11-A
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to conduct a public hearing to consider adopting Resolution No. 24-58 – A Resolution authorizing the City Manager to execute a Purchase and Sale Agreement between the City of Bellflower and Alderwood Group (California), Inc., for the purchase of real property located at 9903 Flower Street (APN 7109-013-033).
DATE: October 14, 2024
EXECUTIVE SUMMARY
Executing a Purchase and Sale Agreement (PSA) with Alderwoods Group (California), Inc. (“Alderwoods”) would cause the City to purchase real property located at 9903 Flower Street (the “Property”) for $3,650,000. The Property includes the former White’s Funeral Home and associated parking spaces. Acquiring the Property for economic opportunity would give the City control over its future use in a manner that contributes to Downtown Bellflower’s economic growth and image.
RECOMMENDATION TO CITY COUNCIL
1) Open the public hearing; take documentary and testimonial evidence including receiving and filing a report required by Government Code § 52201;
2) After considering the evidence, adopt Resolution No. 24-58 amending the fiscal year 2024- 25 Operating Budget to allocate funds for the Property purchase and authorizing the City Manager to execute the Purchase and Sale Agreement, in a form approved by the City Attorney; or
3) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The City would pay $3,650,000 to Alderwoods to acquire the Property plus $10,000 to pay for estimated escrow fees and title insurance costs.
A budget amendment to the 2024-25 fiscal year operating budget is needed to allocate $3,660,000 in the General Fund for the purchase of the Property ($1,174,000 from the Cash Reserve for Property Acquisitions and $2,486,000 from the other available General Fund reserve).
PUBLIC NOTICE
On September 27, 2024, a Public Hearing Notice was posted at City Hall, Brakensiek Library, Bellflower Substation, Thompson Park, and Simms Park; also on September 27 and October 4, a Public Hearing Notice was published in the Los Cerritos Community News newspaper for two consecutive weeks.
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Staff Report – Purchase and Sale Agreement with Alderwoods Group October 14, 2024
DISCUSSION
In September 2024, the Property was put on the market for sale for $3,900,000. The Property consists of one parcel containing approximately 9,000 square feet of buildings on 48,534 square feet of land. The property was previously used as White’s Funeral Home and is no longer in operation.
Staff believes the purchase of the Property for economic opportunity, combined with the right business or developer, represents an important asset and opportunity that will contribute to this area’s economic growth including an increase in property tax to all property tax collecting entities by at least 15% at full implementation of a potential project. As part of this process, the City reviewed recent comparable sales in Downtown Bellflower that support the total purchase price of $3,650,000, to which Alderwoods represented that it was agreeable.
Attached is a Summary Report required by Government Code § 52201 that describes the following:
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 acquisition, sale or lease of the property will assist in the creation of economic opportunity (as defined by Government Code § 52200.2), with reference to all supporting facts and material relied upon in making this decision.
It is the City’s intent to secure the property and sell it to a developer for a project that will contribute to the economic development of the Downtown Bellflower area. Proceeds from a future sale of the property will be returned to the City’s general fund.
ATTACHMENTS
Summary Report ......................................................................................................................... 3 Resolution No. 24-58 .................................................................................................................. 5
Summary Report Government Code Section 52200 – Purchase and Sale Agreement – 9903 Flower Street 1
SUMMARY REPORT PURSUANT TO
GOVERNMENT CODE § 52201
REGARDING A
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN THE
CITY OF BELLFLOWER AND
ALDERWOODS GROUP (CALIFORNIA), INC.
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 Alderwoods Group (California), Inc. (“Seller”).
Seller owns a total of 48,534 square feet (1.11 acres) of land located at 9903 Flower Street on one parcel (APN 7109-013-033) (“Property”). The Agreement requires Seller to sell the Property to the City.
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 Seller and the City by the Agreement.
II. Cost of the Agreement to the City: This section details the total cost to the 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 purchase of all that certain real property located at 9903 Flower Street, Bellflower, CA 90706 on APN 7109-013-033.
B. Seller Responsibilities Under the Agreement
The Agreement requires Alderwoods to accept the following responsibilities:
1. Seller agrees to sell the Property, following the satisfactory inspection(s) of the Property by the City and approval of documents produced during a maximum 45-day Due Diligence Period.
2. Seller agrees to pay the costs associated with a CLTA Standard Coverage Police of Title Insurance showing title to the Property vested in Buyer.
Summary Report Government Code Section 52200 – Purchase and Sale Agreement – 9903 Flower Street 2
C. City Responsibilities Under the Agreement
1. The City will purchase the Property for Three Million Six Hundred Fifty Thousand Dollars ($3,650,000) following satisfactory inspection(s) of the Property during escrow and the Due Diligence Period.
II. COST OF THE AGREEMENT TO THE CITY
The cost incurred by the City to implement the Agreement is $3,650,000 for the purchase of the Property plus half of the typical escrow fees and de minimus costs for inspections and staff time to effectuate the acquisition.
III. ECONOMIC OPPORTUNITY
The Property, located on the major east/west arterial street in Downtown Bellflower, is currently occupied by former funeral home that was previously operated by Seller. As a long-term ownership, legacy property, it is currently generating a minimum of state or local taxes. The City anticipates that the site will be developed as a housing project and intends to market the Property to produce a private development project that will create economic opportunity, as defined by Government Code Section 52200.2, by increasing property tax revenues to all property tax collecting entities by at least 15% at full implementation of a project when compared to the year before the property being acquired by the City.
