HomeMy WebLinkAbout11/16/1999, C7 - APPROVAL OF PURCHASE OF PROPERTY AT 1095 MARSH STREET council
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CITY OF SAN LUIS OBISPO
FROM: Ken Hampian,Assistant City Administrative Office
Prepared By: Neil Havlik,Natural Resources Manage
SUBJECT: APPROVAL OF PURCHASE OF PROPERTY AT 1095 MARSH
'STREET
CAO RECOMMENDATION
Approve a Purchase and Sale Agreement with the Cheda Revocable Family Survivors' Trust for
purchase of the property at 1095 Marsh Street in amount of$286,000, which amount includes
certain expected and possible additional costs.
DISCUSSION
The Purchase
This 11,000 square foot commercial property on the corner of Marsh Street and Santa Rosa
Avenue was for many years a filling station. The station was closed some years ago, the
underground storage tanks were removed, and since that time the property has been used as an
auto repair facility and battery sales office, known as John's Batteries. The property has been
identified in the Conceptual Physical Plan for the City Center as a park having frontage on San
Luis Obispo Creek.
Since the acceptance of the Conceptual Physical Plan for the City Center, there have been no
actions taken in regard to this property. However, City staff learned earlier this year that the
family was considering the sale of the property. Staff had several meetings with family
representatives and their attorney, Mr. Christopher Guenther, which led to several offers and
counteroffers, and eventually a purchase price of$286,000 was agreed to by the City Council in
closed session. The purchase price specifically included certain costs, such as environmental
testing and cleanup, and demolition of the existing structure on the property.
Completion of the purchase is subject to (1) successful environmental cleanup of the site and
demolition of the existing structure; and (2) relocation of the tenant. The latter will be in
addition to the purchase price (i.e., at City expense), and is expected to cost approximately
$22,000. At the present time we do not anticipate difficulties with either of these matters.
Potential Use of the Site
As noted above, the property has been identified in the Conceptual Physical Plan for the City
Center as a park having frontage on San Luis Obispo Creek. The site has also elicited the
interest of the Chinese community within San Luis Obispo as a possible site for a Chinese
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Council Agenda Report-Authorization of Application for Grant Funds
Page 2
garden. Upon close of escrow, the CAO will solicit a formal proposal from the Chinese
community for such a use, as well as other potential park.uses for the site.
FISCAL EMPACT
Sufficient funds for this project are in the current City budget, identified as "Downtown Plan
Property Purchases". There is $400,000 allocated to this budget item, which appears more than
adequate to purchase the property, cavy out the relocation, and undertake:site improvements.
Attachments:
Location Map
Purchase Agreement
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BUCKLEY TRACT, R.M. Bk.A Pg. 46
MISSION VINEYARD TRACT, R.M. Bk.A Pg. 143
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PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT is entered into by and between the
CITY OF SAN LUIS OBISPO ("Buyer"), a California Charter Municipal Corporation,
and CHEDA REVOCABLE FAMILY SURVIVOR'S TRUST, dated March 21 , 1990,
("Seller"), pursuant to the following:
RECITALS
WHEREAS, Buyer is a California charter Municipal Corporation; and
WHEREAS, Buyer, acting through its City Council and through adopted public
procedures, has determined that certain lands within the City of San Luis Obispo
are important to the scenic character, healthy natural environment, urban open
space, and economic and social well being of the community and its citizens; and
WHEREAS, Buyer seeks to preserve and conserve characteristics such as
visual quality, wildlife habitat, urban open space, and other community attributes
where appropriate within the City; and
WHEREAS, the purchase of said land in the judgment of Buyer would act to
preserve the values indicated above and serve an important municipal purpose; and
WHEREAS, Seller is owner of certain lands within the City which are of
scenic and ecological value to the City of San Luis Obispo; and
WHEREAS, Seller wishes to protect and restore the scenic and ecological
values which exist or could exist on the Property.
WHEREAS, Seller has disclosed to Buyers that the property was used as the
site of a gasoline station for several years and in conjunction therewith, there were
underground gasoline storage tanks on the property, which were removed in 1991 .
WHEREAS, Seller has undertaken preliminary sub-surface site assessment of
the property and has provided Buyer with a copy of the written report, of Earth
Systems Consultants dated January 29, 1999.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
BUYER hereby agrees to purchase, and SELLER hereby agrees to sell, all of
Seller's right, title and interest in that certain real property in the City of San Luis
Obispo, together with all easement, rights and appurtenances thereto (specifically
including all water and mineral rights actually owned by Sellers), described in
Exhibit A attached hereto, subject to the terms and conditions of this Agreement.
Said property is hereinafter referred to as the "Property" and generally depicted in
Map Exhibit B attached hereto.
