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Home My WebLink About12/12/2000, C4 - APPROVAL OF AGREEMENT FOR EXTENSION OF OPTION FOR PURCHASE OF THE FOSTER PROPERTY council M°�°`z -1 z j agcnaa Repoi t C I TY OF S AN L U IS O B I S P O FROM: Ken Hampian,Assistant City Administrative Officer Prepared By: Neil HavWc,Natural Resources Managerl�`1q. SUBJECT: APPROVAL OF AGREEMENT FOR EXTENSION OF OPTION FOR PURCHASE OF THE FOSTER PROPERTY CAO RECOMMENDATION Approve the Agreement for Extension of Option for Purchase and Sale of Real Property with Jack and Pat Foster for a period of six months (to July 31, 2001), with regard to their 154 acre property in the Irish Hills, including an additional option payment of$10,000. DISCUSSION In February,2000,the City Council entered into a one-year, exclusive option agreement with Jack and Pat Foster to purchase their 154 acre property lying in the Irish Hills between the 360 acre Prefumo Homes dedication and the 182 acre DeVaul property dedication. It was expected that one year would be enough time to put together the funding arrangements necessary to make the project a success. Since that time, staff has secured approximately$700,000 of the $1,150,000 needed for the project, and is very optimistic that the balance will be obtained; however, it does not appear at this time that the funding package can be completely assembled by the end of the option period, January 31, 2001. For this reason staff has requested an extension from the Fosters and they have agreed,with the one caveat that an additional option payment of $10,000 be made and that this payment not apply to the purchase price. All other terms and conditions of the original option agreement will remain in full force and effect. Staff feels that the Fosters' request is reasonable given that the City of San Luis Obispo will have held the exclusive right to purchase the property for 18 months. The total option payment therefore will be $30,000($20,000 for the original option period plus $10,000 for the extension period), approximately three percent of the purchase price. Staff is anticipating successful outcome on grants covering the balance needed for this project in the first half of next year. Thus, by expending the additional option payment, City staff expect to be able to secure enough additional funding to replace it. We expect that we will be able to exercise the option in timely manner,prior to the expiration of the extended option period (that is, July 31, 2001). Assembling the Funding Package The project offers many potential enhancements or improvements to the preservation of the Irish Hills area and its numerous rare plants and wildlife habitat qualities as well as recreational features. Consequently staff has pursued funding opportunities from a variety of sources including the State Coastal Conservancy, Wildlife Conservation Board,Habitat Conservation C4-1 Ir -. Council Agenda Report—Approval of Extension of Option to Purchase Real Property a"e 2 Fund and the David and Lucile Packard Foundation, as well as City funds. At the present time, one likely scenario for funding is outlined below: • Wildlife Conservation Board $300,000 • The Nature Conservancy of California $300,000 • City of San Luis Obispo funds $300,000 • State Coastal Resources Grant Program $150,000 • Land and Water Conservation Fund $100,000 • Total $1,150,000 Applications have been made, or are being made, to all of the agencies above regarding participation in this project and response to date has been positive. FISCAL UAFACT Approving the extension and option payment will continue to "hold" the property while City staff continue to fully assemble the funding package for the property acquisition. This will provide a beneficial impact in that it will allow for additional funds,which appear to be available,to in fact be secured by the City for this project. Total City cost for the project would be approximately $340,000: $300,000 to the purchase price; $30,000 for the options; and $10,000 for other costs associated with the acquisition. These funds will come from the funding allocated in the 1999-01 Capital Improvement Program for open space acquisition. ALTERNATIVE The Council could decide not to proceed with the additional option. This is not recommended as it is tantamount to abandoning the project. Attachment: Agreement for Extension of Option C4-2 AGREEMENT FOR EXTENSION OF OPTION FOR PURCHASE AND SALE OF REAL PROPERTY This AGREEMENT FOR EXTENSION OF OPTION FOR PURCHASE AND SALE OF REAL PROPERTY is entered into by and between the CITY OF SAN LUIS OBISPO (`Buyer"), a California Charter Municipal Corporation, and JACK SLOAN FOSTER AND CHARLOTTE PATRICIA FOSTER ("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 surrounding the city of San Luis Obispo are important to the scenic character, healthy natural environment, 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, and other attributes where appropriate surrounding the City; 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 preserve, protect and restore the scenic and ecological values which exist or may exist on the Property, 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, Buyer and Seller did enter into an Agreement of Option for Purchase and Sale of Real Property on February 1, 2000, which Option was for ONE YEAR, to January 31, 2001; and WHEREAS, both Buyer and Seller recognize that additional time is needed to secure the funds necessary for the transaction, and for other matters related thereto. NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 1. EXTENSION OF OPTION TERM. SELLER, for additional valuable consideration, hereby extends to BUYER the exclusive Option to purchase the Property identified as San Luis Obispo County APNs 067- 221-034, 067-221-035, and 067-221-036, totaling approximately 154 acres ("the property") for an additional SIX MONTHS. BUYER and SELLER agree that the term of this option, which commenced on February 1, 2000, will therefore continue for ONE YEAR AND SIX MONTHS, to July 31, 2001. Buyer may exercise the Option at any time within that period by sending written notice to Seller. C4-3 Nov- 16-00 05:05P Cl- Of SLD-CD DQpt . 805 Al 7173 P.02 2. OPTION EXTENSION PAYMENT; PREVIOUS OPTION PAYMENT FORFEITED In consideration of the Extension of the Option Term described above. Buyer shall pay the sum of ten Ihousand dollars (S10,00G) to Seller as an Option Payment. This payment shall not be refundable nor shall it apply to the purchase price. Furthermore, Buyer acknowledges that the Option Payment of twenty thousand dollars ($20,000) made in February, 2000, is forfeited and will not apply to the Purchase Price as Buyer will not exercise the Option within the original Option Period. 3. ALL OTHER TERMS AND CONDITIONS REMAIN IN FULL FORCE AND EFFECT All terms and conditions of the Option Agreement dated February 1, 2000, between Buyer and Seller shall remain In full force and effect except as modified by this Extension, and are incorporated Into this Agreement by reference. "Sellar' CK SL AN FOSTER CHARLOTTE PATRICIA FOSTER Date: "Suver CITY OF SAN LUIS OBISPO by: --- ALLEN K. SETTLE, MAYOR Date: ATTEST- Lee Price. CMC City Clerk APPROVED AS TO FORM: e rge e Ci Att me C4-4