Council Agenda Report s15

COUNCIL AGENDA REPORT

City of Anaheim DEPARTMENT OF PUBLIC WORKS

DATE: MARCH 26, 2013 FROM: DEPARTMENT OF PUBLIC WORKS SUBJECT: CONVEYANCE OF CITY OWNED PROPERTY AT 1929 – 1937 SOUTH MANCHESTER AVENUE AS PART OF GENE AUTRY WAY (WEST)/I-5 HOV INTERCHANGE PROJECT

ATTACHMENT (Y/N): YES ITEM # 30

RECOMMENDATION:

That the City Council, by Resolution, authorize the Mayor and City Clerk to execute the Grant Deed conveying the City Owned property described in Exhibits A and C attached hereto and depicted in Exhibits B and D attached hereto (“City Owned Property”), to HPT IHG-2 PROPERTIES TRUST (“HPT”).

DISCUSSION:

The purpose of this request is to facilitate the completion of the Gene Autry Way (West)/I-5 HOV Interchange Project (Project), as proposed, which contemplates the conveyance of the property to HPT to mitigate parking impacts attributed to the City’s acquisition of a portion of the parking lot on the Hotel Site. HPT is the fee owner of the adjacent Holiday Inn and Staybridge Suites site, located at 1855-1925 South Manchester Avenue (Hotel Site). The transfer is subject to reservations by the City of a wall easement, a subsurface footing easement, and a public access and maintenance easement, as described in Exhibits E through J.

The City Owned Property is a 0.62 acre (27,200 square foot) property located immediately south of the Hotel Site on Manchester Avenue. The property to be conveyed consists of two parcels, which were purchased by the City as part of the right of way acquisitions attending the Project. Both parcels were acquired by the City through negotiated acquisitions. The larger piece consists of approximately 24,180 square feet, and was acquired by way of agreement dated April 25, 2007. The adjacent smaller piece consists of some 3021 square feet, and was acquired by way of agreement dated December 17, 2007. Both agreements are on file with the City’s Public Works Department, and both included full waivers of any future claims by the selling landowners. The transfer now being contemplated is exempt from any Subdivision Map Act processing, under Government Code sections 66426.5 and 66428(a)(2), as a conveyance “to or from a governmental agency[.]”

200 S. Anaheim Blvd. Suite #276 Anaheim, CA 92805 Tel: (714) 765-5176 Fax: (714) 765-5161 www.anaheim.net As part of the Project, 142 parking spaces on the Hotel Site were affected. Early in the Project planning process, the City and its representatives solicited comment and input from the adjacent hotel owner on plans for mitigating the impacted spaces. Specifically, letters were sent either to the owner or the owner’s legal representatives on January 23, 2009; April 9, 2009; and May 13, 2009. (Copies of these letters are attached as Exhibits K through M.). Despite these and other solicitations for input, the adjacent owner was silent on its preferences for parking mitigation throughout the time period of the City’s efforts at finalizing a parking mitigation plan as part of the Project.

City Staff therefore designed the Project’s parking mitigation component in a way that utilizes the city owned property now proposed to be conveyed. It did so in a way that maximized available surface parking, such as was being offered and used on the Hotel Site before the Project. The Project’s plan calls for 83 spaces to be placed on the City Owned Property and 62 spaces to be replaced on the adjacent hotel owner’s original property, for a combined 145 replacement spaces. This results in a net increase to the Hotel Site of 3 spaces.

These spaces have been constructed, and from all indications are fully functional replacement spaces. Exhibit N contains a collection of photographs showing recent utilization of the spaces, and Exhibit O shows a three-day count the City’s contractor performed, demonstrating use of the spaces.

Because the City Owned Property is adjacent to a wall that forms a part of the elevated Gene Autry roadway constructed as part of the Project, the City must reserve various easements over the City Owned Property to be conveyed. These easements parallel the alignment, scope, and anticipated use of the wall, subsurface footing, and public maintenance and access easements acquired from the adjacent Hotel Site as part of the Project. Legal descriptions and plat depictions of these easements are attached to the recommended resolution, and to this report, as Exhibits E through J.

The City anticipates that the City Owned Property will transfer to the adjacent hotel owner with the benefit of Conditional Use Permit No. 4153, approving the City Staff’s parking mitigation design and its use in connection with the adjacent hotel site, once the property is transferred. This CUP was approved by the Planning Commission on April 9, 2012, and upheld on appeal by the City Council. This entitlement is currently being challenged by the adjacent owner, in litigation which has been consolidated with the eminent domain action the City brought to acquire right-of- way for the Project. That litigation remains pending.

Section 1222 of the Anaheim City Charter governs the disposition of City property. Where the market value of the property to be sold, transferred, exchanged, or otherwise conveyed exceeds $50,000, the City is generally required to sell, transfer, exchange or otherwise convey such property to the highest bidder, after notice by publication. An exception to this general requirement exists, however, where the City Council finds the sale, transfer, exchange, or conveyance is “in the best interests of the City.”

Staff acknowledges that the market value of the City Owned Property which is the subject of this request exceeds $50,000. Nevertheless, Staff believes the conveyance of the City Owned Property to the adjacent hotel owner, without the requirement of a public bidding process, is in the best interests of the City. As noted, the Project has resulted in impacts to a number of parking 200 S. Anaheim Blvd. Suite #276 spaces on the adjacent Hotel Site. Such impacts, unmitigated, could result in significant Anaheim, CA 92805severance damage liability against the City in the eminent domain proceeding now pending Tel: (714) 765-5176 Fax: (714) 765-5161 www.anaheim.net between the City and HPT. The conveyance of the City Owned Property (now improved with a parking lot) will be assembled with the adjacent Hotel Site in a manner which will result in a net gain of 3 parking spaces, thereby mitigating the Project’s impact on the adjacent Hotel Site. Without such conveyance, the Project could result in a loss of a significant number of parking spaces to the Hotel Site.

Moreover, advertising the sale of the City Owned Property for public bidding would not be in the best interest of the City. The City Owned Property is a triangular-shaped parcel of land which would have limited utility other than for assemblage with the adjacent Hotel Site. The Planning Commission recognized these constraints in the findings supporting CUP 4153. The primary functional utility of the site appears to be to mitigate parking impacts to the Hotel Site from the Project. In addition, conveyance of the City-Owned Property to an unrelated third party through the public bidding process would hinder the City’s ability to feasibly mitigate parking impacts on the hotel site.

Staff recommends the City Council authorize by resolution the conveyance of the City Owned Property to HPT in order to mitigate the parking impacts from the Gene Autry Way (West) /I-5 HOV Interchange Project on the adjacent Holiday Inn and Staybridge Suites Site.

IMPACT ON BUDGET:

There is no budgetary impact.

Respectfully submitted,

Natalie Meeks Director of Public Works

Attachment: 1. Resolution and Exhibits

200 S. Anaheim Blvd. Suite #276 Anaheim, CA 92805 Tel: (714) 765-5176 Fax: (714) 765-5161 www.anaheim.net