yjryly AGENDA REPORT Meeting Date: November 20, 2018 Item Number: To: From:

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1 yjryly Meeting Date: November 20, 2018 Item Number: To: From: Subject: F i AGENDA REPORT Honorable Mayor & City Council Paula Gutierrez Baeza, Assistant City Attorney Logan Phillippo, Policy & Management Analystt7 A RESOLUTION OF THE COUNCIL OF THE CITY OF BEVERLY HILLS DECLARING THE REAL PROPERTY LOCATED AT 1297 MONTE CIELO DRIVE IN THE CITY OF BEVERLY HILLS, AND IDENTIFIED AS LOS ANGELES COUNTY TAX ASSESSOR S PARCEL NUMBER , NECESSARY FOR PUBLIC PURPOSES AND AUTHORIZING THE ACQUISITION THEREOF Attachment: 1. Resolution of Necessity RECOMMENDATION Staff recommends City Council: 1. Approve a Resolution of Necessity of the City of Beverly Hills Declaring Certain Real Property Located at 1297 Monte Cielo Drive in the City of Beverly Hills, and Identified as Los Angeles County Tax Assessor s Parcel Number , Necessary for Public Purposes and Authorizing the Acquisition Thereof; 2. Open and conduct a hearing on the adoption of the proposed Resolution of Necessity, receive from staff the evidence stated and referred to in this Agenda Report (Report), take testimony from any person wishing to be heard on issues A, B, C, and D below, and consider all evidence to determine whether to adopt the proposed Resolution of Necessity; 3. If the City Council finds, based on the evidence contained and referred to in this Report, the testimony and comments submitted to the City Council, that the evidence warrants the necessary findings with respect to the proposed Resolution of Necessity, then Staff recommends that the City Council, in the exercise of its discretion, adopt the proposed Resolution of Necessity, which requires a four Page 1 of 6 11/15/2018

2 Meeting Date: November20, 2018 fifths vote of the entire City Council, and authorize the City Attorney s office to file an eminent domain proceeding to acquire in fee the following real property: Real property located at 1297 Monte Cielo Drive, Beverly Hills, California, and identified as Los Angeles County Tax Assessor s Parcel Number in fee, which is owned by Jay Isaac Landers and Despina Gianopulos Landers, Trustees of the Landers Family Trust (Subject Property). The Subject Property is an approximate 22,650 square foot vacant parcel described more particularly on Exhibit A and depicted on Exhibit B to the Resolution; The Resolution, including all Exhibits, is attached hereto and incorporated herein by this reference; 4. If the City Council adopts the proposed Resolution of Necessity, authorize the City Attorney s Office to file and prosecute an eminent domain proceeding for the acquisition of the Subject Property in fee; and 5. Authorize the City Manager to execute all necessary documents. INTRODUCTION The City and Jay Isaac Landers and Despina Gianopulos Landers, Trustees of the Landers Family Trust (Landers Trust) entered into a Purchase and Sale Agreement and Joint Escrow Instructions between the City of Beverly Hills and the Landers Family Trust for the Acquisition of Real Property Located at 1297 Monte Cielo Drive in Beverly Hills and 1721 Monte Cielo Court in Los Angeles with an effective date of July 17, 2018 (Purchase and Sale Agreement). The City acquired the real property located at 1721 Monte Cielo Court, consisting of a single-family residence, (Monte Cielo Court Property) on September 7, 2018 pursuant to the Grant Deed recorded as Document Number of Official Records of the County of Los Angeles. Escrow on the Subject Property, however, could not close due to certain encumbrances, including but not limited to restrictions, recorded against the Subject Property. Staff recommends that the City Council consider the adoption of the proposed Resolution of Necessity to authorize the City to acquire in fee the Subject Property by eminent domain. This will allow the City to complete the proposed acquisition of the Subject Property by condemnation and to clear any title issues in connection with the Subject Property. DISCUSSION The City Council has before it a proposed Resolution of Necessity for the acquisition in fee of the Subject Property by eminent domain. As discussed above, the Subject Property is an approximate 22,650 square foot vacant parcel located at 1297 Monte Cielo Drive, Beverly Hills, California, and identified as Los Angeles County Tax Assessor s Parcel Number The City and the Landers Trust, the record owner, entered into the Purchase and Sale Agreement for the negotiated purchase of the Subject Property Page2of6 11/15/2018

