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08.i. Successor Agency Vacant Property at Faeh StreetMEMORANDUM TO: SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY FROM: STEVEN ADAMS, CITY MANAGER fl SUBJECT: CONSIDERATION OF AN AGREEMENT WITH THE ClTY OF ARROYO GRANDE TO CONVEY OWNERSHIP OF THE VACANT PROPERTY AT FAEH STREET AND EL CAMINO REAL TO 'THE ClTY DATE: JUNE 26,2012 RECOMMENDATION: It is recommended the Successor Agency to the Dissolved Redevelopment Agency approve a Public Conveyance Agreement to transfer ownership of the vacant property at Faeh Street and El Camino Real to the City. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The balance of the loan with interest is approximately $919,000. The most recent appraisal of the property was in 2009, which identified a value of $1,025,000. The recommended action will result in future work load since the intent is to dispose of the property and utilize the revenue for an affordable housing project. BACKGROUND: The Redevelopment Agency acquired a vacant parcel at Faeh Street and El Camino Real in 2006 to facilitate development of a hotel or mixed use project with affordable housing. The property was acquired for $830,000 though a loan from the City's Affordable Housing In Lieu Fee Fund. A Request for Proposal for a project was issued and Exclusive Negotiation Agreements were entered into with two separate developers, but neither was successful in submitting a project. ANALYSIS OF ISSUES: The State Legislature adopted ABXl 26 last year, which eliminated all redevelopment agencies, which was later upheld by the State Supreme Court in its opinion in CRA v. Matosantos. Under the terms of ABXl 26, all assets of the Agenda Item 8.i. Page 1 SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY CONSIDERATION OF AN AGREEMENT WITH THE ClTY OF ARROYO GRANDE TO CONVEY OWNERSHIP OF THE VACANT PROPERTY AT FAEH STREET AND EL CAMINO REAL TO THE ClTY JUNE 26,2012 PAGE 2 Redevelopment Agency are required to be disposed of and the revenue distributed to the property taxing agencies. ABXl 26 also does not provide for repayment of loans from a city to a redevelopment agency. As a result, repayment of the loan was originally included by the Successor Agency on the Recognized Obligation Payment Schedule (ROPS), but was rejected by the State Department of Finance. It was then removed from the ROPS and resubmitted, which was approved. The method of disposing of assets may be determined by the Successor Agency with approval of the Oversight Board. There are two circumstances that make the Faeh Street property unique. First, the property was acquired with funds paid be developers as mitigation for not including affordable housing units in their projects as required by the City's inclusionary housing ordinance. Second, the agreement required repayment of the loan by June 30, 2007 unless the agreement was extended, which it was not. As a result, the property should have reverted to the City at that time, but was not since the Redevelopment Agency was still pursuing a project and there was no expectation that the Redevelopment Agency would ever be eliminated. Due to these circumstances, it is recommended that the property be disposed of ,through an agreement conveying ownership of the property to the City. The agreement has been prepared by the City/Successor Agency's special counsel. If approved, it will be presented to the Oversight Board at their next meeting for consideration. The intent is to sell the property and utilize the revenue for the original purpose of the funds, which would be to support development of an affordable housing project. ALTERNATIVES: The following alternatives are presented for consideration: - Approve the agreement; Offer the property for sale; - Do not convey ownership of the property to the City; or - Provide staff other direction. ADVANTAGES: The agreement will maintain the property under public ownership for the purposes for which it was intended. The recommended action will help prevent staff time and legal costs to implement a more complex process that will result in the same outcome. DISADVANTAGES: No disadvantages have been identified. Agenda Item 8.i. Page 2 SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY CONSIDERATION OF AN AGREEMENT WITH THE CITY OF ARROYO GRANDE TO CONVEY OWNERSHIP OF THE VACANT PROPERTY AT FAEH STREET AND EL CAMINO REAL TO THE CITY JUNE 26,2012 PAGE 3 ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The agenda was posted in front of the City Hall on Thursday, June 21, 2012 and on the City's website on Friday, June 22, 2012. Attachments: 1. Agreement Agenda Item 8.i. Page 3 PUBLIC PROPERTY CONVEYANCE AGREEMENT [FAEH STREET SITE] This PUBLIC PROPERTY CONVEYANCE AGREEMENT ("Agreement") is entered into this 26TH day of June, 2012, by and between the CITY OF ARROYO GRANDE AS SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE ("Successor Agency"), and the CITY OF ARROYO GRANDE, a municipal corporation ("City'). A. Title to that certain publicly owned real property consisting of approximately 0.84 acres on the north side of Faeh Street adjacent