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HomeMy WebLinkAboutAGENDA REPORT 2021 1215 CCSA REG ITEM 09BCITY OF MOORPARK, 
 CALIFORNIA City Council Meeting of December 15, 2021 ACTION APPROVED STAFF RECOMMENDATION. (VOICE VOTE: UNANIMOUS). BY K. Spangler. B.Consider Authorization to Close Escrow on Purchase of 323 Science Drive (APN: 512-0-240-275) for Use as a City Hall. Staff Recommendation: Approve the purchase of 323 Science Drive and authorize City Manager to close escrow on the property. (Staff: Troy Brown, City Manager) Item: 9.B. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Troy Brown, City Manager DATE: 12/15/2021 Regular Meeting SUBJECT: Consider Authorization to Close Escrow on Purchase of 323 Science Drive (APN: 512-0-240-275) for Use as a City Hall SUMMARY On June 2, 2021, the City Council approved an agreement with Lee & Associates – LA/North/Ventura, Inc. (Lee & Associates) for an Exclusive Right to Represent the City for the Purchase or Lease of Real Property to relocate City Hall. On September 1, 2021, the City Council conferred with Mike Tingus, President of Lee & Associates as the City’s chief negotiator regarding price and terms for a potential acquisition of all or a portion of 323 Science Drive. Mr. Tingus continued his efforts in identifying potential sites for a City Hall and reached agreement on terms for the sale of 323 Science Drive. Subsequently, on October 11, 2021, in order to retain the right to acquire the building, the City Council authorized a Purchase and Sale Agreement (PSA) to be executed. The PSA set forth the terms and conditions for the acquisition of 323 Science Drive and outlined tasks to be completed during due diligence prior to escrow closing. All due diligence required as part of the PSA has been completed and both parties have performed the requisite tasks required prior to the closing of escrow. Upon City Council approval to close escrow, the City will take ownership of the property and commence with design, engineering, and construction of tenant improvements to accommodate City Hall operations. BACKGROUND For nearly two decades, the City of Moorpark has had a long-term goal of acquiring a building to serve as a City Hall. In reviewing City Council Goals and Objectives back to 2003, a goal of the City at that time was to “Construct new City Hall and Corporate Yard Facility”. The Corporate Yard Facility has been constructed and was dedicated on April 18, 2007, as the Moorpark Public Services Facility. A new Police Station was constructed in 2006 and the Ruben Castro Human Services Center was completed in 2012; however, for a number of reasons a new City Hall was never constructed. Item: 9.B. 117 Honorable City Council 12/15/2021 Regular Meeting Page 2 Municipal services are provided to residents and businesses located at 799 Moorpark Avenue. On this site, the existing Community Center was the first structure built by the County of Ventura in 1980 and served as the first office space for City staff after the City’s incorporation in 1983. In 1987, the Administration building was built. The Active Adult Center buildout and kitchen addition were completed in 1989. Sometime in the mid to late 90’s the City added a triple wide modular unit, which currently houses the Information Technology staff and serves as a storage area. In 2006, the office space at City Hall was further expanded by leasing additional temporary modular office buildings to accommodate the Community Development and Public Works Departments, and the relocated public counter, as well as contract staff, and expanded breakroom and file storage space. In 2010, in recognition of the fact that the need for the modular buildings would exceed the initial lease term, the City purchased the modular office buildings. Since at least 2003, the City Council has identified construction of a new City Hall as one of its top 10 priorities. The approach has been to identify a location on the existing Civic Center campus located at 799 Moorpark Avenue to house city operations as well as the City Library. Due to the economy and other City priorities, a new Civic Center campus was never developed. In 2018, the City Council directed staff to complete a comprehensive Civic Center Master Plan to determine the location and orientation of the City Hall buildings to occupy the site as a location for the new Library was being determined. To that end, staff entered into an agreement with CWA AIA, Inc. (CWA) for the design of a new Library and creation of the Civic Center Master Plan. The Civic Center Master Plan process began in January 2019 with a detailed site analysis and space needs study. CWA gathered data regarding the Civic Center site by reviewing building plans for the existing Civic Center buildings, historical reports of the site and surrounding developments, and conducting group and individual interviews with the City Manager and Department Heads regarding their departmental functions. Through the space needs study, CWA determined that a future City Hall building should be approximately 22,000 square-feet in size to accommodate current and future staffing needs, as well as a City Council Chamber. Various concepts of a Civic Center Master Plan were presented by CWA to the City Council on July 15, 2020, and the City Council approved the final Civic Center Master Plan design with a determination made on the location of the new Library. An agreement was also made for a phased approach and the construction of the new Library would take place prior to construction of a new City Hall building on the Civic Center property. This phased approach would allow staff an opportunity to evaluate funding options to build a new Civic Center campus. DISCUSSION In an effort to identify locations to relocate City Hall, the City Council approved an agreement with Lee & Associates on June 2, 2021. Based on the findings of Lee & Associates, there is a total of 279,000 sq. ft. of office space currently constructed in the city, with only four (4) buildings having consolidated square footage of 20,000 sq. ft. or more. 118 Honorable City Council 12/15/2021 Regular