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Agenda Item
ASR
Control 24-000138 |
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MEETING
DATE: |
03/12/24 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
2 |
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SUBMITTING Agency/Department: |
County
Executive Office (Approved) |
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Department contact person(s): |
Thomas
A. Miller (714) 834-6019 |
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An
Tran (714) 975-1542 |
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Subject: Exercise of Offer to Convey and
Purchase of 1928 South Grand Avenue, Santa Ana
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
Approved
Agreement to Form |
Discussion |
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3
Votes Board Majority |
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Budgeted: Yes |
Current Year
Cost: See Financial
Impact Section |
Annual Cost: N/A |
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Staffing Impact: |
No |
# of Positions: |
Sole Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 2/15/2005 #34 |
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RECOMMENDED
ACTION(S):
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1. |
Find that the
subject activity is not a project within the meaning of CEQA Guidelines
Section 15378 and is therefore not subject to review under CEQA. |
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2. |
Authorize the
Chief Real Estate Officer or designee to exercise the Offer to Convey and
execute the Purchase and Sale Agreement with Centurion Partners Santa Ana,
LLC, a Delaware limited liability company, for purchase of the office
facility located at 1928 South Grand Avenue, Santa Ana, California, for $100,
in substantially the form attached, with minor modifications that do not
increase the cost or liability to the County, upon County Counsel approval. |
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3. |
Authorize the
Chief Real Estate Officer or designee to take all actions consistent with the
Purchase and Sale Agreement and to execute the Certificate of Acceptance for
the Grant Deed in substantially the form attached, conduct due diligence
investigations in compliance with applicable County ordinances and best
practices, make minor modifications to the documents that do not materially
alter the terms of the transaction, sign related transactional and escrow
documents, direct recordation of the Grant Deed and acceptance documents
through the escrow process and perform related actions necessary to complete
the transaction once all conditions in the Purchase and Sale Agreement have
been fulfilled to close the purchase. |
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4. |
Authorize the
Chief Real Estate Officer or designee to spend up to $350,000 for costs
related to due diligence investigations, escrow and other related costs, and
upon satisfactory completion of all due diligence, to implement the funding
plan to complete the purchase of the office facility located at 1928 South
Grand Avenue, Santa Ana, California. |
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5. |
Direct the
Auditor-Controller, upon notification from the Chief Real Estate Officer or
designee, to issue payments of a total amount not to exceed $350,000 to
vendors for payment of due diligence, title research, land survey,
engineering reports, hazardous material assessment report(s), trust deed
clearance fees, forwarding fees, subordination fees, utility prorations and
other costs and fees associated with the due diligence, escrow and title
research as applicable. |
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6. |
Direct the
Auditor-Controller, upon notification from the Chief Real Estate Officer or
designee, to deposit funds in escrow for Centurion Partners Santa Ana, LLC’s
account for payment of a total not to exceed $100 for the full and final
purchase price of the office facility located at 1928 South Grand Avenue,
Santa Ana, California. |
SUMMARY:
Exercise of the Offer to Convey and
approval of the Purchase and Sale Agreement with Centurion Partners Santa Ana,
LLC, and related documents will allow for the purchase of the office facility
located at 1928 South Grand Avenue, Santa Ana, California, pursuant to a lease
conveyance agreement, to retain the current use as the Orange County Social
Services Agency’s Santa Ana Regional Center and ensure continuation of services
at that location.
BACKGROUND
INFORMATION:
In 1991, the Orange County Social Services
Agency (SSA) began leasing and occupying the office facility located at 1928
South Grand Avenue, Santa Ana (Property), which consisted of three standalone
single-story office buildings totaling 171,964 square feet constructed in 1967
on 13.43 acres of land. On February 15,
2005, the Orange County Board of Supervisors (Board) authorized entering into a
Lease Conveyance Agreement (Lease) with Centurion Partners Santa Ana, LLC, a
Delaware limited liability company (Centurion), which purchased the Property
from the previous owner shortly after.
As a condition of the Lease, Centurion constructed two additional
single-story office buildings adjoining the original three, combining all five
buildings into an interconnected facility totaling 211,964 square feet. Surface parking surrounds the buildings on
all sides and consists of approximately 911 parking spaces. The Property is located on the eastern side
of Santa Ana approximately one mile from the border with the City of
Tustin. The Property is accessed along
Grand Avenue and lies between Edinger Avenue to the north and Warner Avenue to
the south with bus routes running along all three streets.
The Property is a hub for five distinct
SSA departments, each specializing in vital assistance programs. The Assistance Program offers comprehensive
support, including Medi-Cal, CalFresh, General Relief and Cash Assistance for
Immigrants. Family Self-Sufficiency
oversees programs such as CalWORKs cash assistance, Welfare-to-Work and Refugee
Services. Training and Career
Development provides essential training for SSA staff and community partners,
with collaborative initiatives like evening classes in conjunction with Cypress
Community College. Program Integrity
plays a critical role in ensuring the effective functioning of SSA divisions
through various functions, such as appeals, civil rights, grievance reviews,
income eligibility verification systems and fraud detection. Additionally, the Mentor, Onboarding, and
Quality Assurance team offers support to new hires and mentorship to
eligibility staff.
