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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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County Manager’s Office
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DATE:
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May 21, 2008
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BOARD MEETING DATE:
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July 22, 2008
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SPECIAL NOTICE/HEARING:
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One week notice
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VOTE REQUIRED:
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4/5ths
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TO:
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Honorable Board of Supervisors
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FROM:
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Steve Alms, Manager, Real Property Division
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SUBJECT:
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Option to Purchase and Purchase Agreement with the Redevelopment Agency of the City of East Palo Alto for improved surplus property located at the southeast corner of University Avenue and Bay Road, East Palo Alto (COP 731)
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RECOMMENDATION
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Adopt a resolution:
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A.
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Authorizing the execution of an Option to Purchase and Purchase Agreement with the Redevelopment Agency of the City of East Palo Alto for County-owned improved surplus property located at the southeast corner of University Avenue and Bay Road, East Palo Alto (APN 063-221-010), and
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B.
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Authorizing the County Manager, or designee, to execute any and all deeds, notices, consents, approvals, permits, escrow instructions and documents in connection with the Agreement, including any purchase price adjustment as set forth in such Agreement.
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VISION ALIGNMENT
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Commitment: Offer a full range of housing choices.
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Goal(s): Goal 9. Housing exists for people at all income levels and for all generations.
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Commitment: Responsive, effective and collaborative government
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Goal(s): Goal 22. County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County. Providing an option to facilitate the sale of surplus property contributes to these commitments by helping to further the City of East Palo Alto’s economic and community development objectives, and as part of a long-range strategy to promote the expansion of the housing stock in the County, including a mandated affordable component.
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BACKGROUND:
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The County acquired APN: 063-221-010 in 1966 for the realignment of University Avenue. The subject property is the remainder parcel after completion of road construction, and is irregular in shape. It comprises approximately 10,861 square feet (0.25 acres) at the southeast corner of Bay Road and University Avenue. The property is improved with a post office. The property is zoned C-1/S-3 (Neighborhood Business District) and located in the Ravenswood Industrial Area Redevelopment Project Area.
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On September 25, 2007 this Board found the property surplus to the needs of the County in order to facilitate its use as part of a mixed-use development that includes a significant housing component, both market rate and affordable. Real Property Services notified public agencies of the County’s intent to sell the property and, upon receipt of an expression of interest, began negotiations with the Redevelopment Agency of the City of East Palo Alto (“Agency”).
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The Agency and Real Property Services each obtained independent appraisals. Review of both appraisals and protracted negotiations resulted in an agreement on a purchase price of $660,000, which is supported by the appraisals.
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DISCUSSION
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The Option to Purchase and Purchase Agreement (“Agreement”) negotiated with the Agency sets forth the terms and conditions of the option and sale. The Agency will not pay any consideration for the initial year of the option term. The option can be extended for a second year upon payment of a non-refundable option fee of $66,000, which amount will be applied to the purchase price if the transaction is consummated. The Agreement is assignable, and provides for a one-hundred and eighty day due diligence period.
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If during the due diligence period, an environmental audit indicates that environmental remediation is necessary and appropriate, and the County Manager concurs, at the discretion of the County Manager or the County Manager’s designee, the County may reduce the purchase price to compensate for the cost of remediation by an amount not to exceed $65,000. The option and any acquisition of the property will be subject to the existing lease with the United States Postal Service. The right to exercise the option will be conditioned upon receipt of associated land use approvals of the currently proposed mixed-use project from the City of East Palo.
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The Director of the Department of Housing concurs in this recommendation.
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FISCAL IMPACT
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There is no impact on the General Fund. The proceeds of the sale will be deposited in the appropriate Housing Department Trust Fund associated with this property.
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