HomeMy WebLinkAbout03/07/2000, C7 - APPROVAL OF PURCHASE OF REAL PROPERTY IN STENNER CANYON FROM UNION PACIFIC RAILROAD COMPANY council Medry Daee
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CITY O F SAN LUIS O B I S P O
FROM: Ken Hampian, Assistant City Administrative Officer �I
John Moss,Utilities Director,syn
Prepared By: Neil Havlik,Natural Resources Manager fdl#
SUBJECT: APPROVAL OF PURCHASE OF REAL PROPERTY IN STENNER CANYON
FROM UNION PACIFIC RAILROAD COMPANY
CAO RECOMMENDATION
1. Approve the purchase of a 49-acre property in Stenner Canyon from the Union Pacific
Railroad Company for$65,000,plus an allowance of$5,000 for closing costs.
2. To fiord the purchase,bring forward and appropriate$70,000 from the Capital Improvement
Plan's Salinas Reservoir Mitigation program(previously scheduled for 2002-03).
DISCUSSION
The Union Pacific Railroad (UPRR) property in Stenner Canyon consists of four parcels totaling
363 acres. One of the parcels, of 49 acres, lies within the San Luis Obispo Greenbelt, and is
where the State Water pipeline and Salinas Reservoir pipeline emerge from the Cuesta tunnel.
The parcel is a valuable resource area, offering significant potential.for oak woodland, wetland,
and grassland mitigation. City staff has been very interested in this parcel for that mitigation
potential, and for its value in cooperating with Cal Poly on long-term research on mitigation.
Pursuant to Council direction, staff has had discussions regarding this property with the Railroad
Company since August 1998. We have reached agreement on all matters of the transaction, and
staff therefore recommends that the City Council approve the purchase.
FISCAL IMPACT
The cost of the land is $65,000, the appraised value of the property. There will also be minor
closing costs, not to exceed $5,000. The property has considerable potential for oak woodland
mitigation that will be needed in relation to either the Salinas or Nacimiento projects. Water
Enterprise funding for the Salinas Reservoir Mitigation Program has been scheduled in fiscal year
2002-03 of the Capital Improvement Plan. It is recommended that these funds be brought forward
and appropriated to support this transaction. A portion of these funds will be returned to the Water
Fund, since the City has also received a grant of$10,000 from the Federal Government in support
of the acquisition. However, as is usual with Federal grants, the grant monies will be paid to the
City only after the transaction has been fully completed with UPRR.
Attachment: Letter agreement,map and draft deed from Union Pacific Railroad Company.
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UNION PACIFIC RAILROAD COMPANY
Real Estate Department
R.D.Uhrich ANEWIL J.L Hawkhs
Assistant Wee President 49939M Director-0perakons Support
.A.Ani M.E Heenan
DirectDr-Cartracts DnctorA&=Wjafion 8 Budgets
D.D.Brown D.H Lighlwktie
Di2cEor Real Fsfate Duedor4teal Estate
M.W.Casey T.K Love
General Diteda-Specht Properties 1800 Famam Street Diredor4teal Estate
J.P.Gade Omaha,Nebraska 88102
DirectoaFacRy Management Fax(402)887-3801
August 17, 1999
Folder No.: 1721-39
Neil Havlik
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401-3249
Dear Mr. Havlik:
This Letter of Understanding is concerning the proposed sale between Union
Pacific Railroad Company (Railroad Company) and The City of San Luis Obispo (Pur-
chaser), of certain property (Property) near San Luis Obispo, California, as shown on
the attached print.
The undersigned is willing to recommend to the Railroad Company's
Management a sale of the Property subject to the following terms and conditions:
1. Description of Property:
The Property to be conveyed shall consist of a parcel of land totaling approximately 49
acres, as generally depicted on the print attached.
2. Consideration -Sale Price:
The sale price for the Property shall be $65,000 or approximately $.1,327.00._per acre.
Area is subject to certification by Railroad Company's Manager-Descriptions and any
adjustments from the 49 acres will be prorated in determining final consideration.
3. Terms - Possession -Conveyance - Reservation:
Terms of the sale will be cashier's or certified check upon delivery of deed and
possession of the Property will be given at that time.
