HomeMy WebLinkAboutStaff Report 4.F 6/17/2013 Itevw#4. F
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DATE: June 17,2013
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St. John, Director of Public Works&Utilities
SUBJECT: Introduction(First Reading) of an Ordinance Authorizing City Manager to
Complete All Necessary Transactions for the Purchase of the Norman Richards
and D.G. Gilson property, 1375 Industrial Avenue (AP# 007-412-031)
RECOMMENDATION
It is recommended that the City Council introduce the attached Ordinance authorizing the City
Manager to complete all necessary transactions for the purchase of the Norman Richards and
D.G. Gilson property, 1375 Industrial Avenue (AP# 007-412-031) for the amount of$670,000
for the Denman Reach Phase 3 Project.
BACKGROUND
On October 20,2008, the City Council adopted Resolution 2008-198 N.C.S. authorizing the
submittal of a grant application for the acquisition of land and implementation of the Denman
Reach Phase 3 project. Although applied for in 2008,the $850,000 grant for land acquisition
was not awarded until 2011. The grant is not adequate to entirely purchase all three parcels
desired for the project; however, purchase of the subject parcel and either acquiring portions of
or easements over portions of the two adjacent parcels,will provide the necessary length to
construct the project to fulfill the benefit of reducing flood depths in the vicinity and providing
trail access along the Denman Reach length of the River(see Attachment 2) as envisioned by the
grant. The City Council considered an Expanded Initial Study and adopted Resolution#2012-
138 on September 10,2012 adopting a Mitigated Negative Declaration and Approving the
Project.
The required appraisal for the purchase of the Richards-Gilson parcel is complete and has
received the necessary review and approval by the State granting agency. As well, a conditional
offer to purchase has been presented and was accepted by the property owners. Once Council
authorization is received, all paperwork will be submitted to the State for authorization of funds
to be deposited into escrow.
Relative to the two adjacent properties not part of the proposed action, staff has completed
revised appraisals, obtained title reports, and submitted these materials for funding agency
approval. Staff is working with the local appraisal firm and our funding agency to resolve
Agenda Review
City hAttorne Y
Finance Director City Mana
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outstanding comments and questions. Staff intends to negotiate two purchase agreements with
an option so that the minimum necessary land area for the project can be purchased immediately
with available funds. The option would allow the City to then purchase the remaining portions
of the parcels later if additional funding can be arranged.
DISCUSSION
Design of the proposed project will proceed as soon as approval of the revised appraisals is
received from the funding agency. The project design, using the acquired properties, or portions
thereof,will achieve the net reduction of the base flood elevation in the vicinity of the project.
Environmental review has been completed. Preliminary design will allow outreach to interested
community members and groups, neighboring property and business owners and regulatory
agencies to receive early input into the preliminary design. Design is expected to be underway by
fall of 2013.
Staff continues to research possible grants and funding sources for acquiring the remaining two
parcels in total.
FINANCIAL IMPACTS
The City was awarded a grant in the amount of$850,000 to purchase the properties necessary to
implement the Denman Reach Phase 3 flood reduction and riparian restoration project. All funds
associated with the acquisition and escrow expenses will be borne by the grant from The Natural
Resources Agency, California River Parkways Grant Program, funded by Proposition 84. Based
on the appraisals prepared to date,the available funding appears sufficient to purchase the
subject parcel in total, and the portions of the adjacent two parcels needed to do the project.
Existing funding does not cover the appraised value of all three parcels in total.
Zone 2 A and in-kind services will be used as the City's share of the implementation grant
funded by the State Department of Water Resources, Urban Streams Restoration Program, also
funded by Proposition 84.
ATTACHMENTS
1. Ordinance authorizing City Manager to complete all necessary transactions for the
purchase of the Norman Richards and D.G. Gilson property, 1375 Industrial Avenue
(AP# 007-412-031), pursuant to direction from City Council regarding the pursuit of
grant funds as set forth in Resolution 2008-198 N.C.S. adopted October 20, 2008.
