TITLE
Recommendation to receive supporting documentation into the record, conclude the hearing, and adopt resolution making certain findings for an Owner Participation Agreement with Lester Box, Inc., for the development of 1463 Cota Avenue. (District 1)
DISCUSSION
The Long Beach Redevelopment Agency (Agency) staff has concluded the negotiation of an Owner Participation Agreement (Agreement) with Lester Box, Inc., (Developer) for the sale and development of Agency-owned property located at 1463 Cota Avenue (Site)(Exhibit A - Site Map). The Site is located in the Westside Industrial Redevelopment Project Area (Westside).
The Developer's business, Lester Box, Inc., has been operating since 1946 at 1470 Seabright Avenue, which is in the Westside. The company provides custom wooden boxes, crates and pallets as well as commercial and export packing and crating services to aerospace, defense, automotive, medical, petroleum, telecommunications, and many other key industries. The company is a direct supplier of wooden packing materials and crating services to the United States government.
The company's continuous sales growth and increased demand for services, particularly from the military, have prompted the owner to look for additional space in the immediate area. The neighboring Agency-owned property is an ideal acquisition for the company's needs. The Developer anticipates hiring an additional two employees upon expansion.
The Developer intends to construct a new building on the Site, and improve the remainder of the Site with concrete paving, install a block wall with tube steel fencing and gates with a five-foot-deep landscaping planter along Cota Avenue (Exhibit B - Site Plan).
The Agreement includes the following major provisions:
· Under the terms of the Agreement, the Developer will pay the Agency $295,000, as compensation for the approximately 9,755-square-foot site.
· The Developer will utilize the Site in accordance with the West Long Beach Industrial Redevelopment Plan and all applicable City of Long Beach codes and regulations including providing appropriate landscaping and screening.
· An Agreement Containing Covenants will be recorded at closing. This document will prohibit certain uses, describe maintenance responsibilities and levels of maintenance, and require that any future improvements be subject to the Design Guidelines for the Project Area.
· The Developer agrees to close escrow within six months of the date of the Agreement and complete construction on the Site within 180 days.
At its meeting held on October 13, 2010, the Westside Project Area Committee made a recommendation to approve the Developer's conceptual site plan for the project. The Redevelopment Agency approved the Agreement at its meeting of December 6, 2010.
Since the Site was purchased by the Agency with tax increment monies, California law requires that this sale must also be approved by the City Council by resolution after a public hearing.
Pursuant to California Redevelopment Law, the Agency has made available for public inspection and reproduction a summary report (Exhibit C - Section 33433 Summary Report) that contains the following:
· The estimated value of the interest to be conveyed, determined at the highest and best use permitted under the Redevelopment Plan.
· The estimated value of the interest to be conveyed and with the conditions, covenants and development costs required by the Agreement.
· The purchase price.
· The cost of the Agreement to the Agency.
· The net cost/benefit to the Agency.
· An explanation of why the sale of the Site will assist in the elimination of blight.
· An explanation of why the sale of the Site is consistent with the Agency's AB 1290 Implementation Plan.
This letter was reviewed by Chief Assistant City Attorney Heather Mahood on November 18, 2010 and by Acting Budget and Performance Management Bureau Manager Lou Palmer, on November 23, 2010.
TIMING CONSIDERATIONS
City Council action is requested on December 14, 2010, as the Agency and Developer wish to proceed with the project as soon as possible.
FISCAL IMPACT
There will be no impact to the General Fund. The proceeds of $295,000 from the proposed property sale will be deposited into the Redevelopment Fund (RD) in the Department of Development Services (DV). The Developer will pay the Agency with private funds. The Developer anticipates hiring an additional two employees upon completion of the expansion.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH APPROVING THE PROPOSED OWNER PARTICIPATION AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF LONG BEACH, CALIFORNIA, AND LESTER BOX, INC.; FINDING THAT THE CONSIDERATION FOR THE SALE OF CERTAIN REAL PROPERTY IN THE WEST LONG BEACH INDUSTRIAL REDEVELOPMENT PROJECT AREA IS NOT LESS THAN FAIR MARKET VALUE IN ACCORDANCE WITH COVENANTS AND CONDITIONS GOVERNING SUCH SALE; AND APPROVING THE SALE OF THE PROPERTY AND THE OWNER PARTICIPATION AGREEMENT
Respectfully Submitted,
AMY J. BODEK, AICP
DIRECTOR OF DEVELOPMENT SERVICES
APPROVED:
________________________
PATRICK H. WEST
CITY MANAGER