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HomeMy WebLinkAboutAgenda Statement 1983/11/22 Item 17a,b COUNCIL AGENDA STATEMENT Item 17a,b Meeting Date 11/22/83 ITEM TITLE: a. Resolution //y 7/ Waiving bidding procedure for sale of City property b. Resolution // ,47,7--"Accepting offer of sale of City owner property to Financial Scene SUBMITTED BY: City Engineer 90t=-7 (4/5ths Vote: Yes No X ) REVIEWED BY: City Manager When the final map for Hidden Vista Village was approved, the City acquired ownership of Lot 319 of that subdivision for use as a site for relocation of Fire Station No. 2. Subsequently, use of that site was abandoned in favor of a location with better access and less potential for disturbing neighbors. RECOMMENDATION: That Council : 1. Waive the City Code requirement to follow the bidding procedure for sale of these lots on the basis of special circumstances as listed herein. 2. Accept the offer of $35,000 per lot and sell the subject lots to Financial Scene for development along with adjacent property. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: At the time the City agreed to relocation of the fire station site, we also agreed to several options for disposal of the old site. These options are: a. Watt Industries will give Lot 319 to the City of Chula Vista. b. Watt Industries will broker the sale of Lot 319 for the City of Chula Vista and give the proceeds of said sale to the City. c. Watt Industries shall construct two single family homes on the two building sites on Lot 319. The homes will be developed concurrently with Lots 188-193 of the same subdivision. The homes shall be in all respects comparable in design, quality and value to those homes that are constructed on Lots 188-193. Watt Industries shall offer these homes to the City for the actual construction costs which shall be the same as comparable homes in the Hidden Vista Village Subdivision. 7?-1/77/ Page 2, Item 17a,b Meeting Date 11/22/ 83 d. Watt Industries will construct and broker the sale of the two single family homes on Lot 319, and pay to the City the difference between the actual construction costs and the sale price of the two homes. Actual construction costs shall include the cost of financing, marketing and a five percent (5%) contingency to cover indirect costs such as building fees. The home will be developed concurrently with Lots 188-193 of the same subdivision. The homes shall be in all respects comparable in design, quality and value to those homes that are constructed on Lots 188-193. Sale price shall be no less than the average sale price of homes constructed on Lots 188-193. We have now received an offer from McMillin Development in behalf of the owner, Financial Scene, Inc. , for the purchase of the old site which has been divided into two lots by parcel map. They have offered $35,000 per lot and have submitted data on the sale of adjacent lots in this subdivision to verify that the offer is reasonable and appropriate. In our opinion, accepting this offer of purchase would be the City' s best course of action for several reasons. These reasons are as follows: 1. Selling the lots to other private parties or another developer could result in development of the lots in some manner which is not compatible with the adjacent lots. 2. After the costs of handling a sale (either directly by City personnel or through a broker) are deducted, the City might realize no greater income than it would if this offer is accepted. 3. Option C requires the expenditure of City funds for the construction of homes on these lots. Depending on the market at the time the units are complete, it could be necessary to forego earnings on that money for a relatively long time. 4. Option D delays the time at which the City receives income from the sale of these properties for some unknown time. 5. Exercising either of the construction options would put the City into a pseudo-developer position. While a greater income might be realized from adopting that position, it is not ordinarily compatible with City functions. 6. Lot 319 was originally granted to the City for use as a fire station site. A substitute site has been provided and the fire station will be constructed at no cost to the City. Had it not been for a possible early misjudgment on the developer's part, no additional payment would be necessary at all. Allowing the developer the additional income resulting from development of these lots would appear to be a reasonable way of conducting City affairs at the same time that the developer' s purpose is satisfied. /� //X7/ Page 3, Item 17a,b Meeting Date 11/22/83 On the basis of the above reasons for accepting the offer from Financial Scene, it is our opinion that the bidding procedure required by the City Code for the sale of excess City property is inappropriate and that it is in the best interests of the City to waive that requirement as provided in Section 2.56.170 B4 of the Municipal Code. FISCAL IMPACT: If this offer is accepted, a total of $70,000 would be realized