09-21-2004 CC RPT 19 - Laserfiche WebLink

Home

People Serving People CITY OF RIVERSIDE AGENCY/COUNCIL MEMORANDUM Pdverside Ali-America City HONORABLE MAYOR, CITY COUNCIL AND AGENCY MEMBERS DATE: September 21, 2004 ITEM NO: 19 SUBJECT: JOINT PUBLIC HEARING TO CONSIDER PURCHASE AND SALE AGREEMENT FOR THE SALE OF THE REMOTE ENCODING PROPERTY TO KAISER FOUNDATON HEALTH PLANT INC .-- MERGED DOWNTOWN/AIRPORT INDUSTRIAL PROJECT AREA BACKGROUND: In May, 1995, the City Council and Redevelopment Agency approved a Disposition and Development Agreement (DDA) between the Redevelopment Agency of the City of Riverside (Agency) and IP Properties (IPP) for the construction of a 21,600 square foot building on approximately 4.1 acres of combined Agency- and City-owned land. The property is located at 7500 Jurupa Avenue at the corner of Van Buren Boulevard, within the Airport Commerce Center. The intended use of the building was for the United States Postal Service (USPS) as the Remote Encoding Center (REC). To further facilitate this transaction, the Agency entered into two ground leases. One ground lease is with IPP for the REC building site, with the Agency as lessor. A second ground lease is for additional parking, with the City as lessor. Contained within this second ground lease is an option to the Agency to lease an adjacent 3.39-acre vacant parcel for future parking. The REC building was constructed shortly thereafter and occupied by the USPS for approximately five years. The USPS vacated the building in 2000, and on September 17, 2002, the Agency approved early termination of its lease with the USPS. Subsequently, IPP and the Agency began to market the site to potential users and buyers. During the marketing of this site, a potential buyer approached the Agency in 2003, but no agreement was reached and so no sale occurred. A second buyer, Kaiser Foundation Health Plan, Inc. (Kaiser), approached the Agency in 2004. Kaiser had expressed interest in the building for use as a call center to support its medical services. The Kaiser call center will provide between 150-200 new jobs, with wages between $11 and $13 and will allow for the existing Kaiser operation to continue expanding. This new addition to the site would further Redevelopment and Economic Development goals related to promotion of business expansion, retention and job creation. CURRENTISSUE: Several actions must occur before the site may be sold, which are as follow: The Agency will consolidate ownership of the site. While the property is owned by the Agency, the building is owned by IPP. The Agency will exercise the Option to Purchase specified in the DDA to buy the building from IPP, which will unify ownership of the site and allow the sale. The purchase of the building will be concurrent with the close of escrow and sale to Kaiser. · The DDA between the Agency and IPP will be terminated. As the Agency will be sole owner of the site, the DDA is no longer necessary and will be terminated at the close of escrow. · The ground lease between the Agency and IPP for the REC building site will be terminated. The 19-1