3 Meeting Date: November20, 2018 and the adjacent Monte Cielo Court Property. Escrow for the Subject Property transaction, however, could not close due to certain title issues. Accordingly, it is necessary for the City Council to consider the adoption of a Resolution of Necessity at this time to effectuate the proposed acquisition of the Subject Property and to clear the title issues and remove the encumbrances, The City seeks to acquire the Subject Property in fee for a public use, namely for proposed small water infrastructure purposes in connection with existing water pressure regulation stations and abandoned facilities located in the vicinity of the Subject Property, and all uses necessary and convenient thereto (proposed Project). The City of Beverly Hills has authority to acquire real property by eminent domain by Section 19 of Article 1 of the California Constitution, Government Code Sections 37350, , 37351, and 40404, California Code of Civil Procedure Section et seq. (Eminent Domain Law), including but not limited to Sections , , , , and by other provisions of law. Required Findings for Adoption of Resolution of Necessity Authorizing the Acquisition of the Subject Property by Eminent Domain As shown more fully below, the Subject Property, which is described more particularly in the Resolution of Necessity, is necessary for the proposed Project. To adopt the proposed Resolution of Necessity for the acquisition in fee of the Subject Property by eminent domain, the City Council must find and determine that: A. The public interest and necessity require the proposed Project; B. The proposed Project is planned and located in the manner that will be most compatible with the greatest public good and the least private injury; C. The Subject Property described in each Resolution of Necessity is necessary for the proposed Project; and D. The City has made an offer as required by Government Code Section to the owner(s) of record of the real property interest it seeks to acquire. The amount of just compensation is not an issue before the City Council at this hearing. The hearing relates to issues A, B, C, and D above. Environmental Analysis The environmental effects of the proposed Project were studied and analyzed pursuant to the California Environmental Quality Act (CEQA), Public Resources Code Section et seq., and the CEQA Guidelines, 14 Cal. Code Regs. Section et seq. (CEQA Guidelines). City Staff determined that the proposed Project is exempt from CEQA pursuant to Section of the CEQA Guidelines. The proposed Project falls under the Class 3 Exemption. As part of the proposed Project, the City proposes to construct new small water infrastructure facilities and structures on the Subject Property in connection Page3of6 11/15/2018

4 Meeting Date: November 20, 2018 with existing water pressure regulation stations and abandoned facilities located in the vicinity of the Subject Property. The City will post a Notice of Exemption with the Los Angeles County Clerk s Office in accordance with applicable law. These environmental findings are the appropriate findings with respect to the proposed acquisition of the Subject Property. City s Actions Pursuant to Government Code Section 7260 et seq. Pursuant to Government Code Section 7260 et seq., the City obtained a fair market value appraisal of the Subject Property and the Monte Cielo Court Property that were the subject of the Purchase and Sale Agreement. The City set just compensation and extended to the Landers Trust an offer for the Subject Property and the Monte Cielo Court Property. The City and the Landers Trust negotiated in good faith for the City s purchase of said parcels. Escrow on the Subject Property transaction, however, could not close due to title issues that could not be cleared through Escrow. Accordingly, it is necessary that the City consider the adoption of the Resolution of Necessity at this time. City s Actions Pursuant to Code of Civil Procedure Section Pursuant to Code of Civil Procedure Section 1245,235, the City sent a letter and a notice by first-class mail on November 2, 2018 to Jay Isaac Landers and Despina Gianopulos Landers, Trustees of the Landers Family Trust. The City also sent a letter and a notice to Jay Isaac Landers and Despina Gianopulos Landers, Trustees of the Landers Family Trust, do Jeffrey Brynan, Esq. The City Attorney s Office forwarded via electronic mail a courtesy copy of the letter and notice to Mr. Brynan, counsel for the Landers Trust. The letter and notice specifically informed the Landers Trust that it would have an opportunity to appear before the City Council and raise questions about whether the public interest and necessity require the proposed Project; whether the proposed Project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury; and whether the Subject Property the City seeks to acquire from the owners of record are necessary for the proposed Project. As discussed above, based on the inability to clear certain title issues through the Escrow for the Subject Property transaction, it is necessary for the City Council to consider the adoption of the proposed Resolution of Necessity at this time. Required Findings for Adoption of Resolutions of Necessity A. The Public Interest and Necessity Require the Proposed Project The City seeks to acquire the Subject Property for public use, namely for proposed small water infrastructure purposes in connection with the City s existing water pressure regulation stations and abandoned facilities located in the vicinity of the Subject Property, and all uses necessary and convenient thereto. The proposed Project, as planned and located, is in the public interest and necessity and is needed to help the City to construct proposed small water infrastructure facilities that will help it to meet its goal of providing additional water storage capacity in accordance with the goals set forth in the City s Water Enterprise Plan (July 2015) (referred to below as WEP), which is incorporated herein by this reference. Page4of6 11/15/2018

