That the City Council:
A.  Approve a Purchase and Sales Agreement between the City of La Habra and Blue B12, LLC, