09-20-2013 BPU RPT 11 - Laserfiche WebLink

Home

RIVERSIDE PUBLIC UTILITIES Board Memorandum P B L I C UTILITIES BOARD OF PUBLIC UTILITIES DATE: September 20, 2013 ITEM NO: 11 SUBJECT: PURCHASE AND SALE AGREEMENT, GROUND LEASE AGREEMENT AND WELL RELOCATION AGREEMENT BETWEEN CITY OF RIVERSIDE PUBLIC UTILITIES AND HILLWOOD ENTERPRISES, L.P. ISSUES: The items for Board of Public Utilities consideration are approval of the Purchase and Sale Agreement, the Ground Lease Agreement and the Well Relocation Agreement with Hillwood Enterprises, L.P. for certain property within the City of San Bernardino. RECOMMENDATIONS: That the Board of Public Utilities recommends that the City Council: 1. Approve the Purchase and Sale Agreement with Hillwood Enterprises, L.P. in an amount of $9,482,128; 2. Approve the Ground Lease Agreement with Hillwood Enterprises, L.P.; 3. Approve the Well Relocation Agreement with Hillwood Enterprises, L.P.; and 4. Authorize staff to make non-substantive changes to the Agreements listed above. BACKGROUND: The City of Riverside Public Utilities (City) owns certain parcels of land in an area generally bounded by Waterman Avenue, Orange Show Road, the Santa Ana River and the Atchison Topeka & Santa Fe Railway, except for certain parcels owned by the Orange Show Investments. These parcels make up 35.56 acres and are known as the Raub Tract and are the site for five of the City's active production water wells: Raub 4, Raub 5, Raub 6, Raub 7 and Raub 8. Collectively, the Orange Show Investments property and the Raub Track make up the area Hillwood Enterprises L.P. (Hillwood) desires to develop; referred to as the Site and referenced on Attachment 4. In 2012, Hillwood approached the City with a proposal to develop the Site. Their initial proposal was submitted to the City Council on February 19, 2013; and the City Council directed staff to continue negotiations. The City Council was provided another updated on June 18, 2013, with direction to staff to continue negotiations. Staff has now finalized negotiations and this item is before the Board of Public Utilities to make a recommendation to the City Council. Hillwood desires to develop the Site into a 1+ million square foot logistics center (logistics center) by purchasing the Orange Show Investment property and conveying that property to the City. The City and Hillwood would then enter into a 55-year lease agreement for a majority of the combined Site. In order to construct the logistics center, two wells (Raub 4 and Raub 5) must be relocated. The area where the wells will be relocated will not be leased to Hillwood. To this end, Hillwood is seeking to enter into three agreements with the City as described below.