|
<br />,
<br />
<br />CITY OF RIVERSIDE
<br />
<br />REDEVELOPMENT AGENCY MEMORANDUM
<br />
<br />Honorable Mayor & Agency Members
<br />
<br />Date:
<br />Item No.:
<br />
<br />October 9, 2001
<br />2
<br />
<br />Subject: Request Authorization to Enter Into an Option for an Agreement for Purchase and Sale of
<br />Real Property Located at 3845 Market Street, Assessor's Parcel Numbers 215-032-002, 215-
<br />032-003,215-032-005 and 215-022-012 located in the Downtown/Airport Merged Project Area
<br />SUPPLEMENTAL APPROPRIATION
<br />
<br />Background
<br />
<br />A key component of the Mission Village downtown revitalization plan is the Riverside School for the Arts
<br />project. The project, which has been under consideration since the mid-1990s, is conceptually planned to
<br />encompass the blocks of Market Street to Brockton A venue and lOth Street to University A venue, In cooperation
<br />with Riverside Community College (RCC), Agency staff conducted negotiations with the property owners, Mr.
<br />and Mrs. James 0, Heiting, concerning the acquisition of a commercial building. The project financing structure
<br />requires that RCC will execute a lease with the Agency to provide lease revenue adequate to debt service the
<br />building acquisition. miscellaneous due diligence, legal and some of the anticipated seismic retrofit costs. A
<br />specific loan source has not yet been identified, but staff is currently exploring both private and internal
<br />borrowing options, The security for the financing is expected to be the building and the fifteen-year lease
<br />between the Agency and RCC. The college would use the building for RCC campus administrative purposes and
<br />School of the Arts classroom facilities,
<br />
<br />Curre"t Issue
<br />
<br />Staff obtained an appraisal of the fair market value of the property, and thereafter conducted negotiations with the
<br />property owners for an option to purchase the property for $2,403,000,00, The owners bave agreed to enter into
<br />an option period under the terms and conditions set forth in the attached option for an Agreement for Purchase
<br />and Sale of Real Property, Essentially. the Agreement requires that Agency earnest money in the amount of
<br />$12.000,00 be deposited into escrow to hold the property for a period of six months, Additionally, installment
<br />monies of$4.000,00 per month will be deposited into the escrow, beginning at the opening of escrow and on the
<br />first of each month for a period up to six months as additional monthly option payments, There are two 30-day
<br />extension periods allowed beyond the six months, All option money deposited into escrow is to be applied
<br />towards the purchase price, but is non-refundable should escrow cancel and will be applied as liquidated damages
<br />if the Agency chooses not to exercise the option to purchase,
<br />
<br />The option also calls for Mr. Heiting's underlying loan with a principal balance of$183,256.97 to be stayed (no
<br />interest will accrue and no principal payments will be required) during the option period. The loan is paid off
<br />through escrow upon closing,
<br />
<br />Fiscal Impact
<br />
<br />A total of $44.000,00 is required to fund the option money if both extensions are required, Additionally,
<br />diligence costs (for the activities described below) are estimated at $50,000,00, These costs will be recovered
<br />from Riverside Community College as agreed in the Memorandum of Understanding between the Agency and
<br />RCC that was approved on November 21,2000, Sufficient funds to cover the initial option and both extensions as
<br />well as costs associated with due diligence, are available in Downtown/Airport Capital Fund Balance account
<br />0000478-298000, which currently has a balance of approximately $2,500,000, Mr. Heiting has waived relocation
<br />benefits in conjunction with the sale,
<br />
<br />2-1
<br />
|