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CC - Item 3E - Resolution Clarifying the Purchase Price for Property Acquisition of 2714-2718 River Ave E M f a- ROSEMEAD CITY COUNCIL f PRIDE STAFF REPORT oRpotte TO: THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: JEFF ALLRED, CITY MANAGER DATE: JANUARY 27, 2015 SUBJECT: RESOLUTION CLARIFYING THE PURCHASE PRICE FOR PROPERTY ACQUISITION OF 2714-2718 RIVER AVENUE IN ROSEMEAD SUMMARY Proposed Resolution No. 2015-08 clarifies the purchase price of the property at 2714- 2718 River Avenue approved by the City Council on January 13, 2015. The original approving Resolution No. 2015-04, adopted at the last Council meeting, stated that the purchase price was $1.83 million. Subsequently the escrow company has requested a clarification that the actual contract purchase price is $1.85 million with a $20,000 credit in escrow from the Seller, which equals a total cost to the City of $1.83 million. The proposed Resolution No. 2015-08 makes the technical correction requested by the escrow company and does not alter the costs to the City for acquisition of the property. RECOMMENDATION It is recommended that the City Council adopt Resolution No. 2015-08 clarifying the purchase price for the property acquisition of 2714-2718 River Avenue, Rosemead. 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 ITEM NO. City Council Meeting January 27,2015 Page 2 of 2 their intended use as a recreation center. 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. Following the acquisition of the River Avenue property, 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. 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 $1.85 million minus a $20,000 escrow credit to the Buyer for a total acquisition cost to the City of $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 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 $1.85 million sale price, with a $20,000 escrow credit to the City. The City will also incur standard closing costs as well as costs for property inspection and environmental contamination analysis reports. The adoption of Resolution No. 2015-08 provides for a technical correction requested by the escrow company, which has no effect on the actual cost to the City. Attachment—Resolution No. 2015-08 RESOLUTION NO. 2015-08 CLARIFYING THE PURCHASE PRICE OF THAT CERTAIN REAL PROPERTY COMMONLY ADDRESSED AS 2714-2718 RIVER AVENUE, CITY OF ROSEMEAD AS PREVIOUSLY APPROVED IN RESOLUTION NO. 2015-04 PURSUANT TO ESCOW COMPANY'S REQUEST 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. At the City Council meeting of January 13, 2015, the City Council adopted Resolution 2015-04 which authorized the purchase of the Property among other actions to permit finalization of the transaction. D. Resolution 2015-04 stated that the purchase price was $1.83 million. The escrow company has asked that the City clarify that the contract price is for $1.85 million with a $20,000 credit in escrow from the Seller for a cost to the City of $1.83 million. 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. Purchase Price. The City Council hereby clarifies the purchase of the Real Property is for a price of $1.85 million. In addition, there was a $20,000 credit provided by the Sellers in escrow. Therefore the cost to the City for the Real Property is $1.83 million. Section 3. Resolution 2015-04. Except for the clarification on the purchase price as noted in this Resolution, all other terms of Resolution 2015-04 remain the same. Section 4. Certification. The City Clerk shall certify to the passage and adoption of this Resolution, whereupon it shall take immediate effect. PASSED, ADOPTED AND APPROVED this 27th 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