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Corporate Grant Deed
The Property will be conveyed by "••��, as is, where is, without any
warranties, and subject to all conditions, restrictions, reservations, easements and
encumbrances whether recorded or otherwise applicable to the Property. Railroad
Company will reserve from this sale an easement for all existing roadways, utilities and
other facilities, including, without limitation, the Railroad Company's rights under any
existing lease or license agreement covering any such facilities.
The Purchaser assumes the risk of and agrees to indemnify and hold the Railroad
Company harmless, and to defend the Railroad Company against and from any claims,
costs, liabilities, expenses (including, without limitation, court costs and attorney fees),
or demands of whatsoever nature or source for any defects or environmental problems,
latent or obvious, discovered or undiscovered in the Property being conveyed.
4. Title Insurance and Abstract of Title:
The Railroad Company will not furnish Title Insurance nor an Abstract of Title to the
Property, however, Purchaser may independently obtain same.
S. Minerals:
It is understood that the Railroad Company will reserve all of its right, title and interest in
and to the minerals and mineral rights applicable to the Property without right of surface
entry.
6. Offer-Closing:
This offer shall continue in full force and effect for thirty (30) days from the date hereof.
In the event this offer is not accepted by the Purchaser within such thirty (30) day
period, then this offer shall be void.
This transaction shall close on or before 90 days after the date of the Purchaser's
execution of this Letter with approval by Railroad Company Management as hereinafter
set forth. Railroad Company will then provide Purchaser a copy of the Deed for review
and approval. Providing the Deed is approved, Purchaser will so advise and forward a
cashiers check in the appropriate amount. Upon receipt of the cashiers check the
Railroad'-Company will forward the original deed to you for recording.
7. Tax Proration:
After closing, local property taxes, if any, and other assessments applicable to the
Property shall be prorated as of the date of closing by Railroad Company's tax
department.
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8. Submission to Railroad Company Management:
Following receipt of the Purchaser's acceptance and approval of this Letter of
Understanding, this proposal will be submitted to Railroad Company Management for
review and approval. The parties hereto shall promptly thereafter take the necessary
steps to close this transaction as provided for herein.
9. Letter of Understanding:
It is understood and agreed that this document is a Letter of Understanding and not an
Agreement to Purchase/Sell until accepted by the Purchaser and approved by Railroad
Company Management. Either of the parties hereto shall have the right to terminate
negotiations for the purchase/sale of the Property at any time prior to such acceptance
and approval. This termination is without any further obligation of either party to the
other.
10. Negotiations:
Negotiations concerning this transaction have been carried on by both parties without
the intervention-of any person who will produce any valid claim against either of the
parties hereto, for brokerage commission or other like payment. Each party hereto shall
indemnify and hold harmless the other party against and from all claims for brokerage
commission or other like payments arising out of this transaction.
11. Transfer Documentation, Excise Tax and Closing Costs:
All real estate transfer, documentation, closing costs and/or excise taxes resulting from
this transaction will be paid for by the Purchaser.
12. Governmental Approvals:
It is understood between the parties that this transaction is subject to all governmental
restrictions and regulations, as well as the intended use of the property by the
Purchaser,including, but not limited to, subdivision and zoning regulations and building
and environmental permits. Purchaser, at Purchasers sole expense, shall attempt to
sa s
all governmental requirements and obtainali necessary permits. In the event
the Purchaser is unable to satisfy such requirements or obtain the necessary permits
before closing, Purchaser shall, upon written notification to the Railroad Company, elect
to terminate this transaction. This termination is without any further obligation of either
party to the other.
13. Fiber Optics:
Purchaser will contact the Seller's Telecommunications Operations Center at 1-800-
C74
336-9193 during regular business hours to determine if fiber optic cable is buried on the
Property. Purchaser understands that agreements may be in place between the
Railroad Company and various telecommunications companies that may allow.fiber
optic cable to be buried on the Property during the period between Purchaser's
execution of this Letter of Understanding and the date that Purchaser actually takes
possession of the Property. As such, Purchaser must call the Railroad Company's
Telecommunications Control Center immediately prior to digging, even if Purchaser has
called this number before.
