TITLE
Recommendation to authorize City Manager to execute a Purchase and Sale Agreement and Quitclaim Deed, by and between the City of Long Beach and the Long Beach Housing Development Company, a non-profit public benefit corporation, and all related documents necessary for conveyance of the City-owned land and improvements at 2640-2644 Anaheim Street. (District 4)
DISCUSSION
On April 8, 2004, the City of Long Beach purchased property located at 2640-2644
Anaheim Street (Site) at a Los Angeles County Sheriff's Sale resulting from delinquent
earthquake loan assessments and property tax payments. The Site measures
approximately 5,850 square feet (see attached) and contains a two-story 1 1,700 square
foot building known as the Palace Hotel. The second floor of the Palace Hotel contains 24 vacant hotel rooms and a vacant on-site manager unit. The ground floor is divided into four retailkommercial units.
On December 7, 2004, the City Council approved a month-to-month rental agreement
for 1 ,107 square feet of ground floor space with Marjorie Freeman, DBA Family Nutrition Center (FNC). FNC occupied the Site prior to the City's acquisition and is. the sole tenant in the building. FNC pays $750 per month in rent and is responsible for its own utility payments. The City is responsible for property maintenance and water costs of approximately $270 per month.
Since the acquisition of the Site, the City has paid $10,610 in property maintenance
costs and $6651 0 in earthquake assessments. Future earthquake assessment
payments are due in two installments each year through 2015. The earthquake
assessments are calculated using an 11 percent interest rate, reflecting market
conditions for such coverage. The earthquake assessments could be pre-paid for a
lump sum payment of $167,500, if executed during July 2005.
On June 15, 2005, during closed session, the Long Beach Housing Development
Company (LBHDC) Board of Directors approved the acquisition of the Site from the City
for development of a special needs housing project targeting emancipated youth.
A proposed Purchase and Sale Agreement would contain the following terms:
Seller: City of Long Beach.
Buyer: Long Beach Housing Development Company, a non-profit public
benefit corporation.
Condition: Buyer accepts the Site in its "as-is" condition.
Sale Price: The purchase price of approximately $247,620 will include
reimbursement of $77,120 to the City of Long Beach for property
maintenance and earthquake assessment costs; payment of
$ 167,500 for payoff of future earthquake assessment costs; and
payment of approximately $3,000 in escrow and closing costs.
City Council approval of the recommended action will aid in the development of a nearly vacant property and assist in providing a needed service to the community. The City will also be released from continued maintenance expenses, future earthquake assessment costs, and potential future liability.
This letter was reviewed by Deputy City Attorney Richard F. Anthony on July 5, 2005
and Budget Management Officer David Wodynski on July 8,2005.
TIMING CONSIDERATIONS
City Council action is requested on July 19, 2005, to complete this action in a timely manner.
FISCAL IMPACT
Revenue of approximately $77,120 for reimbursement of property maintenance and
past earthquake assessment costs will be deposited into the General Fund (GP) in the
Department of Community Development (CD). Revenue of approximately $1 67,500 for
payoff of future earthquake assessments will be deposited into the Earthquake
Assessment District Agency Fund (AG 452) in the Department of Financial
Management Citywide (XC).
SUGGESTED ACTION
Approve recommendation.
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Respectfully Submitted,
CRAIG BECK
ACTING DIRECTOR OF
COMMUNITY DEVELOPMENT