DATE:
September 3, 2024
TO:
Paul Buddenhagen, City Manager
FROM:
Chadrick Smalley, Community Development Director
SUBJECT:
Resolution Of The City Council Of The City Of Emeryville Authorizing The Acquisition Of 1245 Powell Street (APN 49-1314-001-01); Appropriating $1,706,000 From The Park Impact Fee Fund (Fund 237) To The Budget For Capital Improvement Project URG-01 For Fiscal Year 2024-2025 For The Acquisition Of 1245 Powell Street And Associated Closing Costs; And Authorizing The City Manager To Execute All Documents Required To Complete The City’s Acquisition Of 1245 Powell Street At A Purchase Price Not To Exceed $1,700,000 Recommendation
Staff recommends that the City Council adopt the attached resolution authorizing the acquisition of 1245 Powell Street at a purchase price not to exceed $1,700,000; appropriating funds from the Park Impact Fee Fund for the purchase price and closing costs; and authorizing the City Manager to execute all documents required to complete the acquisition.
Background
In July 2023, the City was alerted to the potential availability of the property at 1245 Powell Street (APN 49-1314-001-01) as the property was being marketed for sale. The property is approximately 12,800 square feet in size and is improved with a currently operating automobile repair shop known as “Boyd’s Auto Body”. The property is located adjacent to Stanford Avenue Park, between Vallejo Street and Beaudry Street. Because of this adjacency, the property represents a unique opportunity to expand this City park in the future.
In recognition of this opportunity, the City’s Parks and Recreation Strategic Plan includes expansion of Stanford Avenue Park as a park opportunity. Specifically, it states “monitor the north half of the block bounded by Powell, Vallejo, Beaudry and Stanford Avenue for an opportunity to purchase the property adjacent to the existing park”. Further, the Strategic Plan also outlines site recommendations for park design for this parcel.
Staff commenced negotiations with the property owner’s representatives in summer 2023, which culminated in a Purchase and Sale Agreement executed on March 19, 2024. Under the terms of the Purchase and Sale Agreement, the purchase price of the property was to be $2,100,000 and the City has 120 business days from the date of execution of the Purchase and Sale Agreement to complete its due diligence, including evaluation of the property’s environmental condition. The date by which the City must complete its due diligence and accept the condition of the property is September 11, 2024.
To support the City’s due diligence, on December 8, 2023, the City entered into a Professional Services Contract with Weiss Associates (Weiss) to prepare a Phase I Environmental Site Assessment (ESA) of the property in an amount not-to-exceed $14,000. The Phase I ESA prepared by Weiss indicated a service station previously occupied the property and consequently Weiss recommended preparation of a Phase II ESA, which includes physical sampling of a property to determine the presence or absence of contaminants. On April 2, 2024, the City Council adopted Resolution No. 24-39, authorizing the execution of an amendment to the contract with Weiss increasing the contract amount from $14,000 to $68,103 to accommodate the preparation of the Phase II ESA.
In June 2024, Weiss completed the Phase II ESA and concluded that the property’s soil and groundwater is contaminated with petroleum hydrocarbons, either from the property’s former use as a service station or from backfill placed during the removal of underground storage tanks, which was conducted in the late 1970’s without regulatory oversight. Because of the anticipated costs required to remediate the property, the City and property owner negotiated and executed Amendment No 1 to the Purchase and Sale Agreement, reducing the purchase price to $1,700,000 and extending the closing date to January 15, 2025, to allow the property owner additional time to wind down the existing automotive repair shop business.
With the completion of the City’s due diligence activities and agreement with the property owner on the purchase price of the property, staff is seeking the City Council’s approval of an appropriation of funds from the Park Impact Fee Fund to the current Fiscal Year budget for acquisition of the property and authorization for the City Manager to execute all agreements necessary to acquire the property.
Discussion
General Plan Consistency
Pursuant to California Government Code 65402, the City cannot acquire real property without a finding by the Planning Commission that the purpose and extent of the disposition or acquisition conforms with the General Plan. On June 27, 2024, the Planning Commission adopted Resolution No. ZC24-003 finding that the proposed acquisition of 1245 Powell Street is consistent and conforms with the General Plan, specifically the following General Plan goals and polices:
PP-G-1 (A comprehensive open space system)
A system that provides a diverse range of active and passive recreation and open space opportunities for residents, workers, and visitors.
PP-G-2 (New public spaces)
A public realm and new public parks and plazas that serve as focal points of the community.
PP-P-1 – Increase park acreage to serve the needs of the growing population and address current deficiencies in park and open space standards.
PP-P-3 – New smaller open spaces – including public plazas and places, community gardens, and pocket parks – will provide local focus points and diversity for the built environment.
As noted above, the City’s Parks and Recreation Strategic Plan, which seeks to implement the General Plan, identifies the parcel at 1245 Powell Street for future park use.
Funding
As outlined above, the negotiated purchase price of the property is $1,700,000, and closing costs are estimated to be approximately $6,000. The City’s Park Impact Fee Fund (Fund 237) receives revenues from development projects that trigger parks and recreation impact fees as required by the City’s Development Impact Fee Ordinance (Article 19 of Chapter 5 of Title 9). These revenues may be used to increase the supply of parks and recreation facilities. Fund 237 currently has a balance of approximately $1,865,000, and staff recommends the City Council appropriate $1,706,000 of this amount to the Fiscal Year 2024-2025 Budget for Capital Improvement Program (CIP) “Parks Projects” (CIP No. URG-01) for acquisition of 1245 Powell Street.
The costs of remediation are expected to range between $400,000 and $800,000; but cannot be reliably estimated at this time pending additional investigation and consultation with regulatory agencies. The City currently holds approximately $1,800,000 in Brownfield Revolving Loan Funds in the Brownfield EPA Grant Fund (Fund 247) that are not committed to any specific project and which are available to cover the costs of environmental remediation.
Next Steps
As noted above, Amendment No. 1 of the Purchase and Sale Agreement establishes a closing date of January 15, 2025, to allow the current owner to wind down the existing business. After the City acquires the property, the City will commence remediation work which will initially entail investigations and preparation of reports for regulatory agencies to determine the remediation plan. Additionally, a Use Permit and Design Review would be needed to develop the property for park and recreation use. As part of this process, community meetings would be held to solicit input on design and it will be reviewed by the Parks and Recreation Committee before review by the Planning Commission at a study session and subsequently, review for approval.
Fiscal Impact
The proposed acquisition would be funded by Park Impact Fees (Fund 237), and the attached resolution appropriates $1,706,000 to the CIP for acquisition of the property in the current Fiscal Year. Future remediation costs would be funded through Brownfield EPA Grant Fund (Fund 247) once these costs are determined. Development of the property as a park would be funded through future CIP budgets.
Staff Communication with the Public
As noted above, the Planning Commission considered the required finding of General Plan consistency at its June 27, 2024 meeting.
Conclusion
Staff recommends that the City Council adopt the attached resolution authorizing the acquisition of 1245 Powell Street at a purchase price not to exceed $1,700,000; appropriating $1,706,000 from the Park Impact Fee Fund (Fund 237) for the purchase price and closing costs; and authorizing the City Manager to execute all documents required to complete the acquisition of 1245 Powell Street.
PREPARED BY: Chadrick Smalley, Community Development Director Approved and Forwarded to the
City Council of the City of Emeryville:
Paul Buddenhagen, City Manager
Attachments
Draft Resolution
1245 Powell St. Acquisition
| September 3, 2024
City of Emeryville
CALIFORNIA
MEMORANDUM