COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

December 3, 2010

BOARD MEETING DATE:

December 14, 2010

SPECIAL NOTICE/HEARING:

Publish once per week for 3 weeks

VOTE REQUIRED:

4/5ths

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Services Division

SUBJECT:

Executive Summary: Resolution authorizing Purchase of Woodhouse Industrial Park Property as the site for the Replacement Jail Project

RECOMMENDATION:

A. Adopt a Resolution authorizing the County Manager or his designee to:

1. Subject to the City of Redwood City satisfactorily meeting its conditional vacation of right-of-way and transfer of property undertakings as set forth in the MOU between the County and Redwood City, accept assignment from Redwood City of four Options To Purchase the land and improvements commonly known as 20, 50, 70 and 80 Chemical Way, Redwood City, by executing the Assignment and Assumption Agreement with Redwood City; and

2. Exercise each and all of the Options To Purchase for and on behalf of the County of San Mateo; and

3. Execute notices, extensions, documents, applications, leases and agreements associated with the acquisition and improvement of the Property, including, without limitation, escrow instructions, certificates of acceptance and relocation agreements, in order to facilitate the acquisition and improvement of the Property and to meet the intent of the Resolution and the Board; and

B. Adopt an Appropriation Transfer Request (ATR) transferring $17,878,258 from Non-Departmental ERAF Reserves to various accounts in the Capital Projects Fund for the acquisition of the Property and related fees and costs, including title and escrow, tenant relocation, environmental insurance, due diligence, and site related studies.

BACKGROUND:

At its October 19, 2010 meeting, your Board approved the Pre-architectural Program and authorized the Sheriff, with support of County staff, to proceed with all necessary steps to bring a proposed Replacement Jail Project at what is now referred to as the “Woodhouse Industrial Park Site” (the “Property”) to this Board for its consideration.

The County has executed a Memorandum of Understanding (“MOU”) with Redwood City which evidences and recognizes the relationship and commitments between Redwood City and the County regarding the acquisition of the Property. Certification of a Mitigated Negative Declaration and the adoption of the Mitigation Monitoring Reporting Program (“MMRP”) for the Replacement Jail Project at Woodhouse Industrial Park in Redwood City are prerequisites to the actions recommended herein.

DISCUSSION:

As set forth in the MOU, the County has until December 22, 2010 to accept assignment from the City of the Options for the purchase of the Property. Exercise of the Options by December 27, 2010 sets the combined cost of the Property at $14,350,000. If the County fails to exercise the Options by December 27, 2010, then in order to extend the Option Period, the County would have to make additional payments. The first such payment would extend the Option Period to January 31, 2011. To so extend would result in total cumulative consideration to $423,500. Of that sum, $138,500 would not be credited toward the purchase price of the Property. Thereafter a payment of $84,125 per month would be required for each month of extension, up to a maximum extension period ending on December 27, 2011.

The City Council of Redwood City has scheduled a Special Meeting for December 21, 2010 to adopt a resolution conditionally vacating all of Redwood City’s interest and rights in the Chemical Way right-of-way, and transferring to the County the two City-owned one foot strips of land that lie between the North side of the Property and Maple Street. Because this Board is not scheduled to meet again until after December 27, 2010, it is recommended that the County Manager, or his designee, be authorized to exercise the right to extend and pay for the first such extension, with any further extensions requiring approval in advance by this Board.

An ATR in the amount of $ 17,878,258 is required to establish an appropriation from Non-Departmental Reserves to fund performance under the Options and to complete the acquisition of the Property, including related costs. It is anticipated that the Jail Project will be bond funded, including reimbursement to County Reserves of the cost of acquisition of the Property and related costs.

County Counsel has reviewed and approved the Assignment and Assumption Agreement, the Option Agreements, and the Resolution as to form.

FISCAL IMPACT:

Purchase of the Property and related costs will be funded from the transfer of $17,878,258 from Non-Departmental ERAF Reserves. The actual total cost could be marginally more or less. If the Options are exercised by December 27, 2010, the County will save $475,000 budgeted for the cost of extensions. Although the budgeted amount is believed to be more than sufficient, relocation costs associated with 50 and 70 Chemical Way could exceed the $750,000 estimate.