14. California Subdivision Map Act:
It may be necessary to comply with provisions of the Subdivision Map Act. In obtaining
approvals from the appropriate governing body, various requirements may be
established with regard to street widths, street improvements, drainage, plan approvals,
design, related surveys and map preparation, fees and various matters. Any and all
expenses in this regard, including dedications, lot line adjustments and/or parcel maps,
will be done by and at the sole cost and expense of the Purchaser.
15. Limited Permission to Enter Upon the Property for Certain Purposes:
Purchaser, and its agents and contractors, are granted the privilege for a period of sixty
(60) days after the date of Purchaser's execution of this Letter of Understanding of
entering upon the Property forthe purpose of performing non-invasive Phase I
environmental audits, surveys, engineering and feasibility studies of the Property as
Purchaser may deem necessary to determine the suitability of the Property. No
invasive activities are permitted, including, without limitation, digging, boring or
environmental sampling.
If the sale of the Property to Purchaser does not close for any reason whatsoever,'then
Purchaser shall surrender to Railroad Company originals of all audits, soils, engineering
and any other reports prepared for Purchaser pertaining to the Property and such
reports shall become the sole property of Railroad Company without cost or expense of
Railroad Company (and the contents thereof shall be kept confidential by the Purchaser
and Purchaser's consultants). Regardless of whether or not the sale of the property
closes, Purchaser shall promptly furnish Railroad Company with the original of any and
all reports-on environmental-assessments performed for the benefit of Purchaser.
Entry on the Property by Purchaser, its agents or contractors, is subject to the following
terms and conditions:
(1) Purchaser agrees to indemnify, defend and save harmless Railroad
Company and/or Railroad Company's Affiliates, their officers, agents, servants and
employees, against and from any and all liability, loss, costs and expense of
whatsoever nature growing out of personal injury to or death of persons whomsoever,
or loss or destruction of or damage to property whatsoever, where such personal injury
C7-S
death, loss, destruction or damage arises in connection with or incident to the
occupation or use of the Property by, or the presence thereof by the Purchaser,
Purchaser's agents, contractors, employees or licensees prior to closing;
(II) Purchaser covenants and agrees to pay in full for any and all materials joined or
affixed to the Property and to pay in full all persons who perform labor upon the
Property, and not to permit or suffer any mechanic's or materialman's lien of any kind or
nature to be enforced against the Property for any work done or materials furnished
thereon at the instance or request or on behalf of Purchaser, and Purchaser agrees to
indemnify and hold harmless Railroad Company against and from any and all liens,
claims, demands, costs and expenses of whatsoever nature in any way connected with
or growing out of such work done, labor performed or materials furnished priorlo
closing;
(III) If the purchase of the Property does not close, Purchaser shall, within 30 days
and at Purchaser's sole expense, restore the Property to the same condition it was in
immediately prior to the time Purchaser entered the Property, failing in which Railroad
Company may perform the work of restoration and Purchaser shall reimburse Railroad
Company for the cost and expense thereof within thirty (30) days after rendition of bill
therefor by Railroad Company; and
(IV. Notwithstanding any provisions in this Letter of Understanding to the contrary, in
the event this Letter of Understanding is terminated for any reason whatsoever,
Purchaser nevertheless shall be obligated to comply with the provisions of this Section.
16. Eminent Domain:
The parties acknowledge that the City has the authority to condemn the Property under
its power.of eminent domain. The City represents that it will institute eminent domain
proceedings in the event that the Railroad Company does not sell the Property upon
the City's demand pursuant to this agreement. The parties further acknowledge that
the Railroad Company intends to treat the sale as being sold under imminent threat of
condemnation pursuant to Sec. 1033 of the Internal Revenue Code of 1986 (26U.S.C.).
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If the foregoing reflects your understanding of the proposal between the Railroad
Company and the Purchaser with respect to the purchase/sale of the Property, please
secure the execution of this Letter of Understanding. Return to me one copy of the .
signed letter advising the correct legal entity in which the Purchaser desires to
take title to the Property. Should you have any questions, please call Ted Stenstrom
at (402) 997-3533.
