HomeMy WebLinkAbout26 - 608 E. Balboa Blvd. and 209 Washington StreetCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 26
January 26, 2010
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
Leigh M. De Santis, Economic Development Administrator
949 - 644 -3207, Idesantis @newportbeachca.gov
SUBJECT: Purchase and Sale Agreement for Acquisition of 608 E. Balboa
Boulevard and 209 Washington Street
RECOMMENDATIONS:
1. Approve and authorize the mayor to sign the attached Purchase and Sale
Agreement by and between the City of Newport Beach and Levon Gugasian and
Zarouhi Gugasian, husband and wife, for the purchase by the City of 608 E.
Balboa Boulevard and 209 Washington Street.
2. Approve budget amendment transferring funds as follows:
• $1,294,268 from the Neighborhood Enhancement B Reserve Account
(010- 3769)to 7024- C3002008,
• $138,897 from the Off Street Parking Reserve Account (010 -3766) to
7022- C3002008,and
• $671,335 from the In -Lieu Parking Reserve Account (010 -3767) to 7021 -
C3002008.
DISCUSSION:
Background:
The City Council, at a closed session on October 27, 2009, provided negotiation
instructions to its negotiating team for the acquisition of 608 E Balboa Boulevard and
209 Washington Street. Additional instructions were sought and provided on November
24, 2009. The team was able to reach agreement with the Sellers in keeping with the
Council's instructions. The property is being purchased for expansion of the City at-
grade public parking lot located on the same block.
Purchase & Sale Agreement
January 26, 2010
Page 2
Terms of Agreement:
Attached to this report for your review and approval is the Purchase and Sale
Agreement. Mr. and Mrs. Gugasian have signed the Agreement.
The Terms of the Agreement are as follows:
1. Consideration
a. Purchase Price: .$3,500,000
b. Payment Schedule
i. Opening of Escrow: $100,000, refundable if title or environmental
issues are unacceptable to Buyer
ii. Close of Escrow: $1,900,000
iii. First anniversary C /E: $750,000 with interest accruing at 2%
iv. Second anniversary C /E: $750,000 with interest accruing at 2%
2. Title Insurance
Seller to provide preliminary title report and policy of title insurance covering
full purchase price
3. Escrow
a. Escrow company to be selected jointly
b. Costs of escrow to be shared equally by Buyer and Seller
c. Documentary transfer tax to be paid by Seller
d. Escrow may not close until City has approved an environmental
determination on the project.
4. Real Estate Commissions
a. Buyer is not represented by real estate agent or broker
b. If Seller is represented by real estate agent or broker, any commission or
fees to be paid for by Seller out of proceeds of sale
5. Environmental Contamination Assessment
a. Purchase to be contingent on no environmental contamination on
property, or contamination at a level acceptable to Buyer
b. Buyer to be responsible for cost of environmental assessment of property
c. Environmental assessment to be completed within ninety (90) days of
opening escrow
Purchase & Sale Agreement
January 26, 2010
Page 3
d. Buyer to have thirty (30) days from completion of environmental
assessment to waive contingency or withdraw from transaction
e. Seller remains responsible for any environmental contamination existing
prior to close of escrow
6. Voluntary Transaction /Relocation Assistance
a. Buyer is not contemplating use of eminent domain
b. If Buyer receives any claims for relocation assistance, Buyer reserves
right to renegotiate purchase price
7. City Council Approval/ California Environmental Quality Act (CEQA)
a. Any agreement for Buyer to purchase property is not valid without
approval by City Council, including City Council approval of environmental
determination pursuant to CEQA
b. Close of escrow to be contingent upon completion of CEQA analysis to
Buyer's satisfaction
Environmental Review:
City staff will be conducting the CEQA review based on the project being the
acquisition, demolition of the existing structure and the expansion of the existing at-
grade public parking lot. Results of the Phase 1 environmental assessment are needed
to complete the CEQA analysis. Staff has selected a firm to complete this work, and it
will be completed well within the 90 -day timeframe noted in the terms. The terms of the
Purchase and Sale Agreement provide, and the escrow instructions will include, that
escrow may not close until the City has approved an environmental determination on
the project.
Funding Availability:
To implement this transaction and build the at -grade parking lot will require $2.1 million
dollars in fiscal year 2010 with two additional annual installments of $750,000 in fiscal
years 2011 & 2012. The money will be used as follows.
Escrow Deposit 100,000 refundable if escrow does not close
Payment due at the Close of Escrow 1,900,000
Phase I Environmental 2,550
Escrow costs 1,950
Demolition 50,000
Construction 50,000
FY 2010 Appropriation $2,104,500
Purchase & Sale Agreement
January 26, 2010
Page 4
FY 2011 Installment $750,000
FY 2012 Installment $750.000
TOTAL $3,604,500
The initial $2,104,500 dollars will be appropriated from three separate reserve accounts:
Neighborhood Enhancement B, In -Lieu Parking, and Off Street Parking. These three
accounts were originally established as depositories for funds to be used to create off -
street parking. The FY 2010 appropriation will fully commit the balances in the three
reserve accounts. This commitment will cause all three accounts to briefly go negative.
They will return to positive balances as more revenue is recognized. Staff projects that
all but $134,858 should be repaid by June 30, 2010. The remaining balance will be
earned in FY 2011. The remaining balance of installment purchase agreement will
obligate the General Fund to pay the seller $750,000 in fiscal years 2011 and 2012
which will be appropriated from future revenue sources.
