Item 43/2025
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ursula Luna-Reynosa
Dept:
City Manager Dept: Economic Development and
Housing
Date: 2/11/2025
Subject: Approval of a Purchase and Sale Agreement with Michael Luu and Kim To Family Trust for the acquisition of property located at 12381 Harbor Boulevard. (Cost: $858,888) (Action Item)
OBJECTIVE
For the City Council to consider purchasing real property located at 12381 Harbor Boulevard.
BACKGROUND
The real property located at 12381 Harbor Boulevard Property (the “Property”) is owned by Michael Luu and Kim To Family Trust (the “Seller”) and is strategically located within the Grove District, between and adjacent to four other City -owned parcels that were originally acquired for the purpose of building a new City Fire Station (prior to the City contracting with Orange County Fire Authority). However, Fire Station 6 was ultimately developed at 12232 West Street, rendering the acquired properties available for alternate use.
The Property disrupts what would otherwise be a contiguous site owned by the City right off Harbor Boulevard. An assembled site holds significant value due to its location in the heart of the Grove District between the Great Wolf Lodge and major hospitality and mixed -use developments, including the Nickelodeon Hotel and the Site -C Mixed-Use Development (Le Méridien and Kimpton Hotels).
Acquiring the Property will enable the City to consolidate land holdings and support future development efforts in the City’s Grove District. This acquisition will enhance connectivity of the area along Harbor Boulevard between the Great Wolf Lodge and the hotels at the Northern Harbor Boulevard and Chapman Avenue intersection, reinforcing the area’s tourism and resort infrastructure.
On January 24, 2024 , the Seller submitted a formal Offer to Sell the Property to the City containing the following terms:
Item 43/2025
A selling price of $880,000
A 6% broker commission to be paid by Buyer
Property to be sold in an “as is” condition with no power or utilities The Buyer to pay all closing costs
A 15-day closing period
DISCUSSION
Staff and the owner’s Broker, Tracy La of Superior Real Estate Group, engaged negotiations and arrived at mutually acceptable terms for the purchase of the Property by the City. The terms of the proposed Purchase and Sale Agreement (the “Agreement”) (Attachment No. 1) between the City (the “Buyer”) and the Seller includes a n agreed upon total purchase price of $858,888, plus incidental closing costs, estimated to be under $6,000.00 . The general terms and conditions of the Agreement are as follows:
Purchase Price: $858,888, “as is” sale
No separate commission to be paid by Buyer
Buyer shall pay all cash at closing with no contingency Each party pays their own escrow fees
5-day Escrow
FINANCIAL IMPACT
Total cost to purchase the Property is $858,888 plus incidental closing costs, estimated to be under $6,000. The cost will be paid from the General Fund. Additional appropriation is necessary to execute the purchase and sale agreement.
RECOMMENDATION
It is recommended that the City Council:
Approve the Purchase and Sale Agreement with Michael Luu and Kim To Family Trust for the acquisition of 12381 Harbor Boulevard by the City for an amount of $858,888, plus an additional $6,000 for related closing costs appropriated for the acquisition of the Property;
Appropriate an additional $865,000 in the Economic Development and Housing Department’s Real Estate Division from the General Fund’s existing fund balance; and Authorize the City Manager, or designee(s), to execute the Agreement, make minor modifications as appropriate thereto, and execute any additional documents necessary to effectuate the transaction, on behalf of the City.
By: Greg Blodgett, Deputy Director
ATTACHMENT(S)
Purchase and Sale Agreement