CC - Item 4D - Property Acquisition At 2714-2718 River Avenue For a Corporate City Yard Maintenance FacilityROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS
FROM: JEFF ALLRED, CITY MANAGER
DATE: JANUARY 13, 2015
SUBJECT: PROPERTY ACQUISITION AT 2714 -2718 RIVER AVENUE FOR A
CORPORATE CITY YARD MAINTENANCE FACILITY
SUMMARY
The City Council will consider adoption of a Resolution approving the acquisition of
industrial -zoned real property on River Avenue for the possible establishment of a
corporate city yard maintenance facility ( "Property "). The Property consists of an
approximately .75 -acre parcel of land in the M -1 manufacturing zone on River Avenue
located south of Garvey Avenue. It includes a warehouse, front office and exterior
perimeter block walls. Acquisition of this site is proposed to house the Public Works
Department field maintenance operations and accommodate the secure storage of City -
owned vehicles and equipment. Costs for the purchase price of $1.83 million plus
closing costs will be drawn from the unallocated fund balance in the City's General
Fund.
BACKGROUND
Since incorporation in 1959, the City of Rosemead has operated without a city yard
maintenance facility, which is highly unusual for cities. Instead, the City's public works
maintenance operations are housed in a converted recreation building at Garvey Park
with vehicles and equipment stored adjacent to the tennis courts. In addition, vehicles,
materials, supplies and equipment are stored in a remote corner of Rosemead Park.
These space limitation conditions are not ideal, and the City continues to experience
break -ins, vandalism and thefts of vehicles and equipment at these park locations.
The need to upgrade the current conditions of the City's public works maintenance
operations have been a subject of concern to the City Council in recent years. The
City's current Strategic Plan for 2014 and 2015 includes Strategy 3(F), which directs
staff to: Explore the potential for the acquisition of real estate for a municipal
maintenance facility ( "city yard') to enhance the efficiency and effectiveness of the
City's infrastructure maintenance operations, and to restore facilities at Garvey Park to
their intended use as a recreation center.
Item No. Q
City Council Meeting
January 13, 2015
Page 2 of 3
The subject property at 2714 -2718 River Avenue in Rosemead consists of an
approximately .75 -acre parcel of land south of Garvey Avenue that includes a
warehouse building, a front office, and perimeter block walls in excess of 15 ft. in height.
The property is also paved with concrete, which is conducive to heavy vehicle use and
low maintenance.
The Public Works Department maintenance operation will be moved into the site with
significant benefits in terms of security of vehicles and equipment as well as operational
efficiencies. As a result, the community building at Garvey Park on Emerson Place
could then be converted back into a public recreation center for community programs.
Also, the rectangular piece of land west of the tennis courts at Garvey Park, currently
used to store vehicles, could then be made available for recreation use.
Following the acquisition of the River Avenue property, the City will undertake a CEQA
review of the transfer of the Public Works Department to the Property site to determine
whether any actions under CEQA are required. The current decision for the purchase
of the property is exempt from CEQA as further described in the attached Resolution.
The City's interests in the real estate negotiation process have been represented by
commercial real estate broker Mark Paulson of Anthony Venti Realtors in Alhambra.
The seller's original asking price of this property was $2 million. Through negotiations,
the sale price has been reduced to $1.83 million. A review of comparable industrial
properties in the West San Gabriel Valley sub - region has validated that the purchase
price is appropriate. A commercial property inspection report has been completed for
the property. In addition, Phase I and II environmental analysis reports have also been
conducted and determined that the property is clean and free of contaminants.
FINANCIAL IMPACTS
The real estate commission costs will be borne entirely by the seller. The City's
obligations in the transaction include remittance of the $1.83 million sale price plus
standard closing costs and costs for the property inspection and environmental
contamination analysis reports. Total acquisition costs will not exceed $1.86 million.
Subsequent to acquisition of the subject property, the unallocated fund balance of the
City's General Fund is projected to remain in excess of $14 million at the conclusion of
the current 2014/15 fiscal year. (In addition to these remaining General Fund "reserves"
of approximately $14 million, the City has placed over $3 million in a separate reserve
trust fund for future expenditures related to projected retiree medical insurance
obligations.)
