10/02/2001 RA RPT 06 - Laserfiche WebLink

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CITY OF RIVERSIDE COUNCIL/AGENCY MEMORANDUM Honorable Mayor & City Council and Redevelopmerit Agency Date: October 2, 2001 Item No.: 6 Subject: Joint Public Hearing to Consider Agreement of Purchase and Sale and Escrow Instructions Between the Redevelopmerit Agency and Finn L. Comer and Holly Lyn Cmner, and Christian E. Singletary. and Ru Anna Singletary - Merged Downtown/Airport Industrial Project Area Background In 1o88. the Redevelopment Agency acquired 2.5 acres of property, comprised of two adjoining parcels (the "Property~). located at 8856 Arlington and 8855 Philip Avenues in the Airport Project Area (see Exhibit attacheall. This transaction was a result of an Owner Participation Agreement "OPA'), which the Agency entered into with Rohr Industries in February of that same year to facilitate Rohr's expansion plans. However, a dispute ensued as to each party's performance under the terms of the OPA, which resulted in the Agency retaining the Property. Current Issue Per court stipulation, the Agency has attempted to market and sell the Property, including listing the Property with various local real estate brokers. over the past 10 years: howeyen the Agency was unable to sell the Property. It is believed that the Properly has been difficult to market because of its location. which is isolated and removed from the core of the Airport industrial area. However, as a result of staffs recent eftbrts to once again attract a listing broker, the Agency received a private offer. The business points that constitute the transaction and are contained in the attached Agreement of Purchase and Sale and Escrow Instructions ("Agreement") are as fol low: · Sale Price: $220,000 · Escrow Deposit: $10,000: refundable within 45 days if Buyer cancels Escrow: after 45 days, but before 90 days, I/2 refundable if Buyer cancels Escrow · Down payment: $56,600 (includes Deposit') · i" Trust Deed: $163,400, payable at 6.5 percent simple annual interest over a five (5) year period, interest only paymenls due quarterly. with the balance due within 60 months · 2'''l Trust Deed: $6,600. with no payments during the five (5) years. forgivable. uoless Buyer defaults · Broker commission: Agency will pay $6,600 in the escrow process · Agency to conve3 the property in an ~as is" condition. · Buyer will develop the property within five (5) years consistent with City's existing land use and zoning regulations and in compliance with the Redevelopment Plan: in the event the Property is not developed, Agency has right of first refusal to repurchase the Property at the original sale price of $220,000. · Feasibili.ty Period: Buyer to have 90 days from opening escrow to investigate the condition of the Property Analysis The Agency purchased the 2.5-acre propert)' in 1988 at a total cost of $570,000. or approximately $5.25 per square foot, with funds advanced by Rohr. After marketing the Properly tbr over a decade, the Agency has received a firm offer of $220,000, or approximately $2.00 per square foot. Given that the Agency has utilized a number of reputable real estate professionals to market the Properly, and that the Property has been on the market for an extended length of time, it has been determined that the offer reflects the fair market value of the Property.