2. Exhibit A to Resolution
3. Location Exhibit
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Attachment 1
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA
APPROVING PURCHASE AND SALE AGREEMENT,BETWEEN NORMAN
RICHARDS AND D.G. GILSON,
AND THE CITY OF PETALUMA
REGARDING REAL PROPERTY COMMONLY KNOWN AS
1375 INDUSTRIAL AVENUE, (APN 007-412-031)
WHEREAS, Section 46 of the Charter of the City of Petaluma requires that actions for
the acquisition, sale, or lease of real property be taken by Ordinance except for such actions
involving sums less than $3,000 or actions pursuant to general state law; and,
WHEREAS,PURSUANT TO Resolution 2008-198 N.C.S.,the City of Petaluma(City),
pursuant to direction from City Council regarding the pursuit of grant funds, submitted
applications to the California River Parkways Grant Program (Program) of the California Natural
Resources Agency, funded by Proposition 84, for grant funds to be used for the acquisition of
certain property commonly known as 1375 Industrial Avenue, County of Sonoma Assessor's
Parcel No. 007-412-031 (the Property); and,
WHEREAS, the City was notified by the State Natural Resources Agency that funding
in the amount of$850,000 has been approved and awarded to the City; and,
WHEREAS,the City has negotiated a purchase and sale agreement between the City and
Norman Richards and D.G. Gilson, owners of the property, in the amount of$670,000, a copy of
which is attached as Exhibit A and incorporated herein by reference; and,
WHEREAS,this action was found in compliance with the California Environmental
Quality Act(CEQA)pursuant to Title 14, Chapter 3 of the California Code of Regulations
(CEQA Guidelines),through the completion and filing of a Notice of Determination on
September 11, 2012, for the acquisition portion of this project following the City Council
consideration of an Expanded Initial Study and adopted Resolution#2012-138 on September 10,
2012 adopting a Mitigated Negative Declaration and Approving the Project.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF PETALUMA AS
FOLLOWS:
Section 1: The City Council approves the purchase and sale agreement between the
City of Petaluma and Normal Richards and the D.G. Gilson, in the amount of$670,000
(Agreements), copies of which are attached as Exhibit A and incorporated herein as reference.
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Section 2: The City Manager is authorized and directed to execute the Agreements
and all other documents reasonably necessary to complete the purchase and sale,according to the
terms of the Agreements.
Section 3: If any section, subsection, sentence, clause,phrase or work of this
Ordinance is for any reason held to be unconstitutional,unlawful or otherwise invalid by a court
of competent jurisdiction or preempted by State legislation, such decision or legislation shall not
affect the validity of the remaining portions of this Ordinance. The City Council of the City of
Petaluma hereby declares that it would have passed and adopted this Ordinance and each and all
provisions thereof irrespective of the fact that any one or more of said provisions be declared
unconstitutional, unlawful other otherwise invalid.
Section 4: This Ordinance shall become effective thirty(30) days after the date of its
adoption by the Petaluma City Council.
Section 5: The City Clerk is hereby directed to publish or post this Ordinance or a
synopsis for the period and in the manner provided by the City Charter and any other applicable
law.
INTRODUCED and ORDERED posted/published this _day of 2013.
ADOPTED this day of 2013 by the following vote:
Ayes:
Noes:
Abstain
Absent
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Exhibit A to Resolution
AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
Mo This Agreement dated S , 20 .3 is between the City of Petaluma, a municipal corporation and
California charter city("CITY' and Norman B. Richards, a married man as to an undivided 50% interest and
D. G. Gilson, Trustee of the Survivor's Trust created under the Gilson Family Revocable Trust, dated March 3,
1993, as amended by the Second Amendment to the Declaration of the Gilson Family Revocable Trust,dated April
25, 2008., ("GRANTOR"). CITY and GRANTOR are sometimes referred to hereafter as the"parties" or individually
as a"party".