Prepared by:
Leigh M. De Santis,
Economic Development Administrator
Submitted by:
SYiaron Z. Wood
Assistant City ager
Attachments: Purchase and Sale Agreement
Budget Amendment
AGREEMENT FOR ACQUISITION AND SALE OF REAL
PROPERTY BY AND BETWEEN THE CITY OF NEWPORT
BEACH AND LEVON AND ZAROUHI GUGASIAN
This AGREEMENT FOR ACQUISITION AND SALE OF REAL PROPERTY
( "Agreement ") is entered into by and between the CITY OF NEWPORT BEACH, a
municipal corporation and Charter city (the "City'), and LEVON GUGASIAN and
ZAROUHI M. GUGASIAN, husband and wife as joint tenants ( "Seller"), for acquisition
by the City of certain real property owned by Seller and is made on the basis of the
following facts, intentions and understandings.
RECITALS
A. Seller is the present owner of that certain real property consisting of two adjacent
parcels generally located at 608 East Balboa Boulevard and 209 Washington
Street, Newport Beach, California ( "Property "), identified as Assessor's Parcel
Numbers 048 -116 -04 and 048 - 116 -05, and more particularly described in
Exhibit "A" ( "Legal Description ") which is attached hereto and incorporated herein
by reference.
B. Seller is to convey fee simple merchantable title in the Property ( "Setters
Interest") to City in accordance with the terms of this Agreement.
C. City desires to acquire Property, for possible redevelopment, and Seller agrees to
sell, assign and transfer Property on the terms and conditions set forth in this
Agreement.
NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
1. Purchase and Sale of Property. Subject to the prior satisfaction of the
Conditions to Closing set forth in Section 3 hereof, City shall acquire from Seller the
Property. The parties agree on the basis of an appraisal in accordance with the
negotiation of this transaction that the value of the Property is Three Million Five
Hundred Thousand Dollars ($3,500,000.00) (the "Property Purchase Price"); to which
the Parties allocate Two Million, Five Hundred and Fifty Thousand Dollars
($2,550,000.00) for the 608 East Balboa Boulevard parcel (the "608 Parcel"), and Nine
Hundred and Fifty Thousand Dollars ($950,000.00) for the 209 Washington Street
parcel. The Parties acknowledge that Twenty-Six Thousand, Five Hundred Dollars
($26,500.00) of the Two Million, Five Hundred and Fifty Thousand Dollars allocated for
the 608 Parcel shall constitute consideration for personal property and fixtures existing
on the 608 Parcel which are included in the subject transaction. The City anticipates
such funds used for the Property Purchase Price will be derived from parking in lieu
fees rather than from the City's General Fund.
2. Closing. This transaction shall close (`Closing ") within thirty (30) days of
the satisfaction of the Conditions to Closing set forth in Section 3, but in any event not
later than one hundred and twenty (120) days after the City has approved this
Agreement (the "Outside Date "). The Closing shall occur at the office of the Escrow
Agent (as hereinafter defined) within Orange County at a time and place reasonably
agreed on by the parties. The "Closing" shall mean the time and day the Grant Deed is
filed for recording with the Orange County Recorder. The "Closing Date" shall mean the
day on which the Closing occurs.
3. Conditions to Closing. The Conditions to the Closing are as follows
(a) Conveyance to City of good and marketable title to the
Property free of any and all interests, encumbrances, liens, easements, rights or
possession or other clouds of title other than the Leases set forth in the Schedule of
Leases attached hereto as Exhibit C and such liens, encumbrances, clouds or
conditions as may be approved in writing by the City's City Manager, or designee; and
(b) Delivery of a CLTA owner's extended coverage title
insurance policy on the Property, at Seller's expense, in the amount of the full Purchase
Price, subject only to such liens, encumbrances, clouds or conditions as may be
approved in writing by the City's City Manager, or designee; and
(c) Satisfaction of all of Seller's obligations enumerated in
Section 4 hereof, and
(d) Satisfaction of all of City's obligations enumerated in
Section 5 hereof; and
(e) City's written approval of the Preliminary Title Report for the
Property as required under Section 13 of this Agreement; and
(f) City's written acceptance of the Leases or rental agreements
set forth in the Schedule of Leases attached hereto as Exhibit C.
(g) City's environmental consultant providing to City evidence
deemed sufficient by City, in writing that the Property is clear of hazardous
contamination, or City's acceptance, in writing, that the level of any hazardous
contamination is acceptable to City. The cost of said site investigation shall be at the
expense of City;
(h) Pursuant to the California Environmental Quality Act
( "CEQA ") Guidelines Section 15004(b)(2)(A) and applicable case law, City conditions its
purchase and use of the Property on the completion and approval of an environmental
analysis. Said approval is at the sole and absolute discretion of City, and shall be
conveyed to Seller in writing prior to the Close of Escrow. By purchasing the Property,
City is not committing itself to any definite course of action on any future project. City
retains its full authority and right to consider all feasible mitigation measures and
alternatives for any future project, including a no project alternative; and,
(i) Seller's execution of an affidavit of exemption from the
Foreign Investment in Real Property Tax Act ( "FIRPTA ").
