HomeMy WebLinkAbout18428 - RESOLUTIONS - 7/6/1994 RESOLUTION NO. 18428
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, RESPECTFULLY
REQUESTING THE FEDERAL GOVERNMENT, BY
AND THROUGH ITS FEDERAL AVIATION
ADMINISTRATION, RELEASE CERTAIN PROPERTY
' FROM RESTRICTIONS, SAID RESTRICTIONS
BEING SET FORTH IN A QUITCLAIM DEED FROM
THE UNITED STATES OF AMERICA, TO THE CITY
OF PALM SPRINGS, DATED SEPTEMBER 15,
1949.
WHEREAS heretofore and on the 1 5th day of September, 1949, the United States of America
granted to the City of Palm Springs, California, a one hundred (100) acre tract of land in
Section Thirteen (13), Township Four (4) South, Range Four (4) East, SBB&M, within the city
limits of said City; and
WHEREAS the said grant was in the form of a quitclaim deed, said quitclaim deed containing
various restrictive clauses concerning all of the hundred acres; and
WHEREAS the City and the Palm Springs Regional Airport, on 11 .8816 acres of the
quitclaimed property, in 1963 developed a centralized joint use maintenance facility, with the
Airport providing the land and the City providing the capital development; and
WHEREAS in 1992 the Department of Transportation Office of Inspector General (DOTIG)
conducted an audit of the Federal Aviation Administration's oversight of Palm Springs
Regional Airport (Audit #R9-FA-3-061) and found that fair market value rental was not being
paid by the City to the Airport for the use of 11 .8816 acres of Airport property; and
WHEREAS the City Council has developed a paper entitled "Palm Springs City Yard," dated
June 15, 1994, and attached as Exhibit "A" to this Resolution, which outlines the history of
the joint use maintenance facility called the City Yard. Further, it outlines the compensation
received by the Airport over the last 30 years for the use of the property; and
WHEREAS the "Palm Springs City Yard" report proposes a donation of land from the City to
the Airport in exchange for release of the 11 .8816 acres for use as a City/Airport joint use
maintenance facility in perpetuity; and
WHEREAS the "Palm Springs City Yard" report property exchange has been developed based
upon an appraisal report prepared by Hilliard, Lipman & Associates, Inc., incorporated hereby
by reference, for the City, 9.39 acres and based upon an appraisal report prepared by Dozier
Appraisal Company, incorporated hereby by reference, for the Airport's 11 .8816 acres,
NOW THEREFORE BE IT RESOLVED AS FOLLOWS:
Section 1 . That the City Council of the City of Palm Springs, California, seeks
Federal Aviation Administration concurrence with the "Avoided
Investment Partnership" employed by the Airport in partnership with the
City to develop a maintenance facility to serve the Airport and the City,
as outlined in Exhibit "A" to this Resolution, as proper compensation to
the Airport for use of the 11 .8816 acres from 1963 to the date of
release from deed restrictions by Federal Aviation Administration.
Section 2. That the City Council of the City of Palm Springs, California, seeks full
release from all quitclaim deed restrictions, including an agreement that
no further compensation would be due the Airport, for the 11 .8816
acres described as: 6 n 1
R18428
Page 2
"These certain portions of Section 13, Township 4 South, Range 4 East,
San Bernardino Base and Meridian, in the City of Palm Springs, County
of Riverside, State of California, being mote particularly described as
follows:
Commencing at the Northeast corner of said Sec'tiion 13, thence
along the northerly line of Section 13, South 89148'00" West a
distance of 1,470.10 feet; thence South 00"06'44" West a distance of '
1,079.51 feet; thence North 89'53'16" West a distance of 25.00 feet
to a point on the westerly right-of-way of Civic Road, said point also
being the: TRUE POINT OF BEGINNING; thence North 8916" West a
distance of 498.05 feet to a point on the easterly right-of-way of
Juanita Drive; thence along said easterly right-of-way North 0004" East
a distance of 1 ,036.65 feet to a point on the southerly night-of-way of
Alejo Road; thence along said southerly right-of-way North 89°48'00"
East a distance of 499.17 feet to a point on said westerly right-of-way
of Civic Drive; thence along said westerly right-of-way South
00006'44" West a distance of 1 ,039.27 feet to the TRUE POINT OF
BEGINNING. Said parcel containing 11 .8816 acres. Basis of bearing is
the northerly line of the East 1/2 of said 'Section 13 bearing, North
89148'00" East." Said acreage as depicted on Exhibit "B" to this
Resolution.
Said release would be in exchange for 9.39 acres of City land being
deeded to the Airport. Said 9.39 acres is in the future Runway
Protection Zone as depicted in the Airport's new Master Plan, shown on
Exhibit "C" to this Resolution.
