Agenda Item   



                                                                                                                        ASR Control  13-000002




legal entity taking action:

Board of Supervisors

board of supervisors district(s):


SUBMITTING Agency/Department:

County Executive Office   (Approved)

Department contact person(s):

Gail Dennis (714) 667-9676 



Karen Roper (714) 480-2805



Subject:  Acquisition of Year-Round Emergency Shelter and Multi-Service Center Site


      ceo Concur

County Counsel Review

Clerk of the Board


Approved Agreement to Form




3 Votes Board Majority




    Budgeted: Yes

Current Year Cost: $3,200,000

Annual Cost: N/A




    Staffing Impact: No

# of Positions:

Sole Source: Yes

    Current Fiscal Year Revenue: N/A

    Funding Source: Fund 15B: 100%


    Prior Board Action: 01/24/2012 #31






Find that the recommended actions are Categorically Exempt from the provisions of California Environmental Quality Act (CEQA) pursuant to Section 15332 of the CEQA Guidelines.



Approve the Purchase and Sale Agreement with 301 S. State College, a California General Partnership, in the amount of $3,150,000 for the purchase of property at 301 S. State College Blvd., Fullerton, CA. and return two executed copies to the County Executive Office.



Authorize the County Executive Officer, or designee, to sign all transactional and escrow documents, including minor modifications that do not materially alter the terms or financial obligations of the transaction, and perform all activities specified under the terms of the Purchase and Sale Agreement and Escrow Instructions including execution of the Grant Deed.



Authorize funding not to exceed $50,000 necessary to conduct due diligence investigations to comply with applicable County ordinances and best practices.



Approve Contract CT-080-13010503 with Vanguard Commercial  for Commercial Real Estate Brokerage Services, and authorize the County purchasing Agent or his authorized Deputy to execute.



Direct the County Executive Officer, or designee, to return to your Board in the event that all Due Diligence investigations regarding the real estate are not completed and the contingencies set forth in the Purchase and Sale Agreement are not fulfilled as set forth therein.







Approval of the Purchase Agreement and County Service Contract will facilitate the acquisition of a site for a year-round emergency shelter and multi-service center for homeless families and individuals in Orange County.






On January 24, 2012, your Board approved Orange County’s final Ten-Year Plan to End Homelessness (the Plan). The Plan includes goals and implementing strategies to effectively end homelessness in Orange County. More specifically, Goal #3 of the Plan is to improve the efficacy of the emergency shelter and access system. Further, Implementing Strategy #14 of the Plan is to develop year-round permanent emergency shelters to replace the seasonal Armory Emergency Shelter Program. To ensure successful implementation of the Plan, your Board established the Commission to End Homelessness (the Commission). The Commission has four Implementing Groups that focus on plan implementation. Implementing Group #2 focuses on emergency and transitional shelter systems improvement. During 2011, Implementing Group #2 convened multiple community meetings and forums to solicit key stakeholder input regarding policies for year-round emergency shelter development. At its November 18, 2011 meeting, the Commission approved the following policy recommendations for your Board’s consideration:


Commission to End Homelessness Policy Recommendations for Year-Round Emergency Shelter


Each year when the County’s Armory Emergency Shelter Program closes for the season, Orange County immediately loses 400 low-demand emergency shelter beds.  To address this issue, it is critical to transition the seasonal Armory Emergency Shelter Program to a year-round emergency shelter program.  To accomplish this objective, the following policies are recommended:





Multiple sites throughout the County should be considered that meet the needs of each local community.  These sites would be strategically developed after the initial opening of a year-round centrally accessible site(s).



Work with cities on how the County shelter effort coordinates with efforts of other jurisdictions working on the same issues.



Co-locate and/or have access to multi-service or “day” center to provide critical services needed by clients.



A sustainable model is one that combines permanent supportive housing with emergency shelter and other components.



The ideal emergency shelter should allow for the lowest possible thresholds to allow an individual to receive services.  The only barrier should be if the behavior of the individual threatens the well-being of other participants.  Individuals with addiction and mental health disorders must be able to receive services in this type of emergency shelter.


As part of the January 24, 2012 Ten-Year Plan to End Homelessness agenda item, your Board approved the aforementioned policy recommendations for year-round emergency shelter. In addition to the aforementioned actions, it is important to outline other key initiatives that led to the identification of a site in the City of Fullerton:

Fullerton Task Force on Homelessness and Mental Health Services:

In September 2011, the Fullerton City Council established the Fullerton Task Force on Homelessness and Mental Health Services in response to the tragic death of Kelly Thomas, a member of the Fullerton community who was homeless and suffered from schizophrenia. The City Council charged the Task Force with five duties, all focused on improving the resources and services available in Fullerton for mentally ill and homeless members of the community.

The Fullerton Task Force was comprised of dedicated and experienced individuals who met 13 times over a six-month period as an independent body and twice were present for City Council meetings focused on the Task Force’s recommendations. On May 15, 2012, the Task Force recommendations were presented to the Fullerton City Council at a special study session. The Task Force submitted eight recommendations to the Fullerton City Council. Task Force Recommendation #1 was Year-Round Shelter. More specifically, Task Force recommendation #1 stated: “Collaborate with the County of Orange, surrounding cities, and service providers to identify and secure a site to create a regional year-round multi-service center that includes a low threshold emergency shelter for the homeless that is accessible to Fullerton residents”.


Supervisor Nelson North County Roundtable on Homelessness:


In support of your Board’s Ten-Year Plan to End Homelessness, in February 2012, Supervisor Nelson convened the North County Roundtable on Homelessness. The Roundtable was comprised of stakeholders from north county cities such as Anaheim, Brea, Buena Park, and Fullerton. North county cities were represented by elected officials, police departments, as well as economic development, community development, and community services departments.


