PURPOSE:

The purpose of this report is to present the information necessary for the Redevelopment Agency Board to consider a resolution authorizing the Executive Director, or her designee, to execute an Acquisition Agreement to purchase the property at 700 South San Fernando Boulevard owned by Max Waisler and Mariam R. Waisler as Trustees of the Waisler Family Trust.

BACKGROUND:

The subject property is located at the southeast corner of the block bounded by South San Fernando Boulevard, East Cedar Avenue, a north/south alley and East Elmwood Avenue.  The property is adjacent to the 39,875 square foot (0.92 acres) Agency-owned property at 704-722 South San Fernando Boulevard commonly known as the former Lance property.  The block, commonly known as the Lance site, has approximately 47,673 square feet (1.09 acres) and is within the South San Fernando Redevelopment Project Area (Exhibit A).  

There are two small, privately owned parcels which need to be acquired in order to complete assemblage of the Lance site.  The Waisler property is a 5,765 square foot parcel located at 700 South San Fernando Boulevard owned by Max and Mariam Waisler of the Waisler Family Trust.   The remaining lot is a 2,033 square foot parcel located at 206 E. Cedar Avenue owned by Craig and Linda Owens. 

On August 6, 2002, staff was authorized to initiate negotiations with the Olson Company to develop 33 for sale townhome units on the former Lance site.  The Agency will ultimately consider entering into a Disposition and Development Agreement in early 2004 at the same time project entitlements are considered.  Acquisition of the Waisler and Owens properties is needed for the development of this site.

ANALYSIS

The Waisler property, located at 700 S. San Fernando Boulevard, is comprised of a 5,765 square foot lot improved with a 2,160 square foot two-story building and a used-car lot currently occupied by John�s West Coast Auto Resale.  The second level of the building is occupied by Viking Football and Harvest Christian Fellowship. 

In order to assemble the development parcel for the proposed project, the Agency made an offer to purchase the Waisler property at the appraised Fair Market Value subject to Agency approval.    Staff obtained an updated appraisal of the subject property dated April 15, 2002 in the amount of $350,000 ($60.71 per square foot).  An offer letter dated December 12, 2002 was sent to the Max and Mariam R. Waisler Family Trust to purchase the property for the appraised value of $350,000.  On January 10, 2003, staff received a verbal acceptance from the Waisler Family Trust�s attorney, Henry Friedman, as to the subject asking price.  This verbal acceptance was followed by a written acceptance dated February 10, 2003.  Pursuant to Agency Board direction, staff was authorized to prepare an Acquisition Agreement for Agency consideration (Exhibit B).  In addition to the $350,000 to purchase the property, there will be costs for escrow, title,  demolition, possible goodwill, relocation and appraisal services estimated at approximately $150,000.  Based on the results of a Phase I analysis, there is no evidence of soils contamination.

Acquisition of the remaining property, located at 206 E. Cedar Avenue, will assemble the property needed for the development of this site.  The Agency made an offer to purchase the property at the appraised Fair Market Value in the amount of $75,000 on December 12, 2002.  Although the owners, Greg and Linda Owens, have not responded to the Agency�s offer to purchase their property, staff will continue to work towards acquisition of the property.

FISCAL IMPACT

The fiscal impact to the Redevelopment Agency will include the costs to acquire the Waisler property in the amount of $350,000.  Additional costs for escrow, title, relocation, possible goodwill, demolition and appraisal services are estimated at approximately $150,000.  Housing Set Aside funds totaling $770,000 were previously budgeted for site assembly activities, therefore no budget adjustments are necessary.

RECOMMENDATION

Staff recommends that the Redevelopment Agency adopt the attached resolutions authorizing the acquisition of 700 South San Fernando Boulevard for $350,000.