MEMORANDUM DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES SUBJECT: CONSIDERATION OF CONSULTANT AGREEMENTS FOR REAL ESTATE SERVICES
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1 MEMORANDUM TO: FROM: CITY COUNCIL/SUCCESSOR AGENCY BOARD DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES SUBJECT: CONSIDERATION OF CONSULTANT AGREEMENTS FOR REAL ESTATE SERVICES DATE: JULY 26, 2016 RECOMMENDATION: 1. As recommended by the Oversight Board, enter into an agreement for consultant services with Lee & Associates to provide real estate agent services for the disposal of the Faeh Avenue property with a list price of $950, Enter into an agreement for consultant services with Triad Real Estate Group to provide real estate agent services for the disposal of the Pearwood Avenue Property with a list price of $750, Authorize the City Manager to execute all associated documents. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: Revenue from the sale of the Faeh Avenue property will be paid to the property taxing agencies. As one of the agencies, the City will receive approximately 15% of the proceeds. Revenue from the Pearwood Avenue property is intended to be used for an affordable housing project in the City by the Housing Authority of the City of San Luis Obispo. There will be measurable staff time required in order to execute the sale of the properties. BACKGROUND: There are two parcels of real property owned by the Former Redevelopment Agency, one located on Faeh Avenue near El Camino Real and the other located on Pearwood Avenue. As approved by the City Council/Successor Board on March 10, 2015, the process of disposing of these properties involved creation of an ad hoc committee to select a real estate agent to represent the City in the sale transaction. The City advertised Request for Proposals (RFP) from qualified real estate agents. The ad hoc committee consists of one member of the Oversight Board, Lynn Compton, one member of the City Council, Kristen Barneich, and one member of the Planning Commission, Glen Martin. Based on the review of the proposals, the ad hoc committee recommends that the City enter into an agreement for consultant services with Lee & Associates to provide real estate agent services for the Faeh Avenue property and that the City enter into an agreement for consultant services with Triad Real Estate Group to provide real estate agent services for the Pearwood Avenue property. Item 9.c. - Page 1
2 CITY COUNCIL CONSIDERATION OF CONSULTANT AGREEMENTS FOR REAL ESTATE SERVICES JULY 26, 2016 PAGE 2 The sale of the Faeh Avenue property, as well as the approval of the agent, is subject to approval by the Oversight Board. The Pearwood Avenue property is not governed by the same requirements for sale as the Faeh Avenue property and no Oversight Board approval is necessary to select an agent or sell the property. The Oversight Board met on June 16, 2016 to review this issue and concurred with the recommendation of the Ad Hoc committee. ANALYSIS OF ISSUES: Staff recommends proceeding with the sale of the lots since the process may take several months. Faeh Avenue Property Since the March 2015 report, which outlined numerous approvals that would be required in order to dispose of the property, including the approval of the State Department of Finance ( DOF ), the DOF has issued guidance that provided that if there is an approved Long-Range Property Management Plan, and disposition of the property is in accordance with that plan, further DOF approvals are not required. This guidance streamlines the process considerably. The Successor Agency has previously received approval of the Long-Range Property Management Plan by DOF. The only property involved in the plan is the Faeh Avenue property. At this time, the Successor Agency can enter into a listing agreement with a real estate agent and begin considering offers from any willing buyers. At such time as the agent locates a willing buyer, the Successor Agency will negotiate with the buyer on the terms of the purchase and sale agreement. Upon close of escrow, the net sales proceeds will be transferred to the County Auditor-Controller and then distributed to taxing agencies. The net sales proceeds are the gross sales proceeds less all costs to the Successor Agency incurred in connection with the sale, including the costs of the appraisal, the fees and costs of the agent, the fees and costs for escrow and title, any environmental costs, and attorney s fees. The City s share, as one of the taxing agencies, would be approximately 15.4% of the net sales proceeds. The Faeh Avenue property is a vacant parcel at Faeh Avenue and El Camino Real with easy freeway access to southbound US 101. It could be an ideal location for a hotel, mixed use, or other commercial development. The proposed listing agent is Marty Indvik with Lee & Associates, and a listing price of $950,000 is recommended. Pearwood Avenue Property The Pearwood Avenue property is deemed a housing asset, is owned by the City and does not fall under the jurisdiction of the Oversight Board to the Successor Agency to the Dissolved Redevelopment Agency or the Long-Range Property Management Plan. Disposition of this property is subject to the Surplus Land Act and, as such, requires Item 9.c. - Page 2
3 CITY COUNCIL CONSIDERATION OF CONSULTANT AGREEMENTS FOR REAL ESTATE SERVICES JULY 26, 2016 PAGE 3 offering the property for sale or lease for affordable housing and park/recreational/open space purposes in accordance with Government Code ALTERNATIVES: The following alternatives are provided for City Council consideration: 1. Approving the listing agreements; 2. Do not approve the listing agreements; or 3. Provide direction to staff. ADVANTAGES: Entering into agreements with real estate agents will facilitate the sale of the properties as required by State law. Proceeds from the sale s will be available to accomplish important City objectives, such as affordable housing and other initiatives. DISADVANTAGES: Significant staff time will be required in executing the sale of the properties. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Thursday, July 21, The Agenda and report were posted on the City s website on Friday, July 22, ATTACHMENTS: 1. Listing Agreement Lee & Associates 2. Listing Agreement Triad Real Estate Group Item 9.c. - Page 3
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