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HomeMy WebLinkAbout2001-06-12 - AGENDA REPORTS - TMF PROPERTY ACQUISITION (2)CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARING City Manager Approv Item to be presented by: Anthony J. Nisich DATE: June 12, 2001 SUBJECT: TRANSIT MAINTENANCE FACILITY, PROJECT NO. F0003 — PROPERTY ACQUISITION DEPARTMENT: Transportation & Engineering Services City Council receive the staff report and review the evidence presented at the public hearing, including public comments and any written comments received; and adopt a resolution authorizing the commencement of eminent domain proceedings so as to acquire property known as Lot 2 of Tract Map No. 52673-02 in the Rye Canyon Business Park for the construction of the proposed Transit Maintenance Facility. BACKGROUND The Transit Maintenance Facility (TMF) project is a City proposal for the property acquisition, design, and construction of a permanent facility to accommodate the operation, maintenance, and administrative functions of the City's transit system. In February 1997, the City Council approved the Transportation Development Plan, which identified the growth needs of the City's transit system over the next 20 years, including needed facilities to serve the present system and future service expansion. Subsequent to City Council approval on March 10, 1998, the Transit Maintenance Facility Study was prepared to determine the facility's future needs and to identify a number of candidate properties suitable for the future site of the TMF. From the 20 sites listed, four were selected for further evaluation: Saugus Speedway, Valley Business Center, Porta Bella, and Rye Canyon Business Park. At the City Council's direction, staff evaluated the final four sites on the basis of accessibility, availability, readiness, and potential for environmental liability/remediation. Based on the attributes and constraints identified for each of the potential sites, the Rye Canyon Business Park became the preferred site. The preferred site is an approximately 11.86 -net -acre (13.97 -gross -acre) vacant industrial lot located in the Rye Canyon Business Park, owned by W9/Rye South Realty, L.L.C., a Delaware Limited Partnership, and currently on the market for sale. The site is identified as Lot 2 of Tract Map No. 52673-02, Book 1252, Page 67 of Los Angeles County. It is situated at the southeast corner of future Galaxy Way and Constellation Road, approximately 2,000 feet north of the intersection of Newhall Ranch Road and Copper Hill Drive, adjacent to the Adapted: . of -sg Agenda Item: �� TRANSIT MAINTENANCE FACILITY PROPERTY ACQUISITION June 12, 2001— Page 2 Valencia Industrial Center. The lot is rough -graded, relatively level, and developable, with street improvements and utility connections to the site. The westerly quarter of the site is traversed by the San Gabriel Fault, considered to be an active fault, and has been identified as a "Restricted Use Zone" (RUZ). The presence of the RUZ prohibits development of structures for human occupancy within the zone, but allows for parking and landscaping requirements, and has reduced the appraised value of the property accordingly. A Mitigated Negative Declaration (MND) and a Categorical Exclusion (CE) were prepared for the Rye Canyon Business Park site and circulated for public comment. On March 28, 2000, the City Council approved the resolution to adopt the Mitigated Negative Declaration prepared for the subject site, thereby granting CEQA (State) environmental clearance. In April 2000, the Federal Transit Administration (FTA) approved the CE prepared for the site and granted NEPA (federal) clearance. In August 1999, it was determined that a consultant specializing in acquisitions be hired to continue to pursue the necessary acquisition following all pertinent federal regulations, and to provide the documentation necessary for the City to pursue eminent domain proceedings if it became necessary. The appraiser has contacted the property owner, has requested permission to enter the properties for appraisal purposes, and has completed the preparation of the appraisal for the property considered in this action. In addition, a review appraisal has been completed in accordance with federal guidelines, and subsequently, the FTA has approved both the appraisal and review appraisal reports. At the February 13, 2001 City Council Closed Session, the City Council authorized the City Manager to transmit a formal offer for the purchase of the subject site in the Rye Canyon Business Park to accommodate the future Transit Maintenance Facility. The offer was formally made to the subject property owner on March 2, 2001 for acquisition of Lot 2 of Tract Map No. 52673-02, at the established Fair Market Value (FMV). A copy of the offer package is available in the City Clerk's reading file. On March 13, 2001, the City received a counteroffer from the subject property owner requesting $6,090,234.00, a considerable amount above the appraised FMV. Upon subsequent meetings with the owner to negotiate an agreement, a positive response was not obtained from the property owner. In a letter dated May 10, 2001 to the attention of the appraiser, the property owner continues to defend and request the price stated in his counteroffer. Therefore, the property is the subject of this proposed action. The City Council must now consider this property for condemnation, as City staff, through mutual agreement with the owner, has been unable to acquire fee ownership. Staff believes that all of the preceding due diligence tasks performed in siting this project, including the project study report, the environmental documents, and all of the negotiating work, prove that the Transit Maintenance Facility will be the highest and best use of the subject property. If the City Council agrees that the public necessity requires the proposed acquisitions, the TRANSIT MAINTENANCE FACILITY PROPERTY ACQUISITION June 12, 2001— Page 3 City Council should adopt a resolution authorizing condemnation proceedings for the purpose of acquiring the interests described in the attached resolution. Questions relating to value are not relevant to this proceeding. However, that does not mean that negotiations for the acquisition of the subject property are at an end. If the City Council adopts the Resolution of Necessity, staff will continue to work with the property owner to reach an agreement. Failing that negotiation process, the City Attorney will file the necessary condemnation action. ALTERNATIVE ACTIONS 1. The City Council could delay the project by requiring that more effort be made to come to agreement with the affected property owner. This may jeopardize federal transit funding of the Santa Clarita Transit system. 