Public Works Agency
www.santa-ana.org/public-works
Item # 16
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
October 15, 2024
TOPIC: 1601 and 1607 N Bristol Street
AGENDA TITLE
Purchase and Sale Agreement and Appropriation Adjustment, in the Same Amount for the Sale of City-owned Real Property, Formerly Portions of 1601 and 1607 North Bristol Street, to Bristol Center Properties, LLC; Amend Purchase and Sale Agreement with Bristol Center Properties to Extend the Deadline to Open A Drive-Thru Restaurant or Drive-Thru Café at 1601 and 1607 North Bristol Street by 18 Months (Non-General Fund)
RECOMMENDED ACTION
1. Approve an appropriation adjustment recognizing revenue in the amount of $2,989 in the Select Street Construction Fund, Sale of Land revenue account for Fiscal Year 2024-25 from the sale of City-owned property formerly portions of 1601 and 1607 North Bristol Street and appropriating the same amount to the OCTA Bristol Street Corridor Improvements, Improvements Other Than Building expenditure account. Receipt of Measure M Street Construction proceeds in the amount of $6,811 will be disbursed to the Orange County Transportation Authority (OCTA). (Requires five affirmative votes)
2. Approve an amendment to the Fiscal Year 2024-25 Capital Improvement Program to include $2,989 of funding into the Bristol Street Improvements Project (No. 11-6741).
3. Authorize the City Manager to execute a purchase and sale agreement with Bristol Center Properties, LLC for the sale of 392 square feet of City-owned property formerly portions of 1601 and 1607 North Bristol Street (APN 405-252- 21 & 22), in the amount of $9,800 (Agreement No. A-2024-XXX).
4. Authorize the City Manager to execute the first amendment to the agreement with Bristol Center Properties to extend the deadline to open for business to the public for a drive-thru restaurant or drive-thru café at 1601 and 1607 North Bristol Street by 18 months (Agreement No. A-2024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
1601 and 1607 N Bristol Street
October 15, 2024
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DISCUSSION
On December 21, 2021, the City Council authorized the City Manager to execute a purchase and sale agreement (PSA) (Exhibit 1) for the sale of 1601 and 1607 North Bristol Street (Exhibit 2) to Southwest Properties Group. The sale from the City to Southwest Properties Group, and a subsequent property transfer to Bristol Center Properties, LLC (Developer), was recorded on May 19, 2022. As part of the PSA, the Developer had to complete the development by November 19, 2024.
In 2023, the Developer submitted applications to the City to develop the properties at 1601 and 1607 North Bristol Street into a drive-through coffee restaurant. Subsequently, during the Site Plan review process for the development project, staff determined that a 392 square-foot portion (Exhibit 3) of Bristol Street right of way is situated outside the limits of the street improvements, and that the right of way could be vacated, conveyed to the developer, and incorporated into the private property site to facilitate a more efficient development. The conveyance requires a series of actions concluding with the recommended actions.
Background
During the course of the Bristol Street Improvement Project, the Public Works Agency acquired properties along the Bristol Street corridor. The City purchased properties at 1601 North Bristol Street (APN 405-252-21) and 1607 North Bristol (APN 405-252-22) to accommodate the Bristol Street Improvements from Washington Street to 17th Street using Orange County Transportation Authority (OCTA) funding that was appropriated for this project. Moreover, following project construction, a 392 square-foot portion of this property (Exhibit 4) remained unused and therefore made available for purposes of exchange or sale.
On July 16, 2024, the City Council adopted a resolution to summarily vacate the 392 square-foot portion of excess Bristol Street right of way, and adopted a resolution declaring it as exempt surplus property.
The subject 392 square-foot property identified as the Vacation Portion is being disposed of in accordance with the Surplus Lands Act. Following Council adoption of the exempt surplus property resolution, staff submitted the resolution to the California Department of Housing and Community Development (HCD). On September 18, 2024, HCD notified the City that the Property qualifies as exempt surplus land under California Government Code section 54221, subdivision (f)(1)(B) and (E).
The purchase price was based on appraised values prepared by a state-licensed appraiser and was based on small size, shape, and lack of independent developability.
The proceeds from the sale of this property are considered restricted funds and will be used to fund the Bristol Corridor improvements.
1601 and 1607 N Bristol Street
October 15, 2024
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Recommendations
Staff recommends approval of the recommended actions to transfer ownership of unused and undevelopable land to the adjacent property owner, as authorized under Santa Ana Municipal Code Section 2-706.1 Sale to Owners of Adjoining Property (Exhibit 5).
Additionally, the original PSA contained a provision in Section 6.24 to ensure the timely development of the remnant property as a drive-thru restaurant or drive-thru café. The provision, termed Opening Covenant in the PSA, allowed for the City to buy back the property in the event the proposed development was not open for business within 30 months following close of escrow. The opening deadline pursuant to the provisions of the PSA would be November 19, 2024. Despite City staff and the developer’s efforts to diligently and cooperatively further the project, based on the current status of the development and the need to vacate and incorporate adjacent excess Bristol Street right of way into the project site, the opening date will not be met.
The agreement amendment (Exhibit 6) changes the allowable timeframe in the Opening Covenant from 30 months to 48 months, an increase of 18 months. The increase would allow sufficient time to complete project entitlements, prepare and approve construction documents, finish construction, and open the business to the public. Staff recommends approval of the recommended actions to extend the deadline to open the business to the public by 18 months to May 19, 2026.
Approval of the recommended actions will allow the City to sell such City-owned vacant property acquired with OCTA Right-of-Way restricted grant funds, and return proceeds of $2,989 to the Bristol Street Improvement Project, and funding agency in the amount of $6,811, proportionally based on match requirements, consistent with Comprehensive Transportation Funding Program (CTFP) Cooperative Agreement C-6-0069 between the respective agencies.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
The revenue generated will be used to reimburse Bristol Street project expenditures and replenish grants used on acquisition costs, as well as fund additional public improvements along Bristol Street. The sale of this property is expected to lead to other significant economic activity spurred from the development of the Better Buzz coffee restaurant project, such as creating local jobs, sales tax boosts, and increased property tax that will be realized by the City in perpetuity. Additionally, the City will be relieved from the continued maintenance, clean up, and liability from owning this vacant parcel.
Approval of the recommended Appropriation Adjustment will recognize the receipt of $2,989 into the Select Street Construction Fund, Sale of Land revenue account (No. 1601 and 1607 N Bristol Street
October 15, 2024
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05917002-57071) and appropriate the same into the OCTA Bristol Street Corridor Improvements Fund, Improvements Other Than Building expenditure account (No. 05917661-66220). These funds will be available for expenditure on the Bristol Street Corridor Improvement Projects (Exhibit 7)
The remaining proceeds of $6,811 will be received in the Measure M Street Construction Fund (Account No. 03201001-20215) for disbursement to OCTA.
The table below summarizes the sales price, Bristol revenue and payments to OCTA.
Parcel ID Sale
Price
Bristol Improvement
Fund (Account No.
05917661-66220)
Reimburse Funding
Agency (Account No.
03201001-20215)
1601;1607 Bristol $9,800 $2,989 $6,811
Total $9,800 $2,989 $6,811
EXHIBIT(S)
1. Original Purchase and Sale Agreement
2. Location Map
3. Detail Map
4. Street Level View of Vacation Area
5. Vacation Purchase and Sale Agreement
6. Purchase and Sale Agreement Amendment
7. FY 24-25 Capital Improvement Program Sheet
Submitted By: Nabil Saba, P.E., Executive Director – Public Works Agency Approved By: Alvaro Nuñez, City Manager