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HomeMy WebLinkAbout2002-07-17 - AGENDA REPORTS - ACQUISITION SOLEDAD TRANSIT (2)CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARING City Manager Item to be pre DATE: July 17, 2002 SUBJECT: SOLEDAD TRANSIT CENTER SITE — PROPERTY ACQUISITION DEPARTMENT: Transportation & Engineering Services RECOMMENDED ACTION City Council open the public hearing; receive the staff report and review the evidence presented at the public hearing, including public comment and any written comments received; and adopt a resolution authorizing the condemnation proceedings necessary for public right-of-way and parking purposes for the Soledad Transit Center Site in Santa Clarita. BACKGROUND In April 1992, the City of Santa Clarita ("City") and the owner of the Porta Bella property ("Property Owner") entered into a Commuter Rail Station Site Lease Agreement ("Lease Agreement"). This Lease Agreement granted the City the right to construct a commuter rail station upon the Soledad Transit Center Site. Construction of the station began in summer 1992, with the station completed and placed into operation in October 1992. The City has been in continuous occupancy of the Commuter Rail Station Site from October 1992 to the present. At the time that this Lease Agreement was executed, the City and the Property Owner were in the process of developing a future land use plan for this property. This 988.6 -acre site was previously used for 80 years as a military explosives and flare manufacturing site by various companies. On September 12, 1995, the City Council approved the Porta Bella Specific Plan (and related actions). On February 27, 1996, the City Council approved the Porta Bella Development Agreement ("Development Agreement"), a contract vesting the entitlements issued for this project for a period of 20 years. Through the execution of the Development Agreement, the City received several benefits from the developer, including the grading of the future civic center site, design and construction of needed roadways, and the prospective transfer of Metrolink station ownership to the City. Under the original terms of the Development Agreement, the City and Property Owner executed a Second Commuter Rail Station Site Lease with Option to Purchase Agreement. Under the terms of these agreements, the Property Owner was obligated to lease the Commuter Rail Station Site ("Station") to the City for $1.00 per year, for a period of three years, commencing on April 21, 1996. Agenda Item: 3 SOLEDAD TRANSIT CENTER SITE — PROPERTY ACQUISITION July 17, 2002 — Page 2 The Development Agreement also granted the City an option to purchase the Station at any time during the three-year lease term. The Development Agreement further required the Property Owner to dedicate the Station to the City upon the recordation of the final tract map of any subsection of the Porta Bella project. In the event that the City exercised its right to purchase the Station prior to recordation of a final tract map, the Development Agreement required the Property Owner to reimburse the City for the full purchase price. In January 1999, Santa Clarita, LLC assumed ownership of the Porta Bella property. On March 23, 1999, the City Council approved a Memorandum of Understanding (MOU) between the City and Santa Clarita, LLC. Since the property owner could not record the first subdivision by April 21, 1999, and funds were not available for the City to purchase the site, the City Council subsequently approved a lease extension on April 13, 1999. The City Council's action on April 13, 1999 began the first in a series of six lease extensions that the City and Santa Clarita, LLC agreed to execute. The City Council approved the sixth and final lease extension on May 8, 2001. This action extended the lease to August 31, 2001. Santa Clarita, LLC and the City were unable to come to terms on a subsequent lease extension, and as of August 31, 2001, the Lease Agreement expired. The expiration of the Lease Agreement threatened the City's ability to maintain operation of the Station, which could have resulted in disruption of Metrolink commuter train service. In light of the significant public interest served by the Station, the City Council directed the City Attorney to take all actions necessary to preserve the Station. In October 2001, the City successfully secured a preliminary injunction that enabled the City to maintain full access and continuing operation of the Station. In the time that has ensued since this court action, the City has worked closely with its partner agencies (Metrolink and the MTA) to find a lasting solution that will ensure that the Station remains in public ownership. Acknowledging the significant public interest served by maintaining full access to the Station, the City Council has directed the City Attorney to pursue acquisition of this property through eminent domain. In the course of preparing the appraisal of the Station, the appraiser determined that with the Development Agreement in place, the 6.23 acres, subject to dedication under the terms of the Agreement, have a nominal value of $1,000.00. The appraiser's basis for assigning this nominal value to the subject property has little to do with the size or condition of the property, but rather the existence of the Development Agreement. As the existing Development Agreement requires dedication of the Station to the City, the Property Owner has no legal ability to initiate any type of development activity upon the subject property. Further, the Development Agreement does not allow the Property Owner to sell the subject property to a third party without also transferring the obligation of site dedication to the City. In summary, the encumbrance placed upon the subject property by the Development Agreement restricts use of the site for any reason other than a commuter rail station. For this reason, the appraiser has determined the value of the subject property to be nominal. SOLEDAD TRANSIT CENTER SITE — PROPERTY ACQUISITION July 17, 2002 — Page 3 On July 2, 2002, the City prepared an offer letter in the amount of $1,000.00 to the current property owner for the portion of the Commuter Rail Station encumbered by the Development Agreement's offer of dedication. This portion of the Station property represents an area that is 6.23 acres in size and is identified in the Development Agreement. The presented offer is subject to, and contingent upon, acceptable soil conditions of the property and the absence from the property of toxic or hazardous substances, and any other kind of soil or water contamination, delivery of a disclosure statement regarding such conditions, and a grant of a right of entry to the City for the purpose of conducting a soils, toxic, and hazardous substances investigation of the property and approval. This offer is subject to modification depending on the results of such an investigation. The City Council must now consider this property for condemnation, as City staff, through mutual agreement with the owner, has been unable to acquire ownership. If the City Council agrees that the public necessity requires the proposed acquisitions, the 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. If the City Council adopts the Resolution of Necessity, the City Attorney will file the necessary condemnation action. Adoption of the Resolution of Necessity requires a four-fifths vote of the Council membership. ALTERNATIVE ACTIONS Other action as determined by the City Council. FISCAL IMPACT This action will not have a significant effect on the actual cost of purchasing the property, as the City is obligated to pay the Fair Market Value based on the approved appraisal. The expense of litigation to finalize the acquisition is unknown at this time. All costs associated with the subject project, including land acquisition, will be funded through the City's Transit Fund. Adequate funds to proceed with the acquisition of this property are available in the Fiscal Year 2002/03 Budget. ATTACHMENTS Resolution of Necessity Exhibit "A" — Site Plan Exhibit `B" — Location Map Offer Letter with attached Legal Description and Appraisal Summary Statement (available in the City Clerk's Reading File) Notice of Hearing (available in the City Clerk's Reading File) KMT:twb .-cil\solededst tion_ecpoisitim 071702