|
Agenda Item
ASR
Control 21-000457 |
||
|
MEETING DATE: |
06/22/21 |
|
|
legal entity taking action: |
Board of Supervisors |
|
|
board of supervisors
district(s): |
All Districts |
|
|
SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
|
|
Department contact
person(s): |
Thomas A. Miller
(714) 834-6019 |
|
|
|
James Treadaway (714) 647-3948 |
|
Subject: Approve Termination and
Developer Agreement for Sale of Property
|
ceo CONCUR |
|
Clerk of the Board |
||||||||
|
Concur |
Approved Agreement(s) and Resolution(s) |
Discussion |
||||||||
|
|
|
3 Votes Board Majority |
||||||||
|
|
|
|
||||||||
|
Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
See Financial Impact Section |
||||||||
|
|
|
|
||||||||
|
Staffing Impact: |
No |
# of Positions:
|
Sole Source:
Yes |
|||||||
|
Current Fiscal Year Revenue: N/A
|
||||||||||
|
Prior Board Action: 01/12/2010
#29 |
||||||||||
RECOMMENDED ACTION(S):
|
1. |
Approve the Termination of Developer Contract and Close-Out Agreement with LDC Greenspot, LLC, and authorize the Chief Real Estate Officer or designee to execute the Termination of Developer Contract and Close-Out Agreement, in substantially the form attached, with approval of County Counsel. |
|
2. |
Pursuant to the Termination of Developer Contract and Close-Out Agreement, authorize the initial payment to LDC Greenspot, LLC or its assigns in the amount of $2,122,749 from the Auditor-Controller, upon notification from the Chief Real Estate Officer or designee, or from sale proceed payment(s), whichever is applicable. |
|
3. |
Adopt Resolution declaring the intent to sell a 1,657-acre parcel of surplus property owned by the Orange County Flood Control District in City of Highland, California, through a competitive Request for Offers, and authorize the use of a licensed real estate broker for such sale. |
|
4. |
Approve the Procedure for Sale, Request for Offers and the form of Offer and Agreement to Purchase Real Property for sale of the 1,657-acre parcel of surplus property owned by the Orange County Flood Control District in City of Highland, California. |
|
5. |
Authorize the Chief Real Estate Officer or designee to execute the Agreement with Park Place Partners, Inc. dba Land Advisors Organization with a term effective through January 6, 2022, to manage the disposition of the LDC Greenspot, LLC property, for a fixed base price of $250,000 and a success fee equal to three percent for every dollar above the minimum asking price of $25,000,000. |
|
6. |
Authorize the Chief Real Estate Officer or designee, on behalf of the Orange County Flood Control District, to take all actions necessary to sell the property by the procedures set forth herein and to sign any and all documents related to the termination of the Developer Contract with LDC Greenspot, LLC, and other collateral matters related to the sale and disposition of the property. |
SUMMARY:
Approval of the Termination of Developer Contract and
Close-Out Agreement with LDC Greenspot, LLC will allow the Orange County Flood
Control District to terminate the Developer Contract with LDC Greenspot, LLC
and dispose of the surplus property owned by the Orange County Flood Control
District through a competitively bid sale, while approval of the Professional
Services Agreement will allow Land Advisors Organization to manage the
disposition of the LDC Greenspot, LLC Property on behalf of the Orange County
Flood Control District.
BACKGROUND INFORMATION:
Developer Contract
On January 12, 2010, the Orange County Board of Supervisors (Board) approved the selection of Lewis Investment Company, LLC (Lewis) as the primary developer to assist with the entitlement of a 1,657-acre property (Property) owned by the Orange County Flood Control District (District), the San Bernardino County Flood Control District and the Riverside County Flood Control and Water Conservation District (Local Sponsors) within the City of Highland, California (City). The Property was acquired in 1997 as a borrow site for the construction of Seven Oaks Dam as part of the Santa Ana River Project. The construction of the Seven Oaks Dam was completed in 1999 pursuant to a Local Cooperation Agreement (LCA) between the U.S. Army Corps of Engineers and the Local Sponsors. In accordance with the LCA, responsibility for disposal of the Greenspot Property was delegated to the District.
The Lewis development proposal included a master-planned community of approximately 3,632 residential units on the Property (Project). On November 18, 2010, the District and Lewis entered into a Developer Contract and, pursuant to an Assignment and Assumption of Contract of the same date, Lewis assigned all of its right, title, interest and obligations under the Developer Contract to LDC Greenspot, LLC (LDC Greenspot).
In August 2016, the City voted unanimously to approve the Project. Shortly thereafter, two public interest groups filed lawsuits in San Bernardino Superior Court challenging the City’s approvals and qualified a referendum for the November 2018 ballot to overturn the City’s approvals. In June 2018, the Court ruled against the City’s approvals based on an inadequate environmental review that failed to analyze the Project’s scope and other impacts identified in the City’s General Plan. On August 8, 2018, at the request of the District, the City rescinded its approvals and the San Bernardino County Registrar of Voters removed the referendum from the ballot.
The District and LDC Greenspot now desire to terminate the Developer Contract and settle any outstanding obligations or claims pursuant to the Developer Contract. The District also desires to pursue disposition of the Property through a public solicitation process; LDC Greenspot has agreed to cooperate with the District in this effort. As such, the District requests the Board approve the Termination of the Developer Contract and Close-Out Agreement (Termination Agreement) with LDC Greenspot. Execution of the Termination Agreement will terminate the Developer Contract and allow the District to compensate LDC Greenspot $2,122,749 for the completion of Tasks, as described in the Developer Contract (Initial Payment), and any additional payment(s) as described in the Termination Agreement, for services provided in connection with the sale of the Property (Sale Proceeds Payment). The Initial Payment and Sale Proceeds Payments will be paid to LDC Greenspot from the Property sale proceeds, after the close of escrow.