Yours truly,
D
D. Vightwine
Director- Real Estate
Acknowledged and Accepted:
I lday of G
City of San Luis Obispo
B a.
Title will be taken in the following name(please print):
Mailing Address:
If Corporation, State of Incorporation:
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f NOTE:Before you begin any work,
see agreement for fiber optic provisions
Exhibit-A.
>t/ao/ss COASTAL INION PACIFIC RAILROAD COMPANY
NOTE^ASSESSOi 6"�6 Near San Luis Obispo,California
12.96
NUMBERS Sale to City of San Luis Obispo
• "' Office of Contracts&Real Estate
Omaha,NE Jan.8,1999
File:1721-39
*LEGEND*
,A Proposed sale hSn
outlined O
'NION PACIFIC RAILROAD COZY NY
Real Estate Department
R.D.Uhrinh J.L.Hawkins
Assistant Vice President
J.A.Anthony Director-Operations Support
M.E.Heenan
D.
Director-Contracts_Brown Director-Administration 8 Budc
D.it Brown D.H.Lightwine
Director-Real Estate
M.W.Casey Director-Real Estate
T.K.Love
General Director-Special Properties 1800 Farnam Street Director-Real Estate
J.P.Gatle Omaha.Nebraska 68102
Director-Facility Management Fax(402)997-3601
January 20, 2000
File: 1721-39
Neil Havlik
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401-3249
RE: Sale of Property in Stenner Canyon
Dear Mr. Havlik:
With final management approval, attached is a copy of the deed covering the
transfer of 49 acres from Union Pacific Railroad Company to the City of San Luis Obispo.
Please forward a check in the amount of$65,000 to my attention. Once I receive
the check,a fully executed original deed will be forwarded to you for your recording.
Thank you for your consideration.
Sine ,
Stenstrom
r. Manager- Real Estate
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL T0:
MAIL TAX STATEMENTS TO:
(Space above line for Recorder's use only)
1721-39
GRANT DEED
FOR VALUE RECEIVED, UNION PACIFIC RAILROAD COMPANY, a Delaware
corporation ("Grantor"), formerly known as Southern Pacific Transportation Company, a
Delaware corporation, grants to CITY OF SAN LUIS OBISPO a municipal corporation of
the State of California ("Grantee"), all of its right, title, and interest in and to that certain real
property (the "Property") situated in San Luis Obispo County, State of California, and as
more particularly described in Exhibit A, hereto attached and hereby made a part hereof.
EXCEPTING AND RESERVING UNTO GRANTOR, its successors and assigns,
forever, all minerals and all mineral rights of every kind and character now known to exist
or hereafter discovered underlying the Property, including, without limiting the generality
of the foregoing, oil and gas and rights thereto, together with the sole, exclusive and
perpetual right to explore for, remove and dispose of said minerals by any means or
methods suitable to Grantor, its successors and assigns, but without entering upon or
using the.surface of the Property, and in such manner as not to damage the surface of the
Property, or to interfere with the use thereof by Grantee, its successors or assigns.
FURTHER EXCEPTING unto Grantor, its successors and assigns, an existing
roadway located on the Property and RESERVING unto Grantor, its successors and
assigns, an exclusive easement on, along, over, under and across the ProPerty in order
for Grantor, its successors and assigns, licensees and lessees to use, maintain and repair
the existing roadway and any existing utility and communication lines or facilities now
existing and now located on the Property.
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THE PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO:
A. All matters of record.
B. All matters which would be revealed or disclosed in an accurate survey of the
Property;
C. All matters which would.be revealed or disclosed by a physical inspection of
the Property;
D. A lien not yet delinquent for taxes for real property and personal property,
and any general or special assessments against the Property;
E. Zoning ordinances and regulations and any other laws, ordinances, notices,
orders and other governmental regulations and restrictions affecting the use, occupancy
or enjoyment of the Property, and amendments and additions thereto, now or hereafter in
force or effect;
F. Licenses and easements, if any, for public utilities; and
G. Notices, orders or violations of any city, county, state or federal office,
department, or authority having or purporting to have jurisdiction, now or hereafter filed
against or affecting the Property or any part of the Property, or now or hereafter a lien
thereon or noted in the records of any such office, department or authority.
