HomeMy WebLinkAbout0205.091March 21, 19~1
HONORABLE CITY COUNCIL
Palo Alto, California
BRU,L" PROPP" Ucxuql PJOPOBN.
Members of the coancilt
RtpOr t 18 B.r i.f
14
This report recomaends Council 1} give staff further instructions
with r-eqard to neqotiations with MS.. Bressler, and 2) take no
action on the dedication of 77-acre City-owned land.
HetqrQUA4
For over a year, City staff has tried to neqotiate an exchange of
a portion of the City-owned 77-acre property in the foothills
adja~ent to Arastradero Road for an approxiaate l~-acre parcel of
land owned by Jacqueline Bressler. In October council directed
staff to continue negotiations in good faith with Ms. Bresslex,
with the understanding that staff would return to Coul!cil on March
25, 1991. COUncil also directed staff to re.port back to Council on
March 25 on the follo~inq: 1) the location, with a map, of the
acreage that would be withheld for potential future exchange; 2) an
identified method ot access; 3) the range of density; and 4)
appropriate dedication ordinances with or without the exchange
package ..
~Jlt....lpprdul
Joi~t appraisals 'Were undertaken to establish the value of both Ks.
Bressler'lI property and a correspondinq value of property in one
acre lots ot a portion of the 77-acre parcel a In order to complete
the assiglUlent 'Within the required time frame and alloW' for
negotiations, the parties aqreed the appraisals should be completed
by January 15~ 1S91.. The difficult part of the appraisal assign
.ant vas to establish on-and off-site development costs~ In order
to aid the appraisers in this part ot the appraisal process, Ms.
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Bressler contracted with the engineerinq firm of Brian !'\:angas:
Foulk~ The City agreed to contribute $3,000 for these services.
The enqineerinq services were not furnished to the apprais~rs until
Mar~~ 11, 1991~ ~he delay meant thera ~as no time to negotiate
over any differences in the two appraisals.
The city contracted wi ttl Appraisal Rasearch Corporatio.n (ARCl.
What fello.... is en ·~tline of the.ir opinion of the Bressler
property value and the corresponding amount of Ithe City~owned 17
acres that would equate to ~n equal exchanqe.
pev,lopment Apaly.i.
A preli.inary develop~ent plan was developed from the information
obtained from Brian Kangas Foulk, based on 14 sites of one ac~e
.inimum size. Site development costs are based on the information
provided and extracted from Brian x~ngas FDulk's ten-ar~ twenty
lot SUbdivision plans. These have b~en ana!yzed ~nd comp3red to
info=mation obtained from some of the co~parable and development
cost factors of oth~r similar developments~
ARC believes the 14.-acre Bressler estate has a value. of $2~ 5
million. Using the methodology employed by the appraisers, it
would take 14 single family residential ~ite~ ~ith ~n~-acre minimum
lot sizes to equal the exchange value of $2. 5 million~ The
appraisers' methodology credited Ks. Bressler for hard and soft
development costs on the 25-1ot exchange parcel. Staff 3qz'eed to
this approach only to facilitate discussions. The finished site
values ascribed ars ba5ed on current estimated finished site values
in the market place. T.he approach to value i:s broJten down as
follows:
14 single faaily residential
sites @ $550,000 per site
On-and off-site development
costs, 14 sites P $220,000 per site
Developers overhead, profit and
s~le expenses--14 sites @ $110,000
per site
Raw land val~e of 14 sites
Raw land v~lue discounted • 12\
for ~8-month estimated development
ti~e
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$1~700,OOO
($3,080,000)
{ 1,540, QOO)
$3,080,000
$2,500,000
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In response. to the tour requests of council, the a.ttached map
shows~ 1) the location of the acreaqe that would be vlthheld for
potential future exchanq~; 2) th& d~nsity; and 3) the access road.
The fourth itam# alao attached, Is the ordinance dedicatinq the
entire 77 acres.
On March 18, 1991, staff received the same packet of information
that was apparently furnished by Ms. Bressler's lawyer to each
Council Xe~r on the weekend of March 16. staft also met briefly
with xa. Bressler on March 20, 15191. The Bressler-proposal
includes a -bona fide-otter ot $4,000,000 offer tor the purchase
of the Bressler Ranch. In staff's opinion, the $4,000,000 offer
received b'J Hs. Bressler for her property makes the City"s proposal
tor any type of exchange based on a $2.5 million appraised value
non-competitive~ It would require 25 one-a~re lots to equal the $4
million value claimed by MS~ Bressler. (See attached letter~) We
would note that the ofter i54' in fact, an opportunity fo!' Ms~
Bressler to .ake an offer to the potential purchaser, given the
fact that the Kay 1, 1991 extension is ·subject to buyer approval.
Moreover, the offer contains a major continqency r~~irinq the city
to acknowledqe the existence ot a certain level of development
riqhts. on the property. Finally, the ofter 'Would have Ms. Bre&sler
carrying an interest-only one million dollar trust deed.
In our brief discussion on March 20, staff received no indication
that Ma. Bressler would consider disposing of her property tor lese
than $·LO ~illion, lrihich she equates to 25 lots. In addition, even
it the City vere to ultiaately find any factual basis for agreeing
that Ms~ Bressler's property is worth $4~O million, L~e environ
mental effect of a 25-1ot SUbdivision in the foothills see.s far
too heavy a prlce to pay for the exchange. unless XS. Bressler is
interested in a trade involvinq substantially fewer lots, staff
reluctantly recommends that the City withdraw from the process and
concentrate solely on the use and dispoSition of its own property#
namely the 77-acre parcel north of Arastradero Road.