Disposition of
Property
Pursuant to Government Code Section 54220, the District is required to notify all local public entities, within the jurisdiction of the Property, of the District’s intent to sell fee ownership of the Property and provide them 60 days to notify the District, in writing, of their interest to purchase the Property. On December 10, 2019, in compliance with the Surplus Land Act, the District sent a Notice of Availability of Surplus Land to all public entities located within the jurisdiction the Property. The District did not receive any public entity requests to purchase the Property. The District has complied with the Surplus Land Act and requests the Board declare the Property no longer required for public use and surplus to Flood Control and County purposes. As a result, the District can then dispose of the Property without further regard to Government Code Section 54220.
The District also requests the Board adopt a Resolution declaring the intention to sell the surplus Property (Attachment B) through a competitive bid process. The release of the Bid Instructions (Attachment E) and sale of the Property will adhere to the Procedure for Sale of Property (Attachment F) and utilize the Offer and Agreement to finalize the purchase the Property (Attachment G).
In addition, the District requests the Board approval
of a Professional Services Agreement with Park Places Partners, Inc. dba Land
Advisors Organization (LAO) (Exhibit C) to assist with the disposition of the
Property. LAO, a licensed real estate broker, has extensive experience in the
disposition of large developable properties throughout the Inland Empire, and
has relationships with major developers with proven ability to manage
properties of this type. LAO will be paid a fixed base price of $250,000 and a
success fee equal to three percent for every dollar above the minimum asking
price of $25 million. LAO's fees will be paid from the Property sale proceeds.
LAO will work with the District and LCD Greenspot, as needed, to develop a
Disposition Strategy, Marketing Plan and Timeline, which includes releasing and
marketing the Bid Instructions, facilitating meetings and site tours, and
compiling sealed written offers and oral bids for Board review. Upon the
Board’s acceptance of the highest bid, LAO will manage the sales transaction to
ensure successful close of escrow.
The Resolution declares the District’s intent to sell the Property and states:
- The Property being sold is a 1,657 acre of parcel located within the City and owned by the District;
- Pursuant to Government Code Section 54220 et seq., the District has complied with the Surplus Land Act and declares the Property is no longer required for public use and is surplus to Flood Control and County purposes;
- The Property has a minimum sale price of $25 million;
- The Property will be sold through a competitive bid process as outlined in the Procedure for Sale of Property (Exhibit F);
- LAO, a licensed real estate broker, will be instrumental in obtaining offers from qualified buyers and will be paid a fixed base price of $250,000 and a success fee equal to three percent for every dollar above the minimum asking price of $25 million;
-Sealed offers will be received and considered, and oral bids shall be called; and
-The final acceptance of the highest bid shall be made at a subsequent Board meeting.
Approval of the Termination Agreement with LCD Greenspot and the Professional Services Agreement with LAO will allow the District to terminate the Developer Contract, pursue disposition of the Property and generate revenue to fund payments to LCD Greenspot and LAO, and contribute to the District recouping its costs associated with acquiring and entitling the Property. Once bids are received, they will be presented to the Board for final approval of the preferred bid.
Compliance with CEQA: This action is not a project within the meaning of CEQA Guidelines 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 the approval includes the termination of an Agreement to allow the District to terminate the Developer Contract with LDC Greenspot, adoption of a resolution declaring the intent to dispose of the surplus flood control property through a competitive Request for Offers and approval of the Professional Services Agreement to allow LAO to manage the disposition of the Greenspot Property on behalf of the District. This proposed activity is therefore not subject to CEQA. Any future action connected to this approval that constitutes a project will be reviewed for compliance with CEQA.
FINANCIAL IMPACT:
Revenue associated with this contract termination was not included in the FY 2021-22 Budget. All payments including the Initial Payment and Sale Proceeds Payment(s) to LCD Greenspot and Broker Fees to LAO will be paid from the Property sale proceeds.
The State of California and the Local Sponsors (Orange County Flood Control District, San Bernardino County Flood Control District, and Riverside County Flood Control and Water Conservation District) shall split the net surplus revenue remaining from the sale of the Property as follow:
- State of California 70%
- Local Sponosrs 30%
The Local Sponsors shall split their 30 percent share as follows:
- Orange County Flood Control District: 87.7%
- San Bernardino County Flood Control District: 7.03%
- Riverside County Flood Control and Water Conservation District: 5.27%
Orange County Flood Control shall be split as follows:
- General Fund 135: 50%
- Orange County Flood Control District Fund 400: 50%
The approval of this agenda item does not commit the County of Orange or District to a definite course of action in regard to a project since the required Board approval, on behalf of District, of said proposed actions herein include approval of the Termination Agreement with LCD Greenspot, adoption of a Resolution declaring District's intent to sell surplus flood control property through a competitive bid process and approval of the Professional Services Agreement with LAO.
STAFFING IMPACT:
N/A
REVIEWING AGENCIES:
OC Public Works
ATTACHMENT(S):
Attachment A – Termination of Developer Contract and Close-Out Agreement
with LDC Greenspot, LLC
Attachment B – Resolution Authorizing Sale of Real Property
Attachment C – Professional Services Agreement with Land Advisors Organization
Attachment D – Government Code 54220
Attachment E – Bid Instructions for Sale of Real Property
Attachment F – Procedure for Sale of Real Property
Attachment G – Offer and Agreement to Purchase Real Property
Attachment H – Notice of Intent to Sell Real Property
Attachment I – Sole Source Agreement with Land Advisors Organization