as City income to the General Fund. RLD:nr/EY093 WPC 0664E COUNCIL AGENDA STATEMENT Item 17a,b Meeting Date 11/22/83 ITEM TITLE: a. Resolution /../ (77 Waiving bidding procedure for sale of City property • b. Resolution // `../"Accepting offer of sale of City owner property to Financial Scene SUBMITTED BY: City Engineer (4/5ths Vote: Yes No X ) REVIEWED BY: City Manager When the final map for Hidden Vista Village was approved, the City acquired ownership of Lot 319 of that subdivision for use as a site for relocation of Fire Station No. 2. Subsequently, use of that site was abandoned in favor of a location with better access and less potential for disturbing neighbors. RECOMMENDATION: That Council: 1. Waive the City Code requirement to follow the bidding procedure for sale of these lots on the basis of special circumstances as listed herein. 2. Accept the offer of $35,000 per lot and sell the subject lots to Financial Scene for development along with adjacent property. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: At the time the City agreed to relocation of the fire station site, we also agreed to several options for disposal of the old site. These options are: a. Watt Industries will give Lot 319 to the City of Chula Vista. b. Watt Industries will broker the sale of Lot 319 for the City of Chula Vista and give the proceeds of said sale to the City. c. Watt Industries shall construct two single family homes on the two building sites on Lot 319. The homes will be developed concurrently with Lots 188-193 of the same subdivision. The homes shall be in all respects comparable in design, quality and value to those homes that are constructed on Lots 188-193. Watt Industries shall offer these homes to the City for the actual construction costs which shall be the same as comparable homes in the Hidden Vista Village Subdivision. Page 2, Item 17a,b Meeting Date 11/2'2/83 d. Watt Industries will construct and broker the sale of the two single family homes on Lot 319, and pay to the City the difference between the actual construction costs and the sale price of the two homes. Actual construction costs shall include the cost of financing, marketing and a five percent (5%) contingency to cover indirect costs such as building fees. The home will be developed concurrently with Lots 188-193 of the same subdivision. The homes shall be in all respects comparable in design, quality and value to those homes that are constructed on Lots 188-193. Sale price shall be no less than the average sale price of homes constructed on Lots 188-193. We have now received an offer from McMillin Development in behalf of the owner, Financial Scene, Inc. , for the purchase of the old site which has been divided into two lots by parcel map. They have offered $35,000 per lot and have submitted data on the sale of adjacent lots in this subdivision to verify that the offer is reasonable and appropriate. In our opinion, accepting this offer of purchase would be the City' s best course of action for several reasons. These reasons are as follows: 1. Selling the lots to other private parties or another developer could result in development of the lots in some manner which is not compatible with the adjacent lots. 2. After the costs of handling a sale (either directly by City personnel or through a broker) are deducted, the City might realize no greater income than it would if this offer is accepted. 3. Option C requires the expenditure of City funds for the construction of homes on these lots. Depending on the market at the time the units are complete, it could be necessary to forego earnings on that money for a relatively long time. 4. Option D delays the time at which the City receives income from the sale of these properties for some unknown time. 5. Exercising either of the construction options would put the City into a pseudo-developer position. While a greater income might be realized from adopting that position, it is not ordinarily compatible with City functions. 6. Lot 319 was originally granted to the City for use as a fire station site. A substitute site has been provided and the fire station will be constructed at no cost to the City. Had it not been for a possible early misjudgment on the developer's part, no additional payment would be necessary at all. Allowing the developer the additional income resulting from development of these lots would appear to be a reasonable way of conducting City affairs at the same time that the developer' s purpose is satisfied. Page 3, Item 17a ,b Meeting Date 11/Z2/83 On the basis of the above reasons for accepting the offer from Financial Scene, it is our opinion that the bidding procedure required by the City Code for the sale of excess City property is inappropriate and that it is in the best interests of the City to waive that requirement as provided in Section 2.56.170 B4 of the Municipal Code. FISCAL IMPACT: If this offer is accepted, a total of $70,000 would be realized as City income to the General Fund. RLD:nr/EY093 WPC 0664E ? // y7 z-