At present, the Property is operated by a
team of 849 dedicated SSA staff. In
2023, SSA served a total of 135,219 clients at the Property, with an average of
11,268 clients per month. The primary
areas serviced include Santa Ana, Tustin, Costa Mesa, Irvine, Balboa Island,
Corona Del Mar and Newport Beach.
Furthermore, SSA collaborates with several
organizations at the Property to enrich the services provided to the
community. Crucial partnerships include
the District Attorney Fraud Investigators, United Way, Mercy House Living
Centers, Orange County Asian & Pacific Islander Community Association
(OCAPICA) and the American National Red Cross.
These partnerships are instrumental in expanding the reach and impact of
SSA to the community. For instance, the
District Attorney Fraud Investigators which provides information verification
support to SSA are based at the Property, while United Way offers free tax
services during tax season. Moreover,
Mercy House Living Centers deliver housing support programs for CalWORKs
clients facing homelessness, OCAPICA focuses on providing pre- and
post-employment services related to the CalWORKs program and the American
National Red Cross organizes semi-annual blood drives at the Property.
The Lease, known as a capital lease due to
the fact that the lease payments including purchase capital as well as rent
payments, contains an Offer to Convey (Offer) the Property to the County for a
purchase price of $100. The Offer was
executed by Centurion and the County in 2005; in order to exercise the Option,
the County must provide Centurion notice of its intent to purchase the Property
between the commencement of the final 12-month period of the Lease and the
one-year anniversary of the expiration of the Lease, from March 1, 2024,
through February 28, 2026. Once the purchase of the Property is complete, SSA
intends to continue operating the Property consistent with its existing
use. County Executive Office (CEO) Real
Estate in conjunction with SSA would like to exercise the Offer and commence
due diligence on the property with the goal of taking ownership at the end of
the Lease term on February 28, 2025.
During the 12-month period following
expiration of the Lease, from March 1, 2025, through February 28, 2026,
pursuant to the Lease terms, the County may continue possession of the Property
on a rent-free basis under the same conditions and covenants contained in the
Lease; however, the County would be responsible for payment of operating costs including,
but not limited to, all repair, maintenance, utility, management, and property
tax expenses during this time period.
Since the County would be responsible for these costs under the Lease or
as the owner of the property, it is in the County’s interest to take ownership
as soon as possible. This is due to the
fact that the operating costs include property taxes, which the County would be
exempt from, therefore resulting in a cost saving to the County’s cost to
operate the facility.
Upon approval of the exercise of the Offer
and the draft Purchase and Sale Agreement by your Board, and subsequent
execution, CEO Real Estate will commence due diligence investigations,
including procurement and review of the preliminary title report, underlying
title documents and a Phase I Environmental Site Assessment for the purchase of
the Property. Due diligence will also
include:
A land survey to support the issuance of
an American Land Title Association Policy.
An estimation of the Property’s market
value.
In addition, OC Public Works will inspect
the building infrastructure and systems and conduct a Tier I structural/seismic
assessment of the Property, and CEO Risk Management will conduct a safety
inspection, as necessary. Based on this,
CEO Real Estate and SSA recommend that the Board approve the acceptance of the
Offer and the execution of the Purchase and Sale Agreement to commence the
process to take ownership of the Property.
Compliance with CEQA:
This action is not
a project within the meaning of CEQA Guideline Section 15378 and is therefore
not subject to CEQA, since it does not have the potential for resulting in
either a direct physical change in the environment, or a reasonably foreseeable
indirect physical change in the environment.
The approval of this Agenda item does not commit the County to a
definite course of action in regard to a project since it is for the approval
of the purchase of an existing building.
The proposed activity is therefore not subject to CEQA. Any individual, specific work authorized
pursuant to this contract will be reviewed for compliance with CEQA. Any future action connected to this approval
that constitutes a project will be reviewed for compliance with CEQA.
FINANCIAL
IMPACT:
Appropriations of $100 for the full
and final purchase price of the property located at 1928 South Grand Avenue,
Santa Ana, California, and up to $350,000 for due diligence and related costs
for the 1928 South Grand Avenue property will be absorbed in SSA Budget Control
063, FY 2023-24 Budget.
STAFFING
IMPACT:
N/A
REVIEWING
AGENCIES:
Social
Services Agency
ATTACHMENT(S):
Attachment
A – Purchase and Sale Agreement
Attachment B – Grant Deed and Certificate of Acceptance
Attachment C – Site Location Street Map and Aerial View
Attachment D – Confirmation of Public Notice Publishing
Attachment E – Acquisition Questionnaire
Attachment F – Offer to Convey