2. Other action as determined by the City Council. FISCAL IMPACT This action will not have a great effect on the actual cost of purchasing the property, as the City is obligated to pay the FMV based on the approved appraisal. The expense of litigation to finalize the acquisitions is unknown at this time. However, these legal costs could be sizable if settlements are not reached in a reasonable time frame. Eighty percent of all costs associated with the construction of the subject project, including land acquisition, will be reimbursed from the Federal Transit Fund already appropriated by the FTA to this project. The remaining required 20 percent local match will be reimbursed from state proposition funds also appropriated to this project, and should have no effect on the City's General Fund. ATTACHMENTS Location Map Resolution with Associated: • Offer with Appraisal Summary and Draft Purchase Agreement • Counteroffer dated March 13, 2001 • Letter from Legacy Partners dated May 10, 2001 KM:lkl coon61\t CWN1201.do i Otdar da. 97"31,544 LOT 2 OF TRACT 52673-02, FILED IN BOOK 1252, PAGES 59 THROUGFr 5s, INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF LOS ANGELES COUNTY, CAI IFORNIA. EXCEPTING THEREFROM all oil, gas and other hydrocarbons and like sub-aances and all minerals below a depth of 500 feet from the surface of said property, provided, however, the right to enter said property and to remove therefrom the substances aforesaid shall be limited to the provisions and to the areas covered, as provided in the deed from The Newhall Land and Farming Company to Lockheed Aircraft JCorporation, recorded May 7 5, 1959 in Book D-468, Page 516, Official Records, as Instrument No. 2018. Nothing therein contained shall be in any way construed io prevent, hinder or delay drillinq operations under said property below 500 foot level by directional or slant drilling wi,houi entering upon the surface of said property by grantor and/or its lessees, as reserved by The Newhall Land and Farming Company, by said last mentioned deed. ALSO EXCEPTING THEREFROM all rights to water, aquifers, minerals, oil, gas, tar, gaseous and liquid hydrocarbons, and metalliferous substances of every kind, loge Cher with the right to drill or mine for the same, without, however, the right to drill or mine through the surface or upper 500 feet of the subsurface of said land, as reserved in Tim deed recorded October 30, 1992 as Instrument No. 92-2006858of Official Records. ALSO EXCEPTING THEREFROM the right to explore for, inject, store, withdraw, cycle and recycle, produce and otherwise use, enjoy and dispose of in such amounts as grantor may deem advisable, all indigenous and foreign natural gas, substitute natural ,gas, gaseous and liquid hydrocarbons, brine and other liquids in and from the subsurface area lying below a depth of 500 feat of said land, including the Zone known as the Wayside Zone (The "Underground gas storage field) as reserved in the deed recorded October 30, 1992 as Instrument No. 92-2006858 of Official Records. + TRACT No. 52'673-02 a IX THE Cl1Y' OF &VITA CLAW& COUNTY OF LOQ WIOtlEi QTATL OF C*ZWQF08A m Lou TOY R 1ACOMMON 8GE 900 IwSURNI. "OIL! ),_.-�. SEE SHEET 8 t / Y• ' ."• O� 3 EXHIBIT "B" .mm www i N, AN I 1 t / Y• ' ."• O� 3 EXHIBIT "B" .mm www i N, AN I IL W F- N H O IL O d 1 io..• n vti �\ / O _ m M u NA6 0035 UJI i O w' �ros� to b i .JA �• i r r- HAMNER, JEWELL & ASSOCIATES Government Real Estate Services a division of Beacon Integrated Professional Resources, Inc. Main Office: 3639 HARBOR BOULEVARD, SUITE 210 VENTURA, CALIFORNIA 93001 Tel. (805) 658-8844 Fax: (805) 658-8859 e-mail., hja@mindspring.com Santa Maria (805) 929-1470 - San Luis Obispo (805) 773-1459 - San Diego (858) 679-7644 March 2, 2001 W-9 WLA Real Estate Ltd. Partnership "Rye Canyon Business Park" c/o Steven C. Meixner, General Manager Legacy Parners Commercial, Inc. 25100 Rye Canyon Road Valencia, CA 91355 Subject: City of Santa Clarita-Transit Maintenance Facility Acquisition: Lot 2 of Tract 52673-02 (Rye Canyon Business Park) Dear Mr. Meixner, This is to formally offer on behalf of the City of Santa Clarita to purchase Lot Number 2 in Tract 25673-02, the Rye Canyon Business Park, in conjunction with the City's interest in relocating and expanding their municipal transit maintenance facility. As you know, as a public agency, there are several governmental requirements that the City must follow in making such a purchase offer. To assure that fair market value is offered for the purchase of the sought property, an independent appraisal of the subject lot has been obtained by the City. That appraisal has taken into consideration the highest and best use of the property, the size and location of the parcel, the completed and proposed off-site tract improvements, and all other factors which affect fair market value. On the attached Appraisal Summary Statement, the amount of $5,105,000 represents the fair market value of the site that the City is interested in purchasing, as established by this recent independent appraisal. This is the amount of the City's offer for the purchase of the described property. In addition to the initial appraisal, which was prepared by D. Michael Mason Associates, a professional appraisal review was also obtained. That review was completed by the appraisal firm of Mason & Mason. Further, in accordance with federal funding requirements, the appraisal was reviewed and approved by the Federal Transportation Administration. All of these review processes verified the property value and the general appraisal methodology. B les/scl ari ta/trans i Urye/offer2-8.doc J Steven C. Meixner March 2, 2001 Page two r - The City therefore offers to purchase the property for the full fair market value of $5,105,000. This offer is subject to the conveyance of title to said property free and clear of all liens, encumbrances, assessments, and leases. The City will pay all usual and