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Home My WebLink About1979-07-17; City Council; 5027-1; PROPOSED PURCHASE OF FIRE STATION NO. 2W CITY OF CARLSRAD 0- Initial: Dept . Hd. - AGENDA BILL NO. ,>-Qz 7 - 2 + J */ I ,' \ C. Atty. - DATE : .Jul~j 17, 1979 DEPARTMENT <: CitY Manager C. Mgr. - Sub j ect : PROPOSED PURCHASE Of FIRE STATION NO. 2 Statement of the Matter - Some time ago the Council authorized the City Manager's office ti obtain an appraisal of Fire Station No. 2 to determine if it sho be purchased at the expiration of the lease. Attached is a rep0 outlining the steps that have been taken and the procedure for the purchase. Mr. Irv Roston of La Costa Land Company has accep this offer to purchase. Exhibit Memo to City Manager from Assistant City Manager dated 6/9/79. Letter to La Costa Land Company offering to purchase.' Letter from Irv Roston accepting offer. . Recommendat ion That the City Manager's office be instructed to enter into escro at City expense to complete the purchase of Fire Station Number at the designated price. Council Action-: 7-17-79 Council instructed the City Manager's office to enter into e at City expense to complete the purchase of Fire Station Num at the designated price. 0 9 DATE : JULY 9, 1979 TO : CITY MANAGER FROM : Assistant City Manager SUBJECT: FIRE STATION NO. 2 The City Council and staff have been aware for some time that Fire Station No. 2 in South Carlsbad would have to be purchased or relocated. Council instructed staff to obtain appraisals and enter into negotiations with the La Costa Land Company relative to a purchase price. In August, 1969 the County of San Dielgo and Rancho La Costa Inc, entered into a lease for the construction of a fire station in the La Costa area. The term of the lease for the fire station was 10 years, expiring on August 17, 1979. Rancho La Costa Inc. constructed a 3260 to the ]County of San Diego for $775 per month. The County alsc agreed to pay the county taxes assessed. This payment was considered to be additional rent. Condition No. 7 of the lease contained the following clause, "upon the expiration of this lease, or the sooner termination thereof as herein provided, except in the case of destruction of the property, as set fortl- in Paragraph 8 hereof, the County shall deliver possession of the lease building to the Lessor in the same condition as when accepted at the beginning of this lease. Ordinary wear and teE and damage by the elements or acts of God excepted." This, in effect, was a reversionary clause which reouired the County to give back to La Costa Land Company Fire Station No. 2 at the end of the lease period. In October, 1972 the La Costa area was annexed to the City of Carlsbad, at which time the station site became a part of tf City of Carlsbad and we became responsible for the lease. Sinc that time the City has paid the lease payments and has recentl) of monies paid for the lease and taxes. square foot building at 1906 Arena1 Road, Carlsbad, to be lease paid taxes through the 1979 tax year. Following is a summary $ 29,430 (38 months @ $775, 8/18/69-10/16/72 by County) 57,350 (74 months @ $775, 11/17/72-1/17/79 by City ) - 5,425 ( 7 months @ $775, 2/17/79-8/17/79 by City ) $ 92,225 Total lease payments -10 years $ 24,630 Total tax payments - 10 years $116,855 Total lease and tax payments - - - In September, 1977, La Costa Land Company had an appraisal by an M.A.I. who determined that the value of fire station and site was $199,560. Evaluation was as follows: Land -- $ 50,000 Improvements -- 137,560 TOTAL $199,560 Landscaping and mix. 12,000 0 0 July 9, 1979 Fire Station No. 2 Page 2 In August, 1978 the City had the fire station site appraised and received an evaluation of $111,500. The valuation was established as follows: Land - $ 33,000 Improvements - 78,500 TOTAL $111,500 In summary, the La Costa Land appraisal was $199,560. The $88,000,. Land Company which they have accepted and the staff recommends enterinq into an escrow with La Costa Land Company, at City expense, to complete the purchase of the property at the City Manager's established figure of $63,305. City of Carlsbad appraisal was $111,500, or a difference of The City Manager prepared an offer to the La Costa WILLIAM BALDWIN Assistant City Manager WB:gb 0 e r. r'- 120'3 ELM AVFNUE TELEF CARLSBAD, CALIFOHNIA 92008 (714) 7. Orftce of [be City Mm;t,-er ai@ Qf +&XkbiIb April 12, 1979 Fred J. Morey, Vice President La .Costa Land Company Costa Elel Mar Road Carlsba.d, California 92008 I have looked carefully at the appraisals on tks La Costa Fire Station Site and must adnit that I can't 23re-e with all of the rationale in La Costa's appraisal. If the station location was the City's first C?