General Fund. Additional appropriation is necessary to complete the property acquisition. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
- Find that the acquisition of the property is exempt from CEQA pursuant to CEQA Guidelines 15301 and 15061(b)(3).
- Approve the Purchase and Sale Agreement with LT Properties, LP for the acquisition of 12966 Euclid Street by the City for an amount of $12,189,000, plus related Closing Costs shall be appropriated for the acquisition of the property; and,
- Authorize the City Manager to execute the Agreement on behalf of the City, and make minor modifications thereto as needed.
- Approve additional appropriation in the General Fund in the amount of $12,189,000 plus related Closing Costs for the acquisition of the Property.
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| ATTACHMENTS: | | Description | Upload Date | Type | File Name | | Agreement | 8/2/2023 | Agreement | P_S_Agreement_12966_Euclid.pdf |
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