5 Meeting Date: November 20, 2018 The Subject Property is located adjacent to City-owned land that contains an abandoned subsurface water main, an active water pressure regulation station servicing an interconnection between Los Angeles Department of Water and Power and the City s water distribution system, and an abandoned vault containing two abandoned water tanks. The Subject Property is located at the northern edge of the city limits of the City of Beverly Hills near Coldwater Canyon Drive. The proposed Project will enable the City to build additional water infrastructure to accomplish certain goals set forth in the WEP. The proposed Project would help further the goals of the WEP because it would enable the City to provide for emergency storage of water. This will help the City to work towards meeting the goal of having sufficient emergency reservoir storage capacity to meet a seven-day demand during peak demand periods, which will benefit the community. The proposed Project would allow the City to add some storage capacity to help eventually reach the goal of adding 35 MG of storage to the City s existing supply of 43 MG in existing storage capacity. B. The Proposed Project is Planned and Located in the Manner that will be Most Compatible with the Greatest Public Good and the Least Private Injury As shown below, the proposed Project, is planned and located, in the manner that is most compatible with the greatest public good and least private injury. The Project is planned and located to provide much needed water infrastructure to this area of the City. This will benefit the residents and businesses of this area of the City and the community as a whole. The Subject Property is strategically located at a high elevation adjacent to other Cityowned property that contains an abandoned subsurface water main, an active water pressure regulation station servicing an interconnection between LADWP and the City s water distribution system, and an abandoned vault containing two abandoned water tanks, thus, minimizing the need to acquire other private property by eminent domain. Further, the Landers Trust had agreed to sell the Subject Property to the City pursuant to the Purchase and Sale Agreement, but the transaction could not be consummated due to title issues. The acquisition of this site would allow the City to build additional water infrastructure to help accomplish certain goals set forth in the City s WEP. As discussed above, the proposed Project would help further the goals of the WEP by providing for emergency storage of water. This will help the City to eventually meet the goal of having sufficient emergency reservoir storage capacity to meet a seven-day demand during peak demand periods, which will benefit the community. The proposed Project, as planned and located, will benefit the residents and businesses of the City and the community as a whole. The Landers Trust is aware that it is necessary for the City to consider the acquisition in fee of the Subject Property by eminent domain to clear certain title issues and encumbrances. C. The Subject Property Described in the Resolution of Necessity is Necessary for the Proposed Project The proposed Project requires the acquisition in fee of the Subject Property. As discussed above, the Subject Property is located adjacent to City-owned property that contains an abandoned subsurface water main, an active water pressure regulation station servicing an interconnection between Los Angeles Department of Water and Power and the City s water distribution system, and an abandoned vault containing two abandoned water tanks. Page 5 of 6 11/15/2018

6 Meeting Date: November 20, 2018 The proposed Project cannot be constructed without the acquisition in fee of the Subject Property. D. The City has Made an Offer as Required by Government Code Section to the Owner of Record of the Subject Property. The City, pursuant to Government Code Section 7260 et seq., obtained a fair market value appraisal of the Subject Property and Monte Cielo Court Property, set just compensation in accordance with the fair market value, and extended an offer to the Landers Trust, the owner of record. The City and the Landers Trust negotiated the City s voluntary purchase of the Subject Property, but the sales transaction could not be consummated due to title issues. Accordingly, the City has complied with Government Code Section FISCAL IMPACT On July 17, City Council approved the Purchase and Sale Agreement in the amount of $3.8 million for purchase of the Subject Property and the Monte Cielo Court Property containing the single family residence. At that time, approximately $2.4 million of funds were available in a Capital Assets Fund, Project Administration Program, Capital Improvement Program budget for Land Acquisition ( ). City Council appropriated $1.4 million into this same account to ensure sufficient funds were available to complete the acquisition. On September 7, 2018, the City closed escrow on the single-family residence in accordance with its fair market value in the amount of $3.25 million. The property owner has agreed that the just compensation for the Subject Property, the vacant lot, is $550,000. The total purchase price for both properties will be $3.8 million, which is consistent with the Purchase and Sale Agreement approved by City Council on July 17. $550,000 for this acquisition is available within the Land Acquisition Capital Improvement Program budget ( ). The City will incur litigation expenses relating to the any eminent domain proceeding, but funding for these purposes is available through existing purchase orders in the City Attorney operating budget for legal services. No appropriation of funds is requested at this time. Page 6 of 6 11/15/2018

