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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 .. Uvwt~/ c,f\. 1Y/c rd(,1~~ 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