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CC 2013-01-22_11.c. Process for Sale of City PropertiesMEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER jtJr SUBJECT: CONSIDERATION OF PROCESS FOR SALE OF CITY PROPERTIES ON OLD RANCH ROAD DATE: JANUARY 22, 2013 RECOMMENDATION: It is recommended the City Council: 1) approve the proposed process for sale of City properties on Old Ranch Road; and 2) approve formation of an ad hoc selection committee and appoint one representative of the City Council to participate on the committee to make a recommendation on selection of a realtor to list the properties for sale. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: It is estimated that the sale of the properties will generate $640,000, which is based upon an appraisal and discussions with a number of local realtors. There will be measurable staff time required by the City Manager and Director of Community Development in order to execute sale of the properties. However, selection of one agent will help to reduce that workload and the revenue is necessary to address the Police Department's facility needs, which is a priority in the Critical Needs Action Plan. BACKGROUND: When the Recreation Center project was proposed at the City property on West Branch Street and Old Ranch Road, it was determined that the east portion of the property was not needed and could be better used to sell for residential use to generate revenue for the project. The property narrows as it extends up Old Ranch Road, and providing property for future residential development can create a buffer between the existing residences and whatever project is constructed on the main portion of the City parcel. Sale of the property for private development required removal of a deed restriction by the County, which previously required the property to be used for a public purpose. This was accomplished in conjunction with rezoning of nearby County owned property. The excess portion of the City property was subdivided into four residential lots, each in the range of 1 0,000 square feet. Item 11.c. - Page 1 CITY COUNCIL CONSIDERATION OF PROCESS FOR SALE OF CITY PROPERTIES ON OLD RANCH ROAD JANUARY 22, 2013 PAGE2 Three of the four lots are now proposed instead to be sold to generate revenue for the Police building project. This revenue was assumed in the funding plan for both project alternatives approved by the City Council at the November 27, 2012 meeting. At that meeting, the City Council also directed staff to prepare a recommended process for sale of the three residential lots on Old Ranch Road. ANALYSIS OF ISSUES: Staff recommends proceeding with sale of the lots since the process may take several months and the City is scheduled to proceed with one of the Police building options in March. A report will first need to be approved by the Planning Commission finding that the proposed sale is in conformance with the General Plan. The City can then proceed to list the properties for sale. A similar action was taken to generate revenue for development of Rancho Grande Park. Those lots were sold through a public auction. Given the status of the real estate market, staff believes listing the property with an agent would be more successful in generating the highest offer. Staff considered multiple realtor listings in order to allow all realtors in the community to participate. However, after reviewing this alternative with potential realtors, it was determined that an exclusive listing would likely be more successful in generating the marketing effort necessary to obtain a maximum offer. In order to provide a fair opportunity for all realtors to obtain the listing, it is recommended that the selection be made through the following process: • Solicit applications/proposals with information on experience, recommended approach and commission; • Interviews; • Recommendation by a selection committee; and • Approval by the City Council. It is recommended that the selection committee include the following representation: • One Council Member • One Planning Commissioner • Community Development Director Additional properties owned by the Redevelopment Agency (RDA) will likely be sold by the City as the Successor Agency to the Dissolved RDA as part of the process of dissolving the RDA. If successful, staff will recommend the same process to the City Council and Oversight Board and the results of the selection process can be used to either select the same realtor or another from the process. Item 11.c. - Page 2 CITY COUNCIL CONSIDERATION OF PROCESS FOR SALE OF CITY PROPERTIES ON OLD RANCH ROAD JANUARY 22, 2013 PAGE3 ALTERNATIVES: The following alternatives are presented for consideration: • Approve staffs recommendations; • Direct staff to instead sell the properties through listings with multiple realtors; • Direct staff to instead sell the properties through a public auction; • Request reconsideration of sale of the lots; • Provide staff other direction. ADVANTAGES: Selection of a single realtor to list the residential lots has been determined to have the best chance to obtain the highest offer. The proposed process will provide the fairest opportunity for local realtors to obtain the listing, will result in more competitive services and proposed commissions, and may help facilitate future sale of RDA properties. DISADVANTAGES: The proposed process will be more labor intensive, lengthy and complicated in determining the sale price than a public auction would provide. Multiple realtor listings would better avoid concerns from local realtors that are not selected to represent the City on the listing. ENVIRONMENTAL REVIEW: Environmental review was accomplished through the subdivision process. PUBLIC NOTIFICATION AND COMMENTS: The agenda was posted in front of City Hall on Thursday, January 17, 2013 and on the City's website on Friday, January 18, 2013. Item 11.c. - Page 3 THIS PAGE INTENTIONALLY LEFT BLANK Item 11.c. - Page 4