7 Attachment 1

8 RESOLUTION NO. A RESOLUTION Of THE COUNCIL Of THE CITY Of BEVERLY HILLS DECLARING THE REAL PROPERTY LOCATED AT 1297 MONTE CIELO DRIVE IN THE CITY Of BEVERLY HILLS, AND IDENTIfIED AS LOS ANGELES COUNTY TAX ASSESSOR S PARCEL NUMBER , NECESSARY FOR PUBLIC PURPOSES AND AUThORIZING THE ACQUISITION THEREOF Section 1. The City of Beverly Hills (City), is a municipal corporation in the County of Los Angeles, State of California. Section 2. The City seeks to acquire by eminent domain the fee interest in the real property described in Section 3 of this Resolution for a public use, namely for proposed small water infrastructure purposes in connection with existing water pressure regulation stations and abandoned facilities located in the vicinity of the Subject Property, and all uses necessary and convenient thereto (Project) pursuant to the authority conferred on the City of Beverly to acquire real property by eminent domain by Section 19 of Article 1 of the California Constitution, Government Code Sections 37350, , 37351, and 40404, California Code of Civil Procedure Section el seq. (Eminent Domain Law), including but not limited to Sections , , , , and by other provisions of law. Section 3. The City seeks to acquire the fee simple interest in the real property located at 1297 Monte Cielo Drive, Beverly Hills, California, and identified as Los Angeles County Tax Assessor s Parcel Number (Subject Property). The Subject Property is an approximate 22,650 square foot vacant parcel. The Subject Property is described more particularly on Exhibit A and depicted on Exhibit B, which are attached hereto and incorporated herein by this reference. Section 4. The City and Jay Isaac Landers and Despina Gianopulos Landers, Trustees of the Landers family Trust (Landers Trust), the record owner of the Larger Parcel, entered into a BO \ v2.doc

9 Purchase and Sale Agreement and Joint Escrow Instructions between the City of Beverly Hills and the Landers family Trust for the Acquisition of Real Property Located at 1297 Monte Cielo Drive in Beverly Hills and 1721 Monte Cielo Court in Los Angeles with an effective date of July 17, 201$ (Purchase and Sale Agreement). The City acquired the real property located at 1721 Monte Cielo Court (Monte Cielo Court Property) on September 7, 201$ pursuant to the Grant Deed recorded as Document Number of Official Records of the County of Los Angeles. Escrow on the Subject Property, however, could not close due to certain encumbrances, including but not limited to restrictions, recorded against the Subject Property. Accordingly, it is necessary that the City acquire in fee the Subject Property by eminent domain to clear any title issues and encumbrances recorded against the Subject Property. Section 5. The City seeks to acquire in fee the Subject Property for a public use, namely for proposed small water infrastructure purposes in connection with the City s existing water pressure regulation stations and abandoned facilities located in the vicinity of the Subject Property, and all uses necessary and convenient thereto. The Project, as planned and located, is in the public interest and necessity and is needed to help the City to construct proposed small water infrastructure facilities that will help it to meet its goal of providing additional water storage capacity in accordance with the goals set forth in the City s Water Enterprise Plan (July 2015) (referred to below as WEP), which is incorporated herein by this reference. The Subject Property is located at the northern edge of the city limits ofthe City of Beverly Hills near Coldwater Canyon Drive. It is located adjacent to City-owned property that contains an abandoned subsurface water main, an active water pressure regulation station servicing an interconnection between Los Angeles Department of Water and Power and the City s water distribution system, and an abandoned vault containing two abandoned water tanks. The Project B \ v2.doc 2

