06-19-2015 BPU RPT 10 - Laserfiche WebLink

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V; A 1 = R E N E R G Y I F F PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: JUNE 19, 2015 ITEM NO: 10 SUBJECT: PROPOSED PURCHASE AND SALE AGREEMENT WITH NNN MISSION SQUARE, LLC FOR THE ACQUISITION OF THE MISSION SQUARE OFFICE BUILDING LOCATED AT 3750 UNIVERSITY AVENUE FOR $37,995,000 ISSUE: The issue for Board of Public Utilities consideration is the approval of a purchase and sale agreement with NNN Mission Square, LLC for the purchase of the Mission Square Office Building located at 3750 University Avenue for $37,995,000. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the expenditure of $37,995,000 inclusive of the purchase price, due diligence, title and escrow fees and related miscellaneous closing costs; 2. Approve the supplemental appropriation in the amount of $37,950,000 from the unappropriated Electric Fund balance (Fund 510) to the Building and Improvements Account No. 6000010- 462050; 3. Approve the supplemental appropriation in the amount of $1,200,000 from the unappropriated Electric Fund balance to the Building Maintenance Account No. 6000010 - 424130, representing the net cost between the first year operating expenses and the amount already budgeted for Mission Square lease costs included in the proposed FY 2015/16 Operating Budget; 4. Approve an increase in estimated revenues for the proposed FY 2015/16 budget in the amount of $2,200,000 to the Electric Fund Land and Building Rental Account No. 0000510 - 373100 to reflect tenant income from commercial operation of the building; 5. Adopt the appropriate reimbursement resolution to provide the future option of using bond funds instead of operating funds for the capital financing requirements; 6. Approve the purchase and sale agreement with NNN Mission Square, LLC for the purchase of the Mission Square Office Building and parking structure; and 7. Authorize the City Manager or his designee to execute the Agreement, including making minor non - substantive changes and to sign all documents and instruments necessary to complete the transaction. BACKGROUND: The Mission Square Building consists of approximately 127,533 square feet of rentable office space in a six -story building plus a basement level and a 489 parking stall garage situated on approximately 2.5 acres of land. The Property was originally constructed in 1984. Riverside Public Utilities staff currently occupies floors 3, 4 & 5 which represents about 58% of the total building space. The lease expires on September 30, 2022 and the remaining lease obligation is slightly over $20 million.