FROM:
Development Services
SUBJECT:
Title
Purchase and Sale Agreement - 16767 Spring Street
End
RECOMMENDATION:
Recommendation
1. Approve a Purchase and Sale Agreement for the purchase of buildings and associated land located at 16767 Spring Street, more specifically described as APNs 0191-162-21 and 0191-162-22.
2. Authorize the City Manager to execute any documents necessary or appropriate to effectuate said approvals and/or agreement.
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COUNCIL GOALS:
• Promote economic development by concentrating on job creation.
• Promote economic development by pursuing business attraction, retention, and expansion.
DISCUSSION:
The City of Fontana is undertaking an expansive and comprehensive revitalization of Downtown Fontana. The specific geographic area to be targeted includes Upland Ave to the North, Orange Avenue to the South, Mango Ave to the East and Juniper Ave to the West. A primary component of this revitalization effort will require the acquisition, replanning, and redevelopment of several key properties within the area. To facilitate the implementation of this revitalization, the City has acquired various properties in Downtown.
The subject properties recently became available for acquisition and staff has negotiated the terms of a favorable acquisition based on prior direction from the City Council.
The acquisition consists of a parcel of approximately 13,000 square feet with a building occupying approximately 3,000 square feet of the parcel.
The city and the seller have negotiated a Purchase Agreement with the following proposed deal-points:
• The City of Fontana would acquire the properties for the price of $1,124,000.
• The City of Fontana and seller will equally split any/all escrow and title fees as appropriate.
• The City has completed its due diligence on the subject property, including title review.
• If approved, the anticipating close of escrow date is September 19, 2024.
• Seller will lease the property back from the city for 12 months following the close of escrow. Rent for the 12-month term ($24,000) will be paid in advance concurrent with the close of escrow. Seller will be responsible for all expenses related to the upkeep and operation of the property during the term of the lease. Lease will not be extended beyond the 12-month period.
Approval of the Purchase Agreement and acquisition of the subject property will assist with the assemblage of various properties located in Downtown Fontana. That assemblage will facilitate the City’s vision and plans to revitalize the Downtown Community.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item is estimated to be $1,225,000 (including escrow costs and related acquisition fees and expenses and demolition of the building after the lease period ends) and was included in the 2023-24 budget. Since the project was not completed in 2023-24, the available budget was carried forward to 2024-25 as authorized by Council with the supplemental budget in Fund 602 - Capital Improvement, Org 60230000.
MOTION:
Approve staff recommendation.