Section 3. That the City Council of the City of Palm Springs, California, covenants
that said 11 .8816 acres shall be utilized for a joint use (Airport and City) '
maintenance yard for so long as the Airport shall be in operation,
provided that the City shall have the right to substitute an alternate joint
use maintenance yard, which will provide equal maintenance service.
Section 4. That the Director of ,Aviation is authorized to submit this Resolution to
the Federal Aviation Administration as well as all necessary appraisals.
ADOPTED this 6th day of July , 1994.
AYES: Members Hodges, Kleindienst, Reller-Spurgin and Mayor Maryanov
NOES: None
ABSENT: Member Lyons --�
ATTEST: C �`( LM SP G , C/ LIFORNIA
B �(
Y
( City Clerk y Manager
_i
REVIEWED & Approved:
.�I
1
EXHIBIT "A" TO RESOLUTION NO. 18428
PALM SPRINGS CITY YARD
' The Palm Springs City Yard, the City and Airport maintenance facility, is located on the
southwest corner of Alejo Road and North Civic Drive. The legal description of the property
utilized for the facility is:
"These certain portions of Section 13, Township 4 South, Range
4 East, San Bernardino Base and Meridian, in the City of Palm
Springs, County of Riverside, State of California, being more
particularly described as follows:
Commencing at the Northeast corner of said Section 13,
thence along the northerly line of Section 13, South 89°48'00"
West a distance of 1,470.10 feet; thence South 00006'44"
West a distance of 1 ,079.51 feet; thence North 89053'16"
West a distance of 25.00 feet to a point on the westerly right-of-
way of Civic Road, said point also being the TRUE POINT OF
BEGINNING;thence North 8916"West a distance of 498.05 feet
to a point on the easterly right-of-way of Juanita Drive; thence
along said easterly right-of-way North 0004" East a distance of
1,036.65 feet to a point on the southerly right-of-way of Alejo
Road; thence along said southerly right-of-way North 89148'00"
East a distance of 499.17 feet to a distance of 499.17 feet to a
point on said westerly right-of-way of Civic Drive; thence along
said westerly right-of-way South 00°06'44" West a distance of
1,039.27 feet to the TRUE POINT OF BEGINNING. Said parcel
containing 1 1 .8816 acres. Basis of bearing is the northerly line
of the East 1/2 of said Section 13 bearing, North 89148'00"
East."
The property is a portion of the 140 acres of federal surplus property quit claimed to the City
of Palm Springs for Airport purposes in 1949.
Department of Transportation Office of Inspector General (DOTIG) Audit #R9-FA-3-061
reported the City Yard to be 18 acres. The attached drawing, Exhibit I, indicates the location
of the City Yard ("Corporate Yard") as the westerly 2/3 of lot 3. After subtracting the width
of necessary street improvements for access to the-Airport rental car agencies and the width
of a landscape noise buffer, the usable area is approximately 499 feet by 1036 feet, or 11 .88
acres.
The City Yard provides the following services to the City and the Airport:
■ Vehicle Maintenance ■ Fueling Facility
■ Pavement Maintenance ■ Building Maintenance
■ Landscape Maintenance ■ Waste Collection
■ Purchasing/Warehouse ■ Emergency Supply Depot
If the facility did not exist, the Airport would have to undertake the necessary capital program
to provide some of the facilities for itself. The City of Palm Springs has completed all of the
improvements on the facility, at their cost, with no Airport capital contribution. Dozier
Appraisal Company, in December of 1993, completed an appraisal assignment on the subject
property and found the replacement cost value of the improvements to be $2,704,000 with
a land value of $1,523,000.
In 1963, the City and the Airport both needed to develop a centralized maintenance facility.
When an airport is faced with the need to develop such a facility, a capital project is
//
Exhibit "A" Page 1 of 4 lo2
�6q
undertaken. In this instance, rather than floating a bond to finance the improvement, the
Airport found a partner, the City. The Airport came to the table with land and the City came
with the funds for the development of the facility.
Had the Airport undertaken the development of its own multi-purpose maintenance facility,
it certainly would not have been as large as what was built; however, by the time design
costs are combined with construction, a maintenance facility project of $376,000 could have
occurred. A bond issue to cover the construction, by the time insurance, debt service ,
reserves, and pre-funded interest were included, would be close to $475,000. Annual debt
service would run approximately $47,500. Rather than taking this approach, the Airport
provided the land and let the City proceed. Not only did the Airport avoid expending $47,500
per year, but, the action allowed for that $47,500 to be spent on some other Airport project.
The City Yard development program is worth $95,000 per year to the Airport and over a 30
year period, without interest, the Airport has had $2,850,000 more: to work with for needed
Airport projects. Vacant land was leveraged to provide needed services for the Airport
without negatively impacting cash flow.
