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HomeMy WebLinkAbout06/06/2006, C6 - PURCHASE OF 614 MONTEREY STREET i.; i j councit June 6,2006 j ac,Enaa Repoizt CITY OF SAN LUIS 0BI.SP0 FROM: Jay Walter,Director of Public Works Prepared By: Tim Bochum,Deputy Director of Public Works SUBJECT: PURCHASE OF 614 MONTEREY STREET CAO RECOMMENDATION 1. Authorize the purchase of property located at 614 Monterey Street for $1,165,000 and an allocation of $20,000 to cover the costs associated with closing escrow and property acquisition. 2. Authorize the preparation of a letter of`-`friendly" condemnation. 3. Allocate $435,000 from the Parking Fund working capital balance for this property purchase. and related costs. 4. Authorize the CAO to sign purchase and other necessary documents and the Mayor to execute a certificate of acceptance. DISCUSSION Recently staff became aware that the owners of property at 614 Monterey Street (Attachment 1) may be interested in selling their property. As the City Council has an informal policy of acquiring properties that serve its long-term interest and that do not involve the use of eminent domain, staff was directed to investigate the site and obtain an appraisal prior to any negotiations for purchase. The City has long term interest in the site. It is one of the few shown for eventual City use in the Conceptual Physical Plan for the City's Center (Downtown Plan). The Plan currently identifies the site for part of a cultural/parking/office or retail complex. Although the ultimate use of the site will be determined by Council in the future, the property is the one remaining privately owned parcel within the project area.referred to as the "PalmNipomo site 614 Monterey is currently used as a single family residence. Staff recommends that, if purchased, this property be left in its current use until such time as the entire site is redeveloped. Staff feels that the best property management strategy would be to contract with a professional residential property management company (rather than the Housing Authority) similar to what was done for the City property at 663 Palm Street (adjacent to this location). This would minimize disruption to the current renter and the Parking Fund would receive the bulk of the rents (less a property management fee and maintenance costs which are anticipated to be minor) rather than the typical $1/year paid by the Housing Authority. One of the current Council's goals is to consider future development scenarios of the site — especially a proposed parking garage. Pursuing that goal, the City's recently hired consultants C4 f I Purchase of 614 Monterey Street Page 2 working on the Palm-Nipomo Parking Garage conceptual plan are to prepare ideas of how the site can be developed with and without this property. However, the consultants feel that adding this property to the site would increase the design possibilities and make for a more efficient parking garage layout. Staff recommends the purchase 614 Monterey because of beneficial use in the City's long range plans. With this purchase, and the others made previously, the City will own a rectangular piece of property of over an acre that will offer many possibilities for future use. These could include the currently expected combination of office, cultural and parking uses called for by the Downtown Concept Plan or other future uses that deemed of benefit for the City. The seller has requested that the City offer its use of eminent domain to assist in financial issues associated with selling the property. This does not mean that there are adverse relations between the seller and the City. By indicating the City's willingness to use its powers of eminent domain the seller is given (by law) a longer period in which to find and purchase a suitable replacement property. This is an advantage that municipalities can offer when negotiating a property purchase and the City has done this on numerous occasions in the past. Staff recommends that this procedure also be utilized in this transaction. CONCURRENCES The Planning Commission reviewed the proposed property acquisition for General Plan conformity on May 24, 2006. The Commission unanimously found the proposed acquisition to be in conformance with the General Plan. A copy of the Planning Commission staff report is attached (Attachment No. 2). While the Downtown Association has not been involved in this particular purchase, they are on record as being strongly supportive of a parking facility at this location as our next parking structure priority. FISCAL IMPACT The City solicited an independent appraisal from Schenberger, Taylor, McCormick, and Jecker of San Luis Obispo, California. The appraiser used similar property sales and gross multipliers to arrive at its conclusion that the estimated current fair market value of the property at $1,165,000. There is approximately $750,000 already budgeted for property acquisition in the current Parking Services budget. Should the Council decide to pursue this project, additional funding of$435,000 for the purchase, plus closing costs presently estimated at $20,000, would be needed from the unappropriated working capital balance of the Parking Fund. Based on the current parking enterprise Fund review, the projected working capital at the end of.2005-07 is $2.7 million, which is adequate to fund this purchase and retain working capital balances at policy levels. ALTERNATIVES 1. Do not purchase the property. Given the unique opportunity to purchase a key site identified in the Downtown Plan with a willing seller at a reasonable cost, we do not recommend this option. C� ^�. Purchase of 614 Monterey Street Page 3 2. Renegotiate the selling price or other terms of the sale. Because the City approached the property owner about purchasing their property, the City must offer the appraised value of the property and not a lower price. 