In addition to north county cities, other stakeholder groups included County Agencies such as the County Executive Office, Health Care Agency, Social Services Agency, and OC Community Resources/OC Community Services. Finally, other stakeholder groups included members of the Commission to End Homelessness, homeless shelter & service providers, the faith-based community, as well as the Fullerton City Task Force, and Orange County Congregation Community Organization.


The North County Roundtable on Homelessness concluded that sufficient analyses and studies had been conducted to identify homeless issues and needs. Consistent with the Ten-Year Plan to End Homelessness and the Fullerton Task Force on Homelessness, the North County Roundtable unanimously agreed that North Orange County needs a year-round emergency shelter and multi-service center for homeless families and individuals.


From the period of March 2012 through May 2012, Supervisor Nelson requested Roundtable Members to submit potential sites for year-round emergency shelter and a multi-service center. Due to the fact that no sites were identified, Supervisor Nelson convened numerous meetings with representatives from the City of Fullerton, OC Community Resources/OC Community Services, Vanguard Commercial Real Estate, and the Commission to End Homelessness.


By working directly with the City of Fullerton and a Real Estate Broker local to the City of Fullerton, a number of potential sites were identified and reviewed. The 301 S. State College property was ultimately identified as the best location for a year-round shelter and multi-service center for the following reasons: 1) the Orange County Transportation Authority and the City of Fullerton are jointly working on a grade separation project that will dramatically reduce the commercial viability of the site for continued operation as a retail furniture store; 2) the grade separation takings will bring additional funds that will either reduce the sales price or be accrued to the County per the terms of the Purchase Agreement; and 3) the City of Fullerton is drafting its SB2 Emergency Shelter Zoning Code Amendment to not preclude this site operating as a shelter location.


The Real Estate Transaction


The property consists of a one-story 29,032 square foot industrial/retail building constructed in 1970 as part of a larger retail shopping center.  The building sits on a separate legal parcel, from the remainder of the shopping center, of approximately 2.07 acres, however, the building is physically attached at its southern wall to the adjoining shopping center building.  Current use of the building is as a retail furniture store.  Parking ingress and egress is shared among all tenants of the shopping center.   The property is part of the Lincoln Business Center (Association) consisting of five (5) separate legal parcels/ownerships and is subject to a Declaration of Covenants, Conditions and Restrictions (CC&R's) which control the use of the individual parcels, responsibilities for sharing the cost of common area maintenance, and assuring that the property owners maintain their respective properties to a common standard.


Due Diligence investigations are underway and, to date, a preliminary title report and an appraisal have been obtained.  At the current time, the City of Fullerton's zoning does not identify an emergency homeless shelter and multi-service center as a permitted use of the property.  Additionally, the CC&R's may require approval of the County's intended use in some circumstances.  As part of the Due Diligence investigation process, County staff and leadership will work with the City of Fullerton and the Association, if necessary, to address these issues.  It is anticipated that with the City's cooperation the use will be permitted for this site through the City's SB2 Emergency Shelter Zoning Code Amendment.  Additional Due Diligence investigations, which will occur during the 150 day escrow period, include but may not be limited to:  Phase I environmental site assessment, land survey, structural and physical inspection, roof inspection, sewer line inspection, hazardous materials inspection, and a safety inspection.  Due Diligence will be conducted during the escrow period to determine the suitability of the building for the County's intended use.  Further, the cost of renovating the property for its intended use, while meeting applicable building codes and ADA standards, will be investigated.  The purchase of the property is recommended because the owner of the property is not willing to lease the property.  In addition, ongoing leasing costs would impact operational costs.  The source of funds for building acquisition is Fund 15B, a County Executive Office controlled fund, restricted for housing related uses.  Funding related to any necessary building modifications, and shelter operations will be finalized during the Due Diligence period as well as through the Notice of Funding Availability (NOFA) that will be subsequently released by OC Community Resources/OC Community Services to select a contractor operator for the facility.  The NOFA will be released once the site is owned by the County.


The County engaged California Commercial Appraisers (Levin Messick), a California Certified and Licensed Appraisal Firm, which is a qualified County Procurement vendor to provide an opinion of value.   Mr. Messick's opinion of Market Value  in the Appraisal Report is $2,900,000. The appraisal also identified an adjusted  value range of from $92.51 to $111.12 per foot for comparable transactions.  The purchase price of $3,150,000 equates to an adjusted value of $108.50 per foot. 


It is our understanding that Orange County Transportation Authority (OCTA) has also engaged appraisal services for the property as part of their grade separation project to secure the property rights needed to realign South State College Blvd. under the railroad tracks to the south of the property.  To date, the County has not received a copy of that appraisal.


The County’s purchase contract contains standard county language CEO Real Estate and County Counsel worked together to tailor to this specific situation.







Funding is available through the use of Fund 15B, a County Executive Office controlled fund, restricted for housing related uses.  Recommended budget actions will be included in the second quarter budget report scheduled to be considered by your Board on February 26, 2013.










County Counsel Approved Agreements to Form




Exhibit A:  Covenants, Conditions and Restrictions (CC&R's)
Exhibit B:  Property Plat Map
Exhibit C:  Property Aerial Map
Exhibit D:  Property Location Map
Exhibit E:  Grant Deed (unsigned)
Exhibit F:  Appraisal Report
Exhibit G:  60-Day Notice Waiver
Exhibit H:  General Plan Conformance Letter
Exhibit I:  Public Notice Publication
Exhibit J:  Confirmation of Public Notice Publication
Exhibit K:  Sole Source Justification
Exhibit L:  Purchase Agreement Summary
Exhibit M:  Vendor Contract with Vanguard Commercial




Attachment A:  Purchase Agreement