10 will enable the City to build additional water infrastructure to accomplish certain goals set forth in the WEP. The Project, as planned and located, would help further the goals of the WEP because it would enable the City to provide for emergency storage of water. This will help the City to work towards meeting the goal of having sufficient emergency reservoir storage capacity to meet a seven-day demand during peak demand periods, which will benefit the community. The Project would allow the City to add some storage capacity to help eventually reach the goal of adding 35 MG of storage to the City s existing supply of 43 MG in existing storage capacity. The Project is planned and located in the manner that is most compatible with the greatest public good and least private injury. infrastructure to this area of the City. It is planned and located to provide much needed water The Subject Property is strategically located adjacent to other City-owned property, thus, minimizing the need to acquire other private property by eminent domain. The record owner of this property negotiated the voluntary sale of the Subject Property to the City pursuant to the Purchase and Sale agreement, but the sales transaction could not be consummated due to title issues. Section 6. The environmental effects of the Project were studied and analyzed pursuant to the California Environmental Quality Act (CEQA), Public Resources Code Section et seq., and the CEQA Guidelines, 14 Cal. Code Regs. Section et seq. (CEQA Guidelines). City Staff determined that the Project is exempt from CEQA pursuant to Section of the CEQA Guidelines. The Project falls under the Class 3 Exemption. As part of the Project, the City proposes to construct new small water infrastructure facilities and structures on the Subject Property in connection with existing water pressure regulation stations and abandoned facilities located in the vicinity of the Subject Property. The City will duly post a Notice of Exemption with the Los Angeles County Clerk s Office in accordance with applicable law. Said 3 B \ v2.doc

11 Notice of Exemption is incorporated herein by this reference. These environmental findings are the appropriate findings with respect to the proposed acquisition of the Subject Property. Section 7. Pursuant to Government Code Section 7260 et seq., the City obtained a fair market value appraisal of the Subject Property and the Monte Cielo Court Property that were the subject of the Purchase and Sale Agreement. The City set just compensation and extended to the Landers Trust an offer for the Subject Property and the Monte Cielo Court Property. The City and the Landers Trust negotiated in good faith for the City s purchase of said parcels. Escrow on the Subject Property transaction, however, could not close due to title issues that could not be cleared through Escrow. Section 8. On November 2, 201$, the City provided written notice to the record owner of the City Council s intent to consider the adoption of the proposed Resolution of Necessity pursuant to Code of Civil Procedure Section The City also notified counsel for the record owner in writing about the hearing to consider the proposed Resolution of Necessity and provided to him a copy of the City s letter and notice pursuant to Code of Civil Procedure Section Section 9. Based on the written and oral evidence presented at the hearing regarding the adoption of the Resolution of Necessity including the Agenda Report, Notice of Exemption, WEB, and documents referenced in the Agenda Report, the City Council hereby finds and determines that: A. The public interest and necessity require the Project; B. The Project is planned and located in the manner that will be most compatible with the greatest public good and the least private injury; B \ v2.doc 4

12 C. The Subject Property described in each Resolution of Necessity is necessary for the Project; and D. The City has made an offer as required by Government Code Section to the owner of record of the Subject Property. Section 10. The findings and declarations contained in this Resolution are based on the record before the City Council on November 20, 2018, including the Agenda Report, and all documents referenced therein, which are all incorporated herein by this reference. The findings and declarations in this Resolution are also based on any testimony, records, and documents produced at the hearing, all of which are incorporated herein by this reference. Section 11. The City Council hereby authorizes and directs the City Attorney s Office to take all steps necessary to commence and prosecute legal proceedings in a court of competent jurisdiction to acquire by eminent domain the Subject Property described more particularly on Exhibit A and depicted on Exhibit B to this Resolution. Section 12. The City Council hereby authorizes the City Manager to execute all necessary documents in connection with the eminent domain proceeding. Section 13. The City Clerk shall certify to the adoption of the Resolution and shall cause the Resolution and his certification to be entered in the Book of Resolutions of the Council of the City of Beverly Hills. Adopted: JULIAN A. GOLD, M.D. Mayor of the City of Beverly Hills, California [Signatures continue] B \ v2.doc 5

13 Legal Depiction ATTEST: LOURDES SY-RODRIGUEZ Assistant City Clerk (SEAL) APPROVED AS TO FORM APPROVED AS TO CONTENT L LAURENCE S. WIENER City Attorney MARDI ALUZRI City Manager Exhibit A Exhibit B Description of Subject Property of Subject Property B \ v2.doc 6

14 Exhibit A Legal Description of Subject Property LOT 55, AS SHOWN ON THAT CERTAIN MAP ENTITLED TRACT NO , WHICH MAP WAS FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA IN BOOK 280 OF MAPS PAGE(S) 1 TO 9. B \ v2.doc

15 Exhibit B Depiction of Subject Property APN: 435O-Q18O44 (Land Parcel) \ v2.doc 8