HomeMy WebLinkAboutAcquisition of City Gym & Pool Property and Resolution 6671- Council/Agency Meeting Held:
Deferred/Continued to:
Approved ❑ Conditionally Approved ❑ Denied 47 City Clerk's Signature
Council Meeting Date: 03/20/95 Department ID Number: CS-95-007
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: MICHAEL T. UBERUAGA, City Adminis �—
PREPARED BY: RON HAGAN, Director, Community Services/
SUBJECT: ACQUISITION OF CITY GYM AND POOL PROPERTY AND A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH APPROVING THE APPLICATION FOR
GRANT FUNDS UNDER THE 1988 CALIFORNIA WILDLIFE,
COASTAL AND PARKLAND CONSERVATION ACT FOR THE CITY
GYM AND POOL
Statement of issue,Funding Source,Recommended Action,Alternative Action,Analysis,Environmental Status,Attachment(s)
Statement of Issue: There is an opportunity for the city to utilize a 1988 California
Wildlife, Coastal and Parkland Conservation Act grant to acquire the Huntington Beach City
School District property upon which the City Gym and Pool building sits.
Funding Source: 1988 California Wildlife, Coastal and Parkland Conservation Act Grant.
State grant does not require a city match.
Recommended Action: 1. Adopt attached resolution approving the utilization of grant
funds under the 1988 California Wildlife, Coastal and Parkland Conservation Act for the
renovation of the City Gym and Pool and to acquire the Huntington Beach City School
District property upon which the City Gym and Pool building sits.
AND
2. Approve purchase of the Huntington Beach City School District property on which the
City Gym and Pool building sits for $437,000 with monies from the 1988 California Wildlife,
Coastal and Parkland Conservation Act.
Alternative Action(s): Do not move forward with the acquisition of the property for the City
Gym and Pool and continue to pay $30,000 annual rent out of the General Fund to the
Huntington Beach City School District. The grant would then continue to be used for
renovation of the City Gym and Pool.
RQUEST FOR COUNCIL ACT*
MEETING DATE: 03/20/95 DEPARTMENT ID NUMBER: CS-95-007
Analysis: The City Gym and Pool building sits on property owned by the Huntington Beach
City School District. The district is willing to sell the property to the city. The city and district
selected an outside appraiser who evaluated the property. Based on this data, the city and
school district staff have established a selling price of $437,000. The state has also
reviewed the appraisal and concurs with the selling price relative to utilizing the 1988
California Wildlife, Coastal and Parkland Conservation Act. The state will advance the city
the funding and no city match is required.
On May 17, 1993, City Council approved a resolution applying for 1988 California Wildlife,
Coastal and Parkland Conservation Act funds in the amount of $548,000 for renovation of
the City Gym and Pool. The funding under the 1988 grant can be used to purchase this
property, if the city so desires, by modifying the existing resolution to include not only the
renovation, but also acquisition.
Staff feels that it would be prudent business sense to acquire the land at this time because
the state grant exists and because property values are depressed. Also, the city originally
paid $1 per year during the first twenty-five year lease. Over the last six years, the city has
been paying $30,000 per year to the school district for rental of this land. Rather than
continuing to pay the $30,000 per year out of the General Fund, staff feels that the city
should utilize the state grant to acquire the property, thereby, reducing the impact on the
General Fund by $30,000 per year. The remainder of the $548,000 grant, after acquisition
costs, would be utilized as part of Phase I renovation of the City Gym and Pool. This money
will be added to the $500,000 in Community Development Block Grant Funds designated for
this purpose.
