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HomeMy WebLinkAbout2/2/2005 - STAFF REPORTS (2) DATE: FEBRUARY 2, 2005 TO: COMMUNITY REDEVELOPMENT AGENCY FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT APPROVAL OF A MEMORANDUM OF UNDERSTANDING WITH MILDRED BROWNE REGARDING THE EXCHANGE OF A 4.96 ACRE AGENCY-OWNED PARCEL AT THE NORTHWEST CORNER OF SUNRISE WAY AND TAHQUITZ CANYON WAY FOR A 7.9 ACRE PARCEL WEST OF BMW OF PALM SPRINGS. RECOMMENDATION: It is recommended that the Agency approve a Memorandum of Understanding with Mildred Browne, allottee, regarding the terms of an exchange of a 4.96 acre Agency- owned parcel for a 7.9 acre allottee parcel on East Palm Canyon Drive. SUMMARY: This Agreement facilitates the exchange by the Agency of a 4.96 (gross) acre parcel at the northwest cornerof Sunrise Way and Tahquitz Canyon Wayfora parcel on East Palm Canyon Drive. The Agency has applied the Bureau of Indian Affairs (BIA)for a Fee to Trust Transfer;simultaneously,the owner's representative of the 7.9 acre parcel on East Palm Canyon Drive has applied to the BIA for a Trust to Fee Transfer to effectuate a swap of the two parcels. It is advantageous to process the two transactions as an exchange through the BIA, though the problem is that the Fee to Trust transfer has more notices required and therefore takes longer. The purpose of this MOU is for the Agency and the allottee to acknowledge that the transactions,taken together,constitute an exchange while,at the same time,the Trust to Fee transfer(our acquiring the parcel on behalf of BMW)could close sooner. This should reduce further delay in the BMW expansion project. BACKGROUND: The Agency has had a long-term interest in assisting VIP Motors (Palm Springs Mercedes, Infiniti and BMW) in improving its business. BMW corporate anticipates that within five years VIP's BMW sales will increase significantly. The dealership anticipates a more conservative growth, but still assumes an increase within that period of time. They were required to identify by the end of 2004 the location where they will build a new facility by 2007. They need adequate land for a building of approximately 20,000-25,000 square feet, plus 20 service bays. Over the past few years, the Agency has looked at a number of options for helping VIP expand. After considering several other locations in the vicinity,the parcel that works the best is the adjacent Indian-owned parcel to the west of BMW. In May, 2003 the Agency expressed its intent to Ernest Noia to facilitate a trade of his client's parcel for a fee simple piece elsewhere in the City. This is the best possible site for the BMW expansion, but in order to qualify for BMW's below-market financing the dealer would need to own the parcel fee simple, and not be in an Indian lease. The Agency has therefore proceeded for about the past 18 months on the land swap. In September, 2003, the Agency appraised a gross 4.96 (net 3.74) acre parcel in Section 14, at the northwest corner of Sunrise and Tahquitz, and started V negotiating with the owner(H & H Investments, LLC)to purchase the property(the H & H Parcel). The Agency's intent was to acquire the H & H parcel and swap parcels with the Indian owner of the parcel adjacent to BMW. The developer acquired the parcel to develop a Vons-anchored shopping center. Our September 2003 appraisal, conducted by Lidgard &Associates of Orange, estimated a value of$2,575,000 for the parcel. The owner of the property was willing to accommodate the Agency's desire to acquire the parcel in order to swap, provided: (1) he still be able to develop a shopping center there, (2) he receives the appraised value, and (3)we can acquire it under threat of condemnation. The Agency used part of its 2004 bond"refinancing proceeds to facilitate this swap: acquiring this parcel and processing the fee-to-trust transfer through the BIA as the fee owner. Having the City/Agency as the applicant/proponent will speed things up since a big factor in the fee-to-trust transfer is getting other governmental approvals (city, county, state). Simultaneously, Noia has requested through the BIA a swap of the Mildred Browne parcel and the Agency parcel. As a public agency, we hope to receive expedited processing through the BIA, which needs to approve the transaction (taking the Browne parcel out of Trust); the Tribe needs to waive its right of option to acquire the Browne parcel out of trust. The BIA