to El Camino Real (101 Freeway), identified as Assessor Parcel No. 006-151-027, commonly known as the Faeh Street Site (the "Property") is currently vested in the name of the Redevelopment Agency of the City of Arroyo Grande (the "RDA"). The legal description of the Property is set forth in Exhibit "A" attached hereto and by this reference incorporated herein. B. Pursuant to Assembly Bill 26 from the 201 1-12 First Extraordinary Session of the California Legislature ("ABxl 26") as modified by the California Supreme Court Decision in California Redevelopment Association v. Matosantos (201 1) 53 ~al.4~ 231, the RDA was dissolved as of February I, 2012. C. The City in its capacity as the Successor Agency to the dissolved RDA pursuant to Health and Safety Code Section 34173, is vested, pursuant to subdivision (b) of Health and Safety Code Section 34173, with all authority, rights, powers, duties, and obligations previously vested with the former RDA except for those provisions of the Community Redevelopment Law that were repealed, restricted, or revised pursuant to ABxl 26. D. The Oversight Board to the Successor Agency to the dissolved RDA ("Oversight Board") has been appointed and is duly constituted pursuant to Health and Safety Code Section 341 79. E. Pursuant to Health and Safety Code Section 34181(a), the Oversight Board is to direct the Successor Agency to dispose of properties of the former RDA that were funded with tax increment revenues of the dissolved redevelopment agency in a manner that maximizes value-but in this case the acquisition of the Property by the RDA was not funded with tax increment revenues but rather was fimded with a loan from City general fimds. As such, the Property should be returned to the City. F. Successor Agency therefore desires to transfer fee title to the Property together with all improvements thereon, and all easements, licenses, and interests appurtenant thereto, to the City and City desires to obtain fee title to the Property, together with all improvements thereon, and all easements, licenses, and interests appurtenant thereto, from the Successor Agency. Upon approval of thls Agreement the Successor Agency shall request approval for the transfer from the Oversight Board. ATTACHMENT 1 Agenda Item 8.i. Page 4 AGREEMENT --------- Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Successor Agency and City agree as follows: 1. CONVEYANCE OF TITLE. 1.1 Conveyance. Subject to all of the terms, conditions, and provisions of this Agreement, and for the consideration herein set forth, Successor Agency agrees to convey fee title to the Property, together with all improvements thereon, and all easements, licenses, and interests appurtenant thereto, to City, subject to matter of record. City agrees to accept such conveyance. Conveyance shall be effected by execution and recordation of the Quitclaim Deed attached hereto as Exhibit "B" and by this reference incorporated herein. 1.2 Consideration. Successor Agency and City agree that the acceptance by City of the obligations to operate and maintain the Property for its intended use constitutes sufficient consideration for the conveyance. 2. PROPERTY CONVEYANCE MATTERS. 2.1 City Acceptance of Properh, in Current Condition. City accepts the condition of the Property, including the title condition, the environmental condition of the Property, and all other matters pertaining to the condition of the Property. 2.2 Reports. All reports and documents pertaining to the Property held by the Successor Agency shall have been deemed to have been transmitted to City concurrent with the recordation of the Quitclaim Deed. 2.3 Payment of Costs. Any costs associated with the conveyance of the Property shall be paid by City. 2.4 Title Policy. City, at its cost, may, in City's sole discretion, obtain an owner's policy of title insurance concurrent with the conveyance. 2.5 AS IS Convevance. City acknowledges and agrees that it has full knowledge of the Property. Except as otherwise provided in this Agreement, the Property is to be conveyed to and accepted by City in an "as-is" condition without any representations or warranties of any nature or kind whatsoever from Successor Agency. 3. MISCELLANEOUS TERMS. 3.1 Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of thls Agreement. 3.2 Binding on Heirs and Successors. This Agreement shall be binding upon the parties hereto and their respective heirs, representatives, transferees, successors, and assigns. Agenda Item 8.i. Page 5 3.3 Entire Agreement, Waivers, and Amendments. This Agreement incorporates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements between the parties with respect to all or part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the party to be charged. Any amendment or modification to this Agreement must be in writing and signed by Successor Agency and City. 3.4 Severability. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way to the fullest extent permitted by law. 3.5 Covenants to Survive. The covenants and agreements contained in this Agreement shall survive the recordation of the Quitclaim Deed and conveyance of the Property. 