Environmental Status: Not applicable
Attachment(s):
NumberCity Clerk's
Page
1. Resolution GG 7/
2. Appraisal
0010617.01 -2- 03/10/95 11:58 AM
RESOLUTION NO. 6671
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF HUNTINGTON BEACH
APPROVING THE APPLICATION FOR GRANT FUNDS FOR
THE PER CAPITA GRANT PROGRAM UNDER THE CALIFORNIA
WILDLIFE, COASTAL,AND PARKLAND CONSERVATION ACT OF 1988
FOR THE LAND ACQUISITION AND RENOVATION OF THE
CITY GYM AND SWIMMING POOL
WHEREAS,the people of the State of California have enacted the California Wildlife,
Coastal and Parkland Conservation Act of 1988,which provides funds to the State of California
and its political subdivisions for acquiring and/or developing facilities for public recreational and
open space purposes; and
The State Department of Parks and Recreation has been delegated with the responsibility
for the administration of the program within the state, setting up necessary procedures governing
application by local agencies under the program; and
Said procedures established by the State Department of Parks and Recreation require the
applicant to certify by resolution the approval of application before submission of said application to
the state; and
Said application contains assurances that the applicant must comply with; and
The applicant will enter into an agreement with the State of California for acquisition or
development of the project(s);
NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach as follows:
1. Approves the filing of an application for the Per Capita Grant Program under the
California Wildlife, Coastal, and Parkland Conservation Act of 1988 state grant assistance for the
land acquisition and renovation of the City Gym and swimming pool; and
2. Certifies that said applicant understands the assurances and certification in the
application form; and
3. Certifies that said applicant has or will have sufficient funds to operate and
maintain the project, and
4. Appoints the City Administrator as agent of the city to conduct all negotiations,
execute and submit all documents including, but not limited to applications, agreements,
amendments, payment requests and so on,which may be necessary for the completion of the
aforementioned project(s).
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular
meeting held on the loth day of March 1995.
Mayor epr
ATTEST:
APPROVED AS TO FORM:
City Clerk
REVIE AND
N �.,ity Attorney
INITIATED APP OVED:
City Admi Is ator
Direct o Com ity Services
2
Res. No. 6671
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of
the City of Huntington Beach, and ex-officio Clerk of the City Council of said
City, do hereby certify that the whole number of members of the City Council of
the City of Huntington Beach is seven; that the foregoing resolution was passed
and adopted by the affirmative vote of at least a majority of all the members of said
City Council at a regular meeting thereof held on the 20th of March, 1995 the
following vote:
AYES: Councilmembers:
Harman, Bauer, Sullivan, Leipzig, Dettloff, Green, Garofalo
NOES: Councilmembers:
None
ABSENT: Councilmembers:
None
City Clerk and ex-officio Clerk
of the City Council of the City
of Huntington Beach, California
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APPRAISAL
OF
.783 ACRE RECREATIONAL FACILITY SITE
PALM AVENUE AND 17TH STREET
CITY OF HUNTINGTON BEACH
PREPARED FOR
CITY OF HUNTINGTON BEACH
REAL ESTATE SERVICES
2000 MAIN STREET
HUNTINGTON BEACH, CALIFORNIA 92648
DATE OF VALUE
OCTOBER 15, 1993
REPORT DATE
JANUARY 25, 1994
PREPARED BY
DONAHUE & COMPANY, INC.
PROPERTY AND URBAN ECONOMICS
f
PROPERTY
JAN 2 8 1994
DONAHUE & COMPANY. INC. MANAGEMENT
PROPERTY AND URBAN ECONOMICS
JOHN C. DONAHUE 23 CORPORATE PLAZA DRIVE, SUITE 160 TELEPHONES
MICHAEL F. WALDRON
MICHAEL A. TAYLOR NEWPORT BEACH. CAT FORNIA 92560 (714)
760-3166
60-3
• (600) 734-0074
NORMAN CANTOR -
FACSIMILE
BARBARA L. ZACHRY
(714) 760-5496
KEVIN J. DONAHUE
PETROS BERHANE
LAWRENCE M. MAXWELL
JEFF KAUTTU
CHARLES P. FOX
DANIEL C. TAYLOR
January 25, 1994
Mr. Dan M. Brennan Re: Appraisal of
Director of Real Estate Services .783 Acre Site Located On
City of Huntington Beach Palm Avenue and Seventeenth
2000 Main Street Street in the City of Huntington
Huntington Beach, CA 92648 Beach, Ca.
Job No. 4888
Dear Mr. Brennan:
Per your request and authorization to proceed, we have completed our investigation and analysis
and herewith submit three (3) copies of this appraisal of a .783 acre site (34,121 sf) located on
the north side of Palm Avenue between 17th Street and 14th Street in Huntington Beach,
California. Our appraisal assignment, per the City's direction,was to determine the market value
of the "LAND ONLY", exclusive of the existing improvements and at its alternative highest and
best use.
'Based on our property inspection, market data investigation and analysis and other valuation
studies, the full fee market value of the subject property, assumed free and clear of all hazardous
waste and adverse soil conditions, as of October 15, 1993, is estimated at a range of:
$406,000 to $470,000
FOUR HUNDRED SIX THOUSAND TO
FOUR HUNDRED SEVENTY THOUSAND DOLLARS
Retained in our files are work sheets, field notes, map information, recorded documents and other
support data upon which our conclusions of value are partially based.