Agreement For Acquisition And Sale Of Real Property
2
4. Seller's Obligations. Seller shall deliver the following to escrow no later
than 12:00 o'clock noon, one (1) business day before the anticipated Closing:
(a) Grant Deed to Property executed by Seller and notarized in
the form of Exhibit "B" attached hereto and incorporated herein by this reference (the
"Grant Deed ").
(b) Transfer all security deposits or advance rental payments
held by Seller or any third -party to the City.
5. City's Obligations. No later than 12:00 o'clock noon one (1) business
day before the anticipated Closing, City shall deliver to escrow the following:
(a) The Certificate of Acceptance (Attachment "1" to Exhibit "B")
signed by City's authorized representative in the form attached to the Grant Deed;
(b) First installment payment of One Million, Nine Hundred
Thousand Dollars ($1,900,000.00) and amounts required to be paid by the City by
Section 12 hereof; and,
(c) A fully executed Promissory Note in favor of Seller, in a form
substantially similar to the one attached hereto as Exhibit D, providing that Buyer shall
pay to Seller the balance of the Purchase Price (One Million, Five Hundred Thousand
Dollars or $1,500,000.00) payable in two equal installments, the first payment due one
year from the Closing Date, and the second payment due two years from the Closing
Date, with interest accruing at two percent (2 %) per annum.
6. Representations and Warranties.
6.1 The City represents and warrants to the Seller as follows
(a) To the best of the City's knowledge, there are no actions,
suits, material claims, legal proceedings, or any other proceedings affecting this
Agreement thereof, at law, or in equity before any court or governmental agency,
domestic or foreign; and
(b) To the best of the City's knowledge, neither the execution of
this Agreement nor the performance of the obligations herein will conflict with, or breach
any of the provisions of any bond, note, evidence of indebtedness, contract, lease, or
other agreement; and
. (c) City is not a "foreign person" within the parameters of
FIRPTA, or is exempt from the provisions of FIRPTA, or that the City has complied and
will comply with all the requirements under FIRPTA; and
6.2 The Seller represents and warrants to the City as follows:
Agreement For Acquisition And Sale Of Real Property
3
(a) The Seller has full right, power and lawful authority to grant,
sell and convey the Property as provided herein; and
(b) To the best of the Seller's knowledge, and except as
disclosed in writing to City, including the Schedule of Leases attached hereto as
Exhibit C, there are no tenants or other persons who have a lawful interest in the
Property; and
(c) The Seller, at the time of the execution of this Agreement, is
in possession of the Property in fee simple and is the lawful owner of and has good
indefeasible title to the Property; and
(d) To the best of the Seller's knowledge, there are no pending
or threatened actions, suits, material claims, legal proceedings, or any other
proceedings affecting the Property or any portion thereof, at law, or in equity before any
court or governmental agency, domestic or foreign; and
(e) To the best of the Seller's knowledge, and except as
disclosed in writing to City, there are no service contracts or other contracts affecting
the Property; and
(f) Until the Closing, the Seller shall not do anything which
would impair the Seller's title to the Property; and
(g) To the best of the Seller's knowledge, neither the execution
of this Agreement nor the performance of the obligations herein will conflict with, or
breach any of the provisions of any bond, note, evidence of indebtedness, contract,
lease, or other agreement or instrument which affects the Property; and
(h) The Seller agrees to convey by grant deed to City
marketable fee simple title to the Property free and clear of all recorded and unrecorded
liens, encumbrances, assessments, easements, leases, and taxes EXCEPT the Leases
set forth on the Schedule of Leases attached hereto as Exhibit C, quasi - public utility,
public alley, public street easements, and rights of way of record, and such other liens
or encumbrances approved in writing by City's City Manager or designee; and
(i) The Sellers are not a "foreign person" within the parameters
of FIRPTA, or are exempt from the provisions of FIRPTA, or that the Seller's have
complied and will comply with all the requirements under FIRPTA.
0) Until the Closing, the Seller shall, upon learning of any fact
or condition which would cause any of the warranties and representations in this
Section 6.2 not to be true as of Closing, immediately give written notice of such fact or
condition to City.
6.3 The representations and warranties set forth in this Section 6 and
Section 8 shall survive close of escrow.
Agreement For Acquisition And Sale Of Real Property
4.
7. Release and Waiver. The amount of the Property Value has been
determined based upon negotiations at arm's- length and an appraisal mutually agreed
upon by the Parties submitted by Richard A. Fuller, MAI on October 15, 2009, and does
not include consideration for any amounts required to be paid for relocation assistance
pursuant to the Relocation Assistance Act (Government Code Section 7260, et seq.)
and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1970 (42 U.S.C. Section 4601, et seq.), and any other applicable federal, state or local
enactment, regulation or practice. Seller has been fully advised by counsel of their
choosing and forever waives and disclaims any claim for relocation benefits or
assistance or any compensation based upon loss of goodwill, severance damages,
improvements pertaining to the realty, attorneys fees, interest, court cost, or otherwise,
and waive any right to receive an offer based on an appraisal, and agrees that the
Purchase Price shall be the sole payment and compensation to the Seller for the sale of
the Seder's Interest in the Property. If the City receives any claim for relocation
assistance pursuant to the Relocation Assistance Act and the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 during the Escrow period,
the City reserves the right to renegotiate the Purchase Price or to cancel Escrow if the
Parties cannot agree upon a modified Purchase Price.