completed the appraisal on the Browne parcel, and the Agency also hired John Sanborn to complete the BLM "Indian survey" of the Browne parcel, which is a necessary prerequisite of the swap. The purpose of this MOU, then, is for both parties to acknowledge that the two transactions are linked, while allowing them to close at different times. The local office in Palm Springs has consented to such an understanding. The MOU itself does not convey any real property interest in the land under California Redevelopment Law. Staff is preparing a DDA with VIP for the purchase of the Browne parcel upon the completion of the exchange at fair market value. We had previously proposed that VIP advance to the Agency the estimated "purchase price" of the Browne parcel, which will come to the Ag ncy within the next 60 days. JOHN S RAY D Di Et of Com unity& Economic Development APPROVED Executive Director,A ATTACHMENTS: 1. Resolution 2. Memorandum of Understanding `� t� MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING (hereinafter referred to as "MOU") is entered into this day of February, 2005 by and between MILDRED BROWNE (hereinafter referred to as "Browne") and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS (hereinafter referred to as "Agency") regarding the exchange of a parcel of trust property owned by Browne with a parcel of reservation land owned in fee by the Agency; and, WHEREAS, the Community Redevelopment Agency of the City of Palm Springs wishes to acquire a property owned by Mildred Browne and the parties have agreed that the purchase price can be paid in the form of an exchange of parcels whereby Mildred Browne will exchange a portion of her trust allotment located in Section 30, Range 5 East, Township 4 South SBBM ("Browne Parcel") for a parcel owned by the Agency located in Section 14, Range 4 East, Township 4 South SBBM ("Agency Parcel"). Both parcels are more particularly described on the attached Exhibit "A" and"B"respectfully; and, WHEREAS, Browne is willing to agree to the exchange provided that the difference in the appraised value is paid on Browne's behalf to the Bureau of Indian Affairs, the parcel she is accepting is placed back into trust status for her and provided father that this transaction is approved by the Bureau of Indian Affairs; and, WHEREAS, the Browne Parcel once acquired by the Agency will be utilized for purposes of implementing the Redevelopment Plan for the Redevelopment Merged Area No. 1 (hereinafter referred to as "Project Area") through the sale and development of the parcel for purposes provided in the Redevelopment Plan and the Implementation Plan, and to alleviate conditions of blight within the Project Area, and the Browne Parcel will be disposed of by the Agency pursuant to the requirements of the California Redevelopment Law; and, NOW THEREFORE, in consideration for the mutual promises contained herein and for other valuable consideration the parties agree as follows: 1. Browne shall exchange the Browne Parcel for the Agency Parcel. The difference in values shall be paid in cash to be deposited with the Bureau of Indian Affairs for the benefit of Browne. 2. The two parcels subject to this exchange were appraised and the appraisals have been approved by the Bureau of Indian Affairs. The Browne Parcel's appraised value is $2,760,000. The Agency Parcel's appraised value is $2,164,932. The difference in the value of the properties is $595,058 which will be paid in cash as set forth herein. Payment of the difference in values shall be made at the time the deeds are exchanged. 3. All costs and expenses for this transaction shall be home by the Agency. This includes the environmental assessments, appraisals, title insurance policies for both parcels, preparation of the exchange agreement, and any other costs. The payment to Browne shall be net of all expenses. In addition, the Agency shall pay to Noia Investments, Inc. 5% of the value of 0100310012/37556.02 110 the Browne Parcel, payable at the time the deeds are exchanged and further subject to any advances made to Noia Investments, hic., if any, prior to said date. 4. It is understood that the Browne Parcel may require a Bureau of Land Management survey prior to the deed being issued to the Community Redevelopment Agency of the City of Palm Springs. Agency has prepared such survey and submitted to the Bureau of Land Management for review and approval. Browne will use her best efforts in cooperating with the Bureau of Indian Affairs in processing the transaction including requesting said survey. 