Utilization of existing cash assets to acquire a needed real property asset is consistent
with the City Council's Fiscal Policies established in the City's Budget and current
Strategic Plan. The pertinent policy states: Use "reserves" only for one -time
expenditures or temporary stop -gap measures.
City Council Meeting
January 13, 2015
Page 3 of 3
RECOMMEND ACTION
It is recommended that the City Council adopt Resolution No. 2015 -04, approving the
purchase of the Property for $1.83 million upon forms, terms and conditions to be
reviewed and approved as to form by the City Attorney and City Manager as well as
authorizing the City Manager and Mayor to take all necessary final actions as further
described in the attached Resolution.
Attachments
Resolution No. 2015 — 04
RESOLUTION NO. 2015 — 04
APPROVING THE PURCHASE OF THAT CERTAIN REAL PROPERTY
COMMONLY ADDRESSED AS 2714 -2718 RIVER AVENUE, CITY OF
ROSEMEAD AND AUTHORIZE THE CITY MANAGER TO FINALIZE THE
TERMS OF THE PROPERTY PURCHASE AGREEMENT FOR SAID REAL
PROPERTY AND TO TAKE ALL OTHER ACTIONS NECESSARY TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
RESOLUTION AND AUTHORIZING THE MAYOR TO EXECUTE THE
AGREEMENT AND SIGN THE CERTIFICATE OF ACCEPTANCE.
A. River Warehouse LLC, ( "Owners ") own that certain real property
containing approximately .75 acres of land generally located at 2714 -2718 RIVER
AVENUE in the City of Rosemead, County of Los Angeles, State of California, (the
"Real Property" or "Property ").
B. The Owners had placed the Real Property for sale, and City staff identified
the Real Property as a potential site for a future public works facility and approached the
Owners with an offer to purchase the Real Property.
C. City staff has negotiated a purchase price of $1.83 million for the Real
Property which is below the offer price, and the City Council believes the purchase price
represents the fair market value for the Real Property based on comparables that were
studied by the City and its broker for other parcels of similar size and uses.
D. The City Council finds that the use of the funds to purchase the Property
for the potential use of a public works facility, as further described in the Staff Report, is
a proper and necessary use of City funds.
NOW, THEREFORE, the City Council of the City of Rosemead resolves as
follows:
Section 1 . Incorporation of Recitals The foregoing Recitals are true and correct
and are incorporated herein and form a part of this Resolution.
Section 2 . Approval of Purchase The City Council hereby approves the
purchase of the Real Property from the Owners for a price of $1.83 million upon forms,
terms and conditions to be reviewed and approved as to form by the City Attorney and
City Manager. The City Manager is hereby authorized and directed to take all steps
necessary to finalize the terms of the Property Purchase Agreement subject to the
approval of the City Attorney. Once the terms are finalized, the Mayor is hereby
authorized and directed to accept, execute and deliver the Property Purchase
Agreement for and on behalf of the City including execution of the certificate of
acceptance of the property as required by Government Code section 27281.
Section 3 . ComNiance With CEQA Pursuant to the California Environmental
Quality Act (CEQA), the State CEQA Guidelines (California Code of Regulations, Title
14, the City's environmental guideline, the City Council finds that approval of the
Property Purchase Agreement is exempt from the requirements of CEQA because it
can be seen with certainty that the mere acquisition of the Real Property has no
potential to cause significant effects on the environment since the proposed agreement
does not change land uses or expand the existing use of the Real Property, and
therefore, the Agreement is exempt from CEQA pursuant to Guidelines Section
15061(b) (3).
Section 4 . Other Actions Authorized The City Manager is hereby authorized
and directed to take all action necessary or reasonably required to carry out, give effect
to, and consummate the transactions contemplated by this Resolution and to take all
action necessary in conformity therewith, including paying all fees and costs incurred
including the Phase I and II environmental reports, to close escrow up to a maximum of
Thirty Thousand Dollars ($30,000).
Section 5 . The City Clerk shall certify to the passage and adoption of this
Resolution, whereupon it shall take immediate effect.
PASSED, ADOPTED AND APPROVED this 13th day of January, 2015.
William Alarcon, Mayor
Attest:
Gloria Molleda, City Clerk
Approved as to Form:
By:
Rachel Richman
Burke, Williams & Sorensen, LLP
City Attorney