4-A
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to conduct a public hearing to consider adopting Resolution No. 23-47 – A Resolution authorizing the City Manager to execute Purchase and Sale Agreement File No. 932.1, in a form approved by the City Attorney, between the City of Bellflower and Bellflower Manager, LLC for the acquisition of real property located at 17634 Bellflower Boulevard (APN 7161-013-081).
DATE: December 14, 2023
EXECUTIVE SUMMARY
Executing Purchase and Sale Agreement File No. 932.1 (PSA) with Bellflower Manager, LLC would cause the City to acquire real property located at 17634 Bellflower Blvd. (Property) for $500,000. The Property includes a vacant 6,022 square foot building.
Acquiring the Property would give the City control over its future use in a manner that contributes to the Bellflower Boulevard corridor’s economic growth.
RECOMMENDATION TO CITY COUNCIL
1) Open the public hearing; take documentary and testimonial evidence; and after considering the evidence, adopt Resolution No. 23-47 authorizing the City Manager to execute Purchase and Sale Agreement File No. 932.1, in a form approved by the City Attorney; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The City will pay $500,000 to Bellflower Manager, LLC plus escrow costs to acquire the Property. Sufficient funds are available in the Property Acquisition Reserve in the General Fund (current cash balance $3,125,000).
PUBLIC NOTICE
On November 30, 2023, a Public Hearing Notice was posted at City Hall, Brakensiek Library, Bellflower Substation, Thompson Park, and Simms Park; also on December 1, 2023 and December 8, 2023, a Public Hearing Notice was published in the Los Cerritos Community News newspaper.
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Staff Report – Purchase and Sale Agreement File No. XXX with Bellflower Manager, LLC December 14, 2023
DISCUSSION
In November 2023, Bellflower Manager, LLC (Seller) offered to sell its right to acquire real property at 17634 Bellflower Blvd. (APN 7161-013-081). The Property consists of a 3,268 square foot, single-story building on a 6,022 square foot lot. Staff recommends that the City Council purchase the Property to help facilitate economic development including, without liitaiton, the second phase of development of the adjacent Belle Fleur Center at the northeast corner of Bellflower Boulevard and Cedar Street while eliminating a blighted, vacant property. Staff reviewed an August 2023 appraisal report provided by Seller, which shows a value for the parcel as vacant at approximately $500,000. Additionally, Seller executed an agreement to purchase the Property for a total price of $750,000 in April 2022. The PSA represents the terms and conditions of this pending purchase and approving it will authorize the City Manager to execute all documents needed to complete the acquisition and future license of the Property.
The Seller will have a “first right of refusal” and a 3-year option to buy back the Property from the City at $500,000 plus annual Consumer Price Index (CPI) increases. After the 3-year option period, Seller can buy two additional years for $25,000 each.
Additionally, as a condition of the City’s purchase of the Property, the City will record a covenant on the Belle Fleur Center development restricting public assembly uses as permitted uses in the development.
It is the City’s intent to license the Property to the adjacent property owner to facilitate the completion of phase 2 of the Belle Fleur Center development project.
Attached is a Summary Report required by Government Code Section 52201 that describes the following, where applicable:
a) the cost of the agreement to the City;
b) the estimated value of the interest to be conveyed or leased determined at the highest and best uses permitted under the general plan or zoning;
c) if applicable, the estimated value of the interest to be conveyed or leased determined at the use with the conditions, covenants, and development costs required by the sale or lease;
d) the purchase price or present value of the lease payments which the lessee will be required to make during the term of the lease;
e) if the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use, then the city shall provide, as part of the summary, an explanation of the reasons for the difference; and
f) an explanation of why the sale or lease of the property will assist in the creation of economic opportunity (as defined by Government Code Section 52200.2), with reference to all supporting facts and material relied upon in m aking this decision.
ATTACHMENTS
Summary Report ............................................................................................................. 3 Resolution No. 23-47....................................................................................................... 5
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Summary Report Government Code Section 52200 – Purchase and Sale Agreement – 17634 Bellflower Bl. 1
SUMMARY REPORT PURSUANT TO
GOVERNMENT CODE § 52201
REGARDING A
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN THE
CITY OF BELLFLOWER AND
BELLFLOWER MANAGER, LLC
The following Summary Report was prepared pursuant to Government Code § 52201.
This report sets forth certain details of the proposed Purchase and Sale Agreement (“Agreement”) between the City of Bellflower (“City”) and Bellflower Manager, LLC (“Bellflower Manager”).
Bellflower Manager is obligated to purchase a total of 6,022 square feet of land located at 17634 Bellflower Boulevard on one parcel (APN 7161-013-081) (“Property”) for a total price of $750,000 (Bellflower Manager previously paid an earnest deposit for the Property amounting to $250,000). The Agreement causes Bellflower Manager to acquire the Property and convey it to City for $500,000.
The following Summary Report is based upon information required by the Government Code. It is organized into the following three sections:
I. Salient Points of the Agreement: This section summarizes the major responsibilities agreed to by Bellflower Manager and City by the Agreement.
II. Cost of the Agreement to the City: This section details the total cost to City associated with implementing the Agreement.
III. Creation of Economic Opportunity: This section describes the existing condition of the subject property and explains how the Agreement will assist in the creation of economic opportunity.
