SR - RES-10928 - LEASE CITY PROPERTY°p° AGENDA ITEM
Aril 12 2016
�UNT
TO: Honorable Mayor and Members
of the City Council
THRU: Rick Otto
City Manager
FROM: Aaron Schulze
Administrative Analyst II
ReviewedNerified B -
City Manager
Finance Direc r
To Be Presented By:
Aaron Schulze
X Cons Calendar
City Mgr Rpts
Council Reports
Legal Affairs
Boards /Cmtes _
Public Hrgs
Admin Reports
Plan/Environ
1. SUBJECT
Resolution No. 10928 - A Resolution of the City Council of the City of Orange authorizing the
City Manager to lease certain City properties on a periodic basis.
2. SUMMARY 7771
In March 2016, the transfer of twelve former Redevelopment Agency properties from the
Successor Agency to the City was completed. During the interim period while future reuse of
governmental properties is evaluated, City Council authorization is requested for the City
Manager or his designee to lease certain properties on a periodic basis. The lease revenue would
provide a funding source to the General Fund to offset the property maintenance costs of the
properties transferred from the Successor Agency.
3. RECOMMENDATION
Approve Resolution No. 10928
4. FISCAL IMPACT
Future rent revenue would be received and available in the General Fund to fund property
maintenance for the properties that were recently transferred from the Successor Agency to the
City.
5. STRATEGIC PLAN GOAL(S)
2. Be a fiscally healthy community
a. Expend fiscal resources responsibly
b. Analyze future fiscal needs and potential revenue opportunities
ITEM J. 0%'-' 1 04/12/16
6. GENERAL PLAN IMPLEMENTATION
Economic Development Element Goal 5.0 Improve economic viability of business districts
through aesthetic enhancement, reconstruction, rehabilitation, and elimination of physical
deterioration.
7. DISCUSSION and BACKGROUND
BACKGROUND
The RDA Dissolution Act sets forth obligations and deadlines for redevelopment wind -down
activities, including specific language in Health and Safety Code Section 34191.5 with respect to
the preparation of the Long Range Property Management Plan ( LRPMP). The LRPMP was
approved by the Successor Agency Board at its November 25, 2014 meeting. The Oversight
Board approved the LRPMP at its December 3, 2014 and formal submittal to the Department of
Finance (DOF) took place on December 4, 2014. The DOF issued its letter approving the
LRPMP on December 10, 2015.
The DOF approved the transfer of a majority of the Successor Agency assets to the City for
future governmental purposes. With the completion of the asset transfers to the City, 4 of the 12
properties are currently leased to office and residential tenants.
DISCUSSION
During the interim period while future reuse of governmental properties is evaluated, staff is
requesting City Council approval to authorize the City Manager to lease certain properties on a
periodic basis. The lease revenue provides a funding source to offset property maintenance costs.
Four properties are currently occupied by tenants under short-term leases:
1. The Royer Building, located at 307 E. Chapman Avenue, currently has fifteen office
leases at this property which is managed by a property management company.
2. The South Grand Apartments, located at 124 -142 S. Grand Street, is currently leased to
ten residential tenants on a month -to -month basis and managed by a property
management company.
3. The former Fire Prevention building located at 174 S. Orange Street is currently leased to
a single office tenant, Architects Orange, and the property is managed by staff.
4. The 123 -129 N. Cypress property is currently leased to a single industrial tenant,
Chapman Crafted Beer Co., and the property is managed by staff.
There are two additional properties that are currently not leased, but have potential interim uses:
5. The potential interim use for the northeast corner of Palm Avenue and Palm Drive
property is a short-term lease to the adjacent preschool.
ITEM 2 04/12/16
6. The potential interim use for the 170 -180 S. Water Street property is a short -term lease to
provide surface parking to the adjacent office uses.
It is recommended that the City Council approve Resolution No. 10928 authorizing the City
Manager to lease certain properties on a periodic basis including the assignment of existing
leases as necessary.
8. ATTACHMENTS
• Resolution No. 10928
04121613_CITY RENTAL PROPERTIES-CITY
ITEM 3 04/12/16
RESOLUTION NO. 10928
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ORANGE AUTHORIZING THE
CITY MANAGER TO LEASE CERTAIN CITY
PROPERTIES ON A PERIODIC BASIS.
WHEREAS, the City of Orange recently had certain properties transferred to it from the
Successor Agency to the City of Orange, which had acquired these properties from the
Redevelopment Agency to the City of Orange; and
WHEREAS, the City accepted the conveyance of these properties, identified as
Properties 1 through 12, from the Successor Agency as listed in the attached Quitclaim Deed,
recorded on March 21, 2016 in the Official Records of the Orange County Recorder's Office; and
WHEREAS, it is the City's desire to maintain these properties in a viable condition.
NOW, THEREFORE, BE IT RESOLVED by, the City Council of the City of Orange
that:
1. The City Council hereby authorizes the City Manager, or his /her designee, to lease the
Properties 1 through 12, for fair market value on a periodic basis.
2. The City Council further authorizes the City Manager, or his/her designee, to take
appropriate actions to maintain these properties in a condition to be used for their
intended purpose.
ADOPTED this day of 1 2016
Teresa E. Smith, Mayor, City of Orange
ATTEST:
Mary E. Murphy, City Clerk, City of Orange