3.6 Oversight Board Approval. The Quitclaim Deed shall not be effective and the Successor Agency and City shall not record the Quitclaim Deed unless and until the Oversight Board has approved the conveyance of the Property from Successor Agency to City. 3.7 Execution in Counterpart. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. 3.8 Exhibits. Exhibits "A" and "B" attached to this Agreement are incorporated herein by hs reference and made a part hereof. Said Exhibits are identified as follows: "A" - LEGAL DESCRIPTION "B" - QUITCLAIM DEED [end-signature page follows] Agenda Item 8.i. Page 6 IN WITNESS WHEREOF, Successor Agency and City have entered into this Agreement as of the date first set forth above. "SUCCESSOR AGENCY" CITY OF ARROYO GRANDE AS SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE By: Tony Ferrara, Mayor, as Chair of the Successor Agency ATTEST: Kelly Wetmore, City Clerk, Secretary to the Successor Agency APPROVED AS TO FORM Successor Agency Counsel "CITY" CITY OF ARROYO GRANDE ATTEST: By: Tony Ferrara, Mayor Kelly Wetrnore, City Clerk APPROVED AS TO FORM Timothy J. Carmel, City Attorney [END OF SIGNATURES] Agenda Item 8.i. Page 7 EXHIBIT "A" TO QUITCLAIM DEED LEGAL DESCRIPTION That certain real property located in the City of Arroyo Grande, County of San Luis Obispo, State of California legally described as follows: PARCEL 1 : Lots 1 to 10 inclusive in Block 14 and Lots 6 and 7 in Block 15, all in Western Addition to the Town of Arroyo Grande, in the City of Arroyo Grande, County of San Luis Obispo, State of California, according to map recorded April 10, 1894 in Book B, Page 10 of Maps, in the office of the County Recorder of said County. PARCEL 2: That portion of Alpine Street, as said street is shown on map of Western Addition to the Town of Arroyo Grande, in the City of Arroyo Grande, County of San Luis Obispo, State of California, according to map recorded April 10, 1894 in Book By Page 10 of Maps, in the Office of the County Recorder of said County, which is bounded on the Northwest by the Northeasterly prolongation of the Northwesterly line of Lot 7 in Block 15 of said Addition, and bounded on the Southeast by the Northwest line of Faeh Avenue as shown on said Map. APN: 006-1 5 1-027 Exhibit "A" Agenda Item 8.i. Page 8 EXHIBIT "B" QUITCLAIM DEED SEE FOLLOWING PAGES Exhibit "B" Agenda Item 8.i. Page 9 When Recorded Mail To: City of Arroyo Grande 300 East Branch St. Arroyo Grande, CA 93420 Attn: City Clerk (Space Above For Recorder's Use) The undersigned grantor(s) declare(s) that this transaction is This document is being recorded for the benefit exempt fiom the payment of a documentary transfer tax of the City of Arroyo Grande and is exempt fiom pursuant to Revenue and Taxation Code Section 1 1922. payment of a recordation fee pursuant to Government Code $9 27383 and 6103. QUITCLAIM DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the CITY OF ARROYO GRANDE AS SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE ("Grantor"), pursuant to its authority set forth in Health and Safety Code Section 34173, and having obtained the approval for the conveyance effected by this Quitclaim Deed fiom the Oversight Board to the Successor Agency to the dissolved Redevelopment Agency of the City of Arroyo Grande, does hereby remise, release and forever quitclaim to the CITY OF ARROYO GRANDE, a municipal corporation ("Grantee"), all of Grantor's right, title and interest in and to certain real property described located in the City of Arroyo Grande, County of San Luis Obispo, State of California, described in the legal description attached hereto as Exhibit "1" and incorporated herein by this reference (the "Property"). Grantor's conveyance of the Property is further subject to the following covenants and restrictions as required by the Community Redevelopment Law, Health and Safety Code section 33000 et seq. (the "CRL"): 1. Ln addition to any other nondiscrimination provisions applicable to the Property under federal, state or local law, the following nondiscrimination provisions apply: (a) There shall be no discrimination against, or segregation of, any persons, or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision @) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, or rental, or in the use, occupancy, or enjoyment of the Property, nor shall Grantee itself, or any person claiming under or through it, establish or permit any such practice Agenda Item 8.i. Page 10 or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property or any portion thereof The foregoing covenants shall run with the Property and shall remain in effect in perpetuity. (b) Notwithstanding subsection (a) above, with respect to familial status, subsection (a) above shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in subsection (a) above shall be construed to affect Sections 5 1.2, 5 1.3, 5 1.4, 5 1.10, 5 1.1 1, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code, shall apply to subsection (a) above. 