HomeMy WebLinkAbout2019-05-14; City Council; ; Notice of Intention to sell city property located at 3701 Catalina Drive (APN 167-154-20) and to set the date for a public hearing for Final Action.CITY COUNC I L
. Staff Report
Meeting Date:
To:
From:
Staff Contact:
May 14, 2019
Mayor and City Council
Scott Chadwick, City Manager
Curtis M. Jackson, Real Estate Manager
Curtis.jackson@carlsbadca.gov or 760-434-2836
CA Review ~
Subject: Notice of Intention to sell city property located at 3701 Catalina Drive (APN
167-154-20) and to set the date for a public hearing for Final Action.
Recommended Action
Adopt a Resolution approving a Notice of Intention to Sell City Property located at 3701
Catalina Drive, APN 167-154-20 to Charles Colletti, and setting the date for a public hearing for
Final Action on June 11, 2019.
Executive Summary
In October 2017, the City Council approved the Real Estate Strategic Plan, which included a
recommendation that the city issue a competitive RFP for the sale of the property located at
3701 Catalina Drive (Old Fire Station No. 3). Consistent with the Real Estate Strategic Plan
(Strategic Plan), in February 2018, the City Council authorized the release of a Request for
Proposals (RFP) for the sale of Old Fire Station No. 3. In response to the RFP the city received 28
proposals. A city staff team has evaluated all 28 proposals and is recommending that City
Council sell the property to Charles Colletti. As such, city staff is requesting City Council
approve a Notice of Intention to Sell City Property located at 3701 Catalina to Charles Colletti
for $803,333, and set the date for a public hearing for Final Action on June 11, 2019.
Discussion
Old Fire Station No. 3 is located on the southeast corner of El Camino Real and Chestnut Avenue,
at 3701 Catalina Drive (APN 167-154-20), and was built in 1976 where it operated uninterrupted
until 2016. The property's lot size is 12,092 square-feet (.21 acres), and is developed with a 2,127
square-foot building. The building is a two-story structure located in a residential neighborhood
and has five (5) bedrooms and three (3) bathrooms, and has an oversized garage with two large
roll-up garage doors in the front and rear that allow vehicular access to and though the garage.
The property has a General Plan Land Use designation of Residential 0-4 du/ac (R-4) and a Zoning
designation of One Family Residential (R-1-8000). Based on the Strategic Plan and an August 2018
appraisal of the property, the estimated revenue from the sale of the property was between
$640,000 to $690,000.
On October 17, 2017, City Council approved the Strategic Plan which was intended to provide a
more strategic approach to how the city's major real estate assets were managed, both to
maximize the return on the investment of public dollars and to leverage properties for the
May 14, 2019 Item #1 Page 1 of 8
greatest public benefit, including addressing future city facility needs (Resolution No. 2017-200).
The Strategic Plan included a recommendation that the city list Old Fire Station No. 3 for sale
through an open market competitive process. Consistent with the Strategic Plan, on February 12,
2019, City Council authorized the release of an RFP for the sale of the property (Resolution No.
2019-017). The city received 28 proposals.
Notice of Intent to Sell City Property
Staff is recommending that City Council make a finding that the public interest and convenience
require the sale of this property pursuant to California Government Code Section 37420. This
finding is supported by the financial benefit the city would receive from revenue generated by
the sale of the vacant city-owned property, as well as ongoing revenue generated from placing
the property onto the real property tax roll. Additionally, the city would no longer have the
obligation of maintaining the property at a cost of approximately $6,000 per year.
The process for the sale of city property is identified in code section 37420 Et seq. Per Section
37422, the City Council must adopt a Resolution of Intention to Sell City Property. The Resolution
of Intention to Sell City Property must:
a) Fix a time for hearing protests to the sale;
b) Provide for publication of the notice of hearing in newspaper and post notice of the public
hearing on the property for not less than 10-days;
c) Fix the time Final Action will be taken;
d) Contain an accurate description of the property to be sold.