necessary escrow, title insurance, and documentary transfer fees associated with this purchase. Additionally, the City will cover any necessary Bridge and Thoroughfare Fees so that the seller will not be obligated to pay such fees in conjunction with this purchase. The City is prepared to close this transaction on or before June 30, 2001, if all terms and conditions of the proposed purchase can be satisfied within said period. This offer is contingent upon the seller obtaining all necessary and required approvals, required permits, and certificates of compliance, for the subdivision and sale of the subject property. The seller is responsible for all costs necessary to place the subject property in a condition to allow a sale of the lot. The seller is also responsible for completing all public streets and utilities required as a condition of Tract approval. Please refer to the enclosed proposed purchase agreement for all terms and conditions of this offer and the proposed sale transaction. This offer is also subject to environmental inspection and subsequent approval by the City. The purpose of this process will be to attempt to confirm that there is no hazardous contamination within, adjacent to, or coming from the property. The environmental inspection and approval process may include physical inspections and environmental assessments as deemed necessary or advisable by the City, as well as other testing or inspections should a preliminary review indicate it advisable. In the event the City determines that corrective or remedial action may be necessary, the City reserves the right to reduce the amount offered to reflect corrective or remedial costs, or to withdraw this offer. Your ongoing cooperation for access to the property for these inspections is appreciated. These inspections will be conducted at the City's expense. The City's initial review of the property has found no items of concern relative to environmental clearance. We trust that you will find this offer acceptable and representative of just compensation and look forward to working with you to finalize this purchase. As the City's authorized representative, I would be happy to work with you in any way I can to complete a purchase agreement for submittal to City Council for acceptance. If you have any questions regarding this offer, please contact me at (805) 658-8844. I look forward to receiving your responses. Sincerely, Lillian D. Jewell enc.: Appraisal Summary Statement (2 pages) When a Public Agency Acquires Your Property Pamphlet Proposed Purchase Agreement fi les/scl arita/transi Nrve/o ffer2-8. doc e / r City of Santa Clarita -- Transit Maintenance Facility Project Lot 2 of a Tract No 52673-02 (Rye Canyon Business Park) SUMMARY STATEMENT RELATING TO PURCHASE OF REAL PROPERTY OR AN INTEREST THEREIN The City of Santa Clarita is proposing to construct a Transit Maintenance Facility on your property located at Lot 2 of Tract No. 52673-02 in the City of Santa Clarita, County of Los Angeles (Rye Canyon Business Park). Title III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 and the California Relocation Assistance and Real Property Acquisition Guidelines requires that each owner from whom the City purchases real property or an interest therein or each tenant owning improvements on said property be provided with a summary of the appraisal of the real property or interest therein, as well as the following information: 1. You are entitled to receive full payment prior to vacating the real property being purchased unless you have heretofore waived such entitlement. You are not required to pay recording fees, transfer taxes, or the pro rata portion of real property taxes which are allocable to any period subsequent to the passage of title or possession. 2. The City will offer to purchase any remnant(s) considered by the City to be an uneconomic unit(s) which is/(are) owned by you or, if applicable, occupied by you as a tenant and which is/(are) contiguous to the land being conveyed. 3. All buildings, structures, and other improvements affixed to the land described in the referenced document(s) covering this transaction and owned by the grantor(s) herein or, if applicable, owned by you as a tenant, are being conveyed unless other disposition of these improvements has been made. The property being purchased is comprised of 11.86 acres, in fee. 4. The market value of the property rights being purchased is based upon a market value appraisal which is summarized on the attached Appraisal Summary Statement and such amount: a. Represents the full amount of the appraisal of just compensation for the property to be purchased; b. Is not less than the approved appraisal of the fair market value of the property as improved; c. Disregards any decrease or increase in the fair market value of the real property to be acquired prior to the date of valuation caused by the public improvement for which the property is to be acquired or by the likelihood that the property would be acquired for such public improvement, other than that due to physical deterioration within the reasonable control of the owner or occupant; and d. Does not reflect any consideration of or allowance for any relocation assistance and payments or other benefits which the owner is entitled to receive under an agreement with the City. 5. The owner of a business conducted on a property to be acquired, or conducted on the remaining property which will be affected by the purchase of the required property, may be entitled to compensation for the loss of goodwill. Entitlement is contingent upon the business owners' ability to prove such loss in accordance with the provisions of Sections 1263.510 and 1263.520 of the Code of Civil Procedure. 