HomeMy WebLinkAbout11/17/1999 - STAFF REPORTS (3) Ld
DATE: NOVEMBER 17, 1999
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM DIRECTOR OF MANAGEMENT&BUDGET
APPROVAL OF AN ESCROW ASSIGNMENT AGREEMENT WITH LUNDIN
DEVELOPMENT COMPANY RELATING TO AGENCY PURCHASE OF A PARCEL AT
THE NORTHWEST CORNER OF SUNRISE WAY AND RAMON ROAD
RECOMMENDATION:
It is recommended that the Agency approve the Escrow Assignment Agreement with
Lundin Development Company for the acquisition of a 13,000 s f.parcel,known as the
Shell Station,at the comer of Sunrise Way and Ramon Road
BACKGROUND:
In April,Lundin Development Company("Lundin")requested Agency assistance in
the redevelopment of the shopping center at the northwest corner of Sunrise Way and
Ramon Road. They have an agreement with Ralphs Grocery Company,the major
tenant in the center,to acquire the center and the adjacent parcels to the west and
build a new center that can accommodate a new 50,000±s.f.Ralphs Grocery.
The Agency approved an Exclusive Agreement to Negotiate with Lundin on June 16,
1999 for the entire site,including the shopping center, the Desert Water Agency
parcel, the Riverside County Flood Control parcel,the adjacent 5-acre parcel, and the
Shell service station. In September the Shell station closed and Shell, through its real
estate subsidiary Equiva Services,LLC, put the station up for sale. Agency staff urged
Lundin to acquire the property, even though a final DDA has not been negotiated,
because Equiva has a need to complete the sale by December 31, and there was
another buyer overbidding on the property. Were the other buyer to acquire the Shell
property, the entire project would be jeopardized, and the Agency probably would
then have been asked to consider condemnation on the Shell station.
While the Agency desires to acquire this parcel at this time,but does not have the
$400,000 in cash on hand, Lundin will lend the funds to the Agency for the purchase
through a non-recourse note secured by the property. Lundin has opened escrow for
this acquisition which now is being transferred to the Agency via this Agreement. The
subject Agreement is the first of a number of documents which will be brought to the
Agency to consummate the purchase transaction. If the project does not move
forward,the Agency can choose to either pay off the note and retain the property or
allow it to go back to Lundin.
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J YMO
irecto of t&Bud et
APPROVED /� .�
- J Executive Director
ATTACHMENTS: _
1. Resolution
2. Assignment Agreement-to be provided
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS,
CALIFORNIA, APPROVING AN ASSIGNMENT
AGREEMENT WITH LUNDIN DEVELOPMENT
COMPANY OF HUNTINGTON BEACH,
CALIFORNIA FOR THE ACQUISITION OF A
PARCEL IN THE BARISTO-FARRELL
REDEVELOPMENT PROJECT AREA(AREA#8)
WHEREAS the Community Redevelopment Agency is responsible for eliminating blight
within the Baristo-Farrell Redevelopment Project Area; and
WHEREAS a deteriorated neighborhood shopping center, with a low level of maintenance
and high vacancy rate, is located in the project area;and
WHEREAS the Agency has entered into an Exclusive Agreement to Negotiate with Lundin
Development Company of Huntington Beach("Lundin")on four parcels adjacent to the
shopping center while they negotiate to assemble the project parcels;and
WHEREAS one of the adjacent parcels,the Shell station, is available for sale and Lundin
needs the Agency to purchase the property for the project;and
WHEREAS the Agency desires to purchase the property for the project but does not have the
available cash for the project; and
WHEREAS Lundin has agreed to lend the funds to the Agency for this purchase, using a
non-recourse note secured by the property; and
WHEREAS the escrow opened by Lundin for this acquisition is being assigned to the Agency
by the subject Assignment Agreement.
NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of the
City of Palm Springs,that the Assignment Agreement between the Agency and Lundin
Development Company, in a form approved by the Agency Counsel, is hereby approved.
ADOPTED this day of 19
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary _
REVIEWED&APPROVED AS TO FORM C�� Z
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