07/24/2001 RA RPT 07 - Laserfiche WebLink

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CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: July 24, 2001 Item No.: 7 Subject: Request Authorization to Extend the Option to Purchase Regarding Property Located at the Northeast Corner of Market Street and Mission Inn Avenue (Stalder Building) - Downtown/Airport Merged Project Area Background On January 18, 2000, the Redevelopment Agency approved the Downtown Retail Entertainment Strategy and Action Plan, which was prepared by Keyser Marston Associates. The purpose of the plan was to formulate a strategy for the continued revitalization of Downtown Riverside through the attraction of a variety of upstale restaurants, specialty retail and entertainment opportunities. The Strategy and Action Plan states that in order to ensure the success of the revitalization efforts, the Agency must obtain control of strategic properties. Recognizing the scope of the project, coupled with limited available resources, the Strategy and Action Plan advises that the revitalization of Downtown be conducted through a deliberate, phased approach. As such, the document recommends that the revitalization project be initiated at the Stalder block due to the proximity to the Mission Inn, and because the subject site is the most central of the properties that would likely make up the lifestyle entertainment center. Staff obtained an appraisal of the fair market value of the Stalder property, and thereafter conducted negotiations with the property owners for an option to purchase the property at the appraised value. The property bears Assessor Parcel Nos. 213-222-002 and 213-222-003, and is owned by Donald S. Stalder, John D. Bippart and Alger J. Fast (now deceased) as trustees of the S.F.&B. Trust dated June 26, 1984. The owners agreed to an option at the appraised value of $1,215,000 under the terms and conditions set forth in the Option to Purchase. Essentially, the agreement required that option money in the amount of $15,000 be tendered to hold the property through December 31, 2000. On September 19, 2000, the Agency Board authorized staff to enter into an option to purchase the subject site. Subsequently, on December 5, 2000 the Agency directed staff to pursue two 90-day extensions (through June 30, 2001) and authorized payment of an additional $7,500 in option money for each such 90-day extension. A total of $30,000 in option money has been paid thus far. Current Issue The Agency Board earlier authorized staff to extend the Option to Purchase of the subject site through June 30, 2002, and directed staff to submit the extension of the Option to Purchase for final approval. For purposes of this further extension, the owners have agreed to hold with the previously established Purchase Price of $1,215,000. While the owners have increased the one-year option price to $40,000, they have agreed to apply half of all the option money ($X 5 ,OO0 + 20,000 = $35 ,O00) to the purchase price. Howe,~er, the option money becomes non- refundable if the Agency chooses not to exercise the option. On a related matter, on July 10, 2001, the Agency authorized the extension of the Memorandum of Understanding Agency with Fancher/Kaser Parmers regarding the development of a lifestyle entertainment center encompassing the same area. Extending the purchase option agreement for the Stalder property should be seen as consistent with that objective as well.