Significant new development is occurring within the vicinity of the Property. This includes Edgeway Downtown Bellflower, The Mayne Events Center and Los Angeles County Fire Museum, The Bellflower Regional Transit Center and Parking Structure, SteelCraft outdoor food hall, the Downtown Collection townhomes by City Ventures, The Nest Eatery, and The Stand Up Comedy Club. The Site, located in the heart of Downtown Bellflower just east of Bellflower Blvd., is proximate to a City-owned public parking lots. Additionally, a street improvement project has been awarded by the City to complete improvements on Bellflower Boulevard from Flower Street south to the 91 Freeway.
The Property is served by all major utilities and has only been vacant for approximately six months. A potential housing development of approximately 20 units utilizing the square footage of the Property could increase the property’s net assessed value almost 5-times generating a significant increase in property tax, exceeding the required 15% increase for the various taxing entities. Furthermore, as part of Downtown Bellflower, the property is included in the Downtown Bellflower Revitalization Vision Strategy, the Downtown Bellflower Strategic Development Plan, and adjacent to the Downtown Bellflower Transit Oriented Development Specific Plan Area.
CITY OF BELLFLOWER
RESOLUTION NO. 24-58
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A
PURCHASE AND SALE AGREEMENT BETWEEN THE CITY OF
BELLFLOWER AND ALDERWOODS GROUP (CALIFORNIA), INC., FOR THE PURCHASE OF REAL PROPERTY LOCATED AT 9903 FLOWER STREET (APN 7109-013-033)
THE CITY COUNCIL DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. In October 2024, in response to the sale listing, the City of Bellflower (“City”) made an offer to purchase the property located at 9903 Flower Street (APN 7109-013- 033) (the “Property”) from Alderwoods Group (California), Inc. (“Seller”) for a purchase price of $3,650,000;
B. Based on a review of recent comparable sales in Downtown Bellflower in March 2024, the City verified the negotiated price for the Property as a fair market purchase price;
C. Seller desires to convey the Property to the City for a purchase price of $3,650,000, which represents a fair market value for the Property;
D. As set forth in the accompanying report prepared pursuant to Government Code § 52201 the City believes that the Property is an important asset that will contribute to the economic activity in Downtown Bellflower by increasing property tax revenues to all property tax collecting entities by at least 15%.
E. Notice of Public Hearing before the City Council was duly given and published in the time, form, and manner as required by law;
F. On October 14, 2024, the City Council opened a public hearing to receive and consider public testimony and other evidence regarding acquisition of the Property including, without limitation, information provided to the City Council by the Seller; and
G. The City Council considered the information provided by the Economic Development Director, public testimony, and the Seller. This Resolution, and its findings, are made based upon the evidence presented to the City Council at its October 14, 2024, hearing including, without limitation, the staff report submitted by the Economic Development Director.
SECTION 2. Environmental Assessment. The City reviewed the environmental impacts of the Project under the California Environmental Quality Act (Public Resources Code §§ 21000, et seq. “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regs. §§ 15000, et seq., the “CEQA Guidelines”). Pursuant to CEQA Guidelines § 15061(b)(3), CEQA applies only to activities that have the potential to cause a significant effect on the environment Acquisition of the Property (by itself) does not have the potential to cause significant effects on the environment.
Any future redevelopment of the Property would require separate environmental review and either discretionary or ministerial approvals by the City.
City of Bellflower
Resolution No. 24-58
SECTION 3. Notice of Exemption. The City Manager, or designee, is directed to file a Notice of Determination in accordance with Public Resources Code §§ 21152, 21167(f); CEQA Guidelines § 15075; and any other applicable law.
SECTION 4. Authorizations/ Action. The City Council authorizes:
1) And directs the City Manager, or designee, to amend the FY 2024-2025 Operating Budget to allocate $3,660,000 in the General Fund account no. 012-47212-9000 to account for the acquisition of property.
2) The Mayor and City Manager to execute all documents, including, without limitation, purchase and sale agreement, escrow instructions, grant deed, closing statements, and the certificate of acceptance, in a form approved by the City Attorney, needed to implement the conveyance of the Property as contemplated by this Resolution.
SECTION 5. Preservation. This Resolution does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Resolution's effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution.
SECTION 6. Reliance On Record. Each and every one of the findings and determinations in this Resolution are based on the competent and substantial evidence, both oral and written, contained in the entire record relating to the project. The findings and determinations constitute the independent findings and determinations of the City Council in all respects and are fully and completely supported by substantial evidence in the record as a whole.
SECTION 7. Limitations. The City Council’s analysis and evaluation of the project is based on the best information currently available. It is inevitable that in evaluating a project that absolute and perfect knowledge of all possible aspects of the project will not exist. One of the major limitations on analysis of the project is the City Council’s lack of knowledge of future events.
In all instances, best efforts were made to form accurate assumptions. Somewhat related to this are the limitations on the City’s ability to solve what are in effect regional, state, and national problems and issues. The City must work within the political framework within which it exists and with the limitations inherent in that framework.
SECTION 8. Summaries of Information. All summaries of information in the findings, which precede this section, are based on the substantial evidence in the record. The absence of any particular fact from any such summary is not an indication that a particular finding is not based in part on that fact.
SECTION 9. Construction. This Resolution must be broadly construed in order to achieve the purposes stated in this Resolution. It is the City Council’s intent that the provisions of this Resolution be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Resolution.
SECTION 10. Severability. If any part of this Resolution or its Application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.
City of Bellflower
Resolution No. 24-58
SECTION 11. 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 12. 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 13. 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 OCTOBER 2024.
________________________________
Dan Koops, Mayor
ATTEST:
__________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
Karl H. Berger, City Attorney
__________________________________
Justin A. Tamayo, Deputy City Attorney