8. Condition of the Property.
Hazardous Waste... The Seller acknowledges with respect to the. Property that to the
best of the Sellers knowledge, Hazardous Materials ( "Hazardous Materials ") were not
used, generated; stored; .released; discharged or disposed of on, under, in, or about the
Property or transported to or from the Property. The Seller represents with respect to
the Property, that the Seller nor any other person or entity under the control of, or with
the knowledge of the Seller will cause or permit the use, generation, storage, release,
discharge, or disposal of any Hazardous. Materials on, under,. in, or about the subject
property. As used in this.Agreement.the term "Hazardous Materials" shall mean any
substance, material, or waste which is or becomes; prior to the closing date, regulated
by any local governmental authority, the State of California, or the United States
Government, including, but not limited to, any material or substance which is (i) defined
as a "hazardous waste ", "extremely hazardous waste ", or "restricted hazardous waste"
under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control
Law), (ii) defined as "hazardous substance" under Section 25316 of the California
Health and Safety Code, Division 20, Chapter 6.8 (Carpenter - Presley- Tanner
Hazardous Substance Account Act), (iii) defined as a "hazardous material ", "hazardous
substance ", or "hazardous waste" under Section 25501 of the California Health and
Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans
and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances), (v) petroleum, (vi). friable asbestos, (vii) polychlorinated
biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely
hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations,
Division 4, Chapter 20, (ix) designated as a "hazardous substances" pursuant to Section
311 of the Clean Water Act, (33 U.S.C. §1317), (x) defined as a "hazardous waste"
pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C.
section 6901 et seq. (42 U.S.C. §6903) or (xi) defined as "hazardous substances"
pursuant to Section 101 of the Comprehensive Environmental Response,
Agreement Fer Acquisition And Sale Of Real Property
5 — — -
Compensation, and Liability Act, 42 U.S.C. Section 6901 et seq. The Seller shall be
responsible for the removal of all Hazardous Materials, if any, before the Seller
relinquishes actual possession of the Property, subject to the City's approval of Seller's
satisfactory removal of all Hazardous Materials. City shall have the right to fully inspect
the Property prior the Close of Escrow and shall provide written notice of its approval or
non - approval of the removal of Hazardous Materials to its satisfaction prior to the Close
of Escrow. If the removal of Hazardous Materials by Seller has not been completed to
City's satisfaction no later than one (1) business day before Close of Escrow, City
reserves the right to cancel Escrow and terminate this transaction.
9. Compliance with Environmental Laws. To the best of the Seller's
knowledge, the Property and its present use complies with all applicable laws and
governmental regulations including, without limitation, all applicable federal, state, and
local laws pertaining to air and water quality, hazardous waste, waste disposal, and
other environmental matters, including, but not limited to, the Clean Water, Clean Air,
Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation
Recovery and Comprehensive Environmental Response Compensation and Liability
Acts, and the California Environmental Quality Act, and the rules, regulations, and
ordinances of the City within which the subject property is located, the California
Department. of Health Services, the Regional Water Quality Control Board, the State
Water Resources Control Board, the Environmental Protection City, and all applicable
federal, state, and local agencies and bureaus.
10. Indemnity. The Seller agrees to indemnify, defend and hold City
harmless from and against any claim, action, suit, proceeding, loss, cost, damage,
liability, deficiency, fine, penalty, punitive damage, or expense (including, without
limitation, attorneys' fees), resulting from, arising out of, or based upon (i) the presence,
release, use, generation, discharge, storage or disposal of any Hazardous Materials on,
under, in or about, or the transportation of any such Hazardous Materials to or from, the
Property, or (ii) the violation; or alleged violation, of any statute, ordinance, order, rule,
regulation, permit, judgment or license relating to the use, generation, release,
discharge, storage, disposal or transportation of Hazardous Materials on, under, in or
about, to or from, the Property. This indemnity shall include, without limitation, any
damage, liability, fine, penalty, punitive damage, cost or expense arising from or out of
any claim, action, suit or proceeding for personal injury (including sickness, disease or
death, tangible or intangible property damage, compensation for lost wages, business
income, profits or other economic loss, damage to the natural resource or the
environment, nuisance, contamination, leak, spill, release or other adverse effect on the
environment. This indemnity extends only to liability created prior to the Closing Date.
11. Environmental Contingency. This Agreement, or escrow created
hereby, is additionally contingent upon the City receiving satisfactory evidence, in the
form of an environmental assessment report, from a licensed contractor who is
acceptable to the City in its sole and absolute discretion and who shall be hired by the
City, showing that the Property is free from any Hazardous Materials in the soil or
groundwater, or any other environmental conditions which may affect the value of the
Property. In the event the City is not able to obtain such an environmental assessment
report, the City is entitled to conduct such further and other examination and testing as it
Agreement For Acquisition And Sale Of Real Property
— - 6
or any responsible governmental agency may require or request to determine the
nature, source, scope, and extent of such Hazardous Materials, or it may terminate this
transaction and cancel escrow. Such environmental assessment report shall be
completed within ninety (90) calendar days of opening of escrow. If a licensed
contractor selected by the City determines that there are Hazardous Materials in, on or
under the Property, including in the groundwater, then the City may elect to:
(i) terminate this transaction and cancel escrow, or (ii) negotiate a modified purchase
price with Seller and purchase the subject Property. The City shall provide written
notice to the Seller of its election to terminate the transaction and cancel escrow under
this paragraph within thirty (30) days from the completion of the environmental
assessment report. Regardless of which option is selected by the City in the event
Hazardous Materials are found in, on or under the subject property, neither Party
waives or relinquishes any common law or statutory rights it or they may have against
one another or third persons arising from or related to the cause or source of the
Hazardous Materials, or for contribution or indemnity as a result of site evaluation,
remediation and clean -up costs and liability.