It is agreed between the parties as follows:
1. PROPERTY TO BE CONVEYED: GRANTOR agrees to sell and CITY agrees to purchase from GRANTOR
on the terms set forth in this Agreement the following described real estate in the County of Sonoma,
comprised of an unimproved parcel commonly known as 1375 Industrial Avenue Petaluma, CA and
identified as Assessor's Parcel Number 007-412-031, more particularly described and depicted in Exhibit A
attached hereto and incorporated herein by reference (the"Subject Property").
2. ACCEPTANCE OF GRANT DEED: Upon receipt of a Grant Deed for the Subject Property, duly executed
and acknowledged, CITY shall execute an acceptance of said Grant Deed in accordance with and subject
to the terms and conditions of this Agreement.
3. COMPENSATION: CITY shall:
A. Pay the sum of$670,000 for the Subject Property("Purchase Price")conditioned upon fee title to the
Subject Property vesting in the CITY free and clear of all liens, leases, encumbrances, Easements
(recorded and/or unrecorded), assessments and taxes, except any title exceptions acceptable to
CITY as so indicated by CITY in writing ("Permitted Exceptions"). The purchase price for the Subject
Property includes payment for any and all improvements located on the Subject Property.
B. Pay all escrow, recording and title insurance charges, if any, incurred in this transaction.
C. Close of this transaction and payment of Purchase Price may, at the sole discretion of CITY, be
contingent issuance of an CLTA or ALTA title insurance(subject only to Permitted Exceptions)from a
title insurance company acceptable to CITY, and in a form, acceptable to CITY.
4. REPRESENTATIONS AND WARRANTIES:
A. GRANTOR represents and warrants that during the period of Grantor's ownership of the property,
there have been no disposals, releases or threatened releases of hazardous substances or
hazardous waste on, from, or under the property. Grantor further represents and warrants that the
Grantor has no knowledge of any disposal, release, or threatened release of hazardous substances
or hazardous waste on, from, or under the property which may have occurred prior to Grantor taking
title to the property. If the property being acquired is found to be contaminated by the presence of
hazardous waste which requires mitigation under Federal or State law, the Grantee may elect to seek
recovery of its clean-up costs from those who caused or contributed to the contamination.
B. GRANTOR represents and warrants that GRANTOR is the sole fee owner of the Subject Property
and GRANTOR warrants that GRANTOR has the right and power to enter into this Agreement and to
convey fee title and, by said Grant Deed, does convey the Subject Property free and clear of all
taxes, assessments, encumbrances, easements, liens, leases, deeds of trust, and claims of any kind
whatever, except Permitted Exceptions. GRANTOR further represents and warrants that it is not
under contract with any other party for the purchase and sale of the Subject Property, and that there
are no oral or written leases in effect with respect to any portion of the Subject Property.
C. GRANTOR shall be responsible for paying any commission incurred by it in connection with this
Agreement and the sale and purchase of the Subject Property, if any.
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
D. GRANTOR agrees to indemnify, defend, hold harmless and reimburse CITY and CITY officers,
representatives, agents and employees from and against any and all suits, damages, costs, fees,
claims, demands, causes of action, losses, liabilities and expenses, including without limitation
attorneys'fees, in the event that any of GRANTOR's representations or warranties contained in this
paragraph 5 are not correct at the time made or at the close of escrow, which obligations shall survive
close of escrow and recordation of the Grant Deed. The representations and warranties set forth
above shall survive close of escrow and recordation of the Grant Deed.
5. RIGHT OF POSSESSION AND USE:
It is agreed and confirmed by the parties hereto that, notwithstanding the other provisions in this
Agreement, the right of possession and use of the Subject Property by CITY, shall commence on
recordation of the Grant Deed and that the consideration amount shown above includes, but is not
limited to full payment for such possession and use, from said date.
