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HomeMy WebLinkAboutStaff Report 307-06City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 10 FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:AUGUST 7, 2006 CMR: 307:06 SUBJECT:APPROVAL OF OFFER AND AGREEMENT TO PURCHASE REAL PROPERTY - 2460 HIGH STREET RECOMMENDATION Staff recommends that Council accept the bid in the amount of $450,000 submitted by Kenny Huo (exact vesting to be determined prior to opening escrow) for the purchase of the City-owned property located at 2460 High Street by authorizing the Mayor to execute the Offer and Agreement to Purchase Real Property, and the Grant Deed and any other document necessary to accomplish the conveyance of the property. BACKGROUND On September 19, 2005, the Council approved the February 15, 2005 Finance Committee recommendation (CMR 149:05, CMR 366:05) to: 1)Declare a portion of a City-owned parcel located on High Street near Oregon .Expressway~ to be surplus property; 2)Direct staff to process an application to change the zoning from Public Facility (PF) to Two Unit Multiple Family District (RMD); and 3) Return to Council for approval of the Request for Bid Proposal (RFBP) to dispose of the property using an open bid procedure in accordance with the City policy for sale of surplus property; and to use the funds from the sale of the High Street property for proposed redevelopment of the Alma Substation property for affordable housing. On February 8, 2006, the Planning and Transportation Commission recommended that Council adopt the City-initiated rezoning of 2460 High Street from PF to RMD. On March 21, 2006, Council adopted an ordinance amending the Zoning Map of the City of Palo Alto to change the designation of a portion of 2460 High Street (Designated Surplus Property) from PF to RMD (CMR: 172:06). On June 5, 2006, Council approved a Request for Bid Proposals (RFBP) for sale of the City-owned property located at 2460 High Street and directed staff to solicit proposals for sale of the site. CMR:307:06 Page 1 of 3 Following Council approval, staff advertised the RFBP in local newspapers, including a special ad in the Friday, Saturday and Sunday Real Estate section of the Palo Alto Daily. Staff also sent the information flyer to persons on the Real Estate Division Surplus Property Mailing List and to local contractors and developers. The major terms of the offering as contained in the RFBP for sale of the 5,413 square foot parcel at 2460 High Street are as follows: 1. Minimum bid of $450,000. 2. Sealed written bids, accompanied by a good faith deposit in the amount of $45,000, will be accepted until 3:00 p.m. on July 25, 2006. Following opening of the written bids, oral bids will be accepted, beginning at 5 percent above the highest written bid. Only those submitting written bids will be allowed to participate in the oral bidding. 3. Within seven days following notification from the City that a bidder was the qualified high bidder, the bidder is to pay the City the difference between the $45,000 good faith deposit and 20 percent of the total bid amount. 4. Following acceptance of the bid by the City Council, escrow is to be opened, and the buyer is to pay the balance of the purchase price, with escrow closing within 90 days thereafter. 5. Buyer is to pay all title and escrow costs. DISCUSSION On July 25, 2006, one written bid in the amount of $450,000 was received from Kenny Huo, who has submitted the required 20 percent of the bid ($90,000) as set forth in the Offer and Agreement to Purchase Real Property. The Offer and Agreement to Purchase Real Property reflecting the bid submitted by Kenny Huo is attached. RESOURCE IMPACT The proceeds from the sale to be deposited in the Residential Housing Fund will be used to offset the costs of the development of the Alma Street Substation site for affordable housing. POLICY IMPLICATIONS Approval of the Offer and Agreement to Purchase Real Property at 2460 High Street is in accordance with City policies and procedures for sale of surplus property. ENVIRONMENTAL REVIEW Authorization of the sale of City property is Categorically Exempt under provision 15305, Minor Alterations in Land Use Limitation, of the California Environmental Quality Ac.t Guidelines. PREPARED BY: WILLIAM W. FELLMAN Manager, Real Property CMR:307:06 Page 2 of 3 DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: CARL YEATS Services HARRISON Assistant City Manager ATTACHMENTS Attachment A: Offer and Agreement to Purchase Real Property CMR:307:06 Page 3 of 3 :ATTAC~NT A PARCEL NO: 132-17-081 PROJECT: 2460 High Street OFFER AND AGREEMENT TO PURCHASE REAL PROPERTY (Full Cash Payment) SELLER: BIDDER: CITY OF PALO ALTO In consideration of SELLER’S proposal to sell the real property described and shown on the form of grant deed labeled Exhibit A, attached hereto, by competitive bids to be received July 25, 2006, BIDDER agrees to purchase said real property for the sum of: (Amount in numbers) and herewith, in accordance with subparagraph 7 below, gives SELLER a good faith deposit (Proposal Deposit) in the amount of $45,000. This bid is conditioned upon and made with the understanding that: Upon notice from SELLER’S Real Estate Division that BIDDER is the qualified high bidder, BIDDER shall within 7 days after said notice pay SELLER anadditional sum equal to the difference .between the good faith deposit and 20% of the total amount bid. Should BIDDER, for any reason whatsoever, fail to pay to SELLER said additional amount, said good faith deposit shall be retained by SELLER as set forth in subparagraph 7 below. -- Within thirty (30) days after BIDDER has paid SELLER the additional sum referred to in Paragraph 1 above, SELLER shall consider this bid and accept orreject it. Should