6. If you ultimately elect to reject the City's offer for your property and the City desires to proceed with this purchase, you would be entitled to have the amount of compensation determined by a court of law in accordance with the laws of the State of California. (SCIarita/tra sit/acq/rye-park/ssexpl.doc)s APPRAISAL SUMMARY STATEMENT PROJECT: City of Santa Clarita Transit Maintenance Facility PARCEL NO: Lot 2 of Tract #52673-02 Owner: W-9 WLA Real Estate LTD Partnership, a Delaware limited partnership Property Location: Lot 2 of Tract No. 52673-02 (Rye Canyon Business Park), City of Santa Clarita, County of Los Angeles Zone: BP - Business Park Best Use: Commercial/ industrial development Total Land Sae: 11.86 acres (516,649 sq. ft.) Area to be acquired: All (516,649 sq. ft.) Interest to be acquired: Fee Simple Market Value of Required Property Rights: Present Use: Vacant, finished pad of industrial land Date of Valuation: 02/01/01 Including Access Rights: Yes X No _ Improvements to be acquired: All S5,105,000 FIVE MILLION ONE HUNDRED FIVE THOUSAND DOLLARS (55,105,000) The above market value determination is based upon the Sales Comparison approach to valrie, which is summarized as follows: Unencumbered Land- 404,688 square feet @ $12.00 54,856,256 Restricted Use Zone - 111,961 square feet @ $ 4.80 $ 537,413 Improvements: $ g Severance Damages: None $ 0 Total: $5,393,669 Benefit: Buyer waives Seller's offer to pay B&T Fees, calculated at S.56 per s.f. S 289,300 Total (Rounded): $5,105,000 This summary of the basis of the amount offered as just compensation is presented in compliance with Federal and State law and has been derived from a formal appraisal prepared by an independent appraiser which includes supporting sales data and other documentation. Approved for Acquisition Anthony J. c Director of Transportation and Engineering Services City of Santa Clarita Date: 0-2-7-01 (SCWft1V%=Wnw Ayspwk1s t.&c) 03/0+1/01 (fileslsdarita/tmsit/rye/mvagmt.doc) ESCROW NO.: PARCEL NO.: PROJECT: City of Santa Clarita--Transit Maintenance Facility TITLE REPORT NO.: AGREEMENT FOR ACQUISITION OF REAL PROPERTY (WITH CONTINGENCIES AND ESCROW INSTRUCTIONS) THIS AGREEMENT is made and entered into this day of 2001 by and between The City of Santa Clarita, a general law city (hereinafter called 'Buyer"), and W-9 WLA Real Estate LTD Partnership, a Delaware limited partnership, (hereinafter called "Seller"), for acquisition by Buyer of certain real property as hereinafter set forth. RECITALS: A. The City of Santa Clarita (Buyer) is seeking to acquire a property for the relocation and expansion of its municipal transit maintenance facility, the development of which is hereinafter referred to as the City's "Project." B. The City has secured federal funding through the Federal Transit Administration (FTA) to aid in funding the property acquisition for the Project, and seeks to pursue its property acquisition efforts for the Project in conformance with State and Federal funding guidelines. C. Seller owns certain property in the City of Santa Clarita, which Seller is in the process of subdividing for sale and development, and which Seller desires to sell to Buyer in conjunction with the Project. D. Buyer and Seller are entering into this Agreement to effect the sale of Seller's property identified herein to Buyer, under the following terms and conditions. IT IS HEREBY MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS: 1. AGREEMENT TO SELL AND PURCHASE. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, upon the terms and for the consideration set forth in this Agreement, all that certain real property (hereinafter called "Property") situated in the City of Santa Clarita, County of Los Angeles, State of California, and legally described as follows: Lot 2 of Tract 52673-02 which is in the development commonly referred to as the "Rye Canyon Business Park." 2. PURCHASE PRICE. The total purchase price, payable in cash through Escrow is five million one hundred five thousand dollars ($5,105,000), (the "Purchase Price"), as that amount may e adjusted pursuant to Paragrap 4.B. oft is ATi—greement. The Purchase Price will be paid upon the close of Escrow, which is to occur only upon the removal of all sale contingencies specified in this Agreement. Seller has no obligation to pay City `13 & T Fees" in conjunction with this purchase nor in conjunction with Buyer's development of the Property. LA63509.RED 1/8 03/01/01(rileshelarita/trmsit/rye/revagnntdoc) 3. SITE PREPARATION AND MAINTENANCE OBLIGATIONS. All slopes upon the Property are to be landscaped and irrigated by Seller, at Seller's cost and expense, in accordance with the City's subdivision regulations and conditions of approval. Such irrigation and landscaping is to be maintained by Seller in good condition up to and including the date of the close of Escrow. Further, Seller agrees to continue providing Property maintenance in conformance with State Storm Water Prevention Plan (SWPPP) after the close of Escrow until such time as all frontage roads adjacent to the Property ( such roads are referred to on the Seller's maps of the Property as "Galaxy Way" and "Constellation Road") are completed and proper access to the Property is available to Buyer. The obligations set forth in this paragraph shall survive and continue after the close of Escrow. If the Property is not maintained in accordance with the provisions of this paragraph, Buyer reserves the right to seek reimbursement from Seller for any costs Buyer incurs in restoring the Property to the condition that existed as of the date of the close of Escrow. 4. SALE CONTINGENCIES. A. Completion of all Tract Roadway and Public Utility Improvements. This Agreement is expressly subject to and contingent upon Seller's completion, at Seller's sole cost and expense, of all roadways and public utility improvements shown within the tract map 52673 -02 - Rye Canyon Business Park, and such off-site improvements required in the conditions of said tract map approval. If such improvements are not completed prior to the scheduled close of escrow, Seller agrees to post bond(s) guaranteeing that such improvements will be completed by the end of March 2002. Such bonds, which are subject to Buyer's approval, must be in place prior to the close of Escrow. The cost of such bonds is to be borne solely by Seller. The intent of this bonding is to assure that dual access routes are in place prior to completion of Buyer's Project. B. Testing, Inspection, Entry On Premises, And Responsibility For Condition Of Premises. Seller grants to Buyer, and its authorized agents, permission to enter upon the Property at all reasonable times prior to close of Escrow for the purpose of making inspections, tests, borings, samplings, and other such investigations as Buyer deems reasonable to determine the physical condition of the Property, including, but not limited to, the existence of biological, archeological, or geological factors which could