~S~C~, I could more readily agree to sone of the appraisal c1a-a but, as you know, the Fire Chief. and at least one member or' c5e City Cour feels that it should be relocated. Personally, if a reasonak trade-off can be made between location, and cost to the City, I believe it is in the City's best interest to stay where we are, 'The City, however, has money budgeted and set aside for land acquisition and construction to replace this station, That money could possibly be better utilized for other purpo: Although I recognize La Costa Land Company's need to have th appraisal to establish sone value on the property, appraised value by itself is not a reasonable approach to the City acquiring the land and station. Even though you know the history of the fire station develop1 it is important to consider it in our discussion, Company requested the County to locate on this site and agre to build the building with the County leasing the facility f ten years. The lease payments over these ten years have equ the building costs, In addition, the County (City) has or w have paid all property taxes on the land. $ 29,450 38 m3;lths e $775, 8/18/69 - 10/16/72 by County 517,350 74 months (3 $775, 11/17/72 - 1/17/79 by City 5,425 7 m@?nths Q $775, 2/17/79 - 8/17/79 by City La Costa T--- $ 92,225 -,--1 lease payments - 10 years -- $ 11.6.855 $ 86,880 15:~ k:-c~z; Costs, $24 sy- ft. x 3,620 sq. f -____ $ 1:L6, $390 - 17- _- ______ 2!4,630 ~~~~-2 tax payxiits - 10 years - -=:-:I le2se and ta:.; payments .- -. $ :$o,ooo If s; 2s residential lot in 1963 - - T~tal estimated land and building cost in W a ’ April 12, 1379 * Page 2 subject: Fire Station - La Costa The County, as does the City, obviously felt responsibility for providing fire protection in this area and I think the trade-offs were equitable. The missing ingredient was a resolution of what would happen at the end of: ten years. The County thought they had bought a fire station. I have verified this with previous County staff and elected of ficia: who were with the County at the time. Obviously, the County, and now the City, does not have such a station. As with so many situations, the persons having to resolve tht issue were not present at the time, and both City and La Cos1 off ici,als must deal with certain presumptions and t7eigh those against current facts and sn2n.J. business c‘,e=.%s’_sr?.s. It is ir the City’s interest to clos-2 this mattel- and I -,.;auld recoLxner the following to the City Council, if La Cos-kz officials agre PROPOSAL Land Appraisal/La Costa $ 50,OC.fi Land Appraisal/City . 33, OQG $ 33,00( $ 17,OCf: 1/2 DiE€erence Land - La Costa/City $ 8,509 $ 8,500 Improvement Appraisal - La Costa Improvement Appraisal - City $ 78,500 $ 78,500 $149,560 $ 71,060 1/2 Difference Improvements La Costa/City $ 35,530 $ 35,530 City Lease Payments $ 92,225 ($ 92,225 Proposed Purchase Price $ 63,305 I am aware that there are many other approaches one can take this problem which would be mme f-avorable to one side or the For example, I have used full land value, which has included . some value €or the taxes paid by the landowner. In this case City has paid the taxes over a ten yezr period in the amount ( $24,630. No attero.Ft has been made to deduct any portion of t: from the land valce- OD the other si3e of the ledger, no attc has been made for i3-l =L interest whic3 nay have accrued if La { had invested thz 5:ilZing costs els-;.;here- I’m not sure thes issues would be ZZ~:::LL 59 explore. -. - .- W 8 ;r April 12, 1979 Page 3 Subj2ct: Fire Stakion - Lz Costa The staff is prepared to recomnend that the land and buildin! be purchased for $63,305.00, or to move ahead with a new stal and we would appreciate your discussing this with the appro- priate La Costa Land Company officials. If possible, I woulc like to take this matter to the City Council at their hfay 15 1979 meeting. If that is not convenient, we can aim for the first meeting in June, i-) I ‘1 ---c-- PAUL D. BUSSEY City Manager PDB : ldg - I) b ". I. July 3, 1979 LR costn Mr. Paul D. Bussey City Manager City of Carlsbad Carlsbad, Ca. 92008 Dear Pau I : We have reviewed your letter of April 12, 1979 addressed to Fred J. Morey of our company in which you indicated your willingness to recommend to City Council the purchase of the La Costa Fire Station at a price of $63,305.00. While we do not necessarily agree with the rationale involved in the prepara- tion of your offer, we have decided that it would be in the best interest of all concerned if we were to accept this offer. One significant reason for our action in this regard is to indicate our concern for the City's problems in providing capital facilities. We suggest to you that in agreeing to what we consider to be a bargain pice that our company is helping finance facilities for the La Costa project, but also for projects of other developers such as the two Rancho Ponderosa projects north and south of La Costa, the Mola Development on El Camino Real and the Seaport project directly across from the Fire Station, We apologize for the delay in answering your April 12th letter, however, we have been heavily involved in attempting to resolve the sewer situation in this area. Sin cere1 y , LA COSTA LAND COMPANY ! (--,..- -. IJL /\ ,+,/*& Irv Roston Executive Vice President COSTA DEL MAR ROAD * CARLSBAD,CALIFORNIA 92008 . AREA CODE 714 . TELEPHONE 438-9111