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HomeMy WebLinkAbout2/19/2014 - STAFF REPORTS - 2.K. *9ALMg iO A'Pi O CITY COUNCIL STAFF * C�f�RONPTF� p' �~ q<<FOR % REPORT DATE: February 19, 2014 CONSENT CALENDAR SUBJECT: AMENDMENT NO. 1 TO PURCHASE AND SALE OF REAL PROPERTY (A4502) WITH THOMAS A. AND EILEEN C. ADAMO, GRANTING THE NON-EXCLUSIVE USE OF TWELVE (12) PARKING SPACES IN THE DOWNTOWN PARKING STRUCTURE ON SOUTH INDIAN CANYON DRIVE BY ON BEHALF OF FISHERMAN'S GRILL AND BAR, 243 SOUTH INDIAN CANYON DRIVE FROM: David H. Ready, City Manager BY: Community & Economic Development Department SUMMARY It is recommended that the City Council approve Amendment No. 1 to a Purchase and Sale Agreement dated June, 2002 with Thomas A. and Eileen C. Adamo ("Owners"), to grant the non-exclusive use of twelve (12) parking spaces on the top level of the Downtown Parking Structure by Fisherman's Grill and Bar for the purpose of satisfying the off-street parking requirements for the restaurant. As part of the development of the Parking Structure, the Purchase and Sale Agreement was the agreement that contained the City's commitment to the Owners for restricted parking spaces in or near the structure. The Owners of the property have a longer history with the continued development of the Fisherman's property and the repurchase of a portion of the land that was acquired from them through the use of eminent domain. RECOMMENDATION: 1. APPROVE AMENDMENT NO. 1 TO PURCHASE AND SALE OF REAL PROPERTY (A4502) WITH THOMAS A. AND EILEEN C. ADAMO, GRANTING THE NON-EXCLUSIVE USE OF TWELVE (12) PARKING SPACES IN THE DOWNTOWN PARKING STRUCTURE ON SOUTH INDIAN CANYON DRIVE BY ON BEHALF OF FISHERMAN'S GRILL AND BAR, 243 SOUTH INDIAN CANYON DRIVE 2. Authorize the City Manager or his designee to execute all necessary documents. ITEM NO. City Council Staff Report (February 19, 2014)-- Page 2 (Fisherman's/Adamo Parking Spaces) BACKGROUND: The Owners were the previous owners of property at 249 South Indian Canyon Drive when the City acquired the property in 2001 for the purpose of constructing the Downtown Parking Structure. The property held a number of land uses — apartments, retail, and a Saloon — and was acquired using eminent domain. As part of the agreement — as it was with the other property owners that contributed property to the project — the property owners received dedicated parking spaces in the structure or the adjacent surface lots in proportion to the value of their property and previous in-lieu parking fees paid on their contributed properties. Section 4.2 of the Purchase and Sale Agreement states that in consideration for the Assessment and for the Parcel, the Aloe People Property and the Fisherman's Property will be provided with sixteen (16) reserved parking spaces, which are to be provided on the City's surface parking lot adjacent to the Fisherman's Property, as depicted in "Parking Restriction Plan," (Exhibit D). The Amendment would add "and twelve (12) unreserved parking spaces on the upper level of the parking structure." In 2003, the Owners reacquired 550 square feet of property that was purchased by the City as part of the acquisition for the structure. Once the structure was completed and there was no public use for the parcel, it created a problem by being a small, isolated "no man's land" tucked away from the street. The City appraised the property and determined a value of $13,600. However, the property was part of the underlying security for the bond issue that financed the parking structure, which meant all the underlying bond sale documents needed to be amended as part of the transaction. The City of Palm Springs Financing Authority ("Authority") and the City of Palm Springs ("City") entered into a Lease Agreement, dated as of August 1, 2002 ("Lease Agreement") relating to the Downtown Parking Structure and which secures the debt incurred by the City to pay the acquisition and construction costs. Under Section 16 of the Lease (between the City and Financing Authority), property covered by the Lease may be released from such coverage upon certain actions being taken to the satisfaction of the Letter of Credit Bank and the Confirming Letter of Credit, which required the Amendment No. 1 to the Lease ("Lease Amendment No. V) to be approved, as well as an amendment to the Assignment Agreement between the Authority and BNY Western Trust Company; the City also needed to provide an executed Certificate of the City Representative ("Certificate"), plus obtain an executed Consent and Waiver executed by the Letter of Credit Bank, and the Confirming Letter of Credit Bank ("Consent and Waiver"); and, the City was required to provide an opinion of special counsel stating that such amendment or modification (1) is authorized or permitted by the Constitution and laws of the State and by the