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Home My WebLink About08/20/1996, 2 - SALE OF OLD HEADQUARTERS FIRE STATION council ° j acEnaa REpout h=Nbw CITY OF SAN LUIS OBISPO i FROM: Bill Statler, Director of Finance Vl 1 Prepared By: Linda Asprion, Revenue Manager#� SUBJECT: SALE OF OLD HEADQUARTERS FIRE STATION CAO RECOMMENDATION Approve the request for proposal (RFP) for commercial real estate brokerage services for selling the old headquarters fire station and authorize the City Administrative Officer to award the contract to the best overall proposer. DISCUSSION Background On May 21, 1996, the Council adopted a Resolution No. 8537 declaring the old headquarters fire station site (748 Pismo Street) surplus property, and approved a marketing plan consisting of three basic components: ■ Perform an appraisal of the site ■ Solicit interest from other governmental agencies in purchasing the site ■ Review other marketing options, including selecting a commercial real estate broker to sell the site, if no interest is received from other governmental agencies At this time, the appraisal on the site has been completed by Market Dynamics, and a letter soliciting purchase interest has been mailed to twelve government agencies with offices in San Luis Obispo. The letter outlined the City's goals in selling the site, provided general statistical information about the site, and requested a response by August 1, 1996. No responses to this letter have been received. Proposed Marketing Plan Since no response to our solicitation has been received, we need to proceed with other alternatives. The staff task force charged with implementing a marketing plan for the site has reviewed a variety of alternatives as set forth in the City's property management policy,including sealed bids, request for proposals, auction and listing the property for sale with a commercial real estate broker. Council Agenda Report - Sale of Old Headquarters Fire Station Page 2 The task force concluded that the most business-like approach to selling this property is to contract with a professional firm that specializes in selling commercial properties. If we had other objectives than an economic one, there may be other viable options that we might consider. However, since our goal is to obtain the highest possible market price in a reasonable period of time, we believe that the most effective approach in achieving this goal is to contract for professional real estate marketing skills. Why should we use a commercial broker? Although there are a number of other approaches that could be taken in selling the old headquarters fire station, the staff task force believes that using the services of a profession real estate broker is the best approach in meeting the sales objective of receiving the highest possible price for the property. While we will have to pay brokerage fees under this approach, this will be more than offset by increased revenues and reduced staff costs. Any other alternative will require a more extensive use of staff resources, and there are two drawbacks to this approach: ■ Limited expertise. While there are City staff members with land use and marketing skills,no one on staff is a practicing commercial property broker with extensive marketing networks in San Luis Obispo in place. ■ Limited time. Even if we were to assemble a staff team who might - in the aggregate - bring the necessary skills to the table to effectively market this property, this would not be the best use of staff resources given other high priority Council goals. In short, aside from the issue of whether we have the required expertise to do this work, the consequences of assigning this to staff will either be to dedicate less effort to this project than it deserves, or to allocate time away from other important goals. In summary, we believe that assigning this work to a professional whose interests are exactly the same as the City's - selling the property at the highest possible price in the shortest possible period of time - is the best approach in meeting our sales goal. Proposed Broker Selection Process The attached RFP outlines the workscope, contract terms, and selection process for this project. As noted in the RFP, the selection will not be based solely on price, but on a combination of factors, including: ■ Understanding of the services required by the City and our sale objectives ■ Quality and responsiveness of the proposal ■ Demonstrated competence and professional qualifications ■ References ■ Background and related experience of the specific agents/brokers, including working with public agencies Council Agenda Report - Sale of Old Headquarters Fire Station Page 3 ■ Proposed approach to marketing and advertising the property ■ Proposed compensation As reflected in the attached proposer's list, we are focusing