HomeMy WebLinkAboutIdentified Methods to Dispose of Real Property CITY OF PALM DESERT/SUCCESSOR AGENCY
TO THE PALM DESERT REDEVELOPMENT AGENCY
PUBLIC WORKS DEPARTMENT
STAFF REPORT
REQUEST: APPROVE THE USE OF IDENTIFIED METHODS TO DISPOSE
OF REAL PROPERTY
SUBMITTED BY: Mark Greenwood, P.E., Director of Public Works
DATE: September 7, 2017
Recommendation
By Minute Motion, that the City Council and the Agency Board:
1. Approve the use of the sealed bid, auction, and open market
methods for sale of real property; and
2. Authorize City Manager to determine which approved method is
appropriate for each property.
Fund availability will be identified on a case-by-case basis, depending upon the
property, and the reason for disposing of it.
Strategic Plan Objective
This action will establish the process for disposal of real property, supporting the goals
outlined in the Land Use, Housing & Open Space section of the Strategic Plan. Putting
proper zoning in place for land use was step one.
Background
When the Palm Desert Redevelopment Agency (RDA) was dissolved, the State of
California instructed the Successor Agency to the Palm Desert Redevelopment Agency
(SARDA) to dispose of all of the RDA assets, including real property owned by the RDA.
A Long Range Property Management Plan (LRPMP) was put in place, identifying these
parcels, with the disposition strategy for each.
In addition to the property held by the RDA, the City will occasionally have remnant
parcels of property. These remnants are generally a result of acquisition of right-of-way.
Staff Report
Approval Use of Identified Methods to Dispose of Real Property
Page 2 of 3
September 7, 2017
There are many ways in which these properties can be sold. Staff has researched
several methods, and has identified three as the most common used by agencies
statewide. They are the sealed bid method, the auction method and selling the parcel
on the open market. A minimum sales price can be established with any of these three
methods, with the City/SARDA reserving the right to reject all offers if the minimum is
not met.
The sealed bid process entails advertising a Notice Inviting Offer, and compiling a
package containing pertinent information the City may have. For example, the title
report, the appraisal, assessor's parcel maps, Planning Department documents, if
applicable, etc. A pre-offer meeting may be held, depending upon the complexity of the
property being offered for sale. All Instructions to the Bidders will include statements
that the "City, in its absolute discretion, may accept or reject any or all offers."
Instruction will be given that a ten percent deposit shall accompany all bids, and the
successful bidder's deposit will be non-refundable, and deposited into escrow. At the
appointed time and place, all offers will be opened and read aloud. The bidder with the
highest responsive offer will be notified. The sale will proceed as per the Agreement of
Purchase and Sale and Escrow Instructions for the property.
For the auction method, the same information is prepared as though the property were
being sold by sealed bid. Instruction will be given that a ten percent deposit shall
accompany all bids, and the successful bidder's deposit will be non-refundable, and
deposited into escrow. The major difference in the process is that a property disposition
consultant would be selected to advertise the property, and to hold the auction.
Selection of the consultant would be through a competitive process, as is currently used
for professional consultants, and compensation would not be based on a percentage of
the sales price.
The third method proposed is offering a property for sale on the open market. This
entails advertising the property for sale and soliciting buyers, allowing both parties to act
in their own self-interest. Other municipalities in the Coachella Valley use a process to
offer a property on the open market by using a real estate consulting firm. There are
several firms that specialize in selling property for public entities that operate in the
Coachella Valley. Staff engaged in informational conversations with several such
consultants, and found them to operate within the same general framework. Due to the
wide variety of property types owned by the SARDA and the City, most work performed
by the consultants will be charged on a time and task basis. Agencies using this
method often select firms based on qualifications to be used for an "on-call" list. Then
requests for quotes for the time and task cost would be requested for each property
being sold using this method.
There are advantages and disadvantages to each of the three methods. Each property
has unique characteristics, and must be evaluated independently for the preferred
Staff Report
Approval Use of Identified Methods to Dispose of Real Property
Page 2of3
September 7, 2017
method to meet the City's objectives, and to maximize the expected revenue from the
sale. In all cases, the sales price will be brought to the City Council for approval.
Staff recommends that City Council approve the use of these three methods for the sale
of real property: the sealed bid, the auction, and the open market. Staff would evaluate
each property, and recommend a preferred method for selection by the City Manager to
commence with the designated process.
Fiscal Analysis
This is no fiscal impact associated with this action.
Prepared y: Depart nt a d:
try 2
Cora . Gaugush Mark G e wood, P.E.,
Capita Improvement Projects Technician Director 9+ Public Works
t M. Moore, Director of Finance
Approval:
Lauri Aylaian, City Manager