2. All deeds, leases or contracts for the sale or leasing of the Property or any interest therein shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 2.1 In deeds. In deeds, language shall appear in substantially the following form : (a) "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) LLNotwithstanding subsection (a) above, with respect to familial status, subsection (a) above shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in subsection (a) above shall be construed to affect Sections 5 1.2, 5 1.3, 5 1.4, 5 1.10, 5 1.1 1, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code, shall apply to subsection (a) above." 2.2 In leases. In leases, language shall appear in substantially the following form: (a) "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Agenda Item 8.i. Page 11 Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (b) "Notwithstanding subsection (a) above, with respect to familial status, subsection (a) above shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in subsection (a) above shall be construed to affect Sections 5 1.2, 5 1.3, 5 1.4, 5 1.10, 5 1.1 1, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code, shall apply to subsection (a) above." 2.3 In contracts pertaining to the sale, transfer or leasing of the land or any interest therein, language shall appear in substantially the following form: (a) "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. The foregoing provisions shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the contract." (b) "Notwithstanding subsection (a) above, with respect to familial status, subsection (a) above shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in subsection (a) above shall be construed to affect Sections 51.2, 5 1.3, 5 1.4, 5 1.10, 5 1.1 1, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code, shall apply to subsection (a) above." 3. The covenants and restrictions in this Quitclaim Deed shall bind Grantee and its successor in interest to the Property or any portion thereof. [CONTINUED ON NEXT PAGE] Agenda Item 8.i. Page 12 DATED AND EXECUTED ON: ,2012. "GRANTOR CITY OF ARROYO GRANDE AS SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE By: Tony Ferrara, Mayor, as Chair of the Successor Agency ATTEST: Kelly Wetmore, City Clerk, Secretary to the Successor Agency APPROVED AS TO FORM Timothy J. Carmel, successor Agency Counsel "GRANTEE" CITY OF ARROYO GRANDE, a municipal corporation By: Tony Ferrara, Mayor ATTEST: Kelly Wetmore, City Clerk APPROVED AS TO FORM - Timothy J. Carmel, City Attorney [END OF SIGNATURES] Agenda Item 8.i. Page 13 State of California 1 County of San Luis Obispo ) City of Arroyo Grande 1 On , before me, , Notary Public, (here insert name and title of the officer) personally appeared Tony Ferrara, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) islare subscribed to the within instrument, and acknowledged to me that helshelthey executed the same in hisherltheir authorized capacity(ies), and that by hisherltheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Agenda Item 8.i. Page 14 EXHIBIT " 1" TO QUITCLAIM DEED LEGAL DESCRIPTION That certain real property located in the City of Arroyo Grande, County of San Luis Obispo, State of Califomia legally described as follows: PARCEL 1 : Lots 1 to 10 inclusive in Block 14 and Lots 6 and 7 in Block 15, all in Western Addition to the Town of Arroyo Grande, in the City of Arroyo Grande, County of San Luis Obispo, State of Califomia, according to map recorded April 10, 1894 in Book B, Page 10 of Maps, in the office of the County Recorder of said County. PARCEL 2: That portion of Alpine Street, as said street is shown on map of Western Addition to the Town of Arroyo Grande, in the City of Arroyo Grande, County of San Luis Obispo, State of Califomia, according to map recorded April 10, 1894 in Book B, Page 10 of Maps, in the Office of the County Recorder of said County, which is bounded on the Northwest by the Northeasterly prolongation of the Northwesterly line of Lot 7 in Block 15 of said Addition, and bounded on the Southeast by the Northwest line of Faeh Avenue as shown on said Map. Agenda Item 8.i. Page 15 CERTIFICATE OF ACCEPTANCE This to certify that the interest in real property and other interests conveyed by the foregoing Quitclaim Deed, dated , 2012, from the City of Arroyo Grande as Successor Agency to the dissolved Redevelopment Agency of the City of Arroyo Grande ("Grantor"), to the City of Arroyo Grande, a municipal corporation ("Grantee"), is hereby accepted by the undersigned officer of the Grantee City of Arroyo Grande, on behalf of the Grantee City of Arroyo Grande, pursuant to authority conferred by Resolution No. of the City Council of the City of Arroyo Grande adopted on , and the Grantee City of Arroyo Grande, consents to the recordation thereof by its undersigned duly authorized officer. CITY OF ARROYO GRANDE, a municipal corporation By: Its: Dated: ATTEST: Kelly Wetrnore, City Clerk State of California 1 County of San Luis Obispo ) City of Arroyo Grande 1 On , before me, , Notary Public, (here insert name and title of the officer) personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) islare subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Agenda Item 8.i. Page 16