12. Escrow. Within ten (10) days after the execution of this Agreement by
City and the Seller, the parties shall open escrow with an escrow company agreed to by
all parties (the "Escrow Agent'.
12.1 City shall deposit $100,000.00 with Escrow Agent within three days
of opening escrow as a deposit toward the Purchase Price (the "Initial Deposit ").
The Initial Deposit shall be.refundable in full.to the City if any of the conditions set
forth in Section 3j.8 or 11 of this Agreement cannot be satisfied or completed.
12.2 The City shall pay one -half (1/2) all escrow fees, charges and costs
(the "Escrow Fees ") consisting of the following:
(a) The Escrow Agent's fee;
(b) The cost of any documentary transfer taxes, if any, on the
Property Grant Deed;
(c) Fees for recording and filing all documents required by this
Agreement in connection with the transfer of Property, including the Property Grant
Deed; and
12.3 The Seller shall pay one -half (1/2) all escrow fees, charges and
costs (the "Escrow Fees ") consisting of the following:
(a) The Escrow Agent's fee;
(b) The cost of any documentary transfer taxes, if any, on the
Property Grant Deed;
(c) Fees for recording and filing all documents required by this
Agreement in connection with the transfer of Property, including the Property Grant
Deed; and
Agreement For Acquisition And Sale Of Real Property
7
(d) The full costs of an CLTA owner's extended insurance
coverage, including any land survey costs for the Property in the amount of the Property
Purchase Price.
13. Preliminary Title Reports. Within five (5) business days after the
opening of escrow, the Seller, at the Seller's expense, shall furnish City with a
Preliminary Title Report on the Property issued by a title company mutually agreed to by
both Parties. The Preliminary Title Report shall be accompanied by legible copies of
all underlying documents for all exceptions ( "Exceptions ") set forth in the Preliminary
Title Report. The City shall have ten (10) business days from receipt of the Preliminary
Title Report within which to give written notice to the Seller of the City's approval or
disapproval of any of such Exceptions. The City's failure to give written approval of the
Preliminary Title Report within such time limit shall be deemed disapproval of the
Preliminary Title Report. No deeds of trust, mortgages or other liens, except for the lien
of property taxes and assessments not yet due, shall be approved Exceptions. If the
City notifies the Seller of its disapproval of any Exceptions in the Preliminary Title
Report, or is deemed to have disapproved the Preliminary Title Report, the Seller shall
have the right, but not the obligation, to remove any disapproved Exceptions within thirty
(30) days after receiving written notice of the City's disapproval or provide assurances
satisfactory to the reviewing. party that such Exception(s) will be removed on or, before
the Closing. If the Seller cannot or does not elect to remove any of the disapproved
Exceptions within that period, the City shall have ten (10) days after the expiration of
such thirty (30) day period to either give the Seller written notice that the City elects to
proceed with the acquisition subject to the disapproved Exceptions or to give the Seller
written notice that the City elects to terminate this Agreement. The City shall have the
right to.approve or disapprove any Exceptions reported by the Title Company after the
City has approved the condition of title for the Property. Neither party shall voluntarily
create any new exceptions to title following the date of this Agreement.
14. Escrow Instructions. This Agreement constitutes the joint escrow
instructions of the City and the Seller, and Escrow Agent to whom these instructions are
delivered is hereby empowered to act under this Agreement. The parties hereto agree
to do all acts reasonably necessary to close this escrow in the shortest possible time.
14.1 By 12 o'clock noon, the last business day before Closing, the City
and the Seller will deposit the documents as required by Section 4 and 5 hereof with
Escrow Agent. The City and the Seller agree to deposit with Escrow Agent any
additional instruments as may be necessary to complete this transaction or required by
escrow.
14.2 Insurance policies for fire or casualty are not to be transferred, and
Seller will cancel its policies after the Closing.
14.3 All funds received in this escrow shall be deposited with other
escrow funds in a general escrow account(s) and may be transferred to any other such
escrow trust account in any State or National Bank doing business in the State of
California. All disbursements shall be made by check from such account.
__ Agreement For Acquisition And Sale Of Real Property
8
14.4 If in the opinion of the City it is necessary or convenient in order to
accomplish the Closing of this transaction, City may require that the parties sign
supplemental escrow instructions as may be required by the Escrow Agent; provided
that if there is any inconsistency between this Agreement and the supplemental escrow
instructions, then the provisions of this Agreement shall control. The Parties agree to
execute such other and further documents as may be necessary, helpful or appropriate
to effectuate the provisions of this Agreement. The Closing shall take place when the
conditions of Closing as set forth in Section 3 have been satisfied.
14.5 Escrow Agent is instructed to release City's escrow closing and the
Seller's escrow closing statement to the parties as identified in Section 19.4 of this
Agreement.