This report and the Agreement are to be made available for public inspection prior to the approval of the Agreement and no later than the time of publication of the first required notice of the public hearing pursuant to Government Code § 52201.
I. SALIENT POINTS OF THE AGREEMENT
A. Project Description
The Project is the City’s acquisition of certain real property located at 17634 Bellflower Boulevard, Bellflower, CA 90706 on APN 7161-013-081.
B. Seller Responsibilities Under the Agreement
The Agreement causes Bellflower Manager to accept the following responsibilities:
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Summary Report Government Code Section 52200 – Purchase and Sale Agreement – 17634 Bellflower Bl. 2
1. Bellflower Manager agrees to acquire the Property )following the satisfactory inspection(s) of the Property by City and approval of documents produced during a standard Due Diligence Period) and then convey it to City for $500,000.
2. Bellflower Manager agrees to pay the costs associated with an ALTA Standard Coverage Policy of Title Insurance showing title to the Property vested in Buyer.
3. Bellflower Manager agrees to pay all the costs associated with demolition and the construction and maintenance of improvements.
C. City Responsibilities Under the Agreement
1. City will pay Bellflower Manager $500,000 to acquire the property following satisfactory inspection(s) of the Property during escrow and the Due Diligence Period.
2. City will license the Property to Seller for use as a needed drive -through queue and landscaping set back area.
II. COST OF THE AGREEMENT TO THE CITY
The cost incurred by the City to implement the Agreement is $500,000. All other costs will be paid by Bellflower Manager.
III. ECONOMIC OPPORTUNITY
Significant new development is occurring within the vicinity of the Property. This includes the Golden Corral, In-N-Out Burger, Dunkin’ Donuts/Wing Stop, the Exchange, Auto Zone, and the Boulevard Collection by City Ventures. Recent roadway improvements including the widening of Bellflower Boulevard between the 91 Freeway and Artesia Boulevard and the Bellflower Boulevard streetscape improvement project have improved the section of Bellflower Boulevard from the 91 Freeway south to the city boundary.
The 6,022 square foot Property is currently occupied by a vacant 3,268 square foot building and owned by Bellflower Manager. It is currently generating a minimum of state and local taxes and is not creating or retaining any jobs. The City intends to license the Property to the adjacent property owner to complete the second phase of a development project that will create economic opportunity, as defined by Government Code Section 52200.2, by creating or retaining at least one full-time equivalent (FTE), permanent job for every $35,000 of city investment in the project after full capacity and investment. At the purchase price of $500,000, this equates to approximately 15 FTE permanent jobs. The second phase of the development is estimated to create or retain approximately 32 FTE permanent jobs.
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CITY OF BELLFLOWER
RESOLUTION NO. 23-47
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A
PURCHASE AND SALE AGREEMENT FILE NO. 932.1, IN A FORM
APPROVED BY THE CITY ATTORNEY, BETWEEN THE CITY OF
BELLFLOWER AND BELLFLOWER MANAGER, LLC FOR THE
ACQUISITION OF REAL PROPERTY LOCATED AT
17634 BELLFLOWER BOULEVARD (APN 7161-013-081)
THE CITY COUNCIL OF THE CITY OF BELLFLOWER DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. In November 2023, Bellflower Manager, LLC offered to sell its property located at 17634 Bellflower Blvd. (7160-013-081) to the City of Bellflower for a purchase price of $500,000;
B. Using a property appraisal report commissioned in August 2023, the City verified the offering price for the property as a below fair market purchase price;
C. Bellflower Manager, LLC desires to convey the Property to the City of Bellflower for a purchase price of $500,000, which represents a below fair market value for the Property per Bellflower Manager, LLC’s property appraisal report;
D. The City believes that the Property is an important asset that contributes to the economic activity in the Bellflower Boulevard corridor. Accordingly, the City desires to purchase the Property; and
E. Toward that end, the City and Bellflower Manager, LLC desire to enter into a Purchase and Sale Agreement for the Real Property.
SECTION 2. Environmental Assessment. Adopting this Resolution is exempt from further environmental review pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regulations §§15000, et seq., the “CEQA Guidelines”).
Specifically, the proposed conveyance is exempt from CEQA requirements pursuant to CEQA Guidelines § 15312. Bellflower Manager, LLC proposes to sell the Property; the Property is not located in an area of concern; the Property does not have significant value for wildlife habitat or other environmental purpose; and the use of the Property and adjacent property has not changed since the time Bellflower Manager, LLC acquired the - Page 5 of 6 -
City of Bellflower
Resolution No. 23-XX – 17634 Bellflower Blvd. Property Acquisition
Property. Accordingly, this action conforms to a Class 12 categorical exemption under CEQA.
SECTION 3. Authorizations. The City Council authorizes the acquisition of the Property from Bellflower Manager, LLC to the City upon payment of $500,000 by City. In order to effectuate that conveyance, the City Manager is authorized to execute all documents, in a form approved by the City Attorney, needed to implement the conveyance of the Property as contemplated by this Resolution including, without limitation, escrow instructions, the grant deed, closing statement, the certificate of acceptance, and a future license agreement for use of the property. The City Manager is further authorized to cause the grant deed to be recorded in the Office of the County Recorder of the County of Los Angeles after it has been executed by the Bellflower Manager, LLC.
SECTION 4. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 5. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
SECTION 6. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 14th DAY OF DECEMBER 2023.
________________________________
Sonny R. Santa Ines, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
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