HomeMy WebLinkAbout15 - Sale of City-Owned - 204 44th Street0
NEWPORT ' O e�
August • ••• u x
CqG /FO:t
TO: Members of the Newport Beach City Council
FROM: Dave Kiff, Assistant to the City Manager
Marion Brockman, Administrative Assistant, City Manager's Office
SUBJECT: Sale of City-Owned Property -204 444th Street
RECOMMENDED
ACTION:
Authorize the sale of City-owned property at 204 441h Street for $430,000.
EXECUTIVE The City has owned a 2,302 square ;foot duplex at 204 44th Street since July 1987.
SUMMARY: In August 1985, an oil well beneath the sidewalk adjacent to the property "blew
out" when utilities workers were maintaining the well equipment. To settle a
claim resulting from the blow out, the City purchased the property for $357,500
and has operated the house as rental property.
In June 1998, a City Council subconunittee (Debay, Edwards, Thomson) viewed
the property and recommended that it be sold. The selling price was set at
$475,000. City staff has entertained a number of offers below that price and asks
the Council to approve the sale of the duplex for $430,000.
BACKGROUND: As noted in the summary, this 2,302. square foot duplex at 204 441h Street adjacent
to Balboa Boulevard has been under City ownership since July 1987. The "44th
Street House" includes a front unit (1,606 so and a rear unit (696 sf) with a large
garage. The parcel is zoned R -2. A picture follows:
Newport Beach City Council
ITEM 15
Page 2
BACKGROUND: The oil well near the duplex was first drilled by A. J. Delany in November 1924.
(cont'd): Delany later sold it to the South Basin Oil Company. South Basin was then
purchased by Orange County Refining Company. In May 1946, Orange County
Refining Company transferred the well to the City of Newport Beach.
Receipt of House as On August 2,1985, the well "blew our underneath a casing when utilities
Settlement workers were maintaining the well equipment. As the well blew out, the well
gas caught fire. After working with the State Department of Conservation's
Division of Oil and Gas to cap the well, the City formally abandoned it on
August 16,1985. To settle a disputed claim made by the then - owners of 204 44th
Street, Dean and Marcella Phillips, the City purchased the property from the
Phillipses for $357,500.
The front unit of the duplex (315D, 2BA and 1,606 so is currently rented out via a
month -to -month lease to a tenant who pays $1,600 per month. The rear unit
(21313,1BA and 696 so, was rented in February 1994 for $1,000 per month (again
on a month -to -month lease) to two tenants who were evicted by the City for
unpaid rent in October, 1997. The unit has been vacant since the tenants'
departure. A review of the unit by City staff determined that it needs significant
repairs ranging from $18,000 to $20,000 prior to any rental re- marketing.
In June 1998, the Council subcommittee ( Debay, Edwards, Thomson) directed
staff to market the property for sale "as is" either through an open bid process or
to any willing buyer participating with a real estate agent. In September 1998,
the City first sent a written offer to "sell or lease surplus land for the purpose of
developing low- and moderate - income housing" to the Authority Manager of the
Orange County Housing Authority per Government Code §54222.
When the open bid process was conducted and completed in November 1998,
the City did not receive any responsive bids for the 441h Street House. Since then,
the City has' marketed" the property for sale via flyers (attached) and limited
notification to real estate agents.
Proposed Selling Price In early July 1999, City staff reviewed the offer and two counteroffers of a
prospective buyer with Council members Ridgeway, Debay, and Thomson. Staff
now recommends (pending City Council approval) selling the 44th Street House
for $430,000 'as is," with the City paying 3% to the selling real estate agent and
the cost of "termiting" the residence.
Staff believes that any disclosure, liability, or other obligations relating to the
now - capped oil well will be successfully addressed through the escrow process
with the assistance of the CNB Public Works /Utilities Division and the Assistant
City Attorney. If this issue is not resolved to the City Attorney's satisfaction, the
City will not complete the sale.
ATTACHMENTS: 441h Street House Sale Flyer
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Page 3
The City of Newport Beach
announces its intent to sell
Surplus Property
204 44th Street
Newport Beach
(4411 and Balboa Boulevard)
Duplex — zoned R -2
2,302 total square feet
Front Unit = 3 BD, 31h BA, LR, FR, DR (1,606 so
Back Unit = 2 BD,1 BA (696 so
Fireplace in each unit, large garage
$475,000
City will pay 3% to real estate agent who completes sale.
Please contact City Manager's office at 949/644 -3002 for more information
or E -Mail dkiff @city.NewQort- Beachca.us