REPORT TO THE CITY COUNCIL
FROM: Randall W. Morrison, PE, 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
Approve the Agreement for Purchase and Sale of Real Property and Escrow Instructions to acquire fee interest of a combined 0.40-acre (17,583 square feet) improved parcel, identified as Assessor’s Parcel Numbers 451-071-17 and 451-071-34, owned by Arthur Velasquez and Patricia Velasquez for an amount of $1,347,500, for the construction of the Blackstone McKinley BNSF Grade Separation Project. (Council Districts 1 and 7)
Body
RECOMMENDATION
Staff recommends the City Council approve the Agreement for Purchase and Sale of Real Property and Escrow Instructions to acquire fee interest of a combined 0.40-acre (17,583 square feet) parcel improved with an auto body and paint shop, located at 1540 and 1560 North Blackstone Avenue, identified as Assessor’s Parcel Numbers (APNs) 451-071-17 and 451-071-34 (the “Subject Property”), owned by Arthur Velasquez and Patricia Velasquez, for an amount of $1,347,500 for the construction of the Blackstone McKinley BNSF Grade Separation Project (the “Project”), and authorize the Capital Projects Director or his designee to sign all documents necessary to complete the subject acquisition.
EXECUTIVE SUMMARY
The acquisition of APNs 451-071-17 and 451-071-34 (the “Subject Property”) will provide the City with fee title interest of the real property located at 1540-1560 North Blackstone Avenue, Fresno, California, which is necessary to construct the Blackstone McKinley BNSF Grade Separation Project (the “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 Subject Property, owned by Arthur Velasquez and Patricia Velasquez (collectively, the “Owner”), improved with an auto body shop known as Art’s Auto Body and Paint. The City needs to acquire the property interest described above to certify the Project and construct the proposed Project improvements.
The Owner and the City came to a mutually agreed upon total amount of $1,347,500 as just compensation for the acquisition of the Subject Property. The Owner signed the Agreement for Purchase and Sale of Real Property and Escrow Instructions on September 23, 2024. On September 26, 2024, the Council adopted a Resolution of Necessity for the Subject Property in case escrow does not close. However, City staff are hopeful that with the executed Agreement between the parties, escrow will close successfully. The Subject Property is occupied by the owner’s business, who is entitled to relocation assistance pursuant to the Uniform Relocation Act. The City’s relocation consultant has been in contact with the owner to assist in the relocation of their business.
BACKGROUND
The Blackstone Avenue and McKinley Avenue corridors serve as primary routes for the community, the City’s Bus Rapid Transit system, emergency vehicles, and is also part of the Blackstone Smart Mobility Plan providing 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 of any at-grade crossing on the BNSF corridor. The Blackstone McKinley BNSF Grade Separation 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 Valbridge Property Advisors (VPA) to prepare an appraisal report of fair market value of the Property for the Project. On September 21, 2022, VPA prepared an appraisal report determining the fair market value of the Property to be $435,000 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 VPA. Pursuant to Section 7267.2 of the Government Code, an offer of just compensation in the full amount of the appraisal was personally delivered to the Owner by HJA on September 12, 2023. A subsequent, supplemental offer to purchase the Improvements Pertaining to the Realty (IPR) on the property was made on December 15, 2023, in the amount of $118,740. The total combined purchase price for the Property and IPRs is $553,740. On July 29, 2024, an updated appraisal report was prepared by Central California Appraisals and the value of the Property was determined to be $735,000. On August 19, 2024, the City offered an amount of $853,740 for the Property and the IPR; the total combined amount of $853,740. As negotiations continued with the Owner, HJA consulted with a goodwill appraiser to provide a Loss of Goodwill Assessment for Art’s Auto Body and Paint. It was determined that the potential loss of Goodwill is $366,000. After extensive negotiations between the City and the Owner and their legal representative, a mutually agreed upon amount of compensation for the property, IPRs, and loss of Goodwill was established to be $1,347,500. The Owner is entitled to and will receive move costs and reestablishment reimbursement pursuant to the Uniform Relocation Act. The Owner signed the Purchase and Sale Agreement of Real Property and Escrow Instructions on September 23, 2024.
Staff recommends the City Council authorize the Capital Projects Director or designee to sign all documents necessary to complete the subject acquisition. The City Attorney’s Office has reviewed and approved the Purchase and Sale Agreement 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 to 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.
Attachments:
Purchase and Sale Agreement
Vicinity Map
Location Map