City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 1 of 3
RECOMMENDATION:
Staff recommends the Culver City Redevelopment Agency (“The Agency”) exercise
its Option to purchase the commercial property at 11054 Washington Boulevard.
BACKGROUND:
On December 28, 2006, the Agency acquired the site of the former Pleasantview
Home at 11056 Washington Boulevard. The property was purchased on terms, and
there is a payment of $1,550,000 plus interest at 5.5% due three years from the date
of purchase (December 28, 2009).
On March 5, 2007, the Agency approved an Option Agreement to purchase the
adjoining property at 11054 Washington Boulevard, owned by Mr. Richard Tapp. A
copy of the Option Agreement is attached as Attachment No. 1. Under the terms of
the Agreement, the Agency and Tapp opened escrow, and the Agency deposited the
Option payment of $60,000. The Option period is for 14 months, starting from March
6, 2007. Therefore, the Agency has until May 6, 2008, to exercise the Option. If the
Agency exercises the Option, then the $60,000 option payment shall be applied to
the purchase price of $1,152,000. If the Agency elects to let the Option expire, then
the Option payment is non-refundable and is compensation payable to Mr. Tapp for
keeping his property off the market for 14 months.
A decision whether to exercise the Option and go forward with the purchase is
needed from the Agency prior to May 6, 2008.
Meeting Date: 04/21/08 Item Number: A-1
AGENDA ITEM: Consideration of an Option To Purchase 11054 Washington
Boulevard
Contact Person/Dept.: John Fisanotti Phone Number: (310) 253-5767
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification: Mr. Richard Tapp and the Lloyd Family Trust (04/07/08); Master
Notification List (04/17/08).
Department Approval:
Sol Blumenfeld (4/04/08)
Executive Director Approval:
Jerry B. Fulwood (04/17/08)
Fiscal Impact Review:
Jeff Muir (04/17/08)
City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 2 of 3
DISCUSSION:
The Tapp property is a 2,997 square foot commercial property. The Agency’s
property at 11056 Washington Boulevard is 19,760 square feet, so the combined
total of the two, would be 22,757 square feet, (0.52 acre). Attachment No. 2 is a
map of the site for reference.
Mr. Tapp ran his electrical contracting business from the ground floor but recently
has moved out. At the rear of the property is a single two-bedroom apartment unit,
which Mr. Tapp rents to a tenant. Because of the existence of this residential unit on
the property, the Agency can purchase the Tapp parcel only through a voluntary sale
by the owner.
The Tapp property is small but is strategically located. It is the middle of three
parcels on the Pleasantview block and therefore, links the Pleasantview parcel, to
the remaining privately held parcel on the block. If the Agency were to ever attempt
a block scale development, then control of the Tapp property will be essential. If the
Agency acquires the Tapp property, then efforts to acquire the remaining parcel
could be initiated if authorized by the Agency (so far, the remaining owner has been
strongly opposed to selling his property.) Without the Tapp property, the Agency’s
developable parcel is the former Pleasantview site alone.
Staff requested information on the change in real estate values since the date of the
appraisal, which was the basis of the sale price to Mr. Tapp. According to data
provided by Lea and Associates commercial real estate values in this neighborhood
have adjusted +11.5% since the appraisal. Sales of small office buildings within 10
mile radius of the site indicate that on a price per square foot basis, the median price
per square foot increased from $360.54 to $402.09. The increase in price over the
last year argues favorably for exercising the Option.
Related to this discussion is the matter of Request for Proposals to develop the site.
On March 3, 2008, the Agency requested that staff solicit proposals for the
development of the block where the Tapp property is located. Proposals were due
March 31, 2008. Three submittals were received: one is for a commercial building,
another is for a mixed use building and the third is a statement of qualifications
without a proposal. One proposal offered to build on the combination of the Tapp
property and the Agency’s neighboring property and held out the possibility of
expanding the site to include the one remaining property on the block. The other
proposal was for the development of the entire block. In the coming weeks, staff will
be working with the three respondents to refine their proposals before presenting
them to the Agency for consideration.
City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 3 of 3
FISCAL ANALYSIS:
Staff has looked at the Agency’s current cash flow situation and advises that to
exercise the Option the funding to complete the acquisition could come from the
Agency’s undesignated tax increment reserve balance. A Budget Amendment will
be necessary, and if approved, will leave approximately, $2.3 million in the Agency’s
undesignated tax increment reserve balance. The recommended Budget
Amendment will move the necessary funds to purchase the property and pay for
escrow closing costs into the Mid-Washington Opportunity Sites Program Budget
(Program 92650). The amount of the Budget Amendment is recommended at
$1,120,000.
ATTACHMENTS:
1. Option Agreement
2. Map of the Site
MOTION:
That the Redevelopment Agency:
1. Authorize staff to exercise the Option to purchase the real property at 11054
Washington Boulevard.
2. Approve a Budget Amendment to appropriate $1,120,000 from the
undesignated tax increment reserve balance to Program 92650.
3. Authorize the Executive Director to execute documents necessary to
complete the exercise of the option.