6. ESCROW; CLOSING:
A. This transaction shall be handled through an escrow with Chicago Title Company under escrow
number 13-35026244-KB(hereinafter referred to as the"Title Company"). Within five(5) days
after this Agreement is executed by CITY and GRANTOR, GRANTOR shall complete execute and
deliver to escrow holder(i) an affidavit executed by GRANTOR certifying that GRANTOR is not a
"foreign person"within the meaning of Internal Revenue Code Section 1445(f)(3), and meeting the
requirements of Internal Revenue Code Section 1445(b)(2), and (ii) an original Withholding
Exemption Certificate(California Form 590 or 590-RE, as applicable), fully executed by GRANTOR
as required by the California Taxation and Revenue Code, certifying that the GRANTOR is not
subject to tax withholding under applicable California law. GRANTOR shall also deliver the fully
executed Grant Deed to the Title Company. GRANTOR shall not be deemed to have delivered the
Grant Deed to CITY and CITY shall not be deemed to have accepted delivery of the Grant Deed until
such time as the Grant Deed is recorded in the Official Records of Sonoma County, California in
accordance with written the terms and conditions of this Agreement.
B. Upon receipt of the above documents, approval of the Permitted Exceptions by the CITY and receipt
of the necessary funds from the CITY. the Title Company shall record the Grant Deed in the Official
Records of Sonoma County, California and deliver the purchase price to GRANTOR, less amounts
necessary to place title in the condition required by this Agreement and any other amounts identified
by CITY in accordance with Section 3 above. When title to the Subject Property vests in CITY,
subject only to the Permitted Exceptions. title shall be evidenced by a CLTA owner's policy of title
insurance ("Title Policy"). The Title Policy shall be in the amount of the purchase price, showing title
to the Subject Property vested in CITY, subject only to the Permitted Exceptions. The ability of the
Title Company to issue the Title Policy shall be a condition precedent to CITY's obligations under this
Agreement and the close of escrow
C. Notwithstanding the foregoing, CITY shall have the sole right to elect to close this transaction without
the use of escrow services. If CITY elects to close without the use of escrow services, CITY shall
upon acceptance of the Grant Deed, pay the purchase price amount directly to GRANTOR, and
record the Grant Deed. If CITY elects to close this transaction with the use of escrow services, CITY
and GRANTOR shall sign escrow instructions, if necessary, to effect this Agreement and close
escrow.
D. The escrow for this transaction shall close within thirty (30) days from the execution of this Agreement
by all parties, subject to the above requirements and conditions to closing.
E. Current year property taxes and special assessment bond payments, if any, shall be prorated as of
the escrow closing date. Prior year unpaid taxes and assessment bond payments, if any, shall be
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
deducted from the Purchase Price and paid through escrow.
7. SUCCESSORS: This Agreement shall be binding on and shall inure to the benefit of the parties hereto and
their respective successors, heirs, assigns and transferees.
8. NOTIFICATION: In the event GRANTOR sells, conveys, or assigns any property interests encumbered by
this Agreement on or after the date of this Agreement, GRANTOR shall provide that any such sale,
assignment or conveyance is subject to rights and obligations of both parties as included herein and shall
notify the successor or assignee of the rights and obligations of both parties as included herein.
9. SURVIVAL OF AGREEMENT: This Agreement, including all representations, warranties, covenants,
agreements, releases and other obligations contained herein shall survive the closing of this transaction
and the recordation of the Grant Deed.
10. ENTIRE AGREEMENT: The parties have herein set forth the whole of their agreement. The performance of
this Agreement constitutes the entire consideration for the Easement and shall relieve CITY of any further
obligation to GRANTOR. GRANTOR shall make no claim for further compensation for the acquisition or on
account of the construction of the proposed public improvements in the manner proposed, including, but not
limited to, claims arising out of the location of the improvements or changes in grade, and waives all any
and all rights and benefits in connection therewith which GRANTOR now has or in the future may have per
Section 1542 of the Civil Code of the State of California (or similar statute or common law principles) which
states:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.
