FROM:
Development Services
SUBJECT:
Title
Purchase and Sale Agreement-16641 & 16643 Orange Way
End
RECOMMENDATION:
Recommendation
1. Approve a Purchase & Sale Agreement for the purchase of buildings and associated land located at 16641 & 16643 Orange Fontana, CA 92335 specifically described as APN 0191-251-21 & 0191-251-06 in the amount of $7,500,000 plus escrow costs and related acquisition fees.
2. Authorize the purchase of that certain Real Property with APN 0191-251-21 & 0191-251-06 comprised of approximately 34,000 sq. ft. on two parcels of land totaling approx. 67,691 sq. ft (“Property”) from Landexcorp, LLC, A California Limited Liability Company.
3. Authorize the City Manager to enter into the Purchase and Sale Agreement and/or any other documents necessary or appropriate to facilitate said purchase on behalf of the City of Fontana.
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COUNCIL GOALS:
• Promote economic development by pursuing business attraction, retention, and expansion.
• Practice sound fiscal management by living within our means while investing in the future.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.
DISCUSSION:
The City of Fontana continues to experience significant population growth and is now the most populous city in San Bernardino County. This growth has led to a corresponding increase in public infrastructure and demands on public services. To illustrate the scale of current maintenance responsibilities, Public Works staff currently manage over 220 traffic signals, 52 public parks, 470 miles of sewer lines, 640 centerline miles of roadway, and more than 28 public buildings-including the recently completed downtown parking structure.
The existing Public Works Yard, located at 16489 Orange Way, consists of two office buildings and service bays supporting multiple divisions: Utilities and Streets, Parks and Landscape, Fleet and Facilities, Inspection, Traffic Operations, and Environmental Compliance. In addition, Public Works operates an adjacent outdoor lot for employee and departmental equipment parking, an equipment storage yard, and the Fontana Household Hazardous Waste Facility at 16454 Orange Way.
In response to the increasing scope of City infrastructure and rising service demands along with new state and federal regulatory requirements, the City has added staffing and equipment in recent years. As a result, staff is facing growing challenges with onsite parking and constrained workspaces. The Yard is inadequate for the service demands being placed on it, already operating beyond its intended capacity, lacking room to accommodate further growth or additional demands for facilities based on state regulations.
The City and the Seller have negotiated a Purchase Agreement with the following proposed deal-points:
• The City of Fontana would acquire the property for the price of $7,500,000.
• The City of Fontana and Seller, Landexcorp, LLC, will equally split any/all escrow fees as appropriate.
• The City will have 90 days from the opening of escrow to complete its due diligence on the subject property to confirm the suitability and condition of the property for the city’s intended use.
• The City will have a ninety-day financing period to complete all wire-transfers and documents necessary for the close of escrow after approval of the feasibility review.
Approval of the Purchase Agreement and acquisition of the subject property is a crucial step in the City’s efforts to expand Public Works facilities.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item is estimated to be $11,000,000 (including escrow costs, acquisition fees, and tenant improvements). The necessary budget adjustments will be included in the FY 25-26 First Quarter Budget Report in Fund 632.
MOTION:
Approve staff recommendation.