FROM:
Administrative Services
SUBJECT:
Title
Approving an Amendment to its Long-Range Property Management Plan Pursuant to Health and Safety Code Section 34191.5 and Approving Sale of Real Property by the Successor Agency to the City of Fontana.
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RECOMMENDATION:
Recommendation
1. Adopt Resolution No. SAR 2024-004, Approving an Amendment to its Long-Range Property Management Plan, Pursuant To Health And Safety Code Section 34191.5; and
2. Adopt Resolution No. SAR 2024-005, Approving the Sale of Real Property Identified as APN 0228-301-51 - Located at Citrus And South Highland Avenues - To The City of Fontana and Authorizing the Executive Director or Designee To Negotiate and Execute a Purchase and Sale Agreement on Behalf of the Successor Agency to the Fontana Redevelopment Agency and to Take Certain Actions Related Therewith.
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COUNCIL GOALS:
• To operate in a businesslike manner
• To promote economic development by pursuing business development, retention, expansion and attraction
DISCUSSION:
In 2008, prior to the dissolution of redevelopment agencies, the former Fontana Redevelopment Agency purchased from the State of California, Department of Transportation, certain real property then identified as parcel DD 015496-01-01 comprised of eight parcels, (also known as Lots 21-31 of Tract No. 3348, Highland Haven M.B. 47/14-16), now identified with APN 0228-301-51 (the “Property”), with a common location west of Citrus Avenue and north of South Highland Avenue. The Director’s Deed for the Property was recorded with the San Bernardino County Recorder’s Office in the Official Records of the County of San Bernardino. It was recently discovered that it was recorded mistakenly in the name of the City of Fontana and not the Fontana Redevelopment Agency.
As required by AB 1484, enacted in June of 2012, the Successor Agency to the Fontana Redevelopment Agency prepared a Long-Range Property Management Plan (LRPMP) pursuant to Health & Safety Code Section 34191.5. The LRPMP addresses the transfer, disposition and future use of properties previously owned by the former Fontana Redevelopment Agency. The amended LRPMP was approved by the Fontana Oversight Board on June 14, 2013, and approved by the State Department of Finance (DOF) as described in the DOF letter dated May 23, 2014. Due to the above referenced mistake that occurred when the deed to the Property was recorded by the San Bernardino County Recorder’s Office, the Property was not identified as property owned by the former Fontana Redevelopment Agency and, therefore, was mistakenly not listed in the LRPMP.
In 2018 and 2019, the City, under the belief that it owned the Property, conducted a formal Request for Qualifications and Request for Proposal process to facilitate development of the parcels, which included the Property. Following this process in the same year, the City entered into an Exclusive Negotiating Agreement (“ENA”) with the selected party, the Ladhar Group. Per the terms of the ENA, the parties would negotiate and execute an agreement for the purchase, acquisition and development of the City owned properties. On January 26, 2021, the City approved the Purchase, Sale and Development Agreement (“PSDA”) between the City and Citrus Development LLC (formerly the Ladhar Group) for the commercial and retail development of the City owned properties located on the North West Corner of Citrus Avenue and South Highland Avenue. Recently, the mistake in how the title owner for this Property was recorded by the San Bernardino County Recorder’s Office was discovered.
Notwithstanding the mistake that occurred in 2008 when the Director’s Deed was recorded, the former Fontana Redevelopment Agency is the property owner and thus technically it is now owned by the Successor Agency by operation of law when the redevelopment agencies were dissolved in 2012.
The Successor Agency would have listed the Property in the LRPMP and desires to sell the Property in the same manner as properties adjacent to and near the Property that had been listed in the approved LRPMP as Property Nos. 20, 21, 22, 29, 30 and 100. These properties are zoned for general commercial and were identified “for sale” by the Successor Agency. Property Nos. 20, 21, 22, 29, 30 and 100 were placed on the market and advertised through the real estate brokerage community in 2014 and in 2015. Subsequent to those offerings, the City offered to purchase, and to which the Successor Agency accepted and sold to the City on April 28, 2015. At that time, reference information in the action report demonstrated a belief in 2015 that the City already owned the Property.
Now, the Successor Agency seeks to amend its LRPMP to include this Property. The amendment to the LRPMP will include the information concerning the Property pursuant to Section 34191.5(c)(1) and address the disposition of the Property held by the former Redevelopment Agency (pursuant to Section 34191.5(c)(2)).
Following approval by the Successor Agency, the LRPMP will be reviewed and considered by the Countywide Oversight Board. When approved by the Oversight Board, the LRPMP will then be formally submitted to the Department of Finance (DOF) for its review and approval. Approval of the amendment to the LRPMP by the Successor Agency will facilitate transfer of the properties previously owned by the former Fontana Redevelopment Agency in compliance with AB 1484.
The City has submitted an offer to purchase the Property identified with APN 0228-301-51 for $623,505 from the Successor Agency. This Property is part of a larger (commercial zoned) development area located near the corner of South Highland and Citrus Avenue. The City is acquiring this Property to ensure its inclusion as part of the larger commercial development.
Following consideration by the Successor Agency and the Countywide Oversight Board, the recommended property sale “offer” will be submitted to the State Department of Finance for its review and consideration. The Department of Finance may elect to approve or deny the submitted offer. Based upon the time-frames established for DOF’s review and consideration of the recommended offer, it is anticipated that the escrow would close on this Property in late Spring of 2024.
Adoption of the attached Resolutions and approval of the proposed buyer by the Successor Agency will facilitate the sale and disposition of the Property.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item is an estimated $623,505 in revenue from the sale of the property.
MOTION:
Approve staff recommendation