REPORT TO THE CITY COUNCIL
December 18, 2014
FROM: KERRI L. DONIS, Fire Chief
Fire Department
BY: CHERYL CARLSON, Management Analyst III
Fire Department
CRAIG L. HANSEN, Supervising Real Estate Agent
Public Works Department, Real Estate Services Section
SUBJECT
Title
Authorize the City Manager or designee to execute an agreement for purchase and sale of property and escrow instructions for APN 505-150-31, 5938 N. La Ventana, Fresno, California 93723 (Tract 5247, lot 59) for $385,000 from Seller, Grantland Avenue, LLC, a California Limited Liability Company
Body
RECOMMENDATION
Staff recommends Council approve the Agreement For Purchase And Sale Of Property And Escrow Instructions for APN 505-150-31, 5938 N. La Ventana, Fresno, California 93723 for a purchase price of $385,000.00. This site is currently being used as a temporary fire station under a lease agreement with Grantland Avenue, LLC.
EXECUTIVE SUMMARY
Approval of the recommended action will allow the City to purchase the 2,290 square foot single family residence that has been serving as a temporary fire station since March 2006. The Fire Department (Department) has expended $193,385.26 in lease payments through FY2015. The purchase of the property and improvements will end future lease payment obligations while the permanent fire station is undergoing the design and construction process. It is anticipated the permanent station will be completed within the next five years.
BACKGROUND
On May 25, 2004, the Council adopted the 2025 Public Safety Commission Plan, which outlined the need for a fire station to meet growth of the City west of Highway 99. On December 21, 2004, Council approved Housing Tract 5247, which was a 159-acre single-family subdivision in the Bullard/Grantland Avenue area. The entire tract was located outside of a three-mile running distance to the nearest fire station, and the UGM ordinance at the time would have required each home to have sprinklers, be built on every other lot, or the developer would be required to build a fire station. To mitigate the situation and allow development to continue, the developer and the City mutually agreed to the construction of a single family home to be used as a temporary fire station located at 5938 N. La Ventana. In April 2005, Council approved the lease agreement for an initial five-year term and the station was staffed with a three-person engine company in January 2006.
During this same timeframe, Council approved new Citywide Fire and Police Impact Fees for the purpose of enabling the financing of much needed improvements to existing public safety facilities and the construction of new facilities. In 2008, Council approved the issuance of lease revenue bonds to fund the construction of multiple public safety capital projects with the bond debt service to be repaid by a 49/51 percent combination of Citywide Impact Fees and the General Fund respectively. The identified capital projects were broken into two phases, those most immediate needs which could be completed within two years, and those projects anticipated to be completed within four or more years. This phased-in approach also helped to ensure the inflow of revenues would support the proposed bonding capacity as the economic decline was starting to reflect in decreased City revenues.
Phase I Department projects included the construction of three new fire stations (15, 17 and 19), construction of permanent Station 16 (which had been operating from a temporary facility since the 1980's), and completion of renovations at existing facilities started in 2004. The construction of permanent Station 18 was included in the Phase II projects along with the purchase of properties for future fire stations, and construction of new training and fleet maintenance facilities. As the construction of permanent Station 18 was not completed by the expiration of the original five-year lease term, Council approved extending the lease agreement for another five-year term through April 30, 2015.
Unfortunately, the impact of the economic decline on citywide impact fee revenues is still not sufficient to initiate Phase II projects, and it is anticipated that a permanent Station 18 facility is several years from construction. Rather than continue to pay rent, staff entered into negotiations with Grantland Avenue, LLC, to purchase the site for $385,000. Other pertinent terms include the City receiving a credit for fifty percent of rents paid since July 1, 2014, escrow closing within 30 days following Council approval and the parties each pay one half of the escrow fee.
The current temporary station is a 2,290 square foot, 4 bedroom, 2 bath single family residence with modifications to accommodate 24/7 fire crew operations. In addition, the City constructed a 21' x 41' apparatus building, installed additional concrete driveway, curbs, gutters, sidewalks, asphalt, exterior block walls, signage on the gate and a flagpole.
Purchase of the property will be made using a combination of unbudgeted revenues received in FY 2015 and unexpended fire capital project bond proceeds. In August 2014, Council approved an assignment agreement with Unison Site Management, LLC, for a lump sum payment in exchange for future monthly revenues from the cell tower located at Fire Station 13. The Department received the lump sum payment in August providing a net $180,100 in unbudgeted revenues in FY 2015. The remaining purchase price balance of $204,900 will be paid with unexpended bond proceeds from the Phase I fire capital projects previously identified.
After construction of the permanent fire station, it is anticipated that the City would sell the property and proceeds deposited into the citywide impact fee fund for use in making debt service payments.
The City Attorney's Office has reviewed and approved as to form the proposed Agreement.
ENVIRONMENTAL FINDINGS
Pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(5), this acquisition agreement is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment, and is therefore not a "project" as defined in CEQA.
LOCAL PREFERENCE
Local preference was not considered because this does not include a bid or award of a construction or services contract.
FISCAL IMPACT
The acquisition will be made using appropriations for the construction of permanent Station 18 included in the FY 2015 Adopted Budget approved by Council. This transaction will provide annual General Fund savings of approximately $18,000 or more in lease payments in future budget years. There is no negative General Fund impact in FY 2015 for this transaction as the purchase will be paid with $180,100 in unbudgeted FY 2015 revenues in combination with $204,900 in unexpended fire capital bond proceeds.
Attachments:
- Agreement For Purchase And Sale Of Property And Escrow Instructions