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Title:
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Approval of a Purchase and Sale Agreement with Asher Harel Regarding City-Owned Property Located at 10745 Cranks Road.
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City of Culver City, California
Agenda Item Report
Meeting Date: 03/10/2014 Item Number: C-2
CITY COUNCIL AGENDA ITEM: Approval of a Purchase and Sale Agreement with
Asher Harel Regarding City-Owned Property Located at 10745 Cranks Road.
Contact Person / Department:
Joe Susca/CDD
Todd Tipton/ CDD
Phone Number:
(310) 253-5763
(310) 253-5783
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: []
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification (E-Mail) Meetings and Agendas – City Council (03/04/14); The Culver
City Chamber of Commerce (02/24/14); Cavanaugh Realtors (02/24/14); Asher Harel
(02/24/14); Via U.S. Post: A total of 170 businesses, residents and property owners in
excess of 500 feet of the property (02/24/14)
Department Approval:
Sol Blumenfeld (2/28/14)
Charles Herbertson (2/20/14)
City Attorney Approval:
Heather Baker (03/04/14)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (03/04/14)
City Manager Approval:
John M. Nachbar (03/04/14)
RECOMMENDATION:
Staff recommends the City Council approve a Purchase and Sale Agreement with
Asher Harel for the sale of the City-owned property located at 10745 Cranks Road in
the amount of $900,000.
BACKGROUND:
In February 2005, a landslide created by extensive rain resulted in 10745 Cranks
Road (the “Property”) being deemed uninhabitable. The City repaired the landslide
area and acquired the Property under the terms of a settlement agreement. Following
acquisition by the City, the existing improvements were demolished and the Property
has remained vacant.
On March 26, 2013, the City Council authorized staff to release a Request for
Qualifications (RFQ) to secure a real estate agent to market and sell the Property for
development consistent with the existing zoning. Staff completed the RFQ process,
interviewed respondents, and verified references.
On August 12, 2013, the City Council selected Cavanaugh Realtors (Cavanaugh) to
market and sell the Property as a result of its prior experience successfully selling
three properties located along the Cranks Road hillside and their detailed knowledge
of its history. Since that time, staff executed a contract with Cavanaugh, listed the City of Culver City, California
Agenda Item Report
Property for sale, evaluated offers received, submitted counter offers to each of those
who responded, and prepared a Purchase and Sale Agreement (PSA) with Asher
Harel, who submitted the highest offer.
Mr. Harel is an experienced real estate investor, lender, and developer and is a
partner in Greenworks Construction & Design, a company specializing in high quality
construction projects that are eco-friendly.|1010| Mr. Harel intends to construct a single
family home that conforms in size to the surrounding neighborhood and incorporates
the most recent energy saving technology. Mr. Harel intends to sell the property after
construction is completed.
DISCUSSION:
The PSA includes, but is not limited to, the following terms and conditions:
a. Payment will be made in cash only (traditional financing will be unnecessary).
b. Upon execution of the PSA, a $25,000 deposit will be placed into escrow by
Mr. Harel.
c. Mr. Harel agrees that the deposit will be forfeited as liquidated damages if he
does not complete the purchase.
d. Mr. Harel understands that acceptance of the offer is no guarantee that
unusual construction methods will be approved by the City.
e. Both parties have agreed to a 21-day escrow.
f. Mr. Harel agrees to commence construction within one year of the close of
escrow. Failure to do so will result in a $5,000 per month penalty up to a
$25,000 maximum over five months.
g. If Mr. Harel fails to commence construction within two years, the City has the
option to take back ownership of the Property. If the Property reverts back to
the City, Mr. Harel will receive his original purchase price amount minus 1)
escrow fees, commissions and related fees incurred by the City during the
original land sale transaction; and 2) fees incurred by the City to regain title to
the Property.
FISCAL ANALYSIS:
The Property will be sold for $900,000. Five percent of the $900,000 sales price
($45,000) will be divided between Cavanaugh and Asher Harel’s broker ($22,500
each) as their commission fees, which is payable upon the close of escrow. The
remaining $855,000 in land sale proceeds (minus escrow fees and related costs) will
be deposited into the City’s Self-Insurance Fund (30916100.386350 – Land Sale
Proceeds).
City of Culver City, California
Agenda Item Report
MOTIONS:
That the City Council:
1. Approve a Purchase and Sale Agreement to sell the 10745 Cranks Road
property to Asher Harel in the amount of $900,000; and
2. Authorize the City Attorney’s Office to prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City.
NOTES:
|1010|For more information on Greenworks Construction, visit their website at: http://greenworks-
construction.com/