our selection efforts on professional commercial real estate brokers located in San Luis Obispo. The proposers list is a combination of firms in the phone book listing expertise in commercial properties and a listing provided by the Economic Development Manager. Key dates in the selection process are: ■ Issue RFP 8/23/96 ■ Conduct pre-proposal conference/tour property 9/10/96 ■ Receive proposals 9/20/96 ■ Complete proposal evaluation 9/27/96 ■ Conduct finalist interviews (tentative date) 10/1/96 ■ Award contract 10/4/96 ■ Execute contract and begin marketing site 10/18/96 As noted above, we recommend that the Council authorize the CAO to award this contract based on the "best value"proposal we receive. Once marketing efforts begin, all serious purchase offers will be reviewed by the Council, and any property sales agreement will be subject to final Council approval. FISCAL EMPACT There are no negative fiscal impacts associated with going forward with this marketing plan. It is expected that any broker fees will be paid from the proceeds of the sale, and revenue from the sale of this site (conservatively estimated at $600,000) is an integral part of the budget-balancing strategy adopted by the Council. CONCURRENCES The task force assembled by the CAO to oversee this sale consisting of the City Administrative Officer, Assistant CAO, Director of Public Works, Director of Finance, Fire Chief, and Development Review Manager, concur with this recommendation. Additionally, the Economic Development Manager concurs with the recommended marketing plan. ATTACHMENTS ■ Proposers list ■ Request for proposal for commercial real estate brokerage services for selling the old headquarters fire station property ,2-3 PROPOSERS LIST COMMERCIAL REAL ESTATE BROKERAGE SERVICES - SPECIFICATION NO. 97-13 Business Name: Adobe Realty Business Name: Century 21 San Luis Properties Contact Name: Alex Gough Contact Name: Gary Toll Address: 964 Chorro Street Address: 1335 Broad Street City: San Luis Obispo, CA 93401 City: San Luis Obispo, CA 93401 Phone #: 805-543-2693 Phone #: 805-543-6361 Fax #: 805-549-0894 Fax #: 805-543-7715 Business Name: Arnett& Broadbent Inc. Realtors Business Name: Farrell Smyth Contact Name: Ed Arnett Contact Name: Lary Smith Address: 1380 Broad Street Address: 21 Santa Rosa Street Ste.100 City: San Luis Obispo, Ca 93401 City: San Luis Obispo, CA 93405 Phone #: 805-543-9100 Phone #: 805-543-2172 Fax #: 805-543-9113 Fax #: 805-543-4801 Business Name: Real Estate Group of San Luis Obispo Business Name: Central Coast Commercial Realty Contact Name: John Hough Contact Name: Robert Bronte Address: 962 Mill Street Address: P. 0. Box 1146 City: San Luis Obispo, CA City: San Luis Obispo, CA 93406 Phone #: 805-541-2888 Phone#: 805-543-7696 Fax #: 805-541-0390 Fax #: 805-543-7252 Business Name: Dill Commercial-Industrial Properties Business Name:Grubb&Ellis Commercial Real Estate Contact Name: Mr. Hal Dill Contact Name: Walt Behn Address: 2146 Parker Street Address: 1060 Palm Street City: San Luis Obispo, CA 93401 City: San Luis Obispo, CA 93401 Phone#: 805-544-3700 Phone#: 805-541-5000 Fax #: 805-544-6576 Fax #: 805-781-6172 Business Name: McNamara Realty Inc. Business Name: Real Property Investments Contact Name: Francis McNamara Contact Name: Thomas C. Swem Address: 390 Higuera Street Address: 570 Marsh Street City: San Luis Obispo, CA 93401 City: San Luis Obispo, CA 93401 Phone#: 805-543-7777 Phone#: 805-544-4422 Fax #: 805-543-7791 Fax#: 805-5442742 Business Name: Rossetti Company Business Name: Stafford-McCarty Contact Name: John Rossetti Contact Name: Greg Stafford Address: 1065 Higuera Street Address: 641 Higuera Street City: San Luis Obispo, CA 93401 City: San Luis Obispo, CA 93401 Phone#: 805-5443900 Phone#: 805-543-1801 Fax #: 805-5443922 Fax #: 805-543-1857 Business Name: Patterson Realty Business Name: Maddalena Realty Contact Name: Charlie Senn Contact Name: Roland maddalena Address: 444 Higuera Street Address: 1329 Broad Street City: San Luis Obispo, Ca 93401 City: San Luis Obispo, CA 93401 Phone #: 805-5448662 Phone #: 805-543-9312 Fax #: 805-5442837 Fax #: 805-543-9317 Business Name: Delucia Commercial Real Estate Services Contact Name: Joseph Delucia Address: 1194 Pacific Street City: San Luis Obispo, CA 93401 Phone #: 805-543-1502 Fax #: 805-545-8001 tlEETING AGENDA DATE -b-9.4ITEM # RICHARD SCHMIDT 112 Broad Street, San Luis Obispo, CBr9340 444.4 _J FOUNCIL O CDD DIR ti�i: rschm1dt®ecFftPJ&du V��ACAO ❑ FIRE CHIEF !. August 20, 1996 /t�/ATTORNEY ❑ PW DIR 1 F�CLERK/ORIG ❑ POLICE CHF Re: Aug. 20 Agenda, Miscellaneous Items ❑ MGMT TEAM O REC DIR : q ❑ R 0 FIDE ❑ UTIL DIR I ❑ PERS DIR To the City Council: Looking through your agenda packet, I am appalled at the lack of information staff provides you and how the agenda packets have been dumbed down (or should it be Dunned