HomeMy WebLinkAboutStaff Report 3.E 04/16/2018DATE: April 2, 2018
Agenda Item #3.E
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St,' Jo ' F�A�SCE —Director of Public Works & Utilities
Jason Beatty .E. — Senior Civil Engineer
SUBJECT: Adoption of an Ordinance Approving Purchase and Sale Agreement Regarding
Real Property Commonly Known as Lot 33 Industrial Avenue and Authorizing
the City Manager to Execute the Agreement and All Other Documents Necessary
to Complete the Purchase and Sale
RECOMMENDATION
It is recommended that the City Council Adopt the Ordinance Approving Purchase and Sale
Agreement Regarding Real Property Commonly Known as Lot 33 Industrial Avenue and
Authorizing the City Manager to Execute the Agreement and All Other Documents Necessary to
Complete the Purchase and Sale.
BACKGROUND
On April 2, 2018, the City Council approved, with a vote of 6-0 with Council Member Healy
absent, the first reading of an ordinance approving a purchase and sale agreement regarding real
property commonly known as Lot 33 Industrial Avenue and authorizing the City Manager to
execute the agreement and all other documents necessary to complete the purchase and sale. The
recommended action provides for a second reading and adoption of the ordinance.
FINANCIAL IMPACTS
The project is currently in the FY 17/18 CIP budget, and is primarily funded by the State DWR
and the SCWA Zone 2A. This action was anticipated in the current CIP budget and has no
unexpected impacts.
ATTACHMENTS
1. Ordinance with Exhibit A (Purchase and Sale Agreement)
Attachment 1
EFFECTIVE DATE ORDINANCE NO. N.C.S.
OF ORDINANCE
Introduced by Seconded by
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA
APPROVING PURCHASE AND SALE AGREEMENT BETWEEN WILLIAM R.
NELSON, DARREL S. NELSON, WILLIAM E. NELSON, MARTHA SUE DAVIS,
ROBERT L. NELSON, AND HAROLD SILEN, THE TRUSTEE OF THE SILEN
FAMILY TRUST, AND THE CITY OF PETALUMA REGARDING REAL PROPERTY
COMMONLY KNOWN AS LOT 33 INDUSTRIAL AVENUE, (APN 007-412-033) AND
AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT AND ALL
OTHER DOCUMENTS NECESSARY TO COMPLETE THE PURCHASE AND SALE
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 2017-126 N.C.S., the City of Petaluma (City)
entered into a funding agreement with the Sonoma County Water Agency (SCWA) for the
Petaluma River Flood Management Denman Reach Phase 4 Project, which included funding for
the acquisition of certain property commonly known as Lot 33 Industrial Avenue, County of
Sonoma Assessor's Parcel No. 007-412-033 (the Property); and
WHEREAS, the funding agreement with the Sonoma County Water Agency provides
funding in the amount of $2,634,624, for the Petaluma River Flood Management Denman Reach
Phase 4 project, which includes acquisition of the Property; and
WHEREAS, the City has negotiated a purchase and sale agreement between the City and
William R. Nelson, Darrel S. Nelson, William E. Nelson, Martha Sue Davis, Robert L. Nelson,
and Harold Silen, Trustee of the Silen Family Trust, owners of the property, in the amount of
$1,000,000, a copy of which is attached as Exhibit A and incorporated herein by reference; and
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WHEREAS, this action was found in compliance with the California Environmental
Quality Act 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 with a Mitigated Negative Declaration.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF PETALUMA AS
FOLLOWS:
Section 1: The City Council approves the purchase and sale agreement (Agreement)
between the City of Petaluma and William R. Nelson, Darrel S. Nelson, William E. Nelson,
Martha Sue Davis, Robert L. Nelson, and Harold Silen, Trustees of the Silen Family Trust, in the
amount of $1,000,000, 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 (3 0) 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.
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Exhibit A to Ordinance
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 William R. Nelson & Darrell S. Nelson, husband and wife as community property,
as to an undivided 30% interest; William E. Nelson & Martha Sue Davis, husband and wife as community property,
as to an undivided 30% interest; Robert L. Nelson, a married man as his sole and separate property, as to an
undivided 20% interest and Harold Silen, Trustee of the Silen Family Revocable Living Trust, 1988, as to an
undivided 20% interest, ("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 Lot 33 Industrial Avenue Petaluma, CA and
identified as Assessor's Parcel Number 007-412-033, more particularly described and depicted in Exhibit A
attached hereto and incorporated herein by reference (the "Subject Property").
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.
COMPENSATION: CITY shall:
A. Pay the sum of $1,000,000 for the Subject Property ("Purchase Price") conditioned upon fee title to
the Subject Property vesting in the CITY within fourteen (14) days after execution of this Agreement
by CITY and GRANTOR, CITY will report to GRANTOR in writing any objections to title contained in
CITY's preliminary title report. If CITY objects to any exceptions to the title, GRANTOR will use due
diligence to remove such exceptions before close of escrow. If such exceptions cannot be removed
before close of escrow, this Agreement will terminate, unless CITY elects to purchase the Property
subject to such exceptions ("Permitted Exceptions"). If GRANTOR concludes that GRANTOR is in
good faith unable to remove such objections, GRANTOR will so notify CITY within ten (10) business
days after receipt of CITY's objections. In that event, CITY may terminate this Agreement. 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,
GRANTOR has no knowledge of any 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.
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
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
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 hereby represents and warrants that it has not been represented by.any agent or broker
in connection with this transaction. 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 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 Old Republic Title Company under escrow
number 0812014686 (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(0(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
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
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
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 Purchase and shall relieve CITY of any further
obligation to GRANTOR. GRANTOR shall make no claim for further compensation for the acquisition, 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.
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
17. AMENDMENT: This Agreement shall not be modified or amended except by an instrument in writing
executed by each of the parties hereto.
GRANTOR:
Dated:
Dated:
Dated:
Dated:
Dated:
Dated:
CITY OF PETALUMA:
Dated:
ATTEST:
Claire Couper
City Clerk
APPROVED AS TO FORM:
Eric W. Danly
City Attorney
Bv:
William R. Nelson
By:
Darrell S. Nelson
By:
William E. Nelson
By:
Martha Sue Davis
By;
Robert L. Nelson
By:
Harold Silen
John Brown
City Manager
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AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY
EXHIBIT A
The land referred to is situated in the County of Sonoma, City of Petaluma, State of California,
and is described as follows:
Lot 2, as shown upon that certain Parcel Map entitled, "City of Petaluma Parcel Map No. 199",
filed for record February 11, 1985, in Book 369 of Maps, at Pages 1 & 2, Sonoma County
Records.
APN: 007-412-033-000
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