this bid be rejected by SELLER or should SELLER fail to accept or reject this bid within the time period set forth in Paragraph 2 above, BIDDER may withdraw this bid and all money paid to SELLER by BIDDER shall be refunded to BIDDER. If this bid be accepted by SELLER, said good faith deposit and the additional sum paid to SELLER as provided in Paragraph 1 above shall constitute a portion of the agreed purchase price paid to SELLER outside of escrow, with the balance to be paid through escrow as set forth below. If this bid is accepted by SELLER, SELLER’S Real Estate Division shall open an escrow with North American Title Company, 497 North Santa Cruz Avenue, Los Gatos, CA, 95030. o The opening date of escrow shall be the date upon which the escrow holder named above receives written authorization from SELLER’S Real Estate Division to open said escrow. The balance of the purchase price shall be paid through escrow and the escrow period sha!l run for a period of ninety (90) days from the opening date of escrow. SELLER shall deliver to said escrow a Grant Deed in the form of Exhibit A and such other documents as are required to transfer title subject only to those exceptions shown in the attached Preliminary Report No.56901-54990528 .PRT, dated June 11, 2004, labeled Exhibit B and made a part hereof, and any reservations, covenants and conditions, if any, set forth in the Grant Deed referred to above. Prior to the date set for close of escrow, BIDDER shall deposit into escrow the difference between the total purchase price and the total sum paid to SELLER .outside of escrow. The close of escrow may occur prior to the time period set forth above if it is mutually desirable to SELLER’S Real Estate Division and BIDDER. However, said time periods shall not be extended unless authorized in writing by SELLER’S Real Estate Division staff. Close of escrow shall be the date that the documents are filed for recordation with the County Recorder. The good faith deposit and the additional sum referred to in Paragraph 1 above shall be in the form of a cashier’s or certified check made payable to the City of Palo Alto. The good faith deposit must be submitted together with this Agreement. Said good faith deposit shall be held by the SELLER as a guarantee securing the obligations BIDDER agrees to assume in this Agreement. BIDDER agrees that in the event that this Offer and Agreement to Purchase Real Property is accepted by SELLER and BIDDER fails to meet the terms hereof, said good faith deposit and the additional sum referred to in Paragraph I represent a fair and reasonable estimate of SELLER’S costs in connection with this transaction, and BIDDER further agrees that said sum shall be retained by SELLER as compensation for said costs. Title insurance On the subject property shall be supplied by North American Title Compa6y at Buyer’s expense. -, .. Title shall be vested as specified in Paragraph 10 below and shall be subject to the excePtions shown in Preliminary Report No. 5690;I-5499052~ PRT, and ~ny reservations, conditions or covenants, if any, set~ forth in the G,[ant Deed r~eferred to in Paragraph 6 above. If SELLER is unable to deliver title as, specified herein prier to the date set for close of escrow, BIDDER shall have the option to: Accept title in the condition in which it exists. Acceptance of such title by BIDDER shall constitute full satisfaction of the terms of this Agreement as they relate to title, and SELLER shall in no way be liable for its failure to deliver title as set forth herein, or B.Terminate this Agreement by delivering written notice thereof to SELLER’S REAL ESTATE DIVISION 250 Hamilton Avenue PO Box 10250 Palo Alto, CA 94303 and to the escrow holder. Thereupon, all monies paid by BIDDER hereunder shall be refunded to BIDDER, and SELLER and BIDDER shall be relieved of further obligations to one another. In the event of termination as provided in this subparagraph, all escrow and title fees incurred shall be paid by SELLER, and BIDDER shall not be liable therefore. 10. 11. 13. Neither Subparagraph 8A nor 8B hereinabove shall apply if SELLER delivers better title than that set out in Paragraph 6 above. In addition to the amount specified in Paragraph 6 above, BIDDER shall deposit into escrow a sum sufficient to pay the total cost of title insurance, escrow fees, Real Property Transfer Tax, and all recording fees applicable to this transaction. Title to the real property conveyed pursuant to this Agreement shall be vested in BIDDER as set forth below. (Please type or print clearly. An example of one of the several ways title may be vested is: John Doe and Jane Doe, husband and wife, as joint tenants.). This Offer and Agreement to Purchase Real Property may be withdrawn at any time prior to the time set for opening bids except as provided under Paragraph 3 above may not be withdrawn after the time set for such oPening. SELLER reserves the right to reject any or all bids and to accept that bid which will, in its opinion, best serve the public interest. All documents, correspondence, and communications concerning this transaction shall be directed as follows: TO: BIDDER i Telephone: TO: SELLER CITY OF PALO ALTO c/o Real Estate Division 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Attn: Bill Fellman Time is of the essence of this Agreement. BIDDER accepts property "as is". SELLER has no responsibility for the existing condition of the property. BIDDER hereby submits this offer with full cognizance of the terms and conditions contained herein. SELLER has considered and accepts this offer: SELLER: . CITY OF PALO ALTO By MAYOR, CITY OF PALO ALTO Date ATTEST: CITY CLERK By APPROVED AS TO FORM: CITY ATTORNEY By RECOMMENDED FOR APPROVAL: ASSISTANT CITY MANAGER By MANAGER, REAL PROPERTY By