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RESOLUTION NO. 2015-052 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE PURCHASE OF A 0.14-ACRE COMMERCIAL PROPERTY LOCATED AT 224 THIRD AVENUE AND AMENDING THE FISCAL YEAR 2014/2015 BUDGET BY APPROPRIATING $270,000 FROM THE GENERAL FUND RESERVES TO THE NON-DEPARTMENTAL DEPARTMENT CAPITAL BUDGET FOR THE PURCHASE PRICE AND ASSOCIATED COST (4/5 VOTE REQUIRED)
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
The subject parcel is a 0.14 acre commercial property located at 224 Third Avenue and currently identified as San Diego County Assessor's Parcel No. 568-044-19. It is the vacant lot immediately north of the Vogue Theater. The property has been on the market for several months with an asking price of $275,000 to $400,000. After negotiations, staff and the owner have come to an agreed purchase price of $260,000, subject to Council approval.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed property acquisition for compliance with the California Environmental Quality Act (CEQA) and has determined that there is no possibility that the activity may have significant effect on the environment; therefore, pursuant to Section 15061(b)(3) (General Rule) of the state CEQA Guidelines the activity is not subject to CEQA. Although environmental review is not necessary at this time, additional environmental review will be required as applicable prior to the approval of any future project specific development entitlements.
BOARD/COMMISSION RECOMMENDATION
Not Applicable]
DISCUSSION
The subject parcel is a 0.14 acre commercial property located at 224 Third Avenue and currently identified as San Diego County Assessor's Parcel No. 568-044-19. As shown on a map attached to this report, the subject parcel is the vacant lot immediately north of the Vogue Theater and takes it's access from the alley to the west. The property has been listed for sale several times over the last few years with the current listing being in place since September (2014). The listing price is a range of $275,000 to $400,000. After negotiations, staff and the owner have come to an agreed purchase price of $260,000, subject to Council approval.
The following is a summary of the purchase terms:
Purchase Price: $260,000, all cash at close of escrow
Seller/Buyer Allocation of Costs: City shall pay all associated escrow and closing cost.
Conditions to Close: City review and approval as to the condition of title and physical condition of the property.
Estimated Closing Date: March 20, 2015.
These terms shall be memorialized on a standard form Real Property Purchase Agreement, which shall be reviewed and approved by the City Attorney's office and signed by the City Manager.
Staff believes this is an opportunity purchase that presents significant current and future benefits. In the long term, it presents development opportunities in conjunction with one or more of the adjacent parcels that front onto Third Avenue. Ownership by the City allows a degree of control over what type of use ultimately is developed there. Parking fees should generate sufficient revenue to provide for the maintenance and upkeep of the parcel.
Staff is requesting that, should Council approve this purchase, $270,000 be appropriated from the FY 2014-2015 budget to the non-departmental capital budget to cover the purchase price, title and escrow cost and the cost to clean, re-seal and stripe and beautify the lot for parking use.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City's Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. This acquisition falls in line with the City's goal of Economic Vitality. By acquiring and holding this lot, the City provides additional parking downtown while ensuring that it can be developed in a manner that best serves the economic revitalization of downtown Third Avenue.
CURRENT YEAR FISCAL IMPACT
Approval of this resolution will result in amending the Fiscal Year 2014-2015 budget by appropriating $270,000 from the General Fund Reserves to the Non-Departmental Capital Budget for the purchase price and associated cost of acquiring the Third Avenue commercial property. $260,000 will be used towards the purchase of the property. Staff estimates that $2,500 will be needed for closing costs and approximately $7,500 will be used to clean, re-seal and stripe, and beautify the lot for parking use.
As reported in the audited Financial Statements, the unassigned fund balance (operating reserves) for the City's General Fund totals $14.3 million as of June 30, 2014. With the appropriations Council is considering tonight, $1.8 million for the Telegraph Canyon Road Erosion Repair and $270,000 for the purchase of the Third Avenue property, the operating reserves will be reduced to approximately 9% of the fiscal year 2015 amended budget.
ONGOING FISCAL IMPACT
There is no anticipated ongoing fiscal impact as a result of this expenditure. Once the lot is prepared for parking use, it is anticipated that the lot will have very little maintenance costs. Associated costs may be funded by revenue generated by parking fees.
ATTACHMENTS
1. Site map
2. Agreement
Staff Contact: Rick Ryals, Real Property Manager