HomeMy WebLinkAboutRS03-Redevelopment Agency
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MlDJt:'I.~ST FOR ~/COUNCIL A~
. From: Glenda Saul, Executive Director
Ot: Redevelopment Agency
Date: April 16, 1987
Subject: ROGER HARMON MOTORS, AUTHORITY TO
ACQUIRE, CCS
Synopsis of Previous Commission/Council ection:
9/22/86 - Resolution 4933 approved Loan Agreement with Roger Harmon Motors.
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Recommended motion: (COMMUNITY DEVELOPMENT COMMISSION)
A. MOVE TO ADOPT RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND DIRECIING THE EXECUTION OF AN AGREEMENT FOR
PURCHASE AND SALE OF LAND AND IMPROVEMENTS IN AID OF DEVELOPMENT AMONG THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, ROGER HARMON MOTORS, INC., AND
THE HARMON FAMILY TRUST.
(MAYOR AND COMMON COUNCIL)
B. Move to adopt aotion directing the City Attorney to prepare a resolution approving
the conveyance of City-owned land identified as Parcel No. 136-11-05 to the
Redevelopment Agency.
/4/&/~d ~(LI
Signature
Contact person:
Glenda Saul
Amount: $
1,200,000
Phone: 383-5081
Ward: 1st Ward
Project: CCS
Date: April 20, 1987
Supporting date attached:
FUNDING REQUIREMENTS:
YES
No edvwM Impact on City:
Council Notes:
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~ 4/20/87
Agenda Item No. =1
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Mmtt:'I-eu.ST FOR ca-s.o./COUNCL Ac:OoN
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STAFF REPORT
Staff and the Redevelopment Committee are recommending that theoAg,ncy acquire the
E Street dealership of Roger Bsrmon Motors which would assist .their relocation to
the San Bernardino Auto Plaza.
BACKGROUND
On November 17, 1986, the COIIIID1ssion adopted a resolution that authorized a loan
to Roger Barmon Motors in the amount of t300,OOO for 10 years. The E Street site
is owned by a fallily trust and it turned out that the loan arrangement did not
meet the requirement of the trust.
The Roger Barmon dealership is an integral part of the Auto Plaza development.
Several dealerships have indicated that they are holding in escrow, pending close
of escrow with the Harmons for a dealership in the Auto Plaza. We are proposing
that the Agency acquire the land from the family trust and buy the improvements
from the Harmons. Their proceeds would be used as a down payment to purchase a
site at the Auto Plaza. The Auto Plaza developers are negotiating a 6 aonth loan
to the Hanons for the balance of the cost for the new site (h.04 IIlillion
total). This will give the Barmon' s time to arrange bank financing for the new
dealership.
Acquiring the E Street dealership will give the Agency control of important
frontage on E Street (approximately 600 feet) and promote the development of the
Overlay Zone area in Central City South. The completion of the new Auto Plaza
purchase is one of the cornerstones of the success of the Auto Plaza development
in Southeast Industrial Park.
AGREEMENT
Location
The attached map shows the E Street dealership and those properties ilDlDediately to
the north and south.
a. The Roger Harmon dealership consists of approximately 141,696.5 square feet
(3.25 acres).
b. The northerly parcel is a 100-foot strip leased to the Harmons by the City.
This land was conveyed to the City by the Agency many years ago for $1. The
site is approximately 27,800 square feet.
Under the Agreement proposed, the Barmons will assign their interest to this
site to the Agency.
Staff is seeking authorization to direct the City Attorney to prepare a
resolution for the next agenda, conveying the land to the Agency.
0173H/SL/RKH
4/20187
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MIDJt:ft-A..ST FOR a-s.../COUNCIL A~
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STAFF REPORT
c.
The property to the south of the dea1ership is proposed to he. acquired at a
later date for the extension of Valley Street west. . .
This entire transaction would give the Agency control of a priae corner entering
the Overlay Zone from E Street.
Harmon's Obligations
Harmon would sell their improvements at the E Street dealership for *350,000. The
proceeds would be used in a simultaneous escrow to purchase the Auto Plaza site.