1. PURCHASE PRICE.
(a) The purchase price for the property is Two Hundred Eighty Six
Thousand Dollars ($286,000), payable as described in Paragraph 5 below, and less
the cost of the following:
- Demolition and removal of the existing structure on the property,
including foundations, concrete, asphalt, and all flatwork (not including retaining
wall);
completion of environmental testing of the site by Earth Systems
Consultants, hereafter "(ESC)" (including but not limited to a Phase I and Phase II
Environmental Assessment); and
any required remediation determined to be necessary by that testing
(including any additional remediation required as a result of discovery during the
remediation work identified by testing).
Seller shall perform the above demolition, testing, and remediation in compliance
with all local, state, and federal rules and regulations, and the costs thereof shall be
deducted from the Purchase Price. Any remediation shall be done pursuant to a
remediation plan prepared by a licensed civil engineer.
2. CONVEYANCE
Title to the Property shall be conveyed by Grant Deed and shall be insured by
a CLTA (or at Buyer's election, an ALTA) owner's policy of title insurance in the
amount of the purchase price, showing title vested in Buyer, subject only to those
exceptions listed in the Preliminary Title Report and/or Supplemental Report which
are approved or deemed approved by Buyer.
3. CONDITIONS PRECEDENT FOR BENEFIT OF BUYER
Buyer's obligation to purchase the Property as expressly conditioned upon
the satisfaction, deemed approval, or Buyer's waiver of each of the following
conditions:
(a) Title Report. Buyer's approval of the exceptions to the title set forth
in CLTA preliminary title report for the Property (the "Preliminary title Report").
Buyer shall have ten (10) days after the receipt of the Preliminary Title Report, and
copies of all documents referenced therein, to provide to Seller written notice of
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Buyer's disapproval of any title exception. Any title exception not so disapproved
shall be deemed approved, and provided that if a Supplemental CLTA title report is
issued showing any exception not shown on the Preliminary Title Report, Buyer
shall have an additional ten 0 0) calendar days after receipt of such Supplemental
Report to approve or disapprove any such title exception. If Buyer disapproves any
title exception, Seller shall have no obligation to cure such disapproval (except that
Seller shall be obligated to remove any liens) but Seller may elect, by written notice
to Buyer within five (5) calendar days after receipt by Seller of such notice of
disapproval to attempt to remove such disapproved items. If Seller is unable within
a reasonable time to accomplish such cure or removal, or if Seller elects not to
attempt to so cure or remove (which election shall be communicated to Buyer
within ten (10) days after receipt of Buyer's notice of disapproval), then Buyer may
elect to (i) terminate its obligations under this Agreement by providing written
notice to Seller, or (ii) waive its objections to such exception, or (iii) elect to correct
any such disapproved exception itself, in which Seller shall use its best efforts to
assist Buyer whenever Buyer may request in order to cure any such defect,
provided that Seller shall incur no monetary obligations in connection with such
cure, and provided escrow shall be extended for a reasonable period in which to
effect such cure.
(b) Inspection and Approval of Property and of Environmental Testing
Thereon. Buyer's acceptance of the findings of the necessary environmental
testing of the site, including but not limited to a Phase I and Phase II Environmental
Assessment and report. It is understood that Buyer's failure to give written notice
to Seller of the "unacceptability" of such report in the manner provided in 3.(d)
below shall be construed as a waiver of this condition.
Access to the property shall be given to Buyer, its agents and
authorized representatives during normal business hours upon at least one (1) day's
notice to Seller, at Buyer's own cost and risk, for any purposes relating to Buyer's
conditions. Buyer shall indemnify and defend Seller against and hold Seller
harmless from all losses, costs, damages, liabilities, and expenses, including,
without limitation, reasonable attorney fees arising out of Buyer's entry onto the
Property or any activity thereon by Buyer or its agents, or authorized
representatives prior to the Close of Escrow, except to the extent any such losses,
costs, damages, liabilities, and expenses arise out of the gross negligence or willful
acts of Seller. In the event of any claim of lien for materials supplied, or labor or
professional services performed on behalf or at the request of Buyer, Buyer shall
promptly satisfy and discharge such lien at its sole cost and expense upon demand
therefore by Seller. Buyer shall repair any and all damages to the property caused
by any such tests and inspections. Any entry onto the Property by Buyer or its
agents, or authorized representatives shall be at reasonable times. The provisions
of this Section shall survive the Close of Escrow.
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(c) Relocation. Buyer's satisfactory agreement with the current tenant on
the property for any and all relocation costs. Seller acknowledges that the tenant
must be given 90 days written notice of termination and Seller agrees to cooperate
with Buyer in meeting its relocation assistance requirements. Buyer shall be
obligated to diligently cause the relocation of the tenant, at it's sole cost and
expense. If Buyer cannot complete the relocation of the tenant within 105 days
from the date the environmental report is completed, Seller may, at their option,
terminate this agreement, without further obligation to Buyer. Seller shall be
entitled to retain any environmental test reports completed prior to the date of
termination.