Staff recommends that City Council approve the Notice of Intention to Sell City Property and that
the public hearing for Final Action be scheduled for the June 11, 2019 City Council meeting. In
this context, Final Action will be the City Council authorization to execute a purchase and sale
agreement for Old F_ire Station No. 3. At any time prior to Final Action, any person may protest
the proposed sale. The protest must be written and delivered to the City of Carlsbad City Clerk or
an oral protest at the public hearing considering the Final Action. If no protests are received the
City Council may proceed with the sale; however, if a protest is received, City Council may either
decline to move forward with the proposed sale of the property or overrule the protest by a four-
fifths vote of its members and proceed with the sale of the property.
Recommended Respondent
On February 12, 2019, City Council approved the release of a competitive RFP for the sale of Old
Fire Station No. 3, for a 45-day period. The RFP identified four selection criteria for respondents
to address: financial benefit to the city; financial ability of respondents to purchase the property,
purchase price & applicable terms and conditions; and highest and best use of the property, as
determined by City Council. At the close of the 45-day RFP period, 28 proposals were submitted.
Consistent with the provisions of the RFP, staff subsequently requested all 28 respondents to
submit their "last best and final" offer. The "last best and final" purchase price offers ranged
May 14, 2019 Item #1 Page 2 of 8
from a lbw of $530,000 to a high of $803,333, with 15 "last best and final" offers above the
appraised value of $690,000. City staff reviewed all 28 proposals, and ranked each proposal in
accordance with the selection criteria detailed in the RFP. The top five ranked proposals were:
1) Charles Colletti
2) Stephanie Foneming Cheng and Wei Hong Tam
3) Robert and Daryl James
4) Jay Dodge
5) Patricia Brady and Dillon Ayers
City staff is recommending Charles Colletti as the prospective purchaser (Buyer). Buyer is
currently a resident of La Jolla and would be moving to Carlsbad to live in Old Fire Station No. 3.
Buyer intends to make minor renovations to the property, with a desire to occupy the property
consistent with the General Plan & Zoning. The essential terms of the proposed purchase and
sale agreement between the city and Buyer are generally described as follows:
1) The purchase price for Old Fire Station No. 3 is $803,333;
2) Buyer is taking the property in an "As-is" condition;
· 3) Escrow will open within seven (7) calendar days after the Final Action is approved by
the City Council;
4) Buyer will be required to place a $10,000 deposit into escrow; which shall be applied
towards the purchase price;
5) Escrow shall close no l_ater than thirty {30) days from the date the City Council
approves the Final Action;
6) Closing Costs are to be split evenly between the city and Buyer;
7) City shall pay for Buyer's title insurance policy.
Fiscal Analysis
The revenue from the sale of Old Fire Station No. 3 will be 803,333 less closing costs, estimated
to be approximately $8,000, which is half of the estimated $16,000 in total closing costs to be
split equally between the city and Buyer. Additionally, the city will pay the listing Agent, Mr.
Reid Chambers, $36,150, which is 4.5 percent of the purchase price. As such, total revenue to
the city is anticipated to be $759,183 which is $69,183 above the appraised value of the
property. Revenue generated from the sale of the property will be deposited into the City of
Carlsbad General Fund.
In addition to sale revenue, the city will be relieved of the responsibility to maintain insurance,
landscaping and security on the property; thus, the sale of the property will provide a slight
expense savings to the city, estimated at $6,000 per year. Finally, the city will receive revenue
from real property taxes once the property is again assessed through the San Diego County tax
rolls.
May 14, 2019 Item #1 Page 3 of 8
Next Steps
Consistent with California Government Code Section 37420 et seq., city staff shall provide for a
minimum 10-day publication of the notice of the public hearing on June 11, 2019, which shall
be published at least once in a daily newspaper published and circulated in the city. Further,
city staff shall post notice of the public hearing on the property for not less than 10-days in at
least three conspicuous places on the property. On June 11, 2019, the City Council must hold a
public hearing for consideration of the Final Action. At any time prior to Final Action, any
person may protest the proposed sale. The protest must be written and delivered to the City of
Carlsbad City Clerk or an oral protest at the public hearing considering the Final Action. If no
protests are received the City Council may proceed with the sale; however, if a protest is
received, City Council may either decline to move forward with the proposed sale of the
property or overrule the protest by a four-fifths vote of its members and proceed with the sale
of the property. Upon approval of the Final Action by City Council, the purchase and sale
agreement for Old Fire Station No. 3 with Buyer for $803,333 will be executed. Within seven
(7) days of approval of the Final Action, the city and Buyer shall open escrow, which shall close
no later than thirty (30) days after approval of the Final Action.