They would assign their interest in the 100-foot strip to the north to the Agency.
The Harmons would pay to the Agency the lease IIIIOunt which they are currently
paying to the fallli1y trust - approsimate1y *7,000 per month until their new
development is complete in the Auto Plaza. It is estimated that this period will
be approsimate1y twelve months.
Agency's Obligations
The Agency would pay *350,000 cash to the Harmons for their improvements. We
would give a note to the family trust for *850,000. For the combined transaction
we would have:
Purchase Price * 1,200,000 (or appraised value,
whichever is leu)
Down Payment * 350,000
Term 7 years
Interest 7 %
Payments int only, quarterly
We would lease the site back to the Harmons until the new site is ready for
occupancy.
S_ry
Site Purchase
City Conveyance
tl,200,OOO
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141,696.5 SF
27,800.0 SF
169,496.5
*8.47 per SF
-0-
*7.08 per SF
(Net Effect)
TOTAL
tl,200,OOO
0173H/SL/RMM
4/20/87
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1
RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF
AN AGREEMENT FOR PURCHASE AND SALE OF LAND AND DlPROVEMENTS IN
3 AID OF DEVELOPMENT AMONG THE REDEVELOPMENT AGBNCY OF THE CITY OF
4 SAN BERNARDINO, ROGER HARMON MOTORS, INC., AND THE HARMON FAMILY
TRUST.
5 BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION OF
6 THE CITY OF SAN BERNARDINO AS FOLLOWS:
7 SECTION 1. The Chairman and Secretary of the Community
8 Development Commission of the City of San Bernardino are hereby
9 authorized and directed to execute for and on behalf of the
10 Redevelopment Agency of the City of San Bernardino an Agreement
11 for Purchase and Sale of Land and Improvements in Aid of
12 Development among the Redevelopment Agency of the City of San
13 Bernardino, Roger Harmon Motors, Inc., and the Harmon Family
14 Trust, with such non-substantive changes to said Agreement as may
0 15 be approved by the Chairman and Agency Counsel. A copy of said
16 Agreement is attached hereto as Exhibit -I" and incorporated
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17 herein by this reference as though fully set forth at length.
Dated:
Approved as to form:
AGENCY COUNSEL
By tt,$;: {~f17
The foregoing resolution was duly adopted by the following
vote, to wit:
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AGREEMENT FOR PURCHASE AND SALE OF LAND
AND IMPROVEMENTS IN AID OF DEVELOPMENT
(Central City South Project Area)
THIS AGREEMENT, effective the
day of
, 1986, by and among ROGER HARMON MOTORS, INC.,
6 hereinafter "Harmon", the HARMON FAMILY TRUST, by its duly
7 designated trustee, hereinafter "the Trust", and the
8 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
9 hereinafter "Agency. sets forth the terms of a Purchase and Sale
10 Agreement between the parties hereto.
11 RECITALS
12 A. Harmon is presently occupying a site located on South
13 "E" Street, sometimes identified as 240-280 South "E" Street, in
14 the City of San Bernardino, which site is located in the area
'4:) 15 proposed for development in the Central City South Study Area.
16 Certain buildings and improvements exist on such site, hereafter
17 the "Improvements., which Improvements are owned by Harmon.
18 B. Harmon presently operates new vehicle dealerships fat
19 selling Pontiac automobiles, as well as AMC, Jeep, and Renault
20 motor vehicles, on the site. Portions of the Harmon site are
21 leased by Harmon from the Trust and another portion is leased by
22 Harmon from the City of San Bernardino. Combined, Harmon's
23 leasehold represents approximately 709 feet of frontage on the
24 west side of "E" Street.
25 C. The site presently occupied by Harmon is considered by
26 the Agency to be if significant importance to the redevelopment
27 of the Central City South Study Area, presently being pursued by
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28 Agency. Agency is convinced that a higher and more intensive use
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1 of this property will be of great benefit to the overall
c:; 2 development of the Central City South Study Area, and Agency
3 considers it of great importance that this site obe. freed up and
4 made available for such higher and more intensive use.
