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AGENDA STAFF REPORT
<br />Page 2 of 3
<br />The County Executive Office, Real Estate was tasked with finding a warehouse location in the city of Santa
<br />Ana, at or below current market value, in good condition, with the potential to be used for storage,
<br />equipment repair, trade shop purposes, and other miscellaneous uses by different County agencies or
<br />departments, including as a possible year -round emergency shelter. The property at 1217 E. Normandy
<br />Place, Santa Ana, a relatively new property constructed in 2000, was determined to provide many use
<br />options based on its proximity to other County facilities, its overall size and excellent condition, its exclusive
<br />ingress and egress access, and its extensive parking and outdoor space.
<br />The property consists of a one -story 23,220 square foot industrial warehouse building, situated on
<br />approximately 56,942 square feet of land, with 44 parking spaces. The building has been used strictly as a
<br />storage warehouse for its entire fourteen year existence resulting in a facility that is environmentally very
<br />clean. Because it is situated on an L- shaped street, which is only accessible from Grand Avenue and
<br />McFadden Avenue, and used only by the businesses on the street, there is very little "general public" vehicle
<br />and pedestrian traffic on a typical work day.
<br />Staff negotiated a Purchase and Sale Agreement (Agreement) between the County, as purchaser, and B &N
<br />Group /JRMV Investments, Inc., the seller, for the purchase of the property for $3,600,000, which was
<br />approved by the Board of Supervisors on July 15, 2014. The Agreement is attached hereto as Attachment A.
<br />The Agreement contains standard County language, which has been developed and tailored for this specific
<br />acquisition by CEO/Real Estate and County Counsel.
<br />Fee simple interest in the property was appraised in July 2014, by CBRE, Inc. - Valuation and Advisory
<br />Services, a California State Certified General Appraiser, with a market value conclusion of $3,600,000.
<br />CBRE's market analysis indicates that the Orange County industrial market experienced an 8.3% increase in
<br />gross activity in the first quarter of 2014 and the small building market, consisting of buildings 30,000
<br />square feet and below, has seen rapid increases in sales prices which are expected to continue. Because
<br />vacancy and availability rates are low, landlords and sellers have started to increase their asking rental rates
<br />and sales prices. The result for the County is a property that is expected to consistently appreciate in value
<br />for many years to come.
<br />Due diligence investigations have been completed and include: the procurement of a preliminary title report,
<br />completion of a current appraisal, a Phase I environmental site assessment, land survey, structural and
<br />physical inspection, roof inspection, sewer line inspection, hazardous materials inspection, and a safety
<br />inspection. The building and land are in excellent condition and the improvements needed to continue the
<br />existing use are minimal.
<br />OC Public Works, OC Facilities has expressed an interest in the Normandy Place property for relocation of
<br />its operations which currently reside at the Fruit Street Operations Yard near the 5 freeway and Santa Ana
<br />Blvd. The Office of the Public Guardian and the Office of the Public Administrator, now separate entities,
<br />have an ongoing need for warehouse space so they also represent a viable use option for this property.
<br />Because Normandy Place is within the SB -2 zone established by the City of Santa Ana, the County would
<br />also have the option to explore the development of a year -round emergency shelter at this site.
<br />On July 15, 2014, your honorable Board approved the Purchase and Sale Agreement and Joint Escrow
<br />Instructions for the purchase of property at 1217 E. Normandy Place, Santa Ana. Staff is returning to the
<br />Board at this time to discuss the due diligence process and for acceptance of the Grant Deed transferring fee
<br />title to the County of Orange. Funding for the purchase of this property has already been approved by the
<br />Board.
<br />Compliance with CEQA: The proposed real estate purchase was previously determined to be exempt from
<br />the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA
<br />Guidelines, on July 15, 2014 by this Board. This exemption is commonly called the common sense
<br />http://cams.ocgov.com/Web—Publisher/Agendatl_t8 2014 files/itnages/At4-001607.H... 11/18/2014
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