CC 2013-10-08_10.b. Listing for Sale of Old Ranch Rd PropertiesMEMORANDUM
TO: CITY COUNCIL
FROM: STEVEN-ADAMS, CITY MANAGER jk
SUBJECT: CONSIDERATION OF LISTING FOR SALE OF OLD RANCH ROAD
PROPERTIES
. DATE: . OCTOBER 8, 2013
RECOMMENDATION:
It is recommended the City Council: 1) approve delaying re-listing the Old Ranch
Road lots for a period of four months; 2) authorize the City Manager to renew the
exclusive listing agreement with Lenny Jones of Jones Goodell & Associates for an
additional 6-month period to begin at that time; 3) direct the City Manager to return
with revised listing price recommendations at that time; and 4) direct the City
Manager to return with recommendations on how to fund the remainder of the Police.
Station costs until revenue from sale of the lots is generated.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The sale of the lots is intended to generate revenue for construction of the new police
station. The current listing prices are $247,500, $242,100, and $233,100 for the
three Old Ranch Road lots .
. 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.
The excess portion of the City property was subdivided into four residential lots, each
in the range of 10,000 square feet. Three of the four lots were then approved to be
sold to generate. revenue for the Police station project. The fourth lot was
recommended to be retained in order to maintain maximum flexibility for potential
parking and . connection to the Woman's Club Community Center parking · lot
associated with the proposed recreation center or other future use.
Item 10.b. - Page 1
CITY COUNCIL
CONSIDERATION OF LISTING FOR SALE OF OLD RANCH ROAD PROPERTIES
OCTOBER 8, 2013
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At the March 26, 2013 meeting, the Council ?PProved the proposed listing prices,
approved an exclusive listing agreement with Lenny Jones of Jones Goodell &
Associates, and authorized the City Manager to approve counter offers contingent
upon City Council approval. The City Council subsequently approved a reduction in
the listing prices at the July 9, 2013 meeting. The listing agreement with Jones
Goodell & Associates expired on September 26, 2013.
At the March 26, 2013 meeting, the City Council also appropriated $30,000 from the
Sewer Fund and $70,000 from the Water Fund and authorized the City Manager to
approve a contract to the lowest responsible bidder to install sewer and water line
connections to the lots. The intent was to repay these funds from the proceeds when
the lots are sold. However, staff may propose some portion of the costs be paid by
sewer and water facility funds.
ANALYSIS OF ISSUES:
Since the property was listed, the City has received a number of offers from potential
developers, but all have been below the list price. It has become apparent that it will
be necessary to sell the lots individually to independent buyers in order to obtain
better prices. As a result, it is recommended the City delay re-listing the properties
for a minimum of four months and complete the utility connections. Staff believes the
properties will be more marketable to individual buyers once the utility connections
are completed.
The Council directed staff to study whether there are feasible alternatives to increase
profit from the lots by developing the properties prior to sale or partnering with a
private developer. However, the City Attorney's research indicates the legality of·
doing this is questionable given the difficulty to demonstrate a "public purpose," it
would create a financial risk to the City, and profitability would be impacted by the
requirement to pay State prevailing wage rates on the construction work.
ALTERNATIVES:
The following alternatives are presented for consideration:
• Approve staffs recommendations;
• Direct staff to re-list the properties at this time;
• Direct staff to prepare additional research for consideration on how to partner
with a developer on construction and sale of homes;
• Direct staff to solicit proposals again to change the listing agent;
• Direct staff to add sale of the fourth lot to the listing; or
• Provide staff other direction.
ADVANTAGES:
Approval of staffs recommendation will increase the likelihood of success in selling
the lots to generate revenue for the police station.
Item 10.b. - Page 2
CITY COUNCIL
CONSIDERATION OF LISTING FOR SALE OF OLD RANCH ROAD PROPERTIES
OCTOBER 8, 2013
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DISADVANTAGES:
The delay in sale of the lots will result in the need to identify other interim funding for
the Police Station project.
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, October 3, 2013, and on
the City's website on Friday, October 4, 2013. No comments were received.
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