5 D. The Agency has offered to purchase from the Trust and
6 the Trust desires to sell to the Agency its interest in the "E"
7 Street site, referred to in Recital A above, and upon terms as
8 specified hereinafter.
9 E. The Agency originally offered to purchase the
10 Improvements from Harmon on the terms as specified hereinafter.
11 Harmon rejected the original offer of the Agency. Subsequently,
12 the Agency informed Harmon (i) of its decision to acquire the
13 Improvements for the use set forth in Recital C above, and (ii)
14 that the Agency will take all necessary steps required to condemn
the Improvements unless Harmon agrees to sell the Improvements to
the Agency. As a result of the Agency's threat of condemnation,
Harmon agrees to sell Improvements upon the terms as specified
hereinafter.
F. Harmon is also now willing to surrender to the City of
San Bernardino or assign to the Agency its interest in the lease
with the City of San Bernardino, whichever the Agency prefers,
upon Harmon's occupancy of two new sites to be obtained by Harmon
in the Orange Show Plaza Auto Center.
G. Harmon desires to obtain and develop two sites for
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~ dealerships in the Orange Show Plaza Auto Center, being
~ established in the Southeast Industrial Park Project Area, and
27 proposes to use funds provided by the Agency under this agreement
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28 to purchase the Auto Center sites.
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1 H. Harmon's relocation into two separate dealerships in the
2 Orange Show Plaza Auto Center will be of significant benefit to
3 the Agency and to the City of San Bernardino, and will help
4 assure the success of the Orange Show Plaza Auto Center.
5 I. Harmon represents that it is unable to relocate its
6 facility to the Orange Show Plaza Auto Center without funds made
7 available to it under this agreement.
8 J. Harmon also requires sewer capacity rights for the
9 development, which Agency is willing to sell to Harmon Motors
10 from its allotment.
11 K. The real property constituting the part of the "E"
12 Street site owned by the Trust is that property described in
13 Exhibit "A" attached hereto and incorporated herein by reference.
14 L. The real property constituting the part of the "E"
15 Street site owned by the City of San Bernardino and leased by
16 Harmon is that property described in Exhibit "B" attached hereto
17 and incorporated herein by reference.
18 IMPLEMENTATION
19 1. Harmon agrees to sell to Agency, and Agency agrees to
20 buy from Harmon, through escrow, the Improvements for the sum of
21 $350,000. Agency shall pay the entire $350,000 through escrow,
22 and shall receive from Harmon, through escrow, a bill of sale
23 conveying the Improvements to Agency free and clear of any and
24 all claims or liens.
25 ~ 2. Agency agrees to sell to Harmon those sewer capacity
26 rights required by Harmon for establishment of the two
27 dealerships in the Orange Show Plaza Auto Center, estimated at
28 4.72 equivalent dwelling units of sewer capacity rights for one
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1 dealership, and 3.83 equivalent dwelling units of sewer capacity
2 rights for the other dealership, comprising a total of 8.55
3 equivalent dwelling units of sewer capacity ri90tS. The price
4 for such rights is $19,323.00, based upon the rate of $2,260.00
5 per equivalent dwelling unit of capacity, that being the price
6 presently charged by the City for such rights as it has
7 available. Harmon agrees to buy such rights from the Agency.
8 The $19,323.00 for the 8.55 equivalent dwelling units of sewer
9 capacity rights shall be paid in cash by Harmon to Agency,
10 through escrow.
11 3. Harmon further agrees to provide the Agency, in a form
12 approved by Agency Counsel, evidence that it is cancelling its
13 lease(s) with the Trust and claims no further interest in the "E"
14 Street site. The Trust agrees to join with Harmon in providing
evidence that the leases are terminated, or assigned to Agency.
4. Harmon further agrees to assign to the Agency, any and
all right, title, or interest which Harmon may have in and to a
lease of certain property on the west side of "E" Street, north
of the westerly extension of Athol Street, which lease was
amended on the 20th day of December, 1984, extending the term for
a period of thirty (30) years ending December 31, 2014. Harmon
agrees to execute an assignment of all interest therein to the
Agency, in form approved by Agency Counsel. The Agency shall be
responsible for obtaining City's consent to such assignment.