affect Buyer's plans for the Property, or to identify any contamination of the Property by "hazardous materials." Should Buyer discover any physical condition of the Property which Buyer deems unacceptable, Buyer may terminate this Agreement and cancel the Escrow, by giving written notice to Seller and Escrow Agent, within sixty (60) days after the date of Buyer's execution of this Agreement. Upon receipt of written notice of Buyer's termination of this Agreement, Escrow Agent is to return all money and documents deposited in Escrow to the party originally making such deposit, and neither party will have any further obligation to the other under this Agreement, except for such obligations as have accrued prior to the termination of this Agreement. Buyer's failure to give written notice of termination per the provisions of this paragraph within sixty (60) days of the date of Buyer's execution of this Agreement will be deemed Buyer's acceptance of all such conditions of the Property as Buyer could have discovered by reasonable inspection, testing, boring, sampling, and other investigations of the Property. In lieu of termination, Buyer and Seller may negotiate an adjustment to the Purchase Price based upon the corrective and remedial costs identified through Buyer's inspection and testing processes. Such Purchase Price is to be documented and agreed to through an Escrow amendment approved in writing by the parties. The Purchase Price stated in Paragraph 2 of this Agreement reflects the fair market value of the Property without the presence of hazardous materials. LA63509.RED 2/8 i 0M/0I(tileWsdaritaluwsit/rye/revagrmt.doc) As used in this Agreement, the term "hazardous materials" means all flammable, explosive, noxious, toxic, or otherwise dangerous materials, wastes, products, or substances, the handling, use, discharge, or release of which is regulated or the contamination by which is prohibited by any federal, state, or local statute, ordinance, rule, or regulation, including, but not limited to, those substances defined as "hazardous substances," "hazardous materials," or "toxic substances" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.: The Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; The Resource Conservation & Recovery Act, 42 U.S.C. Section 6901, et seq.; and also including those substances defined as "hazardous waste" in Section 25117 of the Califomia Health and Safety Code or as "hazardous substances" in Section 25316 of the California Health and Safety Code; and those chemicals to which reference is made in the Safe Drinking Water and Toxic Enforcement Act of 1986, Section 25249.5, et seq. of the California Health and Safety Code. Seller represents and warrants that during Seller's ownership of the Property, there has been no disposal, release, or threatened release of hazardous materials on, from, or under the Property. Seller further represents and warrants that the Seller has no knowledge of disposal, release, or threatened release of hazardous materials on, from, or under the Property which may have occurred prior to Seller taking title to the Property. These representations and warranties will survive the close of Escrow and remain in full force and effect in perpetuity and will accrue for the benefit of Buyer and its successors and assigns. Seller agrees to indemnify, defend, and hold harmless Buyer, its elected and appointed officials, officers, employees, agents and any successors to the City's interest from and against any and all costs, expenses, claims, liability, or damages, including, without limitation, attorneys' fees and court costs, directly or indirectly arising out of the presence, existence, use, generation, storage, release or disposal of hazardous materials on the Property by Seller or any prior owner or operator of the Property. C. Title Approval. This Agreement is expressly subject to and contingent upon Buyer's approval of title (1) Promptly following the date of this Agreement, Buyer will cause Chicago Title Company (the "Title Company") to issue to Buyer (with a copy to Seller) a preliminary report (the "Preliminary Report) for a CLTA Standard Coverage Policy for the Property, together with copies of all documents relating to title exceptions (the "Exceptions") referred to in the Preliminary Report. (2) Buyer shall approve or disapprove each Exception shown in the Preliminary Report and any amendments or updates of the Preliminary Report (which must also be delivered to Seller) within thirty (30) days following receipt thereof. 5. CONVEYANCE OF TITLE. Upon satisfaction or removal of all sale contingencies referenced in Paragraph 4 and the satisfaction of the additional terms and conditions specified in this Agreement, Seller agrees to convey by Grant Deed to Buyer marketable fee simple title to the Property free and clear of all recorded and unrecorded claims, liens, encumbrances, assessments, easements, leases and taxes, EXCEPT: A. Non -delinquent taxes for the fiscal year in which this transfer occurs. B. Those Exceptions approved by Buyer in accordance with the provisions of Paragraph 4.C.(2) hereinabove, LA63509.RED 3/8 f 4 03/01/01 (files/sderita/transittrydrevagnnt.doc) 6. TITLE INSURANCE POLICY. Escrow Agent must, following recording of the Grant Deed to Buyer, provide Buyer with a CLTA Standard Coverage Policy of Title Insurance in the full amount of the Purchase Price issued by the Title Company, showing title to the Property vested in Buyer, subject only to the exceptions set forth in Paragraph 5 (the "Title Policy"). Buyer agrees to pay the premium charged for the Title Policy, but exclusive of the cost of any endorsements necessary to remove exceptions required to be removed in order to insure title subject only to the matters specified in Paragraph 5 which will be Seller's expense. 