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CITY COUNCIL AGENDA REPORT
City of Anaheim
DEPARTMENT OF PUBLIC WORKS
DATE: MAY 5, 2026
FROM: PUBLIC WORKS DEPARTMENT
SUBJECT: PURCHASE OF 1354 SOUTH ANAHEIM BOULEVARD FROM
ATN ASSET HOLDING COMPANY, LLC, AND MEMORANDUM
OF UNDERSTANDING WITH ANAHEIM TOURISM
IMPROVEMENT DISTRICT TRANSPORTATION COMMITTEE
ATTACHMENT (Y/N): YES ITEM # 06
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1. Approve the Agreement for Sale of Property and Joint Escrow Instructions (“Agreement”), in substantial form, between ATN Asset Holding Company, LLC, a California Limited liability company (“Seller”), and the City of Anaheim (“City”) for the City’s acquisition and use of real property located at 1354 South Anaheim Boulevard (“Property”), in the acquisition amount of $9,500,000, and authorize the Public Works Director to sign the Certificate of Acceptance of Interest in Real Property attached to the Grant Deed and authorize the City Clerk, in accordance with the aforementioned Agreement, to cause said Certificate of Acceptance of Interest in Real Property to be released to the authorized escrow agent for the recording of the Grant Deed in the Office of the County Recorder of Orange County; and
2. Approve a Memorandum of Understanding (MOU) in substantial form, between the City of Anaheim and the Anaheim Tourism Improvement District Transportation Committee (“Committee”) providing that the Property will be maintained for eligible transportation purposes and requires that, if the Property is not used for such purposes or is sold, the net proceeds from any disposition will be returned to the ATID Transportation Component Fund; and
3. Authorize and direct the Public Works Director to execute the Agreement, the MOU, and all other related documents and to take such actions as are necessary to implement and administer the Agreement and the MOU, and authorize de minimis changes that do not substantially change the terms and conditions of the Agreement and MOU, so long as the changes are determined to be de minimis by the City Attorney’s Office; and Purchase of 1354 South Anaheim Boulevard from ATN Asset Holdings Company, LLC, and Memorandum of Understanding with Anaheim Tourism Improvement District Transportation Committee May 5, 2026
4. Amend the Public Works FY 2025/26 budget by $9,500,000, funded from the ATID Transportation Component Fund; and
5. Find that the above actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to Sections 15004(b)(2)(A) and 15061(b)(3) of the CEQA Guidelines.
DISCUSSION:
In 2010, the City of Anaheim formed the Anaheim Tourism Improvement District (“ATID”) to provide revenues to cover the cost of activities, improvements, services, and programs that will benefit assessed facilities and the tourism and conventions industry in the City of Anaheim. In December 2025 and January 2026, ATID allocated approximately $6.1 million in Transportation Component Funds to ATN in the form of a loan secured by the Property. On January 28, 2026, the ATN Board of Directors announced that it was winding down operations, with its services ending on March 31, 2026, and would therefore be unable to repay the loan.
To preserve a critical transportation asset, the ATID Transportation Committee at its April 14, 2026, committee meeting affirmed its support for the City's purchase of the Property and allocated an additional $3.4 million to fund the acquisition of the Property for future transportation use.
The Property comprises approximately 1.86 acres of land and is a fully developed transit operations facility that has historically supported transportation services connecting hotels, employment centers, and visitor-serving destinations throughout the Anaheim Resort area. An appraisal of the Property was completed in February 2026, and a peer review was conducted by Mark Hendrickson, MAI, a City-hired consultant, who agreed with the fair market value of $9,500,000 as stated in the appraisal.
Because the ATID Transportation Committee is not a legal entity capable of holding title to real property, the City will acquire and hold title to the Property. Consistent with the MOU developed between the City and the ATID Transportation Committee, the City will hold and manage the Property in a manner consistent with the ATID Management Plan and the allowable uses of ATID Transportation Component Funds.
Funding for the acquisition will be provided entirely through ATID Transportation Component Funds. The ATID was established to fund activities, improvements, services, and programs that support tourism and convention-related uses, including transportation improvements within the Anaheim Resort and Platinum Triangle. The Anaheim Municipal Code and ATID Management Plan define eligible transportation improvements to include the acquisition of tangible property with a useful life of five years or more, as well as transportation systems that support the movement of visitors and employees. Accordingly, this acquisition constitutes an eligible transportation improvement and is consistent with the authorized use of ATID Transportation Component Funds.
To ensure that ATID funds are used in accordance with the ATID Management Plan, the MOU provides that the Property will be maintained for eligible transportation purposes Purchase of 1354 South Anaheim Boulevard from ATN Asset Holdings Company, LLC, and Memorandum of Understanding with Anaheim Tourism Improvement District Transportation Committee May 5, 2026
and requires that, if the Property is not used for such purposes or is sold, the net proceeds from any disposition will be returned to the ATID Transportation Component Fund. The MOU further requires that any future disposition occur at fair market value. As outlined in the MOU, these provisions maintain the Property’s use for transportation-related purposes and ensure that the ATID Transportation Component Funds remain whole.
The acquisition also supports the City’s ongoing efforts to transition from the prior ATN- operated system to a new long-term transportation model for the Anaheim Resort and Platinum Triangle. To support this transition, the ATID Transportation Committee has approved funding to retain key ATN personnel on a temporary basis to assist the City in completing ATN close-out activities and developing future transportation strategies.
The acquisition ensures continued public control of a key transportation asset during a period of transition and positions the City to implement a long-term transportation strategy for the Anaheim Resort and Platinum Triangle.
Staff also recommends that the Council find and determine that the subject actions are exempt from CEQA pursuant to Sections 15004(b)(2)(A) and 15061(b)(3) of the CEQA Guidelines. Section 15004(b)(2)(A) states that agencies “may enter into land acquisition agreements when the agency has conditioned the agency’s future use of the site on CEQA compliance.” If the Council approves the requested actions, future development of the property would be subject to future discretionary actions, which may include, but are not limited to, amendments to the General Plan and Zoning Map and project design and construction. These actions would be subject to CEQA. In addition, since the mere acquisition of the property will not result in a physical change in the environment, it would also be exempt under Section 15061(b)(3), the “common sense exemption” that states that “CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.”
IMPACT ON BUDGET:
The total acquisition cost of approximately $9,500,000 will be funded entirely through ATID Transportation Component Funds, with no impact to the City’s General Fund.
Funding for the acquisition has been approved by the ATID Transportation Committee and is available within the ATID Transportation Component Fund. The Public Works FY 2025/26 budget will be increased by $9,500,000.
Respectfully submitted,
Rudy Emami
Director of Public Works
Attachments:
1. Agreement for Sale of Property
2. Memorandum of Understanding
3. Aerial Photo Map