15. Tax Adjustment Procedure. Escrow Agent is authorized and is
instructed to comply with the following:
15.1 Pay and charge the Seller for any unpaid delinquent taxes against
the Property and/or penalties and interest thereon, and for any delinquent or non -
delinquent assessments or bonds against the Property; and
15.2 Pay and charge the Seller for all taxes against the Property. which
will be due at the end of the current assessment period ending either December 10 or
April 10; and
15.3 The Seller shall have the sole right, after the Closing, to apply to
the County Tax Collector of Orange County for a refund of the amount over and above
the amount of the Seller's pro rata share of taxes then due. This refund would apply to
the period after the City's acquisition of the Property, pursuant to Revenue and Taxation
Code Section 5096.7; and
15.4 Escrow Agent shall forward a separate receipt and check for
prorated taxes to Seller pursuant to paragraph 15.3 above, with separate written notice
to City.
16. Authority of Escrow Agent Escrow Agent is authorized to, and shall:
16.1 Pay and charge the Seller for any amount necessary to place title
of the Property in the condition necessary to satisfy Section 3 of this Agreement; and
16.2 Charge City for Escrow Fees in accordance with Section 12 of this
Agreement; and
16.3 Disburse funds, deliver and record the Grant Deeds and Certificate
of Acceptance when conditions of this escrow have been fulfilled by City and the Seller,
and
16.4 Do such other actions as necessary, including obtaining policies of
title insurance, to fulfill its obligations under this Agreement; and
Agreement For Acquisition And Sale Of Real Property
9
16.5 If the provisions of FIRPTA apply to the transaction memorialized in
this Agreement, and unless City or the Seller are not a "foreign person" or an exemption
applies, the Escrow Agent shall deduct and withhold from the Seller's proceeds in
connection with the conveyance of the Property, ten percent (10 %) of the gross sales
price and shall otherwise comply with all applicable provisions of FIRPTA. City and the
Seller agree to execute and deliver as directed by Escrow Agent any instrument,
affidavit, and statement, and to perform any act reasonably necessary to comply with
the provisions of FIRPTA and regulations promulgated thereunder. City and the Seller
expressly agree to execute a Certificate of Non - Foreign Status by individual transferor
and/or a Seller's Certification of Compliance with Real Estate Reporting Requirement of
the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to be
supplied by Escrow Agent; and
16.6 Prepare and file with all appropriate governmental or taxing
authorities a uniform settlement statement, closing statement, tax withholding forms
including an IRS 1099 -S form, and be responsible for withholding taxes, if any such
forms are provided for or required by law.
16.7 All time limits within which any matter herein specified is to be
performed may be extended, but only by mutual agreement of the parties hereto and
amendment. of.this..Agreement. Any amendment of, or supplement.to, this Agreement
must be in writing, and signed by all parties hereto.
17. Termination. If escrow is not in condition to close by the Outside Date,
then either party which has fully performed under this Agreement may, in writing,
demand. the. return of money or property and terminate this Agreement. If neither party
has fully - complied with the provisions of escrow, no demand for return of documents
shall be irecognized and this Agreement shall not terminate until five (5) days after
Escrow Agent shall have delivered copies of such demand to all other parties at the
respective addresses shown in this Agreement. If any objections are raised within said
five (5) day period, Escrow Agent is authorized to hold all papers and documents until
instructed by a court of competent jurisdiction or by mutual written instructions of the
parties. Termination of this Agreement shall be without prejudice as to whatever legal
rights either party may have against the other arising from this Agreement. If no
demand is made, the Escrow Agent shall proceed with the Closing as soon as escrow is
in condition to Close.
18. Loss or Damage. Loss or damage to Property, by fire or other casualty,
occurring prior to the recordation of the Grant Deed shall be at the risk of the Seller. In
the event that loss or damage to Property, by fire or other casualty, occurs prior to
recordation of the Grant Deed, City may elect to require that the Seller pay to City the
proceeds of any insurance which may become payable to the Seller by reason thereof,
or to permit such proceeds to be used for the restoration of the damage done, or to
reduce the Seller Property Purchase Price by an amount equal to the diminution in
value of Kincaid Property by reason of such loss or damage or the amount of insurance
payable to the Seller, whichever is greater.
19. General Provisions.
Agreement For Acquisition And Sale Of Real Property
110
19.1 Brokers. The City represents and warrants to Seller that it has not
used any finder, broker or real estate agent in connection with this transaction, and
agrees that it shall indemnify and hold the other harmless from and against all
brokerage commissions or finder's fees and claims therefor, payable in connection with
the disposition of the Property and resulting from the acts or omissions of such
indemnifying party. If Seller elects to be represented by a real estate agent or broker,
Seller shall be liable for the payment of any and all commission or fees for Seller's real
estate agent or broker, and such commission or fees shall be paid for by Seller out of
the proceeds of the sale of the Property herein.
19.2 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the City and the Seller and their respective heirs,
personal representatives, successors and assigns. City shall have the right to assign
this Agreement or any interest or right under this Agreement or under the escrow
without obtaining the prior consent of the Seller.
19.3 Attorneys' Fees. In any action between the parties to interpret,
enforce, award, modify or rescind any of the terms or provisions of this Agreement, or
any action otherwise commenced or taken in connection with this Agreement, both
parties shall be responsible for their respective litigation costs and attorneys' fees.