7. ESCROW. Buyer and Seller agree to open an escrow (the "Escrow") in accordance with this Agreement at an escrow company (the "Escrow Agent") of Buyer's choice promptly after this Agreement is fully executed. This Agreement constitutes the joint escrow instructions of Buyer and Seller, and Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do all acts necessary to close the Escrow in the shortest possible time. Seller has executed a Grant Deed to Buyer, for deposit into Escrow concurrently with this Agreement. As soon as possible after the opening of Escrow, Buyer will deposit the Grant Deed with Escrow Agent on Seller's behalf. Thereafter, after removal and/or full and complete satisfaction of all contingencies specified in this Agreement, Buyer will deposit into Escrow a Certificate of Acceptance the Grant Deed and the Purchase Price, upon demand of Escrow Agent. Buyer and Seller agree to deposit with Escrow Agent any additional instruments as may be necessary to complete this transaction. Insurance policies for fire or casualty are not to be transferred, and Seller will cancel its own policies after close of Escrow, or after the date Seller fully vacates the property if later. All funds received in the Escrow are to be deposited with other escrow funds in a general escrow trust account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements must be made by check from such account. ESCROW AGENT IS AUTHORIZED AND INSTRUCTED TO COMPLY WITH THE FOLLOWING TAX ADJUSTMENT PROCEDURE: A. Pay and charge Seller for any unpaid delinquent taxes and/or any penalties and interest thereon, and for any delinquent or non -delinquent assessments or bonds against the Property; B. Escrow is not to be concerned with pro -ration of Seller's taxes for the current fiscal year if this Escrow closes between July 1 and November 1 unless current tax information is available from the Title Company between October 15 and November 1. In the event that tax information is available, Sellers are to be pro -rated in accordance with Paragraph "C" below. From July 1 and the ensuing period, when the tax information referred to above is not available, Seller's pro -rata portion of taxes due to close of Escrow, are to be cleared and paid by Seller, outside of Escrow, pursuant to provisions of Section 5082 through 5090 of the Revenue and Taxation Code of the State of California; LA63509RED 4/8 03/0110Y (files/sctarita/tmnsitlrye/rovagnnt.doc) C. From the date that tax information is available, as per Paragraph "B" above, up to and including June 30, Seller's current taxes, if unpaid, are to be pro -rated to date of close of Escrow on the basis of a 365 -day year in accordance with Tax Collector's pro -ration requirements, together with penalties and interest if those current taxes are unpaid after December 10. At close of Escrow, a check payable to the County Tax Collector for Seller's pro -rata portion of taxes is to be forwarded to Buyer with closing statement; D. Any taxes which have been paid by Seller prior to opening the Escrow are not to be prorated between Buyer and Seller, but Seller will have the sole right, after close of Escrow, to apply to the County Tax Collector of Los Angeles County for refund of those taxes which may be due Seller for the period after Buyer's acquisition pursuant to Revenue and Taxation Code Section 5096.7. ON THE CLOSE OF ESCROW, ESCROW AGENT IS AUTHORIZED AND INSTRUCTED TO: A. Record the Grant Deed (marked for return to Buyer) with the Los Angeles County Recorder which shall be deemed delivery to Buyer by Seller; B. Cause the Title Policy to be issued; C. Pay and charge Seller for any amount necessary to place title in the condition necessary to satisfy Paragraph 5 of this Agreement; D. Pay and charge Buyer and Seller for any Escrow fees, charges and costs payable under Paragraphs 4 and 8 of this Agreement; E. Disburse funds when conditions of this Escrow have been fulfilled by Buyer and Seller; F. Prepare and deliver to both Seller and Buyer one signed copy of Escrow Agent's closing statement showing all receipts and disbursements of the Escrow; G. Deliver to Buyer the FIRPTA and the Withholding Affidavit If Escrow Agent is unable to simultaneously perform all of the instructions set forth above, Escrow Agent is to notify Seller and Buyer and retain all funds and documents pending receipt of further instructions jointly issued by Seller and Buyer. The term "close of escrow", if and where written in these instructions, means the date necessaryinstruments of conveyance are recorded in the office of the Los Angeles County Recorder. All time limits within which any matter herein specified is to be performed may be extended by mutual agreement of the parties. Any amendment of, or supplement to, any instructions must be in writing. LA63509.RED 5/8 03/01/01 (files/sdarita/tmsittrye/revagrmt.doe) TIME IS OF THE ESSENCE OF THIS AGREEMENT AND ESCROW IS TO CLOSE AS SOON AS POSSIBLE. If (except for deposit of money by Buyer, which is to be made by Buyer one business day before close of Escrow, the Escrow is not in condition to by June 30, 2001 (or such later date as may be agreed upon by the parties), any party who then has fully complied this Agreement may, in writing, demand the return of its money or Property; but if none have complied, no demand for return thereof is to be recognized until five (5) days after Escrow Agent has mailed copies of that demand to all other parties at their respective addresses shown in this Agreement, and if any objections are raised within that five (5) day period, Escrow Agent is authorized to hold all papers or documents until instructed by a court of competent jurisdiction or mutual instructions. 8. ESCROW FEES, CHARGES, AND COSTS. Buyer agrees to pay all usual escrow, title and recording fees, charges and costs which arise in the Escrow, except any costs specifically associated with providing clear title to the Property to Buyer in accordance with the provisions of Paragraph 5 of this Agreement, which costs are to be home by Seller. Seller also agrees to pay any brokerage, finder's or similar commissions or fees and all attorney fees which Seller may incur in connection with this transaction, and Seller authorizes Escrow Agent to debit Seller's proceeds for any such commissions and fees approved and submitted by Seller or Seller's agents to Escrow. In no event is Buyer responsible for payment of any such commissions and fees. Since Buyer is a public agency, this transaction is exempt from recording fees for the Grant Deed and any other recordings and from documentary transfer tax. 9 OTHER TERMS OF CLOSE OF ESCROW. Between the date of execution of this Agreement and the date of the close of Escrow, Seller agrees not to enter into any contracts or agreements affecting the Property without first obtaining the written consent of Buyer. 