down) so that you couldn't possibly understand what you are doing based on the information provided. I am also appalled at the overwhelmingly propagandistic nature of the "information" being provided. Further, be it said that if other information is being provided to you to supplement the scanty stuff in you packet, the public doesn't have access to that information, and thus the public is being shut out -- by Dunn and company -- of having any meaningful role in understanding the business that is carried out in the public's name. Finally, I am amazed at the ease with which the current administration has bamboozled the five of you into dismantling San Luis Obispo as we have known it, with nary a word of caution that such is actually what you are up to. When I looked at the current agenda, I was dizzy with the number of major changes you are talking about approving as if they were routine weekly business. I BELIEVE IT IS FAIR TO SAY THAT THIS IS THE MOST RECKLESSLY OUT OF CONTROL COUNCIL I HAVE ENCOUNTERED IN 26 YEARS OF LOCAL RESIDENCY. EVEN THE RAMPANTLY PRO-GROWTH DUNIN/RAPPA COUNCIL WOULD HAVE BLUSHED TO DO WHAT YOU DO WEEKLY, AND THE INFAMOUS COOPER COUNCIL NEVER WOULD HAVE TRIED. You have accomplished this all the while believing that the public is wholly behind what you do: you are very mistaken, for the public is angry beyond belief, but feels helpless because you have closed your wagons around the pro-growth/pro-business aristocratic politician "managers" who now run the city and have made it so difficult for the real public to have a hearing of their concerns that most have simply given up. That no one is willing to run against the incumbents is not a sign of approval, it is an indication of total revulsion and disgust and a surrender to defeatism due to the pointlessness of even attempting to speak in opposition. Such sentiments are not confined to persons like myself -- I still make an effort to speak truth to you, after all -- but are the common property of thousands of others far less sophisticated in city affairs than we are. A few more specific comments on agenda items: . 7 .._, AUC 2 1796 CrrV.cu,:r4, ...:D.C:4 C-2. Annexation on South Broad. It seems we have one annexation after another these days. Why, other than to enable certain land speculators realize huge profits off their speculations? What public good is served by this? Of course, there's no map in the packet, so who knows what you're talking about? The open space is so poorly defined I can't figure out what's being dedicated, or where. Surely this will result in a situation that is wholly unenforceable, yet certain incumbents will be able to campaign on having acquired an open space dedication in return for annexation, and how we then need more annexations to accomplish more of the same. C-3. Carwashes on every corner in the CN zone. Bravo. We really need this. Wholly consistent with the Dunn program of erasing every difference between San Luis Obispo and West Covina or Santa Maria in the interests of promoting business. What's next? Drive-through restaurants? C-9. Santa Rosa Street Bridge. No indication of the effects on the creek, or the large trees near the bridge. Would be nice to know more. Do you understand the environmental effects? The public sure cannot understand based on the staff report. Since engineering's been trying to get rid of these trees for years, one suspects the worst. 2. Selling fire house. This is where "running government like a business" gets us -- a totally amoral approach in which long-term city assets are regarded simply as real estate to be disposed of to the highest bidder. Has the city considered adaptive reuse of the firehouse while retaining city ownership? Might this not be better in the long run than trying to dispose of the property during a real estate slump? Could the city ever repurchase such property for less than what it will get by selling it now? What about the city's fiduciary obligation to its own history? I have written to you before -- though, per usual, one might as well not waste one's time.-- about the unique structural nature of the engine house, with its radiating truss roof structure -- a structure so unusual that many of the old-time structural engineering faculty at Cal Poly would make field trips to the site just to show it to students. The engine house space is remarkable. Take out the engines, and it could be a museum, playhouse, or whatever. Does the city not have interest in using its surplus resources to further the cultural life of the city? (Remember, the Dunn crew was dragged kicking and screaming into not quickly demolishing the library, now the SLO City Playhouse.) Are all city assets merely entry lines on some twerp's ledger sheet, and nothing more? You're nuts if you sell this building. Sincerely, Richard Schmidt u.A_s-P z-