(d) Buyer's Withdrawal of Offer Buyer shall have the right to withdraw
this offer without further obligation to Seller, if, within fifteen (15) days of receipt
of the environmental test report on the property a) Buyer finds conditions outlined
in such report to be unacceptable to allow Buyer to continue with the transaction or
b) Buyer has not been able to reach satisfactory agreement with tenant on the
property regarding relocation. It is understood that Buyer's failure to give timely
written notice to Sellers under this paragraph, shall be construed as a waiver of
Buyer's right to withdraw.
4. ESCROW.
(a) Escrow. Buyer and Seller will establish an escrow ("Escrow") with
Chicago Title Company, hereafter referred to as "Escrow Agent") within ten (10)
days of the execution of this Agreement, subject to the provisions of the standard
conditions for acceptance of escrow and the terms and conditions in this
Agreement, with a signed counterpart of this document to be delivered as escrow
instructions to Escrow Holder. In the event of any conflict between the terms of
this Agreement and the standard conditions for acceptance of escrow, the terms of
this Agreement shall control.
(b) Deposit by Buyer: Withdrawals by Seller. Upon signing of this
agreement by both parties, Buyer shall deposit into escrow funds sufficient to pay
the cost of the environmental testing required for the property. Seller shall obtain
an estimate of the cost of the environmental testing from ESC and provide a copy
to Buyers. Buyer shall deposit the amount of said estimate within 5 days of receipt
thereof. Seller shall have the right to withdraw said funds for the purpose of
paying for the environmental testing study and report, including any retainer
deposits required by ESC. Said report shall be delivered to both Buyer and Seller
upon completion and as noted in Paragraph 3(d) above. Buyer shall have fifteen
(15) days from that date (1) to determine whether the site remediation
requirements indicated in the testing .are acceptable to Buyer and (2) to determine
whether Buyer can make satisfactory arrangements for tenant relocation. Upon
such determination Buyer may elect to withdraw the offer to purchase and cancel
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the escrow under paragraphs 3.(b) and 3.(d) above. If Buyer elects to continue
with the transaction, Buyer shall deposit the balance of the $286,000 purchase
price into the escrow within 15 days from the date of receipt of said report. Seller
shall have the right to withdraw the newly deposited funds from the escrow for the
purpose of paying for demolition on the site and/or the environmental remediation
indicated by the test report, including any retainer amounts required by the
contractor(s) hired for this purpose. This shall include the remediation of any site
contamination discovered during the remediation process indicated by the
environmental testing report. Upon completion of the remediation and closing of
the remediation site the balance of the monies may be withdrawn by the Seller
upon close of escrow.
(c) Prorations and Fees.
(i) Real property taxes and rental income shall be prorated to the
cost of escrow.
(ii) Seller shall pay (1) the documentary transfer tax, (2) the
premium for a CLTA policy of title insurance, and (3) recording fees. If Buyer
elects an ALTA policy of title insurance, Buyer shall pay the portion of the premium
that exceeds the premium for a CLTA policy of title insurance.
(iii) All Escrow fees shall be borne equally between Buyer and Seller.
All other fees and costs shall be allocated according to custom in San Luis Obispo
County.
(d) Closing Date. The close of escrow shall occur as soon as possible
after a copy of this Agreement is deposited with the Escrow Holder, and the
demolition, remediation, and relocation of the existing tenant have been completed.
As used above, with respect to remediation, the term "completed" shall mean the
date when any remediation has been completed, as determined by the lead
government agency in charge of the same.
5. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS
(a) Authorized Representative. Buyer and Seller hereby represent and
warrant to each other that the persons who sign this agreement and any other
documents required to be executed by such party to perform its obligations
hereunder, shall have all requisite power and authority to have entered into this
Agreement, and that all authorizations required to be obtained by or on the part of
such party to execute and perform this Agreement have been obtained.
(b) Proof of Citizenship.. Seller is not a foreign person as such term is
used in Section 1445 of the Internal Revenue Code. Prior to the Close of Escrow,
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Seller shall deposit in escrow a non-foreign affidavit as provided under said Section
1445.
(c) Delivery of Prooertx. After demolition and remediation, possession of
the property shall be delivered by Seller to Buyer upon the close of escrow in an
"AS IS - WHERE IS" condition and Seller makes no warranty with respect thereto.
Seller may remove, at Seller's expense, prior to the Close of Escrow all personal
property and trade fixtures on the property.