This appraisal has been reviewed. and approved by Mr. Kevin J. Donahue, who did inspect the
subject property but did not field review the market data items presented herein.
Thank you for this opportunity to provide appraisal services.
Respectfully submitted,
Reviewed & Approved By: DONAHUE & COMPANY, INC.
Kevin . Donahue Albert R. Montes
Senior Appraiser Staff Appraiser
State Certification No. AG015779
KJD:tmm/le
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
SUBJECT LOCATION: North side of Palm Avenue between 17th Street and
14th Street in the City of Huntington Beach, County
of Orange, State of California
PROPERTY DESCRIPTION: (.783) acre site; 34,121 sf improved city gym and
pool site with street, water, sewer and drainage
improvements to the site.
INTEREST APPRAISED: Fee simple
DATE OF VALUE: October 15, 1993
DATE OF REPORT: November 15, 1993
ZONING: CF-E; Community Facilities (Educational) District
RI-O (Low Density Residential combined with oil
production
ALTERNATIVE HIGHEST AND
BEST USE: Single family residential development. Note: The
city gym and pool site has an historic and
established "special purpose use" as a recreational
facility and consequently a permanent recreational
use of the property is also considered its highest and
best use.
VALUE INDICATIONS: Sales Comparison Approach: $836,000
Development Approach: $480,000
Income Approach: Not Applicable
Replacement Cost Approach: Not Applicable
RECONCILIATION: $480,000; $14.00 psf
DONAHUE&COMPANY,INC.
CERTIFICATION AND RESTRICTION UPON DISCLOSURE AND USE
The undersigned does hereby certify that, except as otherwise noted in this appraisal report:
1. I have no present or contemplated future interest in the real estate that is the subject of
this appraisal report.
2. I have no personal interest or bias with respect to the subject matter of this appraisal
report or the parties involved.
3. The compensation received is not contingent upon any action or event resulting from the
analyses, opinions, or conclusions in, or the use of, this report.
4. To the best of my knowledge and belief the statements of fact contained in this appraisal
report, upon which the analyses,opinions and conclusions expressed herein are based,are
true and correct.
5. The undersigned have made a personal inspection of the property that is the subject of
this report except otherwise noted in the preceding transmittal letter.
6. This appraisal report sets forth all of the limiting conditions (imposed by the terms of my
assignment or by the undersigned) affecting the analyses, opinions and conclusions
contained in this report.
7. This appraisal report has been prepared in conformity with and is subject to the
requirements of the Code of Professional Ethics and Standards of Professional Practice
of the Appraisal Institute.
8. No one other than the undersigned prepared the analyses, conclusions and opinions
concerning real estate that are set forth in this appraisal report except as noted in the
transmittal letter.
9. The use of this report is subject to the requirements of The Appraisal Institute relating to
review by its duly authorized representatives.
CERTIFICATION AND RESTRICTION UPON DISCLOSURE AND USE (Cont.)
10. Neither all nor any part of the contents of this report (especially any conclusions as to
value, the identity of the appraiser or the firm with which he is connected, or any
reference to the Appraisal Institute or to the MAI designation) shall be disseminated to
the public through advertising media, public relations media, news media, sales media or
any other public means of communication without the prior written consent and approval
of the undersigned.
CONTINGENT AND LIMITING CONDITIONS
UPON WHICH APPRAISAL IS MADE
This report is made expressly subject to the contingent and limiting conditions, factors and
assumptions herewith:
1. That the vesting and legal description furnished this appraiser are correct.
2. That measurements and areas furnished by others are correct. No survey has been made
for the purpose of this appraisal.
3. That the property is appraised as if free and clear of liens and that the title is good and
merchantable.
4. That no guarantee is made as to the correctness of estimates or opinions furnished by
others which have been used in making this appraisal.
5. That no liabilities be assumed on account of inaccuracies in such estimates or opinions.
6. That no liability is assumed on account of matters of a legal nature, affecting this
property, such as title defects, liens, encroachments, overlapping boundaries, etc.
7. That this appraisal is subject to review upon presentation of data which might be later
made available, undisclosed or not available at this writing.
8. That the appraiser herein, by reason of this appraisal, is not required to give testimony
or attendance in court or any governmental hearing with reference to the property in
question, unless arrangements have previously been made therefore.
9. That the maps and exhibits found in this report are provided for reader reference purposes
only. No guarantee as to accuracy is expressed or implied.
