2012 2:00:00 PM

Monday, November 26, 2012 2:00 PM
Sparks Council Chambers, 745 4th Street, Sparks, NV

Item Number: 5

Title: Public Hearing and possible approval of a Sale and Purchase Agreement with 1864 Real Estate Development LLC for the sale without public bidding of Agency property located at 916 and 918 Victorian Avenue and identified as Washoe County Assessor's Parcel Numbers 032-193-09 and 032-193-10.

Petitioner/Presenter: 1864 Real Estate Development / Community Services/Armando Ornelas, City Planner

Recommendation: Approval of the Sale and Purchase Agreement

Financial Impact: Agency will receive approximately $90,000 in proceeds from the sale

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief: On March 26, 2012 the City Council and Redevelopment Agency Board approved a six month Exclusive Negotiating Agreement (ENA) with 1864 Real Estate Development LLC. The ENA granted 1864 Real Estate Development an exclusive opportunity to prepare a proposal to redevelop the two parcels at 916 and 918 Victorian Avenue owned by the Redevelopment Agency with a new building for a restaurant and bar use. On September 24, 2012 the City Council and Redevelopment Agency Board approved an extension of the ENA through November 26, 2012. This agenda item asks the Redevelopment Agency Board to approve sale of the property to 1864 Real Estate Development for fair market value (i.e., the appraised value). The proposed Agreement does not obligate 1864 Real Estate Development to redevelop the site as originally proposed but rather requires them only to: (1) demolish the buildings on the property within six (6) months of close of escrow; and, (2) pave, stripe and screen the parcels for use as parking or, alternatively, to install a patio for use of adjacent restaurant(s) and/or the public within twelve (12) months of close of escrow.

Background: On March 26, 2012 the City Council and Redevelopment Agency Board approved a six month Exclusive Negotiating Agreement (ENA) with 1864 Real Estate Development LLC. The ENA granted 1864 Real Estate Development an exclusive opportunity to prepare a proposal to redevelop the two parcels at 916 and 918 Victorian Avenue (the “Property”) owned by the Redevelopment Agency for a restaurant and bar use and, if the proposal was approved by the Agency Board and City Council, to acquire and redevelop the property subject to the terms of a Disposition and Development Agreement (DDA). On September 24, 2012 the City Council and Redevelopment Agency Board approved an extension of the ENA through November 26, 2012.

Analysis: This agenda item asks the Redevelopment Agency Board to approve a Sale and Purchase Agreement (“Agreement”) for sale of the Property to 1864 Real Estate Development for ninety thousand dollars ($90,000). The proposed Agreement does not obligate 1864 Real Estate Development to redevelop the site as originally proposed but rather requires them only to: (1) demolish the buildings on the property within six (6) months of close of escrow; and, (2) pave, stripe and screen the parcels for use as parking or, alternatively, to install a patio for use of adjacent restaurant(s) and/or the public within twelve (12) months of close of escrow. The purchase price represents the fair market value of the Property based upon the appraisal report prepared by Johnson-Perkins & Associates, Inc. with a valuation date of August 14, 2012 and the desk review of this appraisal conducted by William G. Kimmel dated October 2, 2012. Because 1864 Real Estate Development is paying fair market value for the Property, it is not subject to the provisions of NRS 279, including but not limited to 279.500, which would obligate compliance with NRS 338.010 to 338.090, (regarding prevailing wages) inclusive for any construction work to be performed for redevelopment of the Property. While 1864 Real Estate Development has submitted a project proposal as required by the ENA, it has been unable to date to secure a loan commitment to construct a new building on the site and outfit it for use as restaurant and bar. Justin Quinton, owner of 1864 Real Estate Development and of the Cantina Los Tres Hombres business in an adjacent building that he leases, nevertheless wishes to acquire the Property so as to have the opportunity to redevelop it at a future date. Staff recommends sale of the Property even without the requirement that 1864 Real Estate Development construct a new building on the site because the Agency did not acquire the Property for a specific redevelopment purpose and is not needed for implementation of the Agency’s Victorian Square redevelopment plan. The Redevelopment Agency acquired the Property in 2008 from Pacific Pawnbroker’s, Inc. as part of a “package” transaction necessary to acquire from Pacific Pawnbroker another property formerly located at 1246 Victorian Avenue. In addition, sale of the Property to 1864 Real Estate Development will result in the return of the property to the property tax roll.

Alternatives: The Agency Board’s alternatives to the staff recommendation including rejecting the Sales and Purchase Agreement or modifying its terms.

Recommended Motion: I move for approval of the Sale and Purchase Agreement with 1864 Real Estate Development LLC for the Agency property located at 916 and 918 Victorian Avenue and identified as Washoe County Assessor's Parcel Numbers 032-193-09 and 032-193-10.

Attached Files:

sale and purchase agreement 1864 Real Estate Develop LLC.pdf

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