Environmental Evaluation {CEQA}
This action is categorically exempt from the California Environmental Quality Act pursuant to
CEQA Guidelines section 15312 (Surplus Government Property Sales).
Exhibits
1. City Council Resolution.
May 14, 2019 Item #1 Page 4 of 8
RESOLUTION NO. 2019-063
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA APPROVING A NOTICE OF INTENTION TO SELL THE
PROPERTY LOCATED AT 3701 CATALINA DRIVE, APN 167-154-20,
COMMONLY KNOWN AS OLD FIRE STATION NO. 3, AND SETTING THE
DATE FOR A PUBLIC HEARING FOR FINAL ACTION ON JUNE 11, 2019.
Exhibit 1
WHEREAS, On October 17, 2017, the City Council approved the Real Estate Strategic Plan
by Resolution No. 2017-200; and
WHEREAS, the Real Estate Strategic Plan recommended that the city list the property
located at 3701 Catalina Drive (Old Fire Station No. 3) for sale through an open market
competitive process; and
WHEREAS, Old Fire Station No. 3 operated uninterrupted between 1976 until the
opening of new Fire Station no. 3 located in the Robertson Ranch East neighborhood; and
WHEREAS, the City Council has determined that Old Fire Station No. 3 is no longer
necessary for city operations; and
WHEREAS, on February 12, 2019, the City Council authorized the release of a request for
Proposals (RFP) for the sale of Old Fire Station No. 3 by Resolution No. 2019-017; and
WHEREAS, on April 1, 2019, the city received 28 proposals which were evaluated and
scored by an internal selection committee; and
WHEREAS, the selection committee scored each proposal using criteria including:
financial benefit to the city; financial ability of respondents to purchase the property, purchase
price & applicable terms and conditions; and highest and best use of the property, as determined
by City Council; and
WHEREAS, Charles Colletti, Stephanie Foneming Cheng and Wei Hong Tam, Robert and
Daryl James, Jay Dodge, and Patricia Brady and Dillon Ayers ranked as the top five proposals; and
May 14, 2019 Item #1 Page 5 of 8
WHEREAS, based on the final cumulative scores, the selection committee recommended
Charles Colletti as the prospective buyer with a purchase price of $803,333; and
WHEREAS, the revenue generated from the sale of the property will be directed to the
City of Carlsbad General Fund; and
WHEREAS, pursuant to California Government Code Section 37420 et seq, the City Council
finds that public convenience and interest is best served through the sale of the property; and
WHEREAS, these findings are supported by the financial benefit the city would receive
from the revenue from the initial sale of the property, the savings in ongoing maintenance
expenses borne by the city, and the revenue generated from real property taxes once the
property is again assessed through the San Diego County tax rolls; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California,
as follows:
1. That the above recitations are true and correct.
2. The city Council hereby approves a Notice of Intent to Sell City Property (Attachment A)
located at 3701 Catalina Drive, APN 167-154-20 to Charles Colletti, and sets a date for a public
hearing for Final Action on June 11, 2019.
3. That the public interest and convenience require the sale of this property pursuant to
California Government Code Section 37420. This finding is supported by the financial benefit the
city would receive from revenue generated by the sale of the vacant city-owned property, as
well as ongoing revenue generated from placing the property onto the real property tax roll.
Additionally, the city would no longer have the obligation of maintaining the property at a cost
of approximately $6,000 per year.
May 14, 2019 Item #1 Page 6 of 8
4. That at any time prior to Final Action, any person may protest the proposed sale. The
protest must be written and delivered to the City of Carlsbad City Clerk or an oral protest at the
public hearing considering the Final Action. If no protests are received the City Council may
proceed with the sale; however, if a protest is received, City Council may either decline to move
forward with the proposed sale of the property or overrule the protest by a four-fifths vote of its
members and proceed with the sale of the property.