10. LEASE INDEMNIFICATION• Seller warrants there are no oral or written leases or other rights or claims of third parties to possession ("Possessory Rights") respecting all or any portion of the Property; if there are any Possessory Rights, Seller agrees to indemnify and hold Buyer harmless from and reimburse Buyer for any and all of its costs, losses, liabilities, damages and expenses (including attorneys' fees and costs) occasioned by reason of any Possessory Rights respecting the Property. 11. COUNTERPARTS. This Agreement may be executed in counterparts, each of which irrespective of the date of its execution and delivery is an original, but all such counterparts together constitute one and the same instrument. 12. CLOSING STATEMENT. Seller hereby authorizes and instructs Escrow Agent to release a copy of Seller's closing statement to Buyer for the purpose of ascertaining if any reimbursements are due Seller. 13. TAX REPORTING AND WITHHOLDING--NON-FOREIGN STATUS. The Foreign Investment in Real Property Tax Act of 1980, as amended by the Tax Reform Act of 1984, places special requirements for tax reporting and withholding on the parties to a real estate transaction where the transferor (Seller) is a non-resident alien or non-domestic corporation or partnership, or is a domestic corporation or partnership controlled by a non-resident or non-resident corporation or partnership. Seller hereby advises Buyer that Seller is NOT a "foreign person" for the purposes of Section 1445 (as may be amended) of the Internal Revenue Code of 1954, as amended, and any regulations LA63509.RED 6/8 f 03MI/Ol (fila/selerita/transittrye/revagrmt.doc) promulgated thereunder, and that, in accordance with the provisions of Section 1445, Seller agrees to execute an affidavit under penalty of perjury, dated as of the close of Escrow, setting forth Seller's name, address, federal tax identification number, and certifying that Seller is not a "foreign person" in accordance with the provisions of the Internal Revenue Code. It is specifically understood and agreed by Seller that closing of the Escrow is subject to, and contingent upon, deposit into Escrow, or notification to Escrow Agent by Buyer, of receipt of that Affidavit. 14. SELLER'S WARRANTIES. The undersigned signatory(ies) signing on behalf of Seller warrant(s) that (s)he is the authorized signatory(ies) on behalf of Seller, that Seller owns the Property, and that Seller is authorized to sell the Property, under the terms and conditions specified herein. Further, Seller warrants that the unencumbered right to possession of the Property will be transferred to Buyer immediately upon the close of Escrow and that Seller is not aware of any boundary disputes regarding the Property. Seller's warranties contained in this Agreement survive the close of Escrow. 15. JUDGMENT IN LIEU OF DEED. In the event Seller is unable to deliver title in accordance with the terms of this Agreement, Buyer may elect to file an action in eminent domain to pursue the acquisition of the Property, and it is agreed that this Agreement constitutes a stipulation which may be filed in those proceedings as final and conclusive evidence of the total amount of damages for the taking, including, without limitation, all of the items listed in Section 1260.230 of the Code of Civil Procedure, regarding Seller's property rights. 16. NOTICES. All notices and other communications required to be given pursuant to this Agreement must be in writing addressed to the recipient party at its Notice Address specified below and will be deemed to have been properly given if personally served (including by courier service or overnight commercial delivery service) at a party's Notice Address, upon receipt or; if mailed to a party at its Notice Address, first class mail, postage prepaid, three (3) business days after deposit in the United State Mail. Each party may change its Notice Address by giving a notice to the other party in the manner described in this Section. The Notice Addresses for the parties are: Buyer: City of Santa Clarita 23920 Valencia Boulevard, Suite 300 Santa Clarita, California 91355 Attn.: City Manager with a copy to: Burke, Williams & Sorensen, LLP 611 West Sixth Street, Suite 2500 Los Angeles, California 90017 Attn.: Carl K. Newton, Esq. Seller: W-9 WLA Real Estate LTD Partnership c/o Legacy Partners Commercial, Inc. 25100 Rye Canyon Road Valencia, CA 91355 Attn.: Steven Meixner LA63509.RED 7/8 03/01/01(files/utarita/transit/rye/revagrtnt.doc) The failure to give a copy of a notice to any addressee specified above for copies will not affect the validity or effectiveness of a notice otherwise properly given to a party in the manner specified in this Section. 17. MISCELLANEOUS TERMS. The terms, conditions, covenants and agreements set forth in this Agreement apply to and bind the heirs, executors, administrators, assigns and successors of the parties hereto. This Agreement contains the entire agreement between the parties and it supersedes all prior or contemporaneous agreements, whether written or oral, between the parties with respect to its subject matter. Neither party relies upon any warranty or representation not contained in this Agreement. This Agreement is subject to and conditioned upon approval and ratification by the City Council of the City of Santa Clarita at a properly held City Council meeting. This Agreement is not binding upon Buyer until executed by the appropriate City official(s) acting in their authorized capacity. The parties have executed this Agreement as of the day and year first set forth above. SELLER: W-9 WLA Real Estate LTD Partnership, a Delaware limited partnership By:_ name title By:_ name title BUYER: City of Santa Clarita M LA63509.RED 8/8 14er 14 01 12:23p 4lamrner, Jewell S Assero (6051 '658x8859 s p.2 From: 'MMY011 21:46 #188 P.002 March 13, 2001 _ Ms. Lillian D. Jewell Hamner, Jewell & Associates 3639 Harbor Blvd., Suite 210 Ventura, CA 93001 RE: Rye Canyon Business Park Lot 2, Tract 52673.02 City of Santa Clarita — Transit Maintenance Facility Pc.aw......n, Dear Ms. Jewell: We have received and reviewed your letter of March 2, 2001 that communicates the City of Sante Clarita's offer to purchase Lot Number 2 of Tract 52673-02. As we have discussed, we have received an offer from another qualified buyer, at a high proposed. er price than what you have The purpose