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Home My WebLink AboutRDA AG PKT 1981-02-23 #6 February 19, 1981 MEMORANDUM TO: Honorable Mayor and City Council FROM: Interim Executive Director SUBJECT: Seal Beach Steam Plant Site At a special open meeting of the Redevelopment Agency held February 9, 1981, the city attorney reported on the reaction of the Department of Water and Power to the Redevelopment Agency's offer dated January 20, 1981 to purchase the above site. Terms of the offer were as follows: $1,500,000 cash at close of escrow, $750,000 paid two years from close, and a further payment of $750,000 four years from close of escrow. Reaction of Department of Water and Power staff to the offer was favorable with certain reservations. These were (a) that 10% interest be payable on the $1,500,000 unpaid balance of the purchase price, (b) that escrow and title costs be shared, and (c) that the unpaid balance would have to be secured in a manner satisfactory to Department of Water and Power. The Department of Water and Power staff also noted that the appraisal on which the purchase price of $3,000,000 was based was now eight months old, and that acceptance of our offer would be subject to approval by the Department of Water and Power Board of Directors and ratification by the Los Angeles City Council . After lengthy discussion which included opinions of members of the audience, no direction was given to staff other than to bring the item back for recon- sideration on February 23, 1981. Assuming the Redevelopment Agency members are in favor of modifying our offer by agreeing to the conditions (a) , (b) , and (c) as expressed above, it would be appropriate to direct the city attorney or Interim Executive Director to so advise the Department of Water and Power in writing. It should be noted that the inclusion of the 10% interest provision would add $450,000 to the cost of the project. In order to fund this amount, it would be necessary to increase the number of condos sold by at least three from the present level of fourteen, unless some other source of revenue can be found. • Respecfully submitted, Denis Thomas DT:ci L __ __ ___ __ ____ AGENCY ITEM #VI . Department of Water and Power n the City of Los:•\ !It eles TOM BRADLEY Commission ^ ' i to� en�Altn.General Manager and Chief Engineer Mayor RICAn)o R.GUf ERREZ Presi 2 - - PAti t' Chief Engineer of Water Works and Anisrant Manager )ottN Gti1RRERA.Vice--Prrsidrrr s,. ;sMS!M.L'O Y.Chief Electrical Engineer and Assistant.tlanager JAES K.MURPHY 7. F f4; 7 1 •. .Cbief Financial Officer -- SAM C SIIVEUNN H;::Rmar C WARD • - !1' - JtDliti it DAytsc SECmtar)'= -- -= .= d L f r.0 ebruary 18, 1981 9 1981a. Ci('1�� . • Our File P-52115 t� Yi}f ila Vum 4, • .. Mr. Dennis Thomas _ '� - �104-°°: Acting City Manager � 211 Eighth Street Seal Beach, California 90740 Dear Mr. Thomas: - Former Seal Beach Steam Plant Site This will acknowledge receipt of the offer dated January 30, 1981 on behalf of the City of Seal Beach to purchase the former DWP Seal Beach Steam- Plant site subject to a number of conditions and contingencies. The City's offer was forwarded to the General Manager's office for review and approval. However, there appears to be serious concerns relative to some of the conditions and contingencies of the offer. The DWP appraisal is now seven and one-half months old and there may be a request from Management to have it updated. The Land Committee of the Board of Water and Power Commissioners is scheduled to meet on Thursday, February 19, 1981, at which time the City's offer is to be discussed in depth. We will notify you as soon as a decision has been reached. Very truly yours, JOSEPH J. PEREZ Chief Land Officer JJP:lr • • III North Hope Street,Los Angele..Califs rnia_Mailing address:Box 111.Los Angeles 90051 Telephone:(213)481-4211 Cable cc�-e-st•:'E+APOLA, Department of Water and r*weir iii e City of Los 'v I 1*e es TOM BRADLEY Commission LOURS H.WINNARD,General Manager and Chief Engineer Mal.or RICARDO R cLmERI z,President PAIR.H.lANE Chief Engineer of Water Warts and Assistant Manager JOHN y GUARRERA Vice President yams I.MUU ON Chief Electrical Engineer and Assistant Manager JAMES K MURPHIY 'RIWAM o.SACHAU Chief Financial Officer SARA c smEMuN HERM RP 4 R'ARD JUDITH K ONv15oNSecreetary February 19 , 1981 Our File P-52115 __ ' \.1.,- l ii ,��' Mr. Denis Thomas �r ° " 9 ,`� Acting City Manager " f{ ' 211 Eighth Street n rC8 '- � tc3 g N( f— Seal Beach, California 90740 1901 CITY MGR ti Dear Mr. Thomas : �� B ED `1 Former Seal Beach Steam Plant Site The Land Committee of the Board of Water and Power Commissioners met today to review the offer to purchase the former DWP Seal Beach Steam Plant site. The result of the meeting is that the offer of the City of Seal Beach, dated January 30 , 1981, is acceptable in part. There is agreement on the sale of the property for $3 ,000 ,000 , payable $1 ,500 ,000 at the close of escrow and the balance of $1,500 ,000 payable as follows : $750 ,000 within a two-year period, and the remaining $750 ,000 within a four-year period, respectively, from the close of escrow, at the rate of 10% per annum interest on the deferred monies . These deferred payments are to be secured in a manner satisfactory to the Department of Water and Power The escrow period appears to offer no major problems , however all escrow costs , including the policy of title insurance, will be shared equally by both seller and buyer. Access and possession will be substantially as provided in the offer submitted September 29 , 1980. It is understood that this offer is subject to the City obtaining a CEIP loan for at least $2 ,750 ,000 on or before Monday, August 3, 1981 . It is also understood that the ultimate sale of the subject site must be approved by resolution of the Board of Water and Power Commissioners and authorized by ordinance of the Los Angeles City Council. I t l North liope Street,Los ADA,Ies,California[1:tl nilIng ad*.,s Box III,Los Angeles 90051 J • Mr. Denis Thomas - 2 - February 19 , 1981 It is possible that either the Board of Water and Power Commissioners or the City Council may require an update of the current appraisal which already is seven and one-half months old. If for any reason there is a delay beyond the August 3rd date mentioned above , it is distinctly understood that an updated appraisal will determine the revised sales price. This could materially affect the current sales price. In the event that the City is unable to obtain the CEIP loan mentioned above , the Department will then prepare to sell the subject property at public auction as provided in the Los Angeles City Charter. Very truly yours , JOSEPH p PEREZ Chief Land Officer JJP: lr cc : Mr. Patrick C. Coughlin City Attorney City of Seal Beach