The DOTIG audit points out that the Airport is losing approximately $322,000 annually in fair
market rental value. That was based upon an erroneous assumption that the Yard occupied
18 acres instead of the actual 11 .8816 acres it occupies. Using the IG's valuation
methodology, on the reduced acreage, one comes to an approximate $212,538 rental value.
The Dozier Appraisal found the, raw land to be worth $1,523,000 and established a fair
market rental value at $152,300 per annurn.
The leases that occurred in 1963 were based on 8% capitalization rate which means the
current full fair market value based on the Dozier appraised land value should be closer to
$1 21,840. If a lease had occurred in '1963, the Airport has an appraisal of like property that
established value at $37,500 per acre. The City Yard site would have been worth $445,560
or an annual lease of $35,644. Our standard lease would increase: rental every 5 years per
CPI, not to exceed 25%. Between 1963 and 1993, there would be 6 increases which, if '
assumed at an average of 23% every 5 years, would mean a 1380/6 increase, or rent in 1993
of $123,428 (see Exhibit II). Total rental for the 30 years would be $2,031,797, which is
approximately $820,000 less than the Airport had available due to the avoided investment
partnership developed with the City. The "avoided investment" partnership outlined above
and the savings that accrued to the Airport is adequate to more than fully compensate the
Airport, during the past 30 years; however, that does not provide for the unrestricted use of
the acreage forever. To complete the compensation package, the: City is prepared to deed
9.39 acres of recently purchased acreage, on Vista Chino and Cerritos, to the Airport and to
guarantee the allowance for Airport maintenance functions to always occur on the City Yard
site. The 9.39 acre site is presently being utilized as a flood retention basin. The subject
property is heavily impacted by the future runway protection zone of the Airport and the
property is shown on the new Master Plan as something to be acquired. On January 25,
1991 , an appraisal of the acreage was provided by Lipman Stevens & Marshall, Inc., and the
value was placed at $716,000.
Combining the $716,000 of value for the 9.39 acre site, plus the $820,000 of extra value
afforded the Airport over the last 30 years from its partnership arrangement with the City,
provides a total of $1 ,536,000 compensation to the Airport for release of the City Yard site
valued at $1,523,000.
Based on the above package, the sponsor, City of Palm Springs, seeks the full release of
property from all restrictions.
R18428
Exhitit "A" Page 2 of 4
EXHIBIT I
AIRPORT LAND TRANSACTIONS
1 '
O O 1 1961
General Obligation Bond Issue
CORPORATE
land purchase.
/
YARD ��
I
CITY HALL
1 i
140 Acres Quit Claimed in 1949.
® �9 SEWER
/ PLANT
NOT ,,SCALE
R18428
Exhibit "A" Page 3 of 4
46(0
EXHIBIT II
CITY OF PALM SPRINGS
CORPORATE YARD
COMPARATIVE YEARLY RENTAL
YEAR YEARLY RENTAL ACCUM. ,
RENTAL INCREASE RENTAL
1963 $35,644.00 $35,644.00
1964 $35,644.00 $71,288.00
1965 $35,644.00 $106,932.00
1966 $35,644.00 $142,576.0111
1967 $35,644.00 $8,198.12 $178,220.00
1968 $43,642.12 $222,062.14
1969 $43,842.12 $265,904.24
1970 $43,842.12 $309,746.36
1971 $43,842.12 $353,588.48
1972 $43,842.12 $10,083.69 $397,430.61:1
1973 $53.925.81 $451,356.41
1974 $53,925.81 $505,282.22
1975 $53.925.81 $559,208.02
19-16 $53,925.81 $613,133.83
1977 $53.925.81 $12,402.94 $667,059.641
1978 $66,328.74 $733,388.38
1979 $66,328.74 $799,717.1 Z
1980 $66,328.74 $866,045.82'
1981 $66,328.74 $932,374.61
1982 $66,323.74 $15,255.61 $998,703.315
1983 $81,584.35 $1,080,287.71
1984 $81.584.35 $1,161,872.05 '
1985 $81,584.35 $1,243,456.4-2
1986 $81,584.35 $1,325,040.77
1987 $81,584.35 $18,764.40 $1.406,625.13
1988 $100,348.76 $1,506,973.88
1989 $100,348.76 $1,607,322.64
1990 $100,348.76 $1,707,671.39
1991 $100,348.76 $1,806,020.15
1992 $100,346.76 $23,080.21 $1,908,368.91
1993 $123,428.97 $2,031,797.80
NOTE: Rental Increase based upon 23%CPI
Increase every five years beginning In 1968.
R18428
Exhibit "A" Page 4 of 4
EXHIBIT "B" TO RESOLUTION NO. _18428
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Exhibit "B" Page 1 of 1
EXHIBIT I]C" TO RESOLUTION NO. 18428
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