Lease; (2) complies with the terms of the Constitution and laws of the State and of the Lease; (3) will, upon the execution and delivery thereof, be valid and binding upon the Authority and the City in accordance with its terms; and (4) will not cause the interest component of the Base 02 City Council Staff Report (February 19, 2014) -- Page 3 (Fisherman's/Adamo Parking Spaces) Rental payments to be included in gross income for federal income tax purposes ("Legal Opinion") before the property may be released. The City agreed to sell and release the 550 square foot portion of the Property to the Owners for $13,600. The Owners also were required to pay the legal fees required to prepare the documents described above; because of the special nature of the legal work, the legal costs were approximately equal to the fair market value of the land. The Parcel was "exempt surplus land" pursuant to Government Code Section 54221(e)(2) because the Release Parcel was less than 5,000 square feet in area and because the Release Parcel was sold to the owner of contiguous land. As part of the transaction, the Owners also received from the City a Grant of Easement for ingress and egress over and across certain real property retained by the City to be able to access to area, which was behind Fisherman's Grill and adjacent to the parking structure. Over the past decade, that area has not been developed, in part due to the proximity of the shared downtown trash enclosure and several grease traps located in the parking lot just to the west, which have been problematic in terms of odors. In 2007, the former Community Redevelopment Agency undertook a major reconstruction of the trash enclosure, fully enclosing it with rollup doors and converting the bin service to compactor service. A more regular cleanup schedule of the enclosure, as enforced by the City's franchise solid waste hauler, has helped as well. Finally, implementation of the City's Fats, Oils, and Grease (FOG) ordinance by the City's Wastewater operator has assisted in controlling the odor emanating from some of the grease traps as they have pushed for more frequent pumping by the responsible restaurants. On May 24, 2012, Fisherman's was granted a Land Use Permit (LUP) by the Director of Planning for the full 146 seat restaurant (76 indoor seats and 70 outdoor seats), plus outdoor entertainment. The LUP acknowledges that Fisherman's was granted 16 parking spaces in the surface lot and 6 spaces on the top level of the parking structure. In May, 2013, the applicant received a Land Use Permit to add the former Aloe People retail space to the operation and finally build out the 550 square foot "Release Parcel" with a stage and a dance floor, removing the current wall at the rear of the patio and connecting the outdoor space in the middle of the buildings. The full seat count would be 196 (76 indoor seats and 120 outdoor seats). As part of the approval of the project, however, Planning recalculated the required parking for the business and the property is now short six (6) parking spaces, largely due to the intensification of the land use in the conversion of Aloe People (retail) to restaurant seating, as well as the additional outdoor seating from the use of the rear parcel. The Owner would be eligible to pay in In-Lieu Parking fee of$12,870, which has been deferred for the past year. The payment of the fee must me made prior to the issuance of a building permit for the expanded patio space, per Section 93.06.00.B.8 of the Zoning Code, unless otherwise approved by the City. The Owner has asked that, rather than pay the in-lieu fee, the Co 3 City Council Staff Report (February 19, 2014) -- Page 4 (Fisherman's/Adamo Parking Spaces) City consider amending the original parking agreement to grant the 6 additional spaces at the top level of the parking structure, in light of the additional legal fees paid as part of the acquisition of the 550 square feet back from the City after it was acquired through eminent domain due to the complexity of the bond financing. FISCAL IMPACT: The in-lieu parking fee due is $12,870, which would be waived through the granting of the additional spaces in the parking garage. However, the improvements to the property, which are now stalled over the parking issue, will drive additional building permit fees and the addition of 50 additional outdoor seats plus a stage should help grow the business, leading to additional sales tax to the City. "Rand Director David H. Ready, Cit r Attachment: Amendment No. 1 to a Purchase and Sale Agreement (A4502) 04 Recording Requested by and ) When Recorded Return to: ) City of Palm Springs ) 3200 Tahquitz Canyon Way ) Palm Springs, CA 92262 ) Exempt from Recording Fees Gov. Code § 27383 AMENDMENT NO. 1 TO A PURCHASE AND SALE AGREEMENT between CITY OF PALM SPRINGS, a municipal corporation, and