Such document shall be delivered to Agency through the escrow
26 provided for hereinabove.
27 s. The parties acknowledge that Harmon may create one or
28 more entities separate from Roger Harmon Motors, Inc., to assume
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1 the ownership of the land, or the ownership and operation of the
2 dealerships, in the Orange Show Plaza Center or some combination
3 thereof. The parties agree that this Agreement'sball inure to
4 the benefit of any such separate entity or entities.
5 6. The Trust agrees to sell to the Agency, and the Agency
6 agrees to purchase from the Trust, through escrow, for the sum of
7 $850,000 the property described in Exhibit "A". Agency shall
8 deliver to the Trust, through escrow, the Agency's promissory
9 note in the sum of $850,000, bearing interest at the rate of
10 seven (7%) percent per annum, with interest only payable
11 quarterly commencing three months from the close of escrow~ the
12 entire principal sum, with interest, shall be payable in full at
13 the end of seven years from the date of close of escrow. The
14 note shall be secured by a trust deed on the property described
15 in Exhibit "A", or, at Agency's option, by other collateral
16 reasonably satisfactory to the Trust. Certificates of Deposit
17 issued by banks or other financial institutions insured by the
18 Federal Deposit Insurance Corporation or by the Federal Savings
19 and Loan Insurance Corporation, in a face amount at least equal
20 to the balance due, shall be deemed satisfactory collateral. The
21 promissory note shall be due and payable in full upon sale of the
22 property described in Exhibit "An, unless other collateral
23 reasonably satisfactory to the Trust shall have first been
24 substituted for the trust deed and provided that such sale or
25 substitution does not result in the interest which is payable to
26 the Trust being taxable for federal or California income tax
27 purposes. Agency covenants not to assign its rights or delegate
28 its duties under the promissory note, so that all payments on the
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note shall be paid by Agency. Such substitution may be made by
Agency at any time, including before close of escrow on this
transaction, or through close of escrow on any.subsequent sale of
such property by the Agency. The Trust shall deliver to Agency,
through escrow, a good and sufficient grant deed to the property,
together with a policy of title insurance issued by a title
company satisfactory to the Agency evidencing that the title
being conveyed is free and clear of all liens and encumbrances,
except for a property tax lien representing taxes which are not
yet due and payable and such other title exceptions such as which
do not impair the use or development of the property. At the
12 close of escrow, Timothy J. Sabo of Sabo and Deitch, the Agency's
13 bond counsel, shall also deliver his opinion, which the Trust may
rely on, that all interest paid by the Agency to the Trust shall
be exempt from federal and California income taxes.
7. Agency agrees to rent the premises described in Exhibit
"A", and the premises described in Exhibit "B", together with all
improvements, to Harmon from and after close of escrow for s~ch
reasonable period of time as is required by Harmon to enable
Harmon to complete its development of automobile dealerships upon
the Auto Center sites to be purchased by it through escrow
coincident with the escrows for this agreement. Harmon shall,
during the term of its occupancy under the terms of this
paragraph, pay to the Agency the same monthly rental as it
25 presently pays to the Trust under its lease(s). In no event
26 shall the tenancy under this paragraph continue for more than
27 twelve (12) months without the further express written agreement
28 of Agency and Harmon. Any extension of time beyond that shall be
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1 at a rental rate reasonable under the then-existing economic
2 circumstances, as the parties may determine. Nothing herein
3 shall prevent Agency from declaring a default i~ this rental
4 agreement in the event that Harmon fails to diligently pursue
5 completion of its development of the automobile dealerships upon
6 the Auto Center sites, but no such action shall be initiated
7 without at least thirty (30) days advance notice to Harmon, and
8 an opportunity to be heard.