5. That any Protests to the sale will be heard at a public hearing on the matter set for the
City Council meeting June 11, 2019 to be held in the City of Carlsbad Council Chambers located
at 1200 Carlsbad Village Drive, Carlsbad, California at 6:00 p.m.
6. That the Notice of Public Hearing for that date and time shall be published at least once
in a daily newspaper published and circulated in the city, and shall be posted for not less than 10
days in at least three conspicuous places upon the parcel to be sold.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council ofthe City of
Carlsbad on the 14th day of May 2019, by the following vote to wit:
AYES: Hall, Blackburn, Bhat-Patel, Schumacher, Hamilton.
NAYS: None.
ABSENT: None
/i /1 /1 ..
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6~ARBARA ENGLESON, City Clerk
May 14, 2019 Item #1 Page 7 of 8
NOTICE OF INTENTION TO SELL CITY PROPERTY
&
PUBLIC HEARING
Attachment A
NOTICE IS HEREBY GIVEN that the City Council of the City of Carlsbad will hold a public hearing at the
Council Chamber, 1200 Carlsbad Village Drive, Carlsbad, California, at 6:00 p.m. on Tuesday, June 11,
2019 to consider selling city property located at 3701 Catalina Drive, APN 167-154-20 to Charles Colletti.
Whereas, on February 12, 2019, City Council approved the release of a competitive Request for Proposals
(RFP) for the sale of Old Fire Station No . 3 located at 3701 Catalina Drive, for a 45-day period. The RFP
identified four selection criteria for respondents to address: financial benefit to the city; financial ability
of respondents to purchase the property, purchase price & applicable terms and conditions; and highest
and best use of the property, as determined by City Council. At the close of the 45-day RFP period, 28
proposals were submitted. Consistent with the provisions of the RFP, staff subsequently requested all 28
respondents to submit their "last best and final" offer. The "last best and final" purchase price offers
ranged from a low of $530,000 to a high of $803,333, with 15 "last best and final" offers above the
appraised value of $690,000. C:ity staff reviewed all 28 proposals, and ranked each proposal in accordance
with the selection criteria detailed in the RFP. The top five ranked proposals were:
1) Charles Colletti
2) Stephanie Foneming Cheng and Wei Hong Tam
3) Robert and Daryl James
4) Jay Dodge
5) Patricia Brady and Dillon Ayers
City staff is recommending Charles Colletti as the prospective purchaser (Buyer). Buyer is currently a
resident of La Jolla and would be moving to Carlsbad to live in Old Fire Station No. 3. Buyer intends to
make minor renovations to the property, with a desire to occupy the property consistent with the General
Plan & Zoning.
The City Planner has determined that this action is categorically exempt from the California Environmental
Quality Act pursuant to CEQA Guidelines section 15312 {Surplus Government Property Sales).
At any time prior to Final Action on June 11, 2019 at 6:00 p.m., any person may protest the proposed sale.
The protest must be written and delivered to the City of Carlsbad City Clerk or an oral protest at the public
hearing considering the Final Action. If no protests are received the City Council may proceed with the
sale; however, if a protest is received, City Council may either decline to move forward with the proposed
sale of the property or overrule the protest by a four-fifths vote of its members and proceed with the sale
of the property. Copies of the staff report will be available on and after Thursday, June 6, 2019. If you
have any questions, please contact the Office of the City Clerk at (760) 434-2808 or clerk@carlsbadca.gov
If you protest the Notice of Intention to Sell City Property in court, you may be limited to raising only those
issues you or someone else raised at the public hearing described in this notice or in written
correspondence delivered to the City of Carlsbad, Attn: City Clerk's Office, 1200 Carlsbad Village Drive,
Carlsbad, CA 92008, at or prior to the public hearing.
PUBLISH: FRIDAY, MAY 31, 2019
CITY OF CARLSBAD
CITY COUNCIL
May 14, 2019 Item #1 Page 8 of 8