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r <br />Revised City Council Memorandum <br />TO: HONORABLE MAYOR AND CITY COUNCIL DATE: June 17, 2008 <br />FROM: DEVELOPMENT DEPARTMENT <br />ITEM NO: 22 <br />WARD: 1 <br />SUBJECT: PROPOSED PURCHASE AND SALE AGREEMENT FOR ACQUISITION OF 3435 <br />14th STREET - ASSESSOR PARCEL NUMBER 215-331-018 FROM WILLIAM <br />FRIIS - SUPPLEMENTAL APPROPRIATION <br />ISSUE <br />The issue before the City Council is whether to approve the attached Purchase and Sale <br />Agreement (Exhibit "A") with William Friis to acquire the Gateway Building located at 3435 14th <br />Street, as shown in the attached Exhibit "B," for the negotiated purchase price of $3,000,000 plus <br />tenant and acquisition costs of approximately $300,000 and future building and improvement <br />costs of approximately $330,000. <br />RECOMMENDATIONS <br />That the City Council: <br />1. Approve a supplemental appropriation of $3,630,000 from the Public Utilities Electric Fund <br />Balance for the acquisition and equipping of the subject property. <br />2. Approve the attached Purchase and Sale Agreement for the acquisition of 3435 14th Street, <br />APN 215-331-018, for the negotiated purchase price of $3,000,000. <br />3. Authorize the City Manager, or his designee, to execute the Agreement, including making <br />minor, non-substantive changes, and to sign all documents and instruments necessary to <br />complete this transaction, and to expend up to $630,000 for title and escrow fees, tenant <br />costs, and subsequent building and office space improvements. <br />4. Direct the City Manager to return to the City Council/Redevelopment Agency within 30-days <br />with an option agreement for the Redevelopment Agency to purchase the subject project in <br />the future. <br />GffiGe spaGe at 3560 University Avenue (the "URiversity PlaGe" builddRg). <br />BACKGROUND <br />With Public Utilities' relocation from City Hall to the Orange Square facility in July 2006, the <br />department's need for additional office space was partially satisfied. Nevertheless, many related <br />functions are not located in proximity to each other and efforts to improve efficiency through <br />consolidation along functional lines remains a significant challenge. If approved, this acquisition <br />would help improve the department's efficiency by allowing the physical co-location of several <br />critical and related functions. <br />The Gateway Building, located at the northwesterly corner of 14th and Lime Streets, is a <br />commercially-zoned 11,237-square-foot multi-tenant office building located on approximately 1.02 <br />acres. The acquisition of this property will immediately provide 6,594 square feet of useable office <br />space, giving the department the ability to consolidate several fragmented work groups into one <br />