For City Council Meeting November 12, 2024
TO: Honorable Mayor and City Council
FROM: G. Michael Milhiser, Interim City Manager
AUTHOR: Colby Cataldi, Director of Community Development
Title
Request City Council to Consider and Approve a Purchase and Sale Agreement between the City of Rialto and Oscar and Blanca Esparza for the property located at 130 South Willow Avenue (APN # 0130-211-30 and 0130-211-36) and adopt Budget Resolution No. 8306.
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
1. Approve the Purchase and Sale Agreement between the City and Oscar and Blanca Esparza and use of General Funds for the acquisition of 130 South Willow Avenue in the amount of $775,000, plus related closing costs not to exceed $25,000;
2. Authorize the City Manager to execute the Agreement, including non-substantiative modifications, amendments and/or other pertinent documents necessary to effectuate and/or implement the Agreement on behalf of the City;
3. Determine the Project is exempt pursuant to Section 15061 (b) (3) (General Rule Exemption), of the California Environmental Quality Act for an administrative action; and
4. Adopt the attached Budget Resolution.
BACKGROUND
On June 12, 2024, Oscar and Blanca Esparza sent the City a letter of interest to the City of Rialto (the “City”) to see if the City would be interested in acquiring the property located at 130 South Willow Avenue (the “Property”). The Property is improved with a two-story building containing approximately 6,900 square feet and approximately 26,000 square feet of asphalt. The remainder of the site is improved with front and side yard landscaping and signage with minor ancillary improvements. The building was built in 1950 and was extensively damaged by fire and currently remains in a red-tagged, non-occupiable condition. Per the County Assessor’s mapping services, the Assessor Parcel Numbers are 0130-211-30 and 0130-211-36. Combined, the parcels size is approximately 0.75 acres or 32,850 square feet (Exhibit A).
On August 27, 2024, City Council authorized City Manager and Staff to negotiate and submit an offer to purchase the Property.
On November 6, 2024, Staff presented to the Planning Commission the acquisition of the Property pursuant to Government Code Section 65402(a). The request to find the acquisition consistent with the General Plan was approved via Resolution No. 2024-69 (Exhibit B).
ANALYSIS/DISCUSSION
In July 2024, an independent appraiser determined the fair market value of the Property to be $722,500, and with the inclusion of various property condition deduction items, a final value was arrived at $645,000 (Exhibit C). City Staff and Oscar and Blanca Esparza, negotiated to arrive at mutually acceptable terms for the purchase of the property by the City for $775,000. Although the proposed sales price is approximately 7% above the sales comparison in the appraisal and 17% above the final appraised market value after property condition deductions, staff believes that Property will offer the City strategic planning benefits for the future redevelopment of the Civic Center area of downtown Rialto. The Property is located within and adjacent to the Civic Center campus area and is ideal to serve in the City’s long-term public facility master plan and development strategy. The purchase and sale agreement (Exhibit D) calls for accepting the Property in the “AS IS” condition. During the 30-day due diligence period, the City shall investigate the condition and suitability of the Property. If for any reason the City decides not to acquire the property during the due diligence period, it may cancel the escrow. Following City Council consideration this evening, coordination with the escrow company and title officer will be underway.
ENVIRONMENTAL IMPACT
The proposed action to approve the Purchase and Sale Agreement is exempt from CEQA as an administrative action. The future development project shall comply with the California Environmental Quality Act (“CEQA”).
GENERAL PLAN CONSISTENCY
Specifically, the land acquisition of approximately 0.75 acres is in compliance with the following General Plan Goals:
Goal 2-5: Develop Downtown Rialto as a lively, pedestrian friendly district typical of a small-town downtown, with a vibrant mix of residential, commercial, civic uses, and transit-oriented development.
Goal 3-1: Strengthen and diversify the economic base and employment opportunities and maintain a positive business climate.
Goal 3-3: Attract, expand, and retain commercial and industrial businesses to reduce blighted conditions and encourage job growth.
Goal 3-4: Revitalize aging and underperforming commercial and industrial areas.
LEGAL REVIEW
The City Attorney's Office has reviewed the agreement and approved it as to form.
FINANCIAL IMPACT
The General Fund is the funding source for the acquisition, which includes a purchase price of $775,000 plus estimated closing costs not to exceed $25,000. Separate from the acquisition, staff will prepare the scope of work and cost for future site demolition and technical studies, as needed.