HomeMy WebLinkAboutStaff Report 5.D 7/7/201401
DATE: July 7, 2014
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dant. Jd6�lrector of Public Works & Utilities
SUBJECT: Introduce Ordinance Authorizing City Manager to Complete All Necessary
Transactions for the Purchase of 1335 Industrial Avenue (AP# 007-412-036)
Owned by the Gateway Financial, Inc., 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.
RECOMMENDATION
It is recommended that the City Council introduce the attached Ordinance Approving a Purchase
and Sale Agreement Between Gateway Financial Incorporated and the City of Petaluma for
Acquisition of Real Property Commonly Known as 1335 Industrial Avenue in the amount of
$370,000 and authorizing the City Manager to complete all necessary transactions for the
purchase of the property
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. Staff applied for an $850,000 grant for land acquisition in 2008 that was
awarded by the Department of Natural Resources (DNR) in 2011. The grant was not enough to
purchase all three parcels identified for the project. The City purchased on the first of the three
parcels, the Richards/Gilson 5 -acre parcel in 2013. The Council, at the time, directed staff to
pursue additional funds to purchase the subject property. Owners of the third property, the
Nelsons, have agreed to execute a temporary construction easement and a permanent trail
easement. This acquisition and the easements will provide the necessary land area along the
river to construct the project and to accomplish the goal of reducing flood depths in the vicinity
and providing trail access along the Denman Reach length of the River (see Attachment 2).
The property appraisal was completed on July 8, 2013 for the subject parcel, but only received
State approval on June 13, 2014. A conditional offer has been made and accepted by the owners
for the acquisition. Once Council authorization is received, all paperwork will be submitted to
the State for authorization of funds to be deposited into escrow. The urgency of the matter is to
open escrow on or before July 8, 2014 to avoid having to prepare an update to the appraisal to
meet grant requirements. The Sonoma County Agricultural Preservation and Open Space
Agenda Review:
City Attorney Finance Director City Manager��
District (SCAPOSD) is providing up to $50,000 to augment the DNR grant to provide sufficient
funding to cover the existing appraised value of $370,000.
Design of the proposed project is underway and utilizes the three properties, including the
subject properties and easements, to meet the project goals. Environmental review has been
completed. An interagency meeting was conducted last month to solicit early input from the
permitting agencies. In the next step, staff will conduct outreach to interested community
members and groups, neighboring property and business owners, and regulatory agencies to
receive input. Design is expected to be completed this summer.
FINANCIAL IMPACTS
The City was awarded a grant in the amount of $850,000, augmented by supplemental funds of
$165,262 to purchase the properties necessary to implement the Denman Reach Phase 3 flood
reduction and riparian restoration project. The City also has been approved for a grant from the
SCAPOSD in the amount of $50,000. 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 and the SCAPOSD grant. Based on the current appraisal, available
funding is sufficient to purchase the subject parcel.
ATTACHMENTS
1. Ordinance authorizing City Manager to complete all necessary transactions for the
purchase of the Gateway Financial Inc. property, 1335 Industrial Avenue (AP# 007-412-
036), 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. Location Exhibit
Attachment 1
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA
APPROVING PURCHASE AND SALE AGREEMENT, BETWEEN GATEWAY
FINANCIAL, INCORPORATED, FOR ACQUISITION OF
REAL PROPERTY COMMONLY KNOWN AS
1335 INDUSTRIAL AVENUE, (APN 007-412-036) IN THE AMOUNT OF $370,000 AND
AUTHORIZING THE CITY MANAGER TO COMPLETE ALL NECESSARY
TRANSACTION FOR PURCHAE OF THE PROPERTY
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; and,
WHEREAS, PURSUANT TO Resolution 2008-198 N.C.S., the City of Petaluma (City)
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 1335 Industrial Avenue, County of
Sonoma Assessor's Parcel No. 007-412-036 (the Property); and,
WHEREAS, the State Natural Resources Agency approved funding in the amount of
$850,000 for land acquisition and awarded the City a subsequent grant of an additional
$165,262; and,
WHEREAS, the Sonoma County Agricultural Preservation and Open Space District has
a pending application in the amount of $50,000 for land acquisition and will, when approved,
reimburse the City; and,
WHEREAS, the City has negotiated a purchase and sale agreement between the City and
Gateway Financial Inc., 1335 Industrial Avenue (AP# 007-412-036), owners of the property, in
the amount of $370,000, 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 March 1,
2012, for the acquisition portion of this 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 Gateway Financial Inc., 1335 Industrial Avenue (AP# 007-413-036), in the
amount of $370,000, a copy of which is attached as Exhibit A and incorporated herein as
reference.