19.4 Approvals and Notices. Any approval, disapproval, demand,
document or other notice ( "Notice") which either party may desire or be required to give
to the other party under this Agreement must be in writing and may be given by any
commercially acceptable means to the party to whom the Notice is directed at the
address of the party as set forth below, or at any other address as that party may later
designate by Notice. Any Notice given under this paragraph, whether personally or by
mail, shall be deemed received only upon actual receipt by the intended party.
To Seller: Levon and Zarouhi M. Gugasian
11 Ridgeline Drive
Newport Beach, CA 92660
To City: City of Newport Beach
Attention: City Manager
PO Box 1768
Newport Beach, CA 92658 -8915
19.5 Jurisdiction and Venue. This Agreement shall be construed under
the laws of the State of California in effect at the time of the signing of this Agreement.
The parties consent to the jurisdiction of the California courts with venue in County of
Orange.
19.6 Titles and Captions. Titles and captions are for convenience of
reference only and do not define, describe or limit the scope or the intent of this
Agreement or of any of its terms. Reference to section numbers are to sections in this
Agreement, unless expressly stated otherwise.
Agreement For Acquisition And Sale Of Real Property
11
19.7 Interpretation. As used in this Agreement, masculine, feminine or
neuter gender and the singular or plural number shall each be deemed to include the
others where and when the context so dictates. The word "including" shall be construed
as if followed by the words "without limitation." This Agreement shall be interpreted as
though prepared jointly by both parties.
19.8 No Waiver. A waiver by either party of a breach of any of the
covenants, conditions or agreements under this Agreement to be performed by the
other party shall not be construed as a waiver of any succeeding breach of the same or
other covenants, agreements, restrictions or conditions of this Agreement.
19.9 Modifications. Any alteration, change or modification of or to this
Agreement, in order to become effective, shall be made in writing and in each instance
signed on behalf of each party.
19.10 Severabilitv. If any term, provision, condition or covenant of this
Agreement or its application to any party or circumstances shall be held, to any extent,
invalid or unenforceable, the remainder of this Agreement, and the application of the
term, provision, condition or covenant to persons or circumstances other than those as
to whom or which it is held invalid or unenforceable, shall not be affected, and shall be
valid and enforceable to the fullest extent permitted by law.
19.11 Offer. Any delivery of unsigned copies of this Agreement is solely
for the purpose of review by the party to whom delivered, and neither the delivery nor
any prior communications between the parties, whether oral or written, shall in any way
be construed as am offer by City, nor in any way imply that City is under any obligation
toz enter the transaction which is the subject of this Agreement. The signing of this
Agreement by the Seller constitutes an offer which shall not be deemed accepted by
City unless and until the City has signed this Agreement. The Seller agrees that his
offer shall be acceptable and cannot be revoked for a period of thirty (30) days. This is
not binding agreement unless and until executed on behalf of City after approval and
adoption of a resolution or minute action by the City's City Council in full compliance
with the City's Charter, ordinances, and regulations.
19.12 Right of Access. City shall first be entitled to possession of the
Property on the Closing Date. Prior to such date, City and its representatives, agents,
employees, contractors and designees shall have the right of access to the Property at
all reasonable times for the purpose of making necessary and appropriate inspections,
tests, borings, samplings, surveys, etc. The City shall save and protect the Sellers
against any claims resulting from such access or use of Property undertaken pursuant
to this Section.
19.13 Computation of Time. The time in which any act is to be done
under this Agreement is computed. by excluding the first day (such as the day escrow
opens), and including the last day, unless the last day is a holiday or Saturday or
Sunday, and then that day is also excluded. The term °holiday" shall mean all holidays
as specified in Section 6700 and 6701 of the California Government Code. If any act is
to be done by a particular time during a day, that time shall be Pack Time Zone time.
Agreement For Acquisition And Sale Of Real Property
12
19.14 Legal Advice. Each party represents and warrants to the other the
following: they have carefully read this Agreement, and in signing this Agreement, they
do so with full knowledge of any right which they may have; they have received
independent legal advice from their respective legal counsel as to the matters set forth
in this Agreement, or have knowingly chosen not to consult legal counsel as to the
matters set forth in this Agreement; and, they have freely signed this Agreement without
any reliance upon any agreement, promise, statement or representation by or on behalf
of the other party, or their respective agents, employees, or attorneys, except as
specifically set forth in this Agreement, and without duress or coercion, whether
economic or otherwise.
19.15 Time of Essence. Time is expressly made of the essence with
respect to the performance by City and the Seller of each and every obligation and
condition of this Agreement including, without limitation, the Closing.
19.16 Cooperation. Each party agrees to cooperate with the other in the
Closing of this transaction and, in that regard, to sign any and all documents which may
be reasonably necessary, helpful, or appropriate to cant' out the purposes and intent of
this Agreement including, but not limited to, releases or additional agreements.
19.17 Acquisition Not Under Threat of Eminent Domain. City possesses
the power, under 'California law, to acquire the property by eminent domain; but it is not
contemplating the .use of its eminent domain power as part of the acquisition of the
Property.
19.18 Agreement in Total.
(a) Entire-:Agreement. This Agreement contains the entire
understanding between the parties relating to the transaction contemplated by this
Agreement. The Seller is entering this Agreement based solely upon the
representations set forth herein and upon the Seller's own independent investigation of
any and all facts the Seller deems material. No subsequent agreement, representation,
or promise made by either party hereto, or by or to an employee, officer, agent or
representative of either party shall be of any effect unless it is in writing and executed by
the party to be bound thereby.