Grantor, Federal ID No. 94-6001323, is not a foreign corporation and withholding
of Federal Income Tax from the amount realized will not be made by Grantee. A
Certification prepared in conformance with IRS regulations under Section 1445 of the
Internal Revenue Code is attached as Exhibit B.
IN WITNESS WHEREOF, the undersigned Grantor has executed this Grant Deed
this day of , 2000.
Attest: UNION PACIFIC RAILROAD COMPANY
Assistant Secretary Its:
(Seal)
2
G.\LANADM\PAA\JML\1721-39G1L%=EED.WC
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ACKNOWLEDGMENT
STATE OF NEBRASKA )
ss.
COUNTY OF DOUGLAS )
On this day of , 2000, before me,
a Notary Public in and for said County and
State, personally appeared and
who are the and
the Assistant Secretary, respectively, of Union Pacific Railroad Company, a Delaware
corporation, and who are personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to in the within
instrument, and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity upon
behalf of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
(Seal)
G:%LAWAM\PA&\Jn\1731-J9GBANS =.DX 3
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UNION PACIFIC RAILROAD COMPANY
PARCEL 1: EMBIT"A"
That portion of Lot 1 of the Partition Map of a part of the Rancho Potrero De
San Luis Obispo, in the County of San Luis Obispo, State of California, referred
to in the Final Decree recorded September 29, 1985 in Book D at Page 26 of
Deeds, described as follows;
commencing at post "S.ii" as said post is shown on the map on file in the office
of the County Clerk of San Luis Obispo County, California, with the Decree in
Action No. 640 Superior Court entitled Estevan Herrera, at al. plaintiff vs.
James Herrera, at al., defendants, to which map special reference is hereby
made, and running thence from said post "S.11", S. BOO 40' E. 8.00 chains to
poast "P.60, as shown on above mentioned Map; thence S. 390 25' E. 29.60 chains
to post "D.30; thence S. 64* 45' W. 24.62 chains to post "D.40; thence N. 880 30'
W. 1.40 chains to post "D.5"; thence S. 60° 30' W. 3.44 chians to post "D.6";
thence S. 68" 45 W. 1.24 chains to post "D.70; thence S. 400 W. 2.70 chains to
poet "D.B"; and thence N. 20" 40' E. 29.17 chains to post "S.li" the point of
beginning.
EXCEPTING therefrom that portion described in the deed to the Southern Pacific
Rail Road Company, recorded December 16, 1896 in Book 11 at page 77 of Deeds, in
the Office of the County Recorder of said County.
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7PI"PA,a 07957L a Ol ZLi 67:L0 6667 0I MN
EXHIBIT B
CERTIFICATION OF NON-FOREIGN STATUS
Under Section 1445(e) of the Internal Revenue Code, a corporation,
partnership, trust, or estate must withhold tax with respect to certain transfers of property
if a holder of an interest in the entity is a foreign person. To inform the transferee that no
withholding is required with respect to UNION PACIFIC RAILROAD COMPANY's interest
in it, the undersigned hereby certifies the following on behalf of UNION PACIFIC
RAILROAD COMPANY:
1. UNION PACIFIC RAILROAD COMPANY is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. UNION PACIFIC RAILROAD COMPANY's U.S. employer identification number is
94-6001323; and
3. UNION PACIFIC RAILROAD COMPANY's office address is 1416 Dodge Street,
Omaha, Nebraska 68179, and state of incorporation is Delaware.
UNION PACIFIC RAILROAD COMPANY agrees to inform the transferee if
it becomes a foreign person at any time during the three year period immediately following
the date of this notice.
UNION PACIFIC RAILROAD COMPANY understands that this certification
may be disclosed to the Internal Revenue Service by the transferee and that any false
statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined this certification
and to the best of my knowledge and belief it is true, correct, and complete, and I further
declare that I have authority to sign this document on behalf of UNION PACIFIC
RAILROAD COMPANY.
Title:
Date:
C:\LAW=M\PAR\JML\1731-79G&W=EM.WC
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