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The Community Redevelopment Agency of the City of Los Angeles, California

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The Community Redevelopment Agency of the City of Los Angeles, California THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA M E M O R A N D U M 5 DATE: FEBRUARY 21, 2008 CR2140 TO: CRA/LA BOARD OF COMMISSIONERS FROM: CECILIA V. ESTOLANO, CHIEF EXECUTIVE OFFICER RESPONSIBLE PARTIES: CAROLYN HULL, REGIONAL ADMINISTRATOR ALVIN JENKINS, PROJECT MANAGER SUBJECT: AUTHORIZATION TO ACQUIRE TWO PARCELS (AND TO PAY FOR RELATED DEMOLITION AND CLOSING COSTS) LOCATED AT 3700 W. MARTIN LUTHER KING, JR. BOULEVARD AND 4013 MARLTON AVENUE FROM DISCOUNT SECURITY STORAGE FOR A TOTAL AMOUNT NOT TO EXCEED $5,250,000 AMENDED CRENSHAW REDEVELOPMENT PROJECT AREA SOUTH LOS ANGELES REGION (CD8) RECOMMENDATIONS 1. That the CRA/LA Board of Commissioners authorize: (i) the acquisition of two adjoining parcels located at 3700 W. Martin Luther King, Jr. Boulevard and 4013 Marlton Avenue from their owner, Security Discount Storage, for an amount not to exceed $5,100,000, (ii) the expenditure of $150,000 for demolition and escrow closing costs related to these parcels, (iii) the Chief Executive Officer or designee to award a contract to demolish a vacant crime-ridden building on said parcels in an amount not to exceed $140,000; and (iv) the Chief Executive Officer or designee to take the necessary steps to carry out these actions, and That the CRA/LA Board of Commissioners, subject to City Council review and approval, amend the FY08 Budget and Work Program to: 2. Transfer $5,000,000 from ”CRA/LA Land Acquisition Fund” to budgeted line item “Commercial and Industrial”; 3. Advanced Carryover of $57,000 in General Revenue funds from the FY07 Budget and Work Program; and 4. Recognize additional projected Tax Increment resources of $103,000 in the FY08 Budget and Work Program. 3700 MLK BLVD. AND 4013 MARLTON AVE. PROPERTY ACQUISITION 2 SUMMARY The Purchase Transaction Staff recommends CRA/LA acquisition of an opportunity site consisting of two adjoining parcels located at 3700 W. Martin Luther King, Jr. Boulevard and 4013 Marlton Avenue (collectively “Property”) through a negotiated purchase from their owner, Security Discount Storage (“Owner”). The Property, APN #s 5032-0003-001 and 013, is located at the southwest corner of these two streets. (See Location Map of Property on Attachment “A” and Site Map on Attachment “B” hereto.) Staff intends to use the Property for redevelopment consistent with the objectives of the Amended Crenshaw Redevelopment Plan (“Redevelopment Plan”) and with City zoning, for the development of retail uses as part of the 22-acre Marlton Square mixed-use development project (“Marlton Square Project”). The two parcels which constitute the Property are adjacent to each other. Staff recommends their purchase for $5,100,000, the Owner’s asking price. CRA/LA’s appraised value of the Property is $4,998,000, which is within 2% of the Owner’s asking price. The acquisition would be subject to completion of a Phase I environmental investigation of the Property. Staff also recommends the expenditure of $140,000 for demolition of the existing building on the Property, and $10,000 for escrow and related costs. Actual costs for these two items are not to exceed $150,000. Staff also recommends the expenditure of up to $140,000 for demolition of the vacant building on the Property, and up to $10,000 for escrow and related costs. The Los Angeles Police Department has made numerous complaints about crime, noise and public nuisance at said building over the many months it has been vacant. Accordingly, staff will conduct a bid process under the State Public Contracting Code to award a demolition contract to promptly remove this building within said $140,000 budget limit. The Redevelopment Plan Objectives Achieved The proposed acquisition and redevelopment of the Property will implement several objectives of the Redevelopment Plan. First, the eventual development of the Property into a quality retail center will improve the area’s physical and economic environment, as well as promote a positive area image. Second, the proposed retail center will implement the Redevelopment Plan’s economic development objective by providing needed retail shopping opportunities, as well as providing new construction and permanent jobs for the area. Third, the proposed retail center will help eliminate blight on the Property by transforming a site with an abandoned building and surface parking lot into an attractive retail center, as part of the overall Marlton Square Project. RE Initial action. 