of this letter is to offer a price and pricing rationale, which would allow us to n " ° proceed to a contract and transaction with the City. Further we are proposing an alternate site, Lot Number 15 of Tract 52673-02, which will accommodate the City's program and be purchasable at a lower price. A site plan that lays out the C enclosed. iry's development program is First, the rationale and price for Lot 2. The property was designed for the development of an industrial building that could accommodate, manufacturing, assembly, warehousing and or distribution activities. The site would contain parking of 2 cars per 1,000 square feet of building or larger, truck docks, truck -maneuvering areas and on site truck circulation. As such, the site coverage ratio (square footage of building divided by square footage of land) would be .42. The alternate buyer has designed a building of 199,329 square feet on the site. Accordingly his proposed building is less then the .42 site coverage ratio: 209,324 Square Feet of Building divided by 516,649 Square Feet of Site equals .41 Coverage Ratio Therefore to calculate the land which is negatively impacted by the Alquist-Priolo set back zone: 209,324 Square Feet of Building divided by .42 Coverage Ratio equals 498,390 Square Feet of Land required, regardless of Alquist-Priolo limits. rslmokmcY -a.aw.w.,anrsf �y.ry Nvuon r:Ml if7 r!]7 r. ffl ]!!]!II Y..•.I.pgp.raw.ee,n Mar 14 01 12:23p fla"Ier, Jetuell 6 Assoc. 18050 658x8859 From: 09MV001 2,1:46 /188 P.003 MM M ills ills Lillian Jewell Ills March 13, 2001 M9M Page two 18.259 Lot 2 land, which exceeds .42 coverage requirements 42$.320 Lot 2 land required for the proposed building 516,649 Total Lot Area Accordingly, we would calculate the sale price as: 498,390 SF S12.00/SF S5,980,690 Land required to support building. 11,259 SF S 6.00/SF 54 Land that does not support building. 516,649 SF S6,090,234 Proposed Purchase Price Please note that we used 56.00 per square foot for the impacted land rather than the appraiser's suggested value of $4.80 per square foot. Second, similar rationale applied to Lot 15 and proposed price. We have designed a 168,000 square foot, two story flex building for the property, which can be used for assembly, research and development and high tech manufacturing, similar to Advanced Bionics Corporation. The property contains 462,172 square feet of land. Accordingly: 168,000 Square Feet of Building divided by .42 Coverage Ratio equals. 400,000 Square Feet of Land required, regardless of Alquist-Priolo limits 62,172 Lot IS land which exceeds .42 coverage requirement 00 000 Lot IS land required for the proposed building 462,172 Total Lot Area Accordingly, we would calculate the sale price as: 400,000 SF 512.00/SF S4,300,000 Land required to support building 62,172 SF S 6.00/SF 7 32 Land that does not support building 462,172 SF $5,173,032 Proposed Purchase Price Finally, as a comparison of the 2 sites please review the attached plan on Lot 15 with the Planning previously done for the City on Lot 2. Also to state the obvious, them is a savings to the City of almost a million dollars by purchasing Lot IS rather than 2. Please let me know your reaction, as well as Tony's, as soon as possible. By the end of this week, we would like to know which direction our transaction might proceed. Sincerely yours, LEGACY NIMe,xn TN.ERS COMMERCIAL, INC. General Manager, P.3 from: R...I Atil Erose May 10, 2001 vcv9.7 D. Michael Mason, MAI 99 South Lake Avenue, Suite 050 se..,.. Pasadena, CA 91101 Re: Rye Canyon Business Dear Mike: o..r¢Mpm.n� 05/1&00h 01:87 W071 P.002 oeslyn s...;.e, We are proceeding with negotiations to sell property to the City of Santa Clarita for its Transit Maintenance Facility. Gn..mrvccbn "gym°^e Your clients were kind enough to share with me the Appraisal Summary Statement which indicated the conclusions of your appraisal. We agree with your primary conclusion that the finished lots are fairly valued at $12.00 per square foot. However we would like to discuss two details pertaining to the application of that number as described in your summary. First, in calculating the area of land which would have a discounted price, you used the actual square footage of land which was precluded from being used for buildings. We on the other hand, start with the value of one of the lots that has no Alquist Priolo limitation on building. Most of our unencumbered lots are yielding .42 square feet of building per square foot of land (Site Coverage Ratio), with some as high as .48. Accordingly we laid out a building of 209,324 on the property you appraised. Accordingly: 1. 209,324 SF Building Area 2. .42 Site Coverage Ratio 3. 498,390 SF Land Required to support Building 4. 516,649 SF Area of Site 5. 18,259 SF Area of Site not required to support Building A developer will be willing to pay the same for a lot which has no Alquist Priolo building restrictions as he will pay for the first 498,593 SF of land. The remaining land of 18,259 is the area that would be subject to a price discount. Accordingly: 1. 498,390 SF Land required to support Building 2. $12.00 Price per SF of land 3. $5,980,680 Price for land required to support Building. 25100 0.y4 Cwn K094 VLanck. CA 91335 l.6pc3. havb,w T.661 1951177 F,"129.52911 wwwjsglcyp 1 .G From: I 05/16/20Dl 0127:#071 P.008 e"M �u■ HIM III■ Page2 LEGACY Mr. Michael Mason IA RTNIR� May 10, 2001 Second, you discounted the impacted land by 60% ($4.80/SF). We believe the market discount is 50% ($6.00/SF), and will share recent comparable sales with you that support that discount. Accordingly: 1. 18,259 Area of site not required to support Building 2. $6.00 Price per SF of land 3. $109,554 Price for land not required to support Building Finally that brings us to what we believe the purchase price should be based on your $12.00 per square foot appraisal. 1. $5,980,680. Price for land required to support Building 2. $ 109,554 Price for land not required to support Building 3. $6,090,234 Total Price I have shared this analysis, informally, with Lillian Jewell. 1 would like an opportunity to meet with you, Lillian and our brokers to discuss this issue. Please call me at your earliest convenience. Sincerely, LEGACY PARTNERS COMMERICAL, INC. �o. c_ Steven C. Meixner General Manager SCM/sw Cc: Tony Nisich Lillian Jewell Craig Peters Doug Sonderegger