SR - AGR-6433 - SALE OF SURPLUS PROPERTY 3101 W CHAPMAN AVENUE; PORTION OF APN 232-061-101. SUBJECT
Approve sale of surplus property (APN 232 - 061 -10 portion of) located adjacent to Panther
Village at 3101 W. Chapman Avenue for $6,500,000.00; and authorize the Mayor and City Clerk
to execute a Purchase and Sale Agreement in substantially the same form as attached, as well as
any grant deed and related escrow documents.
2. SUMMARY
The City acquired a 2.58 acres property from CalTrans after it was deemed surplus following
completion of the I -5 Freeway widening project that occurred in the 1990's. The City acquired
the property for the purpose of eventually building water well on the site. It has now been
determined that the City will only need .44 of an acre for its water well, leaving 2.14 acres
surplus. The City Council approved surplusing the parcel and adopted Resolution 10980 at the
October 2016 meeting. The City's real property agent was authorized to proceed with selling the
parcel.
13. RECOMMENDED ACTION
Approve the sale of surplus property identified as APN 232- 061 -10 (portion of) to Chapman
University in the amount of $6.5 million and authorize the Mayor and City Clerk to execute a
purchase and sale agreement, as well as, grant deed and related escrow documents.
1 4. FISCAL IMPACT
Upon close of escrow, deposit the sale proceeds to the following account:
100.5011.48110.00000 Sale of Real and Personal Property $6,500,000
5. STRATEGIC PLAN GOAL(S) I
1 d. Provide for a safe community — Assure the development of the City occurs in a fashion that
maximizes public safety.
2d. Be a fiscally healthy community — Effectively manage and develop City assets.
6. DISCUSSION and BACKGROUND
The subject parcel is 2.58 acres and was obtained by CalTrans for an I -5 Freeway expansion
project. Upon completion of the project in the late 1990's, CalTrans designated it as surplus and
it was acquired by the Redevelopment Agency and subsequently the City. The property was
acquired for use as a future water well site. The City still intends to place a water well on this lot
however, it has been determined that the water well will only need a portion of the entire site (.44
acres), leaving the remaining available for sale (2.14 acres).
Upon authorization from the City Council at its October 2016 meeting to surplus the property,
the City's real property agent advertised the property for sale in the newspaper and other media.
As this property is adjacent to Panther Village, Chapman University expressed interest and made
a substantial offer of $6,500,000 to purchase the property. It is an all cash offer and does not
require the buyer to obtain a loan. This offer is more than the appraised amount which ranges
from $2.4 million to $6.0 million. While the base amount of the appraisal is $6.0 million, the
appraisal noted that the value could be reduced by up to 60% to $2.4 million as the property is
landlocked and has no direct access from a public roadway.
Tonight's City Council action is to approve the sale at $6,500,00 and authorize the Mayor and
City Clerk to execute a purchase and sale agreement between the City and Chapman University,
as well as, grant deed and related escrow documents.
With the sale of this property, the City will begin work immediately on the planning, design and
construction of the water well on the site. Approximately $3.5 million from the proceeds of the
sale will be allocated to the water well project.
17. ATTACHMENTS
• Purchase and Sale agreement.
ITEM 2 12/13/16