Section 2: The City Manager is authorized and directed to execute the Agreement
and all other documents reasonably necessary to complete the purchase and sale, according to the
terms of the Agreement.
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 2014.
ADOPTED this day of 2014 by the following vote:
Ayes:
Noes:
Abstain
Absent
4
Exhibit A
AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
This Agreement dated 20_ is between the City of Petaluma, a municipal corporation and
California charter city ("CITY") and Gateway Financial Inc., ("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 located on Industrial Avenue in the City of Petaluma,
Sonoma County, CA and identified as Assessor's Parcel Number 007412-036, 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. CONSIDERATION: CITY shall:
A. Pay the sum of THREE HUNDRED SEVENTY THOUSAND DOLLARS ($370,000) 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, which may include an easement to Sonoma County Water
Agency for channel clearance ("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. REPRE SENTATIONS AND WARRANTIES.-
A.
ARRANTIES:
A. Based on GRANTOR's actual and constructive knowledge, 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 tee owner of record 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
VC
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AGREEMENT FOR TIME PURCHASE AND SALE OF REAL PROPERTY
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.
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 4 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 ahove 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 Old Republic Title Company under
escrow number 0812010680 (hereinafter referred to as the "Title Company"). Within five (5)
days atter this Agreement N 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(6)(2), and
(i) 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.
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
C. Notwithstanding the foregoing, CITY shall have the sole tight 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 sixty (60) 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 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 ']'HE TIME OF
EXECUTING 71IC RELEASE, WHICH IF KNOWN BY HIM OR IIER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
I1. 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 Ag'ruement 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 behall' of a party
represents and warrants that such person is duly and validly authorbEd 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,
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
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 shalt 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.
GRANTOR:
GATEWAY FINANCIAL INC.
Dated: Jz'. e 2,3 2,0) t f
/Itcv,ch�
Print Name and Title
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
CITY OF PETALUMA:
Dated:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Eric W. Danly
City Attorney
APPROVED:
Department Director
APPROVED:
Risk Manager
APPROVED:
Finance Director
John Brown
City Manager
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
The land referred to in this Agreement is situated in the County of Sonoma, City of
Petaluma, State of California, and is described as follows:
Beginning at the most Easterly corner of the tract of land conveyed to Bruce
Morehead by Deeds recorded November 29, 1963 in Book 2005 of Official
Records, at Pages 271, 273 and 275 respectively, Sonoma County Records;
thence South 35° 01' West 598.57 feet; thence North 55° 32' West 100.62 feet;
thence North 300 32' West 82.57 feet to the most Southerly corner of the tract of
land conveyed to Pacific Coast Title Company of Marin, a corporation, by Deed
dated November 28, 1966, recorded December 2, 1966 in Book 2243 of Official
Records, Page 618, Sonoma County Records; thence North 350 01' East, along
the Southeasterly line of said tract, a distance of 565.31 feet to the most Easterly
corner of said tract; thence South 540 59' East to the point of beginning.
EXCEPTING therefrom, all that portion conveyed to the City of Petaluma by Deed
recorded November 5, 1984 under Document No. 84074140, Sonoma County
Records.
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DENMAN REACH
Land Acquisition
City of Petaluma
California
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