Meeting Page 3 After a search of available buildings to house city operations, several options were presented to City Council between the period of August 2021 and September 2021. A building at 323 Science Drive was identified as the preferred building due to it being able to accommodate municipal operations. This 22,464 sq. ft. free-standing building meets the City’s size requirements and is an office building offering ideal image and location. A portion of the building is ideally suited for conversion to a Council Chamber. A minor amount of improvements are required to configure the interior of the building to support City Hall functions. Additional contingencies were required to be completed prior to the City taking possession of the property. Further, a tenant currently occupies a portion of the property, their lease is set to expire on December 31, 2021. Section 65402 of the Government Code requires the Planning Commission to make a report as to General Plan conformity prior to the acquisition of the real property for public purposes. On October 26, 2021, the Planning Commission approved an action by making a finding of consistency of the General Plan. The property is currently zoned M-1 which requires the City to obtain a Conditional Use Permit to occupy the site for City operations. This will occur following the close of escrow. In addition, the completion of requisite environmental analysis, due diligence, and pre- purchase procedures were completed over the course of the past six weeks. A brief summary of the due diligence and contingencies completed by the City are outlined below. Physical Inspection – a physical inspection was completed on October 22, 2021. There were no structural deficiencies involved that would prevent the City from taking ownership of the building; however, there are some maintenance issues associated with various components that are noted. Some excerpts from the Inspection Report notes: “The structure has features, including an exceptional positive connection of concrete panels to roof and floor decks. This makes for better performance during seismic events. The electrical is in good condition and should provide optimum power to suit the City’s needs. The plumbing appears to perform as intended. However, some bathroom fixtures need upgrades. The biggest issue is the overall lack of maintenance. The roof, HVAC components, and grounds need the most immediate improvements. Trees and water entry can pose the most severe damage and adverse conditions to the building.” Hazardous Substance and Soils Conditions – The City completed a Phase I environmental review of the subject property on November 11, 2021. The findings of the Phase I analysis present no significant hazardous or environmental concerns warranting a Phase II environmental analysis. Existing Lease – The terms of the existing lease have been provided to the City and escrow cannot close until 15 days following termination of the existing lease agreement. The landlord has not extended the term of the existing lease for the current tenant which will expire on December 31, 2021. 119 Honorable City Council 12/15/2021 Regular Meeting Page 4 Declaration of Covenants, Conditions and Restrictions – Copies of the Association’s documents have been reviewed by the City. Mike Tingus of Lee & Associates has negotiated a cost reduction to account for some of the repairs needed for the building. As is the case with most real estate transactions, not all deficiencies and/or repairs needed will be considered for reduction. The items of most significance were appropriately identified and the values of the repairs have been agreed upon. In sum, the cost has been reduced by $75,000 to offset costs related to roof repairs, HVAC replacement and window repairs. In addition, Lee & Associates will reduce a portion of their commission and contribute $64,200 towards the remaining purchase price of the building. In summary, the original Purchase and Sale Agreement established a negotiated price of $300 per square foot or $6,739,200 for the purchase of the building. After reductions of $75,000 by the seller for repairs and $64,200 by the City’s broker, the final purchase price is $6,600,000. There has been no material change to the condition of the building and the title company has been provided instructions for the close of escrow. All parties have performed their requisite pre-closing activities and all contingencies specified in the PSA have been met or waived. Staff recommends the City Council authorize the City Manager to close escrow on 323 Science Drive. The repairs will be included in the architect’s scope of work and staff has been working to secure a firm for architectural services associated with schematic design, space planning, design development, construction documents, and construction support for the temporary City Hall. These services will be completed prior to taking occupancy of the building. A Request for Proposals has been issued with a closing date of December 16, 2021. Upon selection of the architectural firm, staff will return to the City Council for approval of a contract for these services. FISCAL IMPACT The total cost to acquire 323 Science Drive is $6,600,000. The amount of $202,176.00 was previously deposited with the escrow company and a balance of $6,397,824 is payable upon the close of escrow. The City Council has previously amended the Fiscal Year 2021/22 Budget by allocating $5,750,000 from the Special Projects Fund (3004) to the City Hall Improvement Fund (3001) CIP C0012, which already had $1,468,814 budgeted to fund the purchase of 323 Science Drive. Therefore, there is no fiscal impact associated with the action of authorizing the City Manager to close escrow on 323 Science Drive. COUNCIL GOAL COMPLIANCE This action is consistent with City Council Economic Development Strategy, Goal 3, Objective 3.12: “Identify and transition to temporary City Hall location” (2022). 120 Honorable City Council 12/15/2021 Regular Meeting Page 5 STAFF RECOMMENDATION Approve the purchase of 323 Science Drive and authorize City Manager to close escrow on the property. 121