5. Concurrently with obtaining the BLM survey and processing of the Environmental Assessment (the Bureau of Indian Affairs approval process) Browne has submitted the Bureau of Indian Affairs application commencing the process of placing the Agency's Parcel back into trust status to be held in trust for her. 6. The Agency shall provide support for the fee to trust process including writing a letter to be included in the fee to trust notices required by the Federal Regulations indicating that the Agency has requested this exchange and that as an accommodation, Browne has agreed to accept the Agency Parcel. The Agency shall have no responsibility for the Agency Parcel being placed into trust, other than writing the letter discussed herein. 7. It is the intent of the parties that the exchange occurs as soon as possible but no later than 120 days from the date of this MOU. In addition and notwithstanding that the intention is to complete a simultaneous exchange of properties, the parties further agree that in the event that the fee to trust process has not been completed and all processing of the Agency Parcel has been completed, then upon mutual agreement, the conveyance portion of the exchange will be completed prior to the completion of the fee to trust process. 8. The parties acknowledge that the conveyance of the Agency Parcel to Browne is merely a part of the consideration required to be paid by the Agency to acquire the Browne Parcel which the Agency needs in order to carry out redevelopment under the Redevelopment Plan. In disposing of the Browne Parcel, the Agency shall comply with the Community Redevelopment Law. Browne shall have no responsibility for the disposition of the Browne Parcel by the Agency. 9. It is expressly understood and agreed by the parties that this MOU regards the conduct of contract negotiations only and does not convey any interest in either Parcel whatsoever. A specific exchange agreement may be negotiated by the parties. It is further agreed and understood that this MOU does not imply any obligation on the part of either party to enter into any agreement that may result from the negotiations contemplated herein. Any exchange agreement negotiated shall be approved in accordance with law. 10. This agreement and Brown's performance as set forth herein is conditioned upon the approval of the Bureau of Indian Affairs Pacific Region Director, 2 0 01003/0012/37556.02 IN WITNESS HEREOF, the parties have executed this Memorandum of Understanding on the date first written above. "BROWNE" Mildred Browne "AGENCY" Community Redevelopment Agency of the City of Palm Springs By: By: 01003/0012/37556 02 RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS,CALIFORNIA,APPROVING A MEMORANDUM OF UNDERSTANDING WITH MILDRED BROWNE REGARDING THE EXCHANGE OFA4.96ACRE AGENCY-OWNED PARCEL AT THE NORTHWEST CORNER OF SUNRISE WAY AND TAHQUITZ CANYON WAY FOR A 7.9 ACRE PARCEL WEST OF BMW OF PALM SPRINGS, MERGED AREA#1 AND MERGED AREA#2 WHEREAS,the Community Redevelopment Agency of the Cityof Palm Springs, California ("Agency")is constituted under the Community Redevelopment Law(California Health and Safety Code Section 33000 et. seq.) to carry out the purpose as the redevelopment in the City of Palm Springs ("the City"); and WHEREAS, Section 33430 of the Community Redevelopment Law allows that an agency may, "for purposes of redevelopment, sell, lease, for a period not to exceed 99 years, exchange, subdivide, transfer, assign, pledge, encumber by mortgage, deed of trust, or otherwise, or otherwise dispose of any real or personal property or any interest in property;" and WHEREAS, Section 33432 of the Community Redevelopment Law requires that any such lease shall be conditioned on the redevelopment and use of the property in conformity with the redevelopment plan; and NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs as follows: SECTION 1. The Memorandum of Understanding between the Agency and Mildred Browne regarding the exchange of property is hereby approved and incorporated herein by this reference. SECTION 2. The Chairman of the Agency, and/or his designee, is authorized to execute all necessary documents, in a form approved by the Agency Counsel. ADOPTED this day of , 2005. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED &APPROVED 00A