REPORT TO COUNCIL
SUBJECT
Title
Action on a Purchase and Sale Agreement with Jamestown Realty Co., LLC and Other Documents as Necessary Related to the Sale of North-South Parking Parcel located at 4911 Great America Parkway (APN: 104-43-051)
Report
BACKGROUND
The State of California dissolved all redevelopment agencies in California effective February 1, 2012. At the time of dissolution, the Santa Clara Redevelopment Agency and following, the Successor Agency to the Former Redevelopment Agency of the City of Santa Clara (Successor Agency) owned a number of parcels of land in north Santa Clara. In accordance with Dissolution Statutes (AB1x 26, AB 1484 and SB 107) and the Settlement Agreement entered into by the City, the Successor Agency and the County of Santa Clara et al, the Successor Agency is required to sell all its properties. The proceeds from the initial sale of properties, after deduction of costs of sale, were used to pay the Successor Agency's enforceable obligations.
The Successor Agency has sold two properties: Santa Clara Gateway Parcel 2 located at 5451-5455 Great America Parkway and Santa Clara Hilton parcel located at 4949 Great America Parkway. The proceeds from these sales were used to fully repay all of the Successor Agency’s obligations. Proceeds from the sale of any of the remaining Successor Agency properties will be distributed to the taxing entities. As a taxing entity, the City of Santa Clara will receive approximately 10 percent of the any proceeds received from the sale of Successor Agency property.
In February 2018, the Oversight Board authorized the Successor Agency to engage the services of Eastdil Secured to provide brokerage and real estate advisory services related to the sale of the North South Parcel and the Great America Theme Park Parcel.
The North South Parcel (Property) is a 9.4-acre parcel currently used as a portion of the surface parking for Great America Theme Park and Levi’s Stadium. In March 2018, Eastdil prepared an Offering Memorandum and solicited interest from more than 30 capital sources to seek offers from qualified investors. Five offers to purchase were tendered. At the conclusion of a three round bidding process, Jamestown Realty Co., LLC (“Jamestown” or “Buyer”) made the best offer with a combination of the highest purchase price and with competitive terms.
Jamestown is a privately held company established in 2001. Their real estate portfolio spans across multiple states. In California, Jamestown owns more than 250,000 square feet of property, focused on storage and parking uses.
DISCUSSION
The Property is encumbered by a Lease, Parking Agreement and Parking Easement (Existing Agreements) with Cedar Fair, Forty Niners SC Stadium Company (StadCo), Santa Clara Stadium Authority, and the City of Santa Clara (Parties). The Existing Agreements provide that the Property be available for use by the Parties for Stadium and Great America parking through the terms of the Stadium Lease and the Great America Theme Park Lease or 2074. Per the Existing Agreements, a nominal annual income (i.e., less than $30,000 per year escalated over time) is derived from the Existing Agreements for the benefit of the Property owner. As such the Property was marketed as a future investment opportunity.
A summary of key terms are below:
Purchase Price: $5,150,000.49. Cash at the close of escrow.
Deposit: A non-refundable deposit of $500,000 to be deposited into escrow, three days following the execution of Purchase and Sale Agreement.
Contingency Period: None.
Closing: Closing to occur fifteen (15) days following the execution of the Purchase and Sale Agreement.
The form of Purchase and Sale Agreement is attached. Approval of the recommended action would authorize the City Manager execute the agreement and to make minor changes to the form of agreement subject to the approval of the City Attorney.
Sale of the Property is subject to the approval of the Oversight Board. The Oversight Board is scheduled to consider approval of the sale of the Property and the approval of a Purchase and Sale Agreement on May 18, 2018. Following the sale of the North South Property, the remaining Successor Agency properties to be sold include: Great America Theme Park, Hyatt Hotel and Techmart.
FISCAL IMPACT
The Successor Agency retired all debt of the former Redevelopment Agency with the proceeds from the Gateway 2 sale in Fiscal Year 2016-17. Sales proceeds not needed to pay closing costs will be distributed to the taxing entities including the City. The City receives approximately 10% of revenue distributed from the Successor Agency. It is anticipated that the City will receive a one-time distribution in the range of $500,000 as General Fund revenue.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to the CEQA Guidelines section 15378(a) as it has no potential for resulting in either direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Council acting as the governing body of the Successor Agency to the Former Redevelopment Agency of the City of Santa Clara adopt a Resolution:
1. Approving the sale and transfer of the North South Parcel property located at 4911 Great America Parkway (APN: 104-43-051) and authorizing the City Manager/Executive Officer to execute a Purchase and Sale Agreement with Jamestown Realty Co., LLC for a purchase of $5,150,000.49.
2. Approving and authorizing the City Manager/Executive Officer to execute minor amendments to the Agreement as necessary in coordination with the City Attorney and all documents necessary to accomplish the transfer.
Staff
Reviewed by: Ruth Shikada, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Resolution Authorizing the Purchase and Sale Agreement
2. Purchase and Sale Agreement with Jamestown Realty