10. That no responsibility is assumed by the appraiser for the existence of any hazardous or
toxic wastes, nor for the determination of the costs of removal and/or disposal thereof.
11. The Americans with Disabilities Act("ADA") became effective January 26, 1992. I (we)
have not made a specific compliance survey and analysis of this property to determine
whether or not it is in conformity with the various detailed requirements of the ADA. It
is possible that a compliance survey of the property, together with a detailed analysis of
the requirements of the ADA, could reveal that the property is not in compliance with one
or more of the requirements of the Act. If so, this fact could have a negative effect on
the value of the property. Since I (we) have no direct evidence relating to this issue, I
(we) did not consider possible non-compliance with the requirements of the ADA in
estimating the value of the property.
TABLE OF CONTENTS
INTRODUCTION
Title Page
Letter of Transmittal
Summary of Salient Facts and Conclusions
Certification
Contingent and Limiting Conditions
Table of Contents
GENERAL DATA (TAB) PAGE
Purpose of the Appraisal 1
Definitions 1
Market Value 1
Property Appraised 2
Parcel 2
Lot 2
Function of the Appraisal 2
Date of Value 2
Scope of the Appraisal 2
Valuation Background 2
Report Format 3
Environs 5
Regional Area Description 5
Transportation 5
Community Facilities 6
Utilities 6
Streets and Traffic 7
Neighborhood Description 7
Environs Photographs
SUBJECT PROPERTY (TAB)
Owner of Record 9
History 9
Situs 9
Legal Description 9
Assessor's Data 9
General Plan 9
Zoning 9
Present Use and Occupancy 10
Highest and Best Use 11
Definition 11
Legally Permissible 11
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9
SUBJECT PROPERTY
OWNER OF RECORD:
Huntington Beach School District
20451 Craimer Lane
P. O. Box 71
Huntington Beach, California 92648
LEASE AGREEMENT ABSTRACT:
Between City of Huntington Beach and the Huntington Beach City School District
originally recorded July 17, 1967 and subsequently amended and updated on September
8, 1992. Currently lease agreement is on a month to month basis at an annual rent of
thirty thousand ($30,000) dollars.
SITUS:
1600 Palm Avenue, Huntington Beach, California 92648
LEGAL DESCRIPTION:
Northwest corner begins 240 ft. southeast of the southeast comer of Palm Avenue and
Seventeenth Street. From this point said property has a depth of 229± ft. and street
frontage of 149± ft.
ASSESSOR'S DATA:
APN: 023-100-05 (portion of)
GENERAL PLAN:
The subject property is currently designated "Low Density Residential" on the Land Use
Diagram of the Huntington Beach General Plan. Community facilities such as schools
and recreational uses are considered "minor supporting land uses" when they do not set
the character of the neighborhood. These minor land uses are not shown on the Land Use
Diagram but are considered as a compatible use to the broader land use designation as
delineated on the General Plan Maps.
ZONING:
The subject property is currently zoned "CF-E, Community Facilities (Educational)
District. The CF-E zone is an overlay designation on the underlying base zoning as
shown on the sectional district maps. The underlying zone of the subject property is R1-
0 (Low Density Residential combined with Oil Production).
DONAHUE&COMPANY,INC.
10
EXISTING USE:
The site is currently occupied with a single building used as a public facility consisting
of a gymnasium, a swimming pool, shower and locker rooms, storeroom and offices.
'The subject property is part of the Larger Parcel (APN: 023-100-05) used for the Ethel
Dwyer Middle School and other school district purposes.
HIGHEST AND BEST USE:
Definition
The Appraisal Institute defines Highest and Best Use as:
"The reasonable and probable use that supports the highest present
value, as defined, as of the date of the appraisal".
Alternatively, Highest and Best Use is
"The use, from among reasonably probable and legal alternative
uses, found to be physically possible, appropriately supported,
financially feasible, and that results in the highest present land
value."
The second definition applies specifically to the highest and best use of land or sites as
though vacant. When a site contains improvements, the highest and best use may be
determined to be different from the existing use. The existing use will continue unless
and until land value in its highest and best use exceeds the sum of the value of the entire
property in its existing use and the cost to remove the improvements.
The definitions of highest and best use indicate that there are two types of highest and
best use. The first type is highest and best use of land or a site as though vacant. The
second is highest and best use of a property as improved. Each type requires a separate
analysis. Moreover, in each case, the existing use may or may not be different from the
site's highest and best use.
