REPORT TO THE CITY COUNCIL
FROM: NICHOLAS D. MASCIA, PE, Interim Director
Capital Projects Department
SCOTT L. MOZIER, PE, Director
Public Works Department
BY: ANTONIO M. BUELNA, PE, Assistant Director
Capital Projects Department, Capital Administration Division
NANCY BRUNO, Supervising Real Estate Agent
Capital Projects Department, Capital Administration Division
SUBJECT
Title
Actions pertaining to the acquisition of fee title interest of a parcel to benefit the Blackstone McKinley BNSF Grade Separation Project: (Council Districts 1 and 7)
1. HEARING to consider a Resolution of Necessity for acquisition of fee title interest for rights of way for public street purposes of Assessor’s Parcel Numbers 451-071-25 and 451-071-38, owned by Rocking Rail, LLC, a California limited liability company, for the construction of the Blackstone McKinley BNSF Grade Separation Project;
2. ***RESOLUTION - Determining that public interest and necessity require acquisition of fee interest for rights of way for public street purposes of Assessor’s Parcels Numbers 451-071-25 and 451-071-38, owned by Rocking Rail, LLC, a California limited liability company, for the construction of the Blackstone McKinley BNSF Grade Separation Project and authorizing eminent domain proceedings for public use and purpose. (Requires 5 affirmative votes) (Subject to Mayor’s Veto)
Body
RECOMMENDATIONS
Staff recommends the City Council: (1) conduct a public hearing to consider the adoption of a Resolution of Necessity for the acquisition of Assessor’s Parcel Numbers (APNs) 451-071-25 and 451-071-38, a combined 1.14-acre (49,659 square feet) improved parcel (Property), for the construction of the Blackstone McKinley BNSF Grade Separation Project (Project), owned by Rocking Rail, LLC, a California limited liability company (Owner), and (2) adopt the attached Resolution of Necessity, which states that public interest and necessity require acquisition of fee interest for rights of way for public street purposes of APNs 451-071-25 and 451-071-38, owned by Rocking Rail, LLC, a California limited liability company for the construction of the Blackstone McKiney BNSF Grade Separation Project and authorizing eminent domain proceedings for public use and purpose, pursuant to California Code of Civil Procedure §1245.230.
EXECUTIVE SUMMARY
The acquisition of APNs 451-071-25 and 451-071-38 will provide the City with fee title interest of the real property located at 1538 North Blackstone Avenue and 1815 East Home Avenue, Fresno, California, which are necessary to construct the Blackstone McKinley BNSF Grade Separation Project and will eliminate two existing at-grade crossings by grade separating North Blackstone Avenue and East McKinley Avenue under the BNSF Railway Mainline Track. The Project requires the fee title acquisition of the Property, improved with a commercial structure containing businesses known as E-Z Haul Ready Mix and Landscape Supply, Star Building Supplies, and Star Stucco Products. The City needs to acquire the property interest described above to certify the Project and construct the proposed Project improvements.
The Resolution of Necessity authorizes the City Attorney to initiate an eminent domain action and obtain an order of possession of the Property. In order to obtain fee title interest in the Property, the City must obtain a court order through the Eminent Domain process. This action requires five affirmative votes and is subject to veto by the Mayor.
BACKGROUND
The Blackstone Avenue and McKinley Avenue corridors serve as primary routes for the community, as well as the City’s Bus Rapid Transit system and emergency vehicles. They are also part of the Blackstone Avenue Smart Mobility Plan, which provides Class IV protected bicycle facilities along Blackstone Avenue through the Project area. The Project location has experienced the highest traffic volumes and number of accidents at any at-grade crossing on the BNSF corridor. The Project will eliminate two existing at-grade crossings by grade separating North Blackstone Avenue and East McKinley Avenue under the BNSF Mainline Track. The City is progressing through the preliminary engineering and right of way phases of the Project. The Project costs for the right of way phase are funded by Measure C Grade Separation Program funds and Local Partnership Program Formulaic grant funds.
The City retained Hamner, Jewell and Associates (HJA) to acquire parcels on its behalf for the Project. HJA retained K.R. McBay Appraisal Company (KRMAC) to prepare an appraisal report of fair market value of the Property for the Project. On March 31, 2023, KRMAC prepared an appraisal report determining the fair market value of the Property to be $1,060,000 as defined by Section 1263.320 of the Code of Civil Procedure. The appraisal was reviewed by RowLand Valuation who concurred with the value given by KRMAC. Pursuant to Section 7267.2 of the Government Code, an offer of just compensation in the full amount of the appraisal was emailed and sent via USPS Certified mail to the Owner by HJA on September 7, 2023. A subsequent, supplemental offer to purchase the Improvements Pertaining to the Realty (IPR) on the property was made on December 14, 2023, in the amount of $384,765.00. The total combined purchase price for the Property and IPRs is $1,444,765.00.
Since the date of the initial offer, HJA acquisition consultants have contacted the Owner a total of 80 occasions by email, phone calls, Teams meetings, and two in-person visits to discuss the offer to purchase and to move forward with the acquisition and relocation process. After months of negotiations, the City believed it had reached an Agreement with the Owner to purchase the Subject Property, including the improvements pertaining to realty and other contiguous parcels of land owned by the Owner. However, the City has received a counter offer seeking compensation far in excess of the various appraisals. Staff recommends beginning the process of acquiring the Property from the Owner through the eminent domain process. Starting the eminent domain process now allows the City to obtain an order of possession from the court while giving the Owner a forum in which to make their claim for just compensation. For each property interest to be acquired, a Resolution of Necessity must be adopted prior to the commencement of eminent domain proceedings (see Attachment, Resolution of Necessity Requirements).
The City Attorney’s Office has reviewed and approved the Resolution of Necessity as to form.
ENVIRONMENTAL FINDINGS
This Project was found to be statutorily exempt by Fresno City Council on June 25, 2020, pursuant to California Public Resources Code Section 21080 .13(a) and 15282(g) of the California Environmental Quality Act (CEQA) Guidelines. The Notice of Exemption was thereafter recorded with the Fresno County Clerk on July 30, 2020. The statute of limitations for challenges to this exemption has run pursuant to CEQA Guideline Section 15062(d). This Project will eliminate two railroad crossings and grade separate North Blackstone Avenue and East McKinley Avenue under the BNSF Mainline Track.
LOCAL PREFERENCE
Local preference was not considered because this agreement does not include a bid for or award of a construction or services contract.
FISCAL IMPACT
The proposed Blackstone McKinley BNSF Grade Separation Project is within Council Districts 1 and 7. These acquisitions will have no impact on the General Fund. All Project costs for the right of way phase are funded with Measure C and California Local Partnership Program Formulaic grant funds. All funds necessary for the acquisition are included in the current fiscal year budget as previously adopted by the City Council (Council Districts 1 and 7).
Attachments:
Resolution of Necessity (RON)
Resolution of Necessity Requirements
Vicinity Map
Location Map
Staff Presentation