77-Acre Dedication
City staff continues to recommend that the Council not dedicate the
77 acres 4 Wben the property was acquired in 1982, the 77-ac::re
parcel specifically vas not included in the park dedication~
Instead, the 77 acres were held in reserve tor possible future use
~ dedication. The Council also transferred development potential
for Sl lots from the 51C-acre dedication to tl1e 77-ac::re parcel 4
{Palo Alto Municipal Code 22408~330B} Aside from damage by fire
and the creation of the parking-lot, there has been no change to
the 77 acres in the past nine years, and staff does not foresee any
future changes.
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There are saveral reasona tor ~ dedieatinq all or a portion of
the 7'1 acres at this time.
1. The props~y is O~~ in tae ty the city and no use can be
ude of it without council authorlzation~ Absolute prcotection
is assured and thus dedication ia not necessary~
2. 'Dedication of the property effect.ively removes the Council's
ability to Jlianaqe the land as an ass.et on behalf of tile
co~unity. An excellent exampl~ of the difficulties dedica
tion may ~aU5e can be seen in the El Camino Park situation.
Dedic.tlon of this parcel is costinq an estimated '$300,000 per
year ..
3. Dedication limits the use of ~auxiliary· assets. For example,
the t~o houses and the barn on the Arastradero property may be
lost because of the inflexibility or the dedication process ..
4. This property is isolated from the main body af the preserve.
Dedication eliminates the possibility of expan~inq that main
body through a trade or purchase of lands other tban the
Bressler property.
5. 'rile. potential transa.ctions t;e.tween Ks. Bressler and Gilco
Developaent haa several contingencies associated with it.
Should that an-anqe.ent not be consWDlated, the City 'Would not
be in a position to re-enter discussion with Ms~ Bressler or
her successor if the 77 acres haS already been dedicated.
6. Dedication of only a portion of the 77 acres is unwise, since
it is impossible to tell at this stage what configuration
miqht be most appropriate if a future purchase or trade were
warranted.
Staff recoaaends that Council 1) give staff further directions ~ith
regard to neqotiation with Ms. Bressler, and 2J take no action on
the dedication of the 77 acres ~
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Respectfully submitted,
!tf/f~I1~
WILLIAM W. FELLMAN
Rce 1 Property Manaqer
£' ~ t{v..~ 1;.-
DlIL.f HARRISON
~~FFinance
WI LLllUI' Z " /"
city Manag
Related Staff reports: CMR 517 0
CMR 365 0
CMR 464 9
AttllchJtents: Map showing twenty-five acre subdivision
December 21, 1990 letter to Thomas French
Cl!R:282: 0
cc: Tea French
Jaoquelir.e Bressler
John !lock
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2'S LOT SCENARIO ................ ,"
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NOT~ E/l.CH 1 ACRE "ITE "Hr\-ll~
THE PROPOSED OEVELOPt.I!:HT JNCt..UDES
COkSIDERA8l...E F~IJ"'ATE OP-EN SPACE
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Thomas French
Ware , Freidenrich
400 Hamilton Avenue
fHy of Yalo :RIto
iI',::;. e-:::x :02:!!':l
~ ... _o "'~TO. c..o.. 5143,03
Cecember 21, 1990
Palo Alto. California 94301
Dear Tom:
Please excuse the long delay in getting this letter to you.
r wanted to do it immediately following our last phone -com,ersation
and simply have not had a few spare minutes to compose it. My
concern is that I explain clearly my feelings regarding t'Wo
subjects. :"iI""s:t is the of engineering ...-or-k on the Bressll'!r/City
appraisal issue; second is the question of the number of lots to be
c:!:eated.
"""hen 'We met with the City council (and earlier with the
Finance and Public Wcrks Committee, I led them to believe th.at the
City's cost to :move this project along .... auld be only several
thousand dollars~ The proposed cost of $50.000 for enqineering
studies (City share of $25,000) far exceeds anything I had in mind
and I felt obligated to return to the city Council for further
advice before agreeing to pay such a large amount. That obligation
extend~d equally to any commitment to -reimburse-Krs~ Bressler at
a later date.
As you know~ during ou~ discussions I received a letter from
Brian Xengas Foulk reqarding these engineering charqes~ The work
to be performed was in part:
1~ Prepare a preliminary landscaping planting and erosion
control plan for the preferred conceptual 5ubdivis ion
layout.
I oon't -understand ...,-hat "preferred conceptual subdivision
layout-the consultant is referring to. In any event, I don't feel
that the City of Palo Alto o',Jght to pay for landscaping plans for
a subdivision that has never been promised, authorized, or
discussed. If Mrs. Bressler has some "~referred conceptual
subdivision layout-in mind she sbo~ld bear all costs related to
it.
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Paqe Two
My .feeling that Ms. Bressler should pay these costs is
strenqthened further by an overriding concern about Krs. Bressler's
expectations which brings me to my second issue --the number of
lots. I have stated to Ms. Bressler repeatedly, and in the
presence of several of your predecessors, that r believe the
maximum numbe~ of lots she can expect to obtain via an exchange is
in the range of 5-'1. It is my opinion that, even if the appraisals
show that a greater number of lots is justified economically, the
Council will decline to trade properties. That is because the
Council must weigh all factors, not just economic ones, in making
their decision regarding the appropriateness of a trade with Mrs.
8re9sler~ council members have publicly declared their intent to
consider all f~ctors once they have the data in front of them. I
bava urqed Mrs. Bressler to take ~y opinion into account before she
COMmits any of her own money to this project.
My concerns over these two issues led me, ih part, to limit
the City's contribution to $3,000 on the engineering work. I hope
this letter makes those concerns clear.
WZ/cjl
Very trulY~S,
,. >-.~'-F~_-:----
WILLIAM ZANU
City ~anaqe!'"
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