Legally Permissible
As previously stated, the subject property is designated on the city's General Plan as a
community facility within a residential district. Under the land use policies of the city's
T General Plan, recreational uses are considered compatible land_uses within residentially
designated areas. The existing CF-E overlay and RI base coning on the property is
consistent with the General Plan as an allowable and legally permitted land use.
y
DONAHUE&COMPANY,INC.
11
HIGHEST AND BEST USE (Cont.):
The potential development of the property for residential use also legally exists in light
of the fact that the site is designated for residential use on the General Plan and base
zoning. However, the granting of a zone change and subsequent entitlements for
residential-use would be difficult. The city gym building is recognized as a community
"landmark" and any proposal to construct homes on this site will encounter a negative
citizen's response and probably opposition in the entitlement process.
Physically Possible
It is physically possible to use the site for the land uses legally permitted. The
development of the site for low density single family residential use would require
conformance with the development standards of the city's General Plan and R1 zoning
provisions. It would appear that the site could physically be developed in compliance
with these regulations. Based on the applicable density standards, approximately five (5)
single family residential units could be developed on the site.
The site is somewhat constrained in terms of residential development due to its location
and limited size. The physical possibility of developing the site for single family
residential use would be more favorable if the site were combined with more buildable
acreage from the school. Ideally, a developer would be more inclined to acquire
additional school property along 17th and/or 14th Streets in combination with the city
gym site.
.Financially Feasible
The acquisition of the city gym site as a permanent recreational facility is financially
feasible through the city's recreation and parks program. City staff has indicated that
recreation and park funds are available for land acquisitions.
The development of the site for five single family residential units also appears financially
feasible in terms of producing a higher rate of return on invested capital than revenues
generated from the site's recreational use.
Maximally Profitable
The maximal profitability of the subject property is for single family residential use.
Given that single family residential is 1) legally permitted, 2) physically possible to
develop and 3) financial feasible, the development of a residential project consisting of
single family units would yield the highest land value consistent with the rate of return
as indicated by the current market and development trends. Single family residential
appears to be the land utilization providing the highest productivity in terms of return on
investment.
a DONAHUE&COMPANY,INC.
12
HIGHEST AND BEST USE (ConQ:
Conclusion of Highest and Best Use
'Considering all of the above criteria, the alternative highest and best use of the subject
property is-, as if vacant, for single family residential use. However, the subject property
has historical and established"Special-Purpose Use" that has served the recreational needs
of the community. Consequently, the continued use of the site for recreational purposes
is considered its highest and best use.
PHYSICAL DESCRIPTION:
Shape: Rectangular
Area Content: .783 net acres; 34,121 square feet,
Dimensions: 229± ft. x 144± ft.
Topography: Level ground approximately 2 ft. to 3 ft. above street grade.
Soils & Drainage: We were not provided with a soils report. The soil is
believed to be of suitable loadbearing capacity to support
the opined highest and best use. Surface drainage is to the
southwest towards Palm Avenue.
Toxic/Hazardous Waste: A toxic report was not provided to this appraiser.
Toxic/hazardous waste conditions affecting the subject
property are not known.
Access: The subject property is directly accessible from Palm
Avenue.
Utilities: All public utilities are available to the subject property.
Easements: No easements are known to exist on the property.
Offsite Improvements: Improvements include the standard curb, gutter and
sidewalk configurations,typical paving and street and utility
improvements.
3: DONAHUE&COMPANY,INC.
23
RECONCILIATION
Three separate land valuation methodologies have been employed to derive an estimate
of market value for the subject property. Recapitulation is as follows:
Sales Comparison Approach: $406,000
Land Residual Approach: $470,000
Ground Rent Capitalization: $429,000
A difference of 13.6% exists between the low and the high approach to value. Each of
the three (3) approaches is considered relevant and well supported vis a vis the market.
The Sales Comparison and Land Residual Approaches have been given the least weight,
recognizing the limited development potential of the subject due to its current use. Each
of these two (2) approaches to value have been adjusted for demolition and site
preparation costs.
Greatest weight is given to the ground rent capitalization approach. It provides the most
accurate representation of what a buyer would be willing to pay for a like income stream
and recognizes the existing improvements.
Having considered all relevant information and the salient analysis thereto, the market
value of the leased fee interest, as of October 15, 1993, is estimated at a range of
$406,000 to $470,000
DONAHUE&COMPANY.INC.