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Agenda Item 21.

City Council Meeting

Meeting Date:	03/07/2017
FROM:	City Manager

Subject:

Sale of Successor Agency Owned Property Located at 323 N. Brea Blvd.

RECOMMENDATION

Adopt resolution authorizing the sale of real property to the recommended buyer.

BACKGROUND/DISCUSSION

With the elimination of redevelopment in California in 2012, successor agencies to the former redevelopment agencies were directed by the State to prepare a Long Range Property Management Plan (LRPMP) to govern the disposition and use of the former Agency's non-housing properties. Brea's LRPMP, approved by the State Department of Finance (DOF) in December 2015, included selling three undeveloped lots in the Downtown Brea area. Via a Request for Proposal process brokers Lee and Associates Commercial Real Estate Services, Inc. were recommended to and approved by the Successor Agency to assist staff in selling the three properties.

Lee and Associates used comparative sales in Brea and nearby cities to establish a market value asking price. All those who had previously inquired about the availability of former redevelopment properties were notified that the properties were now available for sale. Purchase offers were received over a two month period and multiple cash offers were received for each of the three properties. The purchase offers were evaluated by staff with assistance from the brokers on criteria that included offer amount as well as the potential buyer's intended use for the property, zoning requirements, neighborhood compatibility and long term value of the property.

The Successor Agency and Oversight Board approved the Purchase and Sale agreements for 340 North Orange Avenue and 112 West Bracken Street and these properties are in escrow.

The Purchase and Sale agreement has been signed by the buyer of the Brea B property and Council is asked to adopt a resolution authorizing the execution of that agreement.

The following chart notes the recommended purchase offer and lists the other offers received.

323 N. Brea Blvd. 19,044 SF \| Mixed Use I Zone
Asking Price: $800,000 ($42.00/SF)	Recommended Offer: Better Blocks LLC (Medical Office) - $950,000 ($49.88/SF) Other Offers: Pacific National Development - $950,000 Stone Chen - $900,000 Richmore Realty - $809,370 AVA Properties - $800,000 Woo Sung Lim - $800,000

The recommended buyer's intended use of the property is to build and occupy a dental practice office on the property.

If the Successor Agency approves the purchase and sales agreement for this property, the next step will be to present the offers to the Oversight Board for their approval. Therefore, the resolution is contingent upon Oversight Board approval. Escrow will be opened upon the Board's approval.

FISCAL IMPACT/SUMMARY

The sale proceeds from this property minus the broker commission, title report and escrow expenses will be remitted to the County Auditor-Controller for distribution to the taxing entities including the City of Brea. The City's share on this property is approximately $133,000. Additionally, as the property is improved and the value increases, the annual property tax generated will increase.

The Successor Agency is asked to adopt a resolution to authorize the sale of property at 323 North Brea Boulevard. This property was acquired by the former redevelopment agency for redevelopment purposes in the Downtown Brea area. Current State legislation requires that it be sold per the terms approved in the Long Range Property Management Plan and that the sales proceeds be distributed to the various taxing entities, including the City of Brea. The sale of the property is contingent upon approval by the Oversight Board.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Kathie DeRobbio, Economic Development Manager
Concurrence: David Crabtree, Community Development Director

Attachments
Resolution SA 2017-03
Purchase and Sale Agreement