(d) Legal Actions. Each of the parties represents and warrants to the
other that as of the Close of Escrow there are no actions, suits, or legal
proceedings related to the ownership, use, operation or sale of the Property and
that such party has not received any notice that any such actions are pending or
threatened.
(e) Brokers. Buyer and Seller each represent to the other that it knows of
no claim for broker's or finder's fees or other commissions in connection with this
transaction. If any broker or finder asserts a claim for a commission or finder's fee,
the party through whom the broker or finder makes this claim shall indemnify the
other party for any and all such costs and expenses (including attorney's fees)
incurred by the other party in defending the same.
(f) Buyer's Rights. As long as Seller diligently pursues the remediation of
any hazardous material as provided herein, Buyer shall have no right to terminate
this agreement on account of the discovery of hazardous materials after Buyer
elects to continue this transaction under 4.(b), above.
(g) Release. From and after the close of escrow, Buyer releases Seller
from any and all claims, liabilities, costs, or damages that Buyer may suffer arising
from any hazardous materials identified or discovered on, in, or under the property
by ESC.
6. NOTICES.
All notices, communications, consents; approvals and disapprovals required
or permitted hereunder must be in writing and shall be delivered by personal
delivery, facsimile, or deposited in the United States mail, postage prepaid and
addressed as follows:
TO BUYER City of San Luis Obispo
Dr. Neil Havlik, Natural Resources Manager
990 Palm Street
San Luis Obispo, CA 93401
Telephone (805) 781-7211
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TO SELLER Cheda Revocable Family Survivors Trust,
dated March 21 , 1990
c/o Christopher W. Guenther
1411 Marsh Street, Suite 108
San Luis Obispo, CA 93401
Telephone (805) 544-7161
The foregoing addresses may be changed by written notice. If served
personally, or by facsimile, service shall be conclusively deemed made at the time
of service. If served by mail, service shall be conclusively deemed made seventy-
two (72) hours after deposit thereof in the United States mail.
7. MISCELLANEOUS
(a) Entire Agreement. This Agreement, and the exhibits hereto, contains
the entire agreement between the parties hereto. No modification or addition to
any term or provision hereof shall be effective unless made in writing and signed by
both parties hereto. The captions and headings in this Agreement are for reference
only and shall not be deemed to define or limit scope or intent of any of the terms,
covenants, conditions or agreements contained herein.
(b) Attorneys' Fees. If litigation is commenced between the parties, the
prevailing party in that litigation shall be entitled to recover from the nonprevailing
party all reasonable attorney fees and costs.
(c) Survival. All of the terms, provisions, representations, warranties, and
covenants of the parties under this Agreement shall survive the Close of Escrow
and shall not be merged in the Deed or other documents.
(d) Successors. This Agreement shall inure-to the benefit of and shall be
binding upon the parties to this Agreement and their respective heirs, successors,
and assigns.
(e) Governing Law. This Agreement shall be governed and construed in
accordance with California law.
(f) Time of Essence. Time is of the essence in this Agreement.
- (g) Offer and Acceptance. This agreement shall be of no force or effect
whatsoever until signed by authorized representatives of both Buyer and Seller.
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(h) Exhibits.
A. Legal Description
B. Map
(i) Tax Deferred Exchange. Seller reserves the right to convert this
transaction to an exchange qualifying for non-recognition of gain under Internal
Revenue Section 1031 and the applicable provisions of the California Revenue and
Taxation Code at any time before the closing date. Seller and Buyer agree,
however, that consummation of the transaction contemplated by this agreement is
not predicated or conditioned on completion of such an exchange. If Seller elects
to complete an exchange, Buyer shall execute all escrow instructions, documents,
agreements, or instruments reasonably requested by Seller to complete the
exchange. Buyer shall incur no additional liabilities, expenses, or costs as a result
of or connected with the exchange.
(j) Counterparts. This agreement may be executed in one or more
counterparts, each of which shall deemed an original, but all of which together shall
constitute one in the same instrument.
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"Seller"
CHEDA REVOCABLE FAMILY SURVIVORS TRUST,
dated March 21 , 1990
RUTH G. CHEDA
Trustee
Date::
"Buver
CITY OF SAN LUIS OBISPO
by:: - - -
ALLEN K. SETTLE, MAYOR
Date: '
ATTEST:
Lee. Price, CMC
City Clerk
APPROVED AS TO FORM:
fr Jorg _nse❑
ity Attor y
Cheda\saleagr.wpd
9
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Exhibit.A
Legal Description
Lots Sixteen 116) and Seventeen (17) in Block One Hundred
Nine (109), according to Plat of a .tract of land belonging to
William Buckley filed for record.in the. Office of the County
Recorder of said County November 15, 1883..
10
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Exhibit B CAL.
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