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Agenda Item
ASR
Control 20-000600 |
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MEETING DATE: |
08/11/20 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
1 |
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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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Thomas Mason (714) 834-7425 |
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Subject: Purchase of 401 Civic Center
Dr, Santa Ana
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ceo CONCUR |
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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:
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Sole Source:
No |
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Current Fiscal Year Revenue: See Financial Impact Section
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Prior Board Action: 10/25/2016
#S49F, 11/09/1999 #S36E |
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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 execute the Purchase and Sale Agreement with 401 Capitol City Tower Corp., a California corporation, for purchase of the office building located at 401 Civic Center Drive, Santa Ana, CA, for $515,000, in substantially the form attached. |
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3. |
Authorize the Chief Real Estate Officer 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 on February 8, 2021. |
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4. |
Authorize the Chief Real Estate Officer or designee to spend up to $200,000 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 purchase of the office building located at 401 Civic Center Drive, 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 $200,000 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 issue checks to escrow for 401 Capitol City Tower Corp., a California corporation’s account for payment of a total not to exceed $515,000 for the full and final purchase price of the office building located at 401 Civic Center Drive, Santa Ana, California. |
SUMMARY:
Approval of the Purchase and Sale Agreement with 401 Capitol City Tower Corp., a California corporation, and related documents will allow for the purchase of the office building located at 401 Civic Center Drive, Santa Ana, California, pursuant to a lease conveyance agreement.
BACKGROUND INFORMATION:
Upon approval of the draft Purchase and Sale Agreement by your Board of Supervisors (Board), and subsequent execution, County Executive Office (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 (a Phase II Environmental Site Assessment will also be obtained, if required) for the purchase of the office building located at 401 Civic Center Drive, Santa Ana, California (Property). Due diligence will also include:
- A land survey to support the issuance of an American Land Title Association Policy.
- A confirmation 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.
On November 9, 1999, the Board approved a Lease Conveyance Agreement (Lease) with 401 Capitol City Tower Corp., a California corporation, for the Property with a 21-year term that commenced on February 9, 2000. The Lease contained an option for the County to purchase the Property at the conclusion of the term for $515,000. On October 25, 2016, the Board approved a First Amendment to the Lease authorizing an increase of rent not to exceed $1,084,504 over the term of October 25, 2016, through February 8, 2021, to facilitate necessary repairs and replacement of the elevator system. The option in the Lease provides that the Property will be conveyed to the County upon the expiration of the Lease on February 8, 2021. If desired, pursuant to the Lease terms the option period may be extended 12 months after the scheduled termination date of the Lease with County paying 110 percent of the prior year rental rate for that period. However, CEO Real Estate recommends that the Property be purchased on February 8, 2021, so that the future use of the Property can be assessed.
The Property is approximately 1.02 acres situated on the northwest corner of Civic Center Drive and Birch Street. Constructed in 1967, the Property is a 10-story office building containing approximately 101,463 square feet with an attached 4-level parking garage containing approximately 220 spaces. In addition, as part of the Lease transaction, the County became the fee owner of two nearby parking lots, containing a total of 113 parking spaces. These parking lots were conveyed to the County previously and are not part of the transaction for the conveyance of the Property. The Lease also allows for use of 24 off-site parking spaces at 900 Broadway until Lease expiration. While a formal appraisal of the Property has not been completed, CEO Real Estate estimates the Property’s underlying land value alone to be approximately $1,725,000, without any improvements. Furthermore, the Property is strategically located within the Civic Center area and would be a logical acquisition for future growth and/or development in accordance with the Civic Center Facilities Strategic Plan, allowing for an assemblage of almost the entire city block under County ownership. The purchase of the Property in the near term will provide parking spaces for Civic Center employees and/or visitors and office swing space that can be used for short or longer term transitions of County agencies and departments from one location to another while the Property is assessed for long-term use.
The Property is one block north of the Hall of Administration and the new County Administration South building, and one-half block north of the future site of County Administration North. The Property’s west side is bordered by the County’s Civic Center Garage. During the term of the Lease the Property has been occupied by the District Attorney. The District Attorney is in the process of being relocated to 300 Flower Street as a part of the Civic Center Facilities Strategic Plan. This plan currently identifies the Property for reuse by a County department. Once the Property is vacated, OC Public Works and CEO Real Estate will commence a study and planning process to determine the long-term viability and usefulness of the Property and report back to the Board with any necessary revisions to the Civic Center Facilities Strategic Plan based on this assessment.
FINANCIAL IMPACT:
Appropriations of $515,000 for the full and final purchase price of building located at 401 Civic Center Drive, Santa Ana, CA, is included in the District Attorney budget, Budget Control 026, FY 2020-21 Recommended Base Budget. Capital Projects, Budget Control 026 will use existing FY 2020-21 Appropriations and Net County Cost within 036 to fund up to $200,000 for due diligence and related costs for the 401 Civic Center facility.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A – Purchase and Sale Agreement
Attachment B – Certificate of Acceptance for the Grant Deed
Attachment C – Site Location Street Map and Aerial View
Attachment D – Documentation of Public Notice Publishing
Attachment E – Acquisition Questionnaire