3700 MLK BLVD. AND 4013 MARLTON AVE. PROPERTY ACQUISITION 3 SOURCE OF FUNDS CRA/LA Land Acquisition, Tax Increment, AB1290 and General Revenue funds. PROGRAM AND BUDGET IMPACT Approval of the recommended amendment of the FY08 Work Program and Budget will result in sufficient funds to cover the cost of the recommended acquisition in the appropriate budget line item. The $5,250,000 for the acquisition consists of $5,000,000 from CRA/LA’s Land Acquisition Fund, in addition to existing Special Revenue funds of $53,000 in budgeted line item “Commercial and Industrial”, Tax Increment funds of $9,812 in budget line item “Response to Development Opportunities”, $27,188 of AB1290 funds, $57,000 in FY07 Advanced Carryover General Revenue funds and $103,000 in additional projected Tax Increment resources for FY08. The $103,000 in additional projected Tax Increment resources is based on updated projections for FY08. ENVIRONMENTAL REVIEW The proposed acquisition is exempt from the provisions of the California Environmental Quality Act (“CEQA”) pursuant to the State CEQA Guidelines Section 15004(b)(2)(A). The subject Property was included in the proposed Marlton Square Initial Study and Mitigated Negative Declaration, which was adopted by the CRA/LA Board of Commissioners (“Board”) on August 1, 2002. BACKGROUND CRA/LA staff, consistent with direction from the Board, is seeking early and creative ways to acquire property in the Marlton Square Project, in the Amended Crenshaw Redevelopment Project Area (“Project Area”) through negotiated sales transactions. The subject Property consists of two rectangular parcels with a total land area of 43,804 square feet. The parcels are improved with a vacant 2-story, 45,000 square foot retail/office building and surface parking lot. The Property is zoned (Q)-C2-2D and the Redevelopment Plan designates it as Regional Center. (See Legal Description on Attachment “C” hereto.) The building on the Property was constructed in 1948, has been vacant for many years, has attracted graffiti and dumping, and has become a source of blight. Once purchased, staff intends to facilitate redevelopment of the Property into an attractive retail center to serve as a key component of the Marlton Square Project. The Property constitutes 2 of the 16 parcels not yet acquired by the Marlton Square developer. These 16 parcels (and a developer-acquired former parking lot parcel), constitute the retail site of the Marlton Square Project. (See Parcel Map on Attachment “E” hereto.) The proposed acquisition of the Property, the demolition of the existing building, and the Property’s eventual retail development, represents the fourth phase of the Marlton Square Project. The first phase is the Buckingham Place Senior Housing development. The 3700 MLK BLVD. AND 4013 MARLTON AVE. PROPERTY ACQUISITION 4 second and third phases are the Single Family and the Condominium Housing developments. (See Illustrative Site Plan on Attachment “E” hereto.) These phases were initiated with the Marlton Square developer’s acquisition of the needed land. Relocation of the tenants on those properties is near completion. After the Property is acquired, staff intends to demolish the existing building. Demolition is estimated to cost $140,000 and escrow costs are estimated at $10,000. Staff also intends to eventually combine the Property with the other seven (7) properties in the retail phase area for joint development, through a future retail Agreement between CRA/LA and a retail developer. The previous Retail Implementation Agreement expired in 2006, with no current negotiations ongoing for a subsequent retail developer. Staff has contracted for a Phase 1 Environmental Study and lead and asbestos reports on the Property. The closing of escrow on the Property will be conditioned on the findings of this Study. Staff views the Property as “strategic” because of its prominent location on the retail development portion of the Marlton Square Project site, and its adjacency to the existing Baldwin Hills Crenshaw Plaza. The proposed acquisition and future retail development of the properties constituting this retail component has long been a high priority for the Crenshaw Community Advisory Committee, the Project Area residents and merchants, as well as Eighth District Councilmember Bernard Parks. Cecilia V. Estolano, Chief Executive Officer by: __________________________ Glenn F. Wasserman Chief Operating Officer There is no conflict of interest known to me, which exists with regard to any CRA/LA officer or employee concerning this action. Attachment “A”: Location Map Attachment “B”: Site Map Attachment “C”: Legal description Attachment “D”: Illustrative Site Plan Attachment “E”: Parcel Map .
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