200 S. Anaheim Blvd.
Suite 733
Anaheim, CA 92805
Tel: (714) 765-4544
Fax: (714) 765-5164
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
ECONOMIC DEVELOPMENT DEPARTMENT
DATE: APRIL 8, 2025
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: DISPOSITION AND DEVELOPMENT AGREEMENT FOR THE
FORMER SUCCESSOR AGENCY PROPERTY AND FORMER
RIGHT OF WAY PROPERTY GENERALLY LOCATED AT THE
INTERSECTION OF LINCOLN AVENUE, MANCHESTER
AVENUE AND LOARA STREET FOR THE DEVELOPMENT OF
A NEW CAR DEALERSHIP AND SERVICE FACILITY
ATTACHMENT (Y/N): YES ITEM # 19
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Resolution, approve the Disposition and Development Agreement (Agreement), substantially in the form attached, by and between the City of Anaheim and Manchester Lincoln, LLC (Developer) for the sale and development of property generally located at the intersection of Lincoln Avenue, Manchester Avenue and Loara Street (APNs 034-070-48, -77, -79, -80, -83, -84, -85); authorize de minimis changes that do not substantially change the terms and conditions of the Agreement, so long as the changes are determined to be de minimis by the City Attorney’s Office; and authorize the Economic Development Director to execute and implement the terms of the Agreement.
BACKGROUND:
The subject site is generally located at the intersection of Lincoln Avenue, Manchester Avenue, and Loara Street and consists of approximately 2.8 acres of vacant land. The site is comprised of parcels formerly owned by the Successor Agency to the Anaheim Redevelopment Agency (Successor Agency) and a portion of the former Manchester Avenue right-of-way, which was abandoned in 2004, as seen in Attachment 4 The property has remained undeveloped for over two decades.
The site falls within the former Anaheim Plaza Redevelopment Project Area, which was established on June 12, 1990 for purposes of revitalizing commercial corridors along Lincoln Avenue, Euclid Street, and surrounding areas. The former Anaheim Redevelopment Agency (RDA) acquired the subject property for future development.
The land was acquired from the Orange County Transit Authority (OCTA) as remnants of the widening of the Interstate 5 freeway.
On June 27, 2012, Assembly Bill 1x 26 set forth the dissolution of redevelopment agencies across the state. The City of Anaheim asserted that the Economic Development Department would perform the functions as the Successor Agency under the Dissolution Disposition and Development Agreement – Lincoln, Manchester and Loara April 8, 2025
Act of 2012 to administer enforceable obligations and unwind the affairs of the RDA.
Oversight Board Resolution No. 2015-05 approved the City’s Long-Range Property Management Plan (LRPMP), which established proposed uses for properties controlled by the RDA at the time of dissolution. The subject property was identified as site #10 (Loara & Manchester Ct.) in the LRPMP and identified as a Future Development site.
The subject property totals approximately 2.8 acres and is comprised of seven parcels (APNs 034-070-48, -77, -79, -80, -83, -84, -85) including a portion of former right of way, Manchester Avenue, that was abandoned in 2004. The subject site was impacted by title issues related to Manchester Avenue that were recently resolved with an adjacent property owner. The parcels are irregularly shaped, however when combined provide for a development site with frontage along Interstate 5 freeway, Lincoln Avenue, Manchester Avenue, and Loara Street.
On April 12, 2022, the City declared the site Surplus Property in accordance with the State Surplus Land Act (SLA). Following SLA notification procedures, no eligible housing or development sponsors expressed interest in the site within the required 60- day period.
DISCUSSION:
The Developer, Manchester Lincoln, LLC, is an affiliate of the McKenna Auto Group, and desires to develop a Porsche dealership and service facility at the subject property.
As illustrated in Attachment 5 the proposed project would provide for a modern, multi- level dealership featuring high-quality architecture, enhancing the Lincoln Avenue corridor with prominent visibility from Interstate 5. The dealership will function as a point of sale for new Porsche vehicles, complementing ongoing revitalization efforts in the area, including the newly completed “ZIA” and “Emerald Point,” residential communities southwest of the site.
City staff have been working with the City Attorney’s Office, outside legal counsel, the law firm of Leibold McClendon and Mann; and the City’s third-party economist, Keyser Marston and Associates (KMA) to negotiate terms and conditions of the proposed property disposition with the Developer. City staff and consultants have engaged in negotiations with the Developer to produce the proposed Disposition and Development Agreement (DDA), attached as Attachment 2 for your consideration.
KEY TERMS OF THE DISPOSITION AND DEVELOPMENT AGREEMENT:
The market value of the site, as assessed by an MAI-certified appraiser, is $10,400,000.
Extraordinary costs associated with the site, including relocation and abandonment of certain sewer, storm drain, water main, jet fuel line, and electrical service lines, will reduce the market value by $1,231,650. After accounting for this reduction, the final purchase price will be $9,168,350. The City's third-party economist, KMA, has reviewed the proposed DDA and confirmed that the final purchase price represents fair market value for the site. Additionally, the City and Developer have agreed to a $200,000 remediation contingency that will be held in escrow in the event that environmental contamination is discovered as a result of the jet fuel line. If no contamination is found, these funds will be released to the City.
Disposition and Development Agreement – Lincoln, Manchester and Loara April 8, 2025
Close of escrow is anticipated on or before October 15, 2026, contingent upon the Developer securing land use entitlements and building permits to ensure the project is shovel-ready at closing. The agreement allows for reasonable extensions if necessary to accommodate entitlement approvals. Escrow costs will be split equally (50/50) between the City and the Developer, with the City covering the premium for standard title insurance, while the Developer will be responsible for any additional title endorsements.
Upon closing, the Developer is expected to deliver an architecturally significant, multi- level Porsche dealership and service facility on the site. The project is anticipated to generate substantial economic benefits, including approximately $1,100,000 in new annual sales tax revenue for the City and the creation of approximately 75 permanent jobs. As part of the agreement, the Developer is contractually obligated, through a covenant, to give hiring preference to Anaheim residents for employment opportunities at the new dealership during a three-year period.
Notably, no financial assistance will be provided to the Developer under this agreement, as confirmed in the economic impact analysis, as can be seen in Attachment 3 prepared by KMA in accordance with Government Code Section 52201. The project will support ongoing revitalization efforts along the Lincoln Avenue corridor by adding a commercial use that aligns with the City’s economic development objectives.
IMPACT ON BUDGET:
Sale proceeds for the parcels formerly owned by the Successor Agency will be distributed to affected taxing agencies. As an affected taxing agency, the City of Anaheim will receive approximately 12% of this amount. Sales proceeds for the former Manchester Avenue right-of-way will accrue exclusively to the City of Anaheim. Of the final purchase price of $9,168,350, staff estimates that the City of Anaheim will receive approximately $2,904,127 from the sale of the property. Upon project completion, new sales tax will be generated from the point of sale and new property tax will be generated from the formerly vacant properties.
Respectfully submitted,
Sergio M. Ramirez
Director of Economic Development
Attachments:
1. Resolution
2. Disposition and Development Agreement
3. 52201 Economic Report
4. Aerial Depiction of Site
5. Project Renderings