THOMAS A. AND EILEEN C. ADAMO i� 5 AMENDMENT NO. 1 TO A PURCHASE AND SALE AGREEMENT This AMENDMENT NO. 1 TO A PURCHASE AND SALE AGREEMENT (the "Amendment") is entered into by and between the CITY OF PALM SPRINGS, a municipal corporation (the "City") and Thomas A. and Eileen C. Adamo ("Owners"). The City and the Owner are sometimes referred to herein, individually, as "Party" and, collectively, as "Parties". This Amendment shall become effective on the date that all of the following are true (1) it has been approved by the City Council and executed by City; and (2) it has been duly recorded in Official Records of Riverside County, California. RECITALS A. On or around June 3, 2002, the Parties approved a Purchase and Sale Agreement ("Agreement") for the purpose of facilitating the construction of a public Downtown Parking Structure. The Property was acquired using eminent domain. B. Section 4.2 of the Agreement provides that the Owners receive sixteen (16) reserved parking spaces the adjacent surface lots in proportion to the value of their property and previous in-lieu parking fees paid on their contributed properties, lot adjacent to the Fisherman's Property, as depicted in the "Parking Restriction Plan." C. Purchase and Sale Agreement states that in consideration for the Assessment and for the Parcel, the Aloe People Property and the Fisherman's Property will be provided with sixteen (16) reserved parking spaces, which are to be provided on the City's surface parking lot adjacent to the Fisherman's Property, as depicted in "Parking Restriction Plan," (Exhibit D). D. In 2003, the Owners reacquired 550 square feet of property that was purchased by the City as part of the acquisition for the structure at the appraised value of$13,600. E. In addition to the appraised value for the parcel, the Owners also were required to pay the legal fees required to prepare the documents described above; because of the special nature of the legal work because the property was part of the underlying security for the bond issue that financed the parking structure, which meant all the underlying bond sale documents needed to be amended as part of the transaction, the legal costs were approximately equal to the fair market value of the land, in excess of the normal repurchase provision included in eminent domain actions. F. On May 24, 2012, Fisherman's was granted a Land Use Permit (LUP) by the Director of Planning for the full 146 seat restaurant (76 indoor seats and 70 outdoor seats), plus outdoor entertainment. The LUP acknowledges that Fisherman's was granted 16 parking spaces in the surface lot and 6 spaces on the top level of the parking structure. G. In May, 2013, the applicant received a Land Use Permit to add the former Aloe People retail space to the operation and finally build out the 550 square foot 2 is "Release Parcel" with a stage and a dance floor, removing the current wall at the rear of the patio and connecting the outdoor space in the middle of the buildings. The full seat count would be 196 (76 indoor seats and 120 outdoor seats). This action requires and additional six (6) off-street parking spaces. H. The payment of an in-lieu parking fee must me made prior to the issuance of a building permit for the expanded patio space, per Section 93.06.00.13.8 of the Zoning Code, unless otherwise approved by the City. I. The Parties therefore desire to Amendment the Purchase and Sale Agreement to add "twelve (12) unreserved parking spaces on the upper level of the parking structure." NOW, THEREFORE, IT IS HEREBY AGREED by the Parties hereto: 1 . The Parties hereby agree that the above recitals are true and correct and such recitals are incorporated herein as if rewritten. 2. Section 4.2 of the Agreement is modified to read as follows: 4.2 Specific Allotment of Reserved Parking to Seller's Property. In consideration for the Assessment and for the Parcel, the Fisherman's Property, including the former Aloe People Property and the 550 square foot "Release Parcel" acquired from the City on July 30, 2003, will be provided with sixteen (16) reserved parking spaces, which are to be provided on the City's surface parking lot adjacent to the Fisherman's Property, and the non-exclusive use of twelve (12) parking spaces on the top level of the Downtown Parking Structure as depicted in "Parking Restriction Plan," (Exhibit D). IN WITNESS HEREOF, the Parties have executed this Agreement on the date(s) set forth below. [Signatures on following pages] 07 3 "CITY" "OWNER" CITY OF PALM SPRINGS, a municipal THOMAS A. ADAMO AND corporation EILEEN C. ADAMO By: By: David H. Ready Thomas A. Adamo City Manager Date: Date: ATTEST: By: City Clerk Eileen C. Adamo APPROVED AS TO LEGAL FORM: Date: City Attorney n 4 08 EXHIBIT "A" TO AMENDMENT NO. 1 TO A PURCHASE AND SALE AGREEMENT LEGAL DESCRIPTION OF PROPERTY 09