3. Fund the purchase from another source. While the ultimate use of this site, if purchased by the City, has not been yet finalized, it is likely that it will be incorporated in some fashion into the plans for the Palm-Nipomo parking structure, which are currently being developed. As such, funding from the Parking Fund is appropriate at this time. In the event that the site is not used for parking at some time in the future, then the Parking Fund will be reimbursed from the appropriate funding source at that time. In the interim, the Parking Fund will receive the rental income from the property. ATTACHMENTS 1. Vicinity map 2. Planning Commission staff report AVAILABLE IN COUNCIL OFFICES Purchase Agreement L\-CAR Reparts\2006\Parldng\614 Palm 6-6-06 cc agenda report.DOC CU�3 Attachment 1 Site Map from GIS Land Use Map X vp i Note: Shaded area denotes City owned property Attachment 2 CITY OF SAN LUIS OBISPO PLANNING COMMISSION STAFF REPORT rrEM# FROM: Jeff Hook, Interim Deputy Director MEETING DATE: May 24, 2006 BY: Peggy Mandeville, Principal.Transportation Planner FILE NUMBER: GPC 75-06 PROJECT ADDRESS: 614 Monterey Street SUBJECT: General Plan conformity determination for a potential property acquisition at 614 Monterey Street, to enable the development of a public facility. RECOMMENDATION Determine and report to the City Council that the property acquisition, if pursued, is in conformance with the General Plan. DISCUSSION Data Summary Property Owner. Greenaway,David Heirs and Etux Owner's Representative: Scott and Wally Greenaway General Plan Land Use Designation: Office Current Zoning: O-H Surrounding Uses: Public parking (n & e), children's museum and private parking (s), City owned single family residence(w) Environmental Status: Categorically exempt as an existing facility (CEQA Guidelines Section 15301; future development of a public or cultural facility will be subject to environmental review. Site Description The proposed property acquisition is an 8,290 square-foot lot containing one single family residence constructed in 1939. The City lists the property's historical designation as a "contributing"property and the site is located within the Downtown Historic District. Why.is the City thinking of buying this property? The City tries to obtain sites intended for public facilities from willing sellers as opportunities arise, rather than by condemnation. The subject site is one of those opportunities. The Downtown Concept Plan shows eventual public ownership of a larger rectangle of property located between Monterey and Palm bordering on Nipomo Street (see Attachment 1). The Greenaway property is the one remaining piece that has not yet been acquired by the City. The Plan calls for a number of uses on the entire site: cultural or historical uses along the Monterey Street frontage; retail or office along the Nipomo Street.frontage; a parking garage behind the . uses on Monterey and Nipomo and pedestrian access paths along the boundary with nearby Planning Commission Staff Report—633 Palm Street Page residential properties. The City Council has designated planning for the eventual parking garage as one of its goals for the FY 2003-05 and FY 2005-07 financial periods and as such, the City has been working with a design consultant to develop possible design options for a structure at this location. To maintain design flexibility, the Council to date has requested that the consultant develop some designs that impact only the rear half of the Greenaway property and some designs that impact the entire property,but maintain the oak tree in the front yard. What will the City do with the property? For the immediate future, the house would remain as rental housing. The property's ultimate use will be determined by this or future City Councils. What is the Planning Commission's role? California law requires that before the City acquires real property, it must first refer the item to the Planning Commission for a determination of conformity with the General Plan (Government Code Section 65402). The Commission must then hold a public hearing and report its findings to the City Council. A finding that a proposed acquisition conforms to the General Plan does not necessarily mean the Commission endorses a particular project for the site. There are no specific sanctions in State law if an acquisition is found not to conform to the General Plan. A finding of nonconformance could make a project vulnerable to legal challenge through Government Code provisions requiring General Plan conformity for new development. What does the General Plan say? The Land Use Map shows the site as Office. (Typically, the Land Use Map designates property as Public only if it is owned by a government agency, to avoid potential "takings" issues.) Land Use Element Figure 4 shows the site as being within the Downtown Planning Area and just outside the Downtown Core(see Attachment 2). Land Use Element policy 4.2.1 says, "Downtown residential uses contribute to the character of the area, allow a 24-hour presence which enhances security, and help the balance between jobs and housing in the community. Existing residential uses within and around the commercial core should be protected, and new ones should be developed." As this purchase does not propose to eliminate housing, this policy will need to be addressed in more detail when a proposal to change the residential use is presented. Land Use Element policy 4.2.2 says, "Residential uses within some downtown areas designated Office prior to this element's 