9 8. This Agreement shall be effective only in the event that
10 it is executed by Harmon and returned to the Redevelopment Agency
11 of the City of San Bernardino within ten (10) days from the date
12 of receipt of this Agreement for execution by Harmon from the
13 Redevelopment Agency, and is also executed by the Trust and
14 returned to the Agency within ten days from the date of receipt
15 of this agreement for execution by the Trust.
16 9. All commitments and obligations set forth in this
17 Agreement are to take place and become effective upon close of
18 escrow. Escrow is to close on or before September 30, 1987, or
19 all rights and obligations under this Agreement shall be of no
20 further force or effect.
21 10. The parties hereto contemplate that all transactions
22 contemplated herein to be accomplished through escrow shall be
23 accomplished coincident with each other, and each is contingent
24 upon the other. Accordingly, the parties agree that unless (1)
25 purchase of two dealership sites in the Auto Center by Harmon,
26 (2) the purchase of the improvements by the Agency from Harmon,
27 (3) the purchase of the property described in Exhibit "An by the
28 Agency from the Trust, and (4) assignment of the lease relating
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to the property described in Exhibit "B", are all completed by or
before September 30, 1987, this agreement may be cancelled at the
request of any party hereto, and all parties ar. relieved
herefrom. Further, the Agency's payment of $350,000 to Harmon
shall be made through escrow, with Harmon paying over that
$350,000 through escrow to the Auto Center as part of its
purchase price of property from the Auto Center.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
ROGER HARMON MOTORS, INC.
By
By
Chairman
President
By
By
Secretary
HARMON FAMILY TRUST
Approved as to form:
AGENCY COUNSEL
By
By 12;.1.... -ff ~
Allen R. Briggs
TRUSTEE
By
Its
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EXHIBIT A
That certain piece of land situate in the City of San Bernardino,
COunty of San Bernardino, State of California, described as follows:
A portion of Lots 3 and 4, Block 11, Five Acre Survey of Rancho
San Bernara..described as commencing at the southeast corner of said
Lot 4 on the westerly line of "E" Street, which street is 82.5 feet
wide; thence westerly along the southerly line of said Lot 4 to a
point on the easterly right of way line of Southern Pacific Railway
Company; thence northerly along said easterly right of way line a
distance of 359.7 feet; thence easterly parallel to the . southerly
line of said Lot 3 to a point on the westerly line of "E" Streetl
thence southerly along said westerly line of "E" Street to the point
of beginning, containing 101075.7 square feet.
AND ALSO
That certain piece of land situate in the City of San Bernardino,
County of San Bernardino, State of California, described as follows:
That property commonly known as 280 South "E" Street, San
Bernardino, California, described as the North 150 feet of the East
281 feet of Lot 5, Block 11, Rancho San Bernar~~as per plat recorded
in Book 7 of Haps, Page 2, records of said County.
The foregoing descriptions are subject to verification upon receipt
of title reports, but are intended to describe those portions of
property on South E Street in San Bernardino now occupied by Harmon
Motors which are owned by the Harmon Family Trust.
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EXHIBIT B
All that portion of Lots 3 and 4, Block 11, of the PIVE ACRE SURVEY
OF THE RANCHO SAN BERNARDINO in the City of San Bernardino, County
of San Bernardino, State of California, as per plat recorded in
Book 7 of Maps, page 2, in the office of ~~e County Recorder of
said County, described as follows:
BEGINNING at a point 3411.7 feet North of the Southeast corner of said
Lot 4, said point being the Ilortheast corner Df that certain parcel of
land deeded to GeDrge Herz and wife, by deed recorded in Eook 889 of
Qeeds, page 341, records of said County; thence West alDng the NOI'th
line of land conveyed to Herz 281 fe:-!t to the East 1 ille of the
right of way conveyed to the SDllthern Pacific Railroad Company by
deed recorded in BDOk 335 of Deed~, page 98, records of said COlmty;
thence Wortl; along the East line of said right of way, 115 feet;
thence Eas~ parallel \~ith the South line of s~id LDt 4, 231 feet to
"E" Street; thence South alDng "E" Street ll!i feet to the point of
beginning.
EXCEPT the SDuth 15 feet.