11. SEVERABILITY: If any provision of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions shall continue in full force and effect so as to carry out the
original intent of the parties under this Agreement to the fullest extent possible.
12. GOVERNING LAW: This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
13. AUTHORITY AND EXECUTION: Each person executing this Agreement on behalf of a party represents and
warrants that such person is duly and validly authorized to do so on behalf of the entity it purports to bind
and if such party is a partnership, corporation or trustee that such partnership, corporation or trustee has
the full right and authority to enter into this Agreement and perform all of its' obligation hereunder.
14. CAPTIONS: The captions of the various sections, paragraphs and subparagraphs of this Agreement are for
convenience only and shall not be considered nor referred to in resolving questions of interpretation.
15. REQUIRED ACTIONS: Each party agrees to execute such instruments and documents and to undertake
such actions as may be reasonably required in order to consummate the purchase and sale contemplated
by this Agreement.
16. COUNTERPARTS: This Agreement may be executed in multiple counterparts each of which shall be deemed
an original but all of which, together shall constitute one and same document.
17. AMENDMENT: This Agreement shall not be modified or amended except by an instrument in writing
executed by each of the parties hereto.
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
GRANTOR:
C
Dated:
Norman B. Richards
Dated: 7 `3 ! (Vigt
D. G. Gilson, Trustee of the Survivor's Trust created under the
Gilson Family Revocable Trust,dated March 3, 1993,
as amended by the Second Amendment to the Declaration of the
Gilson Family Revocable Trust, dated April 25, 2008.
CITY OF PETALUMA:
•
Dated:
John Brown
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
Eric W. Danly
City Attorney
APPROVED:
Department Director
APPROVED:
Risk Manager
APPROVED:
Administrative Services Director
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
EXHIBIT A-LEGAL DESCRIPTION
Parcel One:
A portion of Lot 311 of Petaluma Rancho and adjoining property, and more particularly described as follows:
Commencing at a concrete monument at the intersection of the Southerly line of the Petaluma and Santa Rosa
Railroad right of way with the Easterly line of the former State Highway leading from Petaluma to Santa Rosa,
as established by the Deed to the State of California dated April 23, 1940 and recorded January 21, 1941 in
Book 490 Official Records, Page 477, Sonoma County Records; thence along the Southerly line of said
Petaluma and Santa Rosa Railroad, South 54 degrees 59' East 1442.80 feet to an iron pipe; thence leaving
said Southerly line South 37 degrees 12'West 255.02 feet to the true point of beginning; thence South 37
degrees 12'West 534.08 feet; thence North 66 degrees 32'West 316.80 feet; thence North 55 degrees 32'
West 150.18 feet; thence North 35 degrees 01' East 598.57 feet; thence South 54 degrees 59' East 480 90
feet to the point of beginning.
EXCEPTING THEREFROM that portion conveyed to the City of Petaluma in that certain Deed executed by
Norman G. Richards, et al, recorded January 16, 1984 as Document No. 84002712, Sonoma County Records.
Parcel Two:
An easement 60 feet in width the center line of which is described as follows:
Commencing at a concrete monument at the intersection of the Southerly line of the Petaluma and Santa Rosa
Railroad right of way with the Easterly line of the former State Highway leading from Petaluma to Santa Rosa,
as established by the Deed to the State of California dated April 23, 1940 and recorded January 21, 1941 in
Book 490 of Official Records, Page 477, Sonoma County Records; thence along the Easterly line of said
highway South 8 degrees 26' 30"West 284.95 feet to the true point of beginning; thence South 54 degrees
59' East 1305.60 feet, said easement to extend for its full width from a line drawn North 8 degrees 26' 30"
East and South 8 degrees 26' 30"West on its Westerly side to a line drawn North 37 degrees 12' East and
South 37 degrees 12'West from its Easterly termination.
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