1994 update should be maintained, or replaced as new offices are developed. The City should amend the Downtown Housing Conversion. Pennit process to preserve the number of dwellings in the Downtown Core and the Downtown Planning Area by adopting a "no net housing loss" program by amending the Downtown Housing Conversion ordinance. The amendment shall ensure that within each area, the number of dwellings removed shall not exceed the number of dwellings added." There is no proposal to eliminate housing at this time and thus this policy will be reviewed when the City Council determines a final use for Planning Commission Staff Report—633 Palm Street Page the site. Land Use Element policy 4.10 says, "There should be a diversity of parking opportunities. Any major increments in parking supply should take the form of structures, located at the edges of the commercial core, so people will walk rather than drive between points within the core." The acquisition is consistent with this policy as the Concept Plan placed the area for off-site parking just outside the edge of the core as defined by Figure 4 of the Land Use Element. Land Use Element policy 5.2.2 says, "An appropriate area for cultural facilities is the vicinity of Mission Plaza." Figure 5 shows a "Cultural Facilities Area" extending approximately from Monterey Street to San Luis Obispo Creek and from Nipomo Street to the Mission. The subject site is at the edge of the mapped area and is consistent with the text policy. Land Use Element program 5.6 says, "The City will attempt to acquire land for cultural facilities or Mission Plaza extension as sites become available." The acquisition is consistent with this program as the property owner has expressed an interest in selling their property, and the site would potentially allow improvements and facilities that support cultural uses. Housing Element policy.3.2.1 says "Encourage the rehabilitation, remodeling or relocation of sound or rehabitable housing rather than demolition. Demolition of non-historic housing may be permitted where conservation of existing housing would preclude the achievement of other housing objectives or adopted City goals." As this purchase does not propose to eliminate housing, this policy will need to be addressed in more detail when a proposal to change the residential use is presented. Housing Element policy 3.2.5 says "Preserve historic homes and other types of historic residential buildings, historic districts and unique or landmark neighborhood features." As this purchase does not propose to remove the historic house, this policy will need to be addressed in more detail if and when a proposal to demolish or relocate the house is made. Housing Element program 3.3.5 says "Preserve the number of dwellings in the Downtown Core and the Downtown Planning Area by adopting a "no net housing loss" program by amending the Downtown Housing Conversion Permit Ordinance. The amendment shall ensure that within each area, the number of dwellings removed shall not exceed the number of dwellings added." As this purchase does not propose to eliminate housing, this policy will need to be addressed in more detail when a proposal to change the residential use is presented. 'Conservation and Open Space Element policy 3.21.3 says "Historically or architecturally significant buildings should not be demolished for substantially changed in outward appearance, unless doing so is necessary to remove a threat to health and safety and other means to eliminate or reduce the threat to acceptable levels are infeasible." As this purchase does not propose to remove the historic house, this policy will need to be addressed in more detail if and when a proposal to demolish or relocate is made. Conservation and Open Space Element policy 3.21.5 says "In evaluating new public or private development, the City should identify and protect neighborhoods or districts having historical character due to the collective effect of Contributing and Master List historic properties." There i Planning Commission Staff Report—633 Palm Street Page are three Master List historic properties and three Contributing historic properties on this block, between Broad and Nipomo. The purchase and conversion of private residential property to public parking has the potential of further changing the uses and visual character of this older, historic residential neighborhood. In this case, it would encourage the neighborhood's transition into a mixed-use neighborhood with dwellings, offices, parking and cultural facilities. That transition began with previous parking lot and office development and with the construction of the Children's Museum. If the City opts to purchase and redevelop this and adjacent city-owned properties, it must address this policy in more detail in the project's site layout, architectural and landscape design and uses. Conservation and Open Space Element policy 7.22.1 says that "Significant trees", particularly native species, shall be protected. There is a large Coast Live Oak on the property that may be determined "significant" given its size and aesthetic value. No changes are proposed at this time that would affect the tree. If the City opts to purchase and redevelop this and adjacent city- owned properties, it must address this policy in more detail in the project's site layout, architectural and landscape design. ALTERNATIVES The Commission may determine that the acquisition does not conform to the General Plan. The Commission may continue the item. There is no legally mandated deadline for Commission action. Attachments: 1. Vicinity Map 2. Land Use Element Map 3. Figure 4—Downtown Planning Area 4. Figure 5—Public Facilities Areas JH CLO r�'