Nature of Request

The purpose of this memorandum is to request council approval of a Reimbursement Agreement between the City of Burbank and the Southern California Public Power Authority (�SCPPA�) with respect to property located at 461 N. Varney Street.

Background

The City is in the process of purchasing the property at 461 N. Varney Street to fulfill a noise mitigation condition imposed by the California Energy Commission on the Magnolia Power Project.  The condition requires the City and SCPPA to take steps to discontinue residential use of the property before the start of construction of the Project. 

On March 11, 2003, the Council adopted a Resolution of Necessity, authorizing acquisition of the property by eminent domain.  Staff subsequently reached agreement with the owners to buy it for $352,000.  The Council approved an Acquisition Agreement on April 29, 2003.  The full cost of the acquisition will be paid by SCPPA with Project funds.

Purpose of Reimbursement Agreement 

The purpose of the Reimbursement Agreement is to allow the City to complete the purchase of the property and retain title in its name until it is sold.  When it is sold, SCPPA will receive the net proceeds of sale as reimbursement for the cost of the acquisition.  In the interim, the property can be used for any purpose not inconsistent with the Project, with Project-related uses having priority.  Provisions are included that make the agreement, in effect, subject to termination at any time at the option of either party.  A covenant would be recorded in favor of SCPPA so that its interest in the property appears as a matter of record.

In staff�s view, having the City retain title is a way of ensuring that Burbank retains some measure of control over the ultimate disposition of the property.

The proposed agreement was approved on May 15, 2003, by the Magnolia Coordinating Committee on behalf of SCPPA.

Recommendation

If the Council concurs, the appropriate action would be a motion to adopt the resolution entitled: 

�A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING A REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF BURBANK AND THE SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY WITH RESPECT TO THE PROPERTY LOCATED AT 461 N. VARNEY STREET.�

cc:       Mary Alvord, City Manager

            Ron Davis, General Manager�BWP

            Sue Georgino, Community Development Director

            Gino Gaudio,  Project & Real Estate Manager

K:\Memos\COUNCIL\2003 Council Memos\RJM\Reimbursement 461 Varney 5-27-03 rmm.doc

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