(b) Counterparts. This Agreement may be signed in multiple
counterparts which, when signed by all parties, shall constitute a binding agreement.
(c) Exhibits Incorporated by Reference. All exhibits and
attachments attached to this Agreement are incorporated in this Agreement by this
reference. This Agreement includes eighteen (___) pages and Exhibits "A° through "D."
_ gTement For Acquisition And Sale of Real Property
13
IN WITNESS WHEREOF, the City and the Seller have signed this Agreement on
the dates set forth below.
SEl I =o.
LEN
Dated: 1!2L, 7v !0 By:
` ZAROUHI M. GUGASIAN
Dated: A, I D By: �-
Zarouhi M. Gugasian
Dated:
CITY:
CITY OF NEWPORT BEACH, a municipal
corporation and charter city
By:
David Kiff, City Manager
ATTEST:
0
Leilani Brown, City Clerk
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
0
Mynette D. Beauchamp,
Assistant City Attorney
Agreement For Acquisition And Sale Of Real Property
14
EXHIBIT "A"
LEGAL DESCRIPTION OF SUBJECT PROPERTY
Lots 7, 8, 9, 10 and 11, in Block 7, Balboa Tract, in the City of Newport Beach, County
of Orange, State of California, as per map thereof recorded in Book 7, Page 11, of
Miscellaneous Maps.
A -1'
EXHIBIT "B"
GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:
City Clerk
City of Newport Beach
3300 Newport Boulevard
PO Box 1768
Newport Beach, California 92663 -3884
RECORDING FEE EXEMPT PER
GOVT. CODE SEC. 6103 & 27383
(Space Above for Recorder's Use)
DOCUMENTARY TRANSFER TAX $ NONE
GRANT DEED
FOR A VALUABLE CONSIDERATION; receipt of which is hereby acknowledged,
LEO.GUGASIAN, a married man as his sole and separate property ( ?),hereby
GRANT(S) to the City of Newport Beach, a municipal corporation, the real property in
the City of Newport Beach, County of Orange, State of California, described as follows:
[To be inserted]
Dated: By:
Dated: By:
M
ATTACHMENT NO. "1" TO EXHIBIT "B"
CERTIFICATE OF ACCEPTANCE
This CERTIFICATE OF ACCEPTANCE is to certify that the interest in real property,
by and between the City of Newport Beach, a
municipal corporation, as Grantee, and Leo Gugasian, a married man as
as Grantor, is hereby accepted on by the undersigned officer on behalf
of the City of Newport Beach pursuant to authority conferred by Resolution No. 1992 -82
of the City Council adopted on July 27, 1992. The City consents to the recordation of
said document in the Office of the Recorder of Orange County, State of California.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
OFFICE OF THE CITY ATTORNEY A Municipal Corporation
By: By:
Mynette D. Beauchamp, David Kiff,
Assistant City Attorney City Manager
ATTEST:
Leilani I. Brown,
City Clerk
State of California
County of ORANGE
On before me, Notary Public, personally appeared
DAVID KIFF, who proved to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the same in his authorized
capacity(ies), and that by his signature on the instrument the person, or the entity upon behalf of which
the person(s) acted, executed the instrument
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct
WITNESS my hand and official seal.
Signature
(Seal)
State of California )
County of ORANGE )
On before me, , Notary Public, personally
appeared LEO GUGASIAN, who proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged to me that he executed the same
in his authorized capacity(ies), and that by his signature on the instrument the person, or the entity upon
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
EXHIBIT "C"
SCHEDULE OF LEASES
C -1
EXHIBIT "D"
SAMPLE PROMISSORY NOTE
City of Newport Beach
BUDGET AMENDMENT
2009 -10
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates
Pq Increase Expenditure Appropriations AND
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
from additional estimated revenues
PX from General Fund reserves
EXPLANATION:
This budget amendment is requested to provide for the following:
NO, BA- 10BA -028
AMOUNT: $2,1oa,5oo.00
Increase in Budgetary Fund Balance
X Decrease in Budgetary Fund Balance
No effect on Budgetary Fund Balance
To increase expenditure appropriations from Neighborhood Enhancement B Off Street Parking and In -Lieu Parking Reserves
to facilitate the purchase and sale agreement for the acquisition of 608 E. Balboa Boulevard,
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Number
Fund Account
Description
010 3769
Gen. Fund - Reserve: Neighborhood Enhancement B
010 3766
General Fund - Reserve: Off Street Parking
010 3767
General Fund - Reserve: In Lieu Parking
REVENUE ESTIMATES (3601)
Fund /Division Account
EXPENDITURE APPROPRIATIONS (3603)
Description
Description
Division
Number
7024
Neighborhood Enhancement B
Account
Number
C3002008
608 E Balboa Blvd Acquisition
Division
Number
7022
Off Street Parking
Account
Number
C3002008
608 E Balboa Blvd Acquisition
Division
Number
7021
In Lieu Parking
Account
Number
C3002008
608 E Balboa Blvd Acquisition
Division
Number
Account
Number
Signed:
Signed:
Signed:
Administrative Approval: City Manager
City Council Approval: City Clerk
Amount
Debit Credit
$1,294,268.00 '
$138,897.00
$671,335.00 '
$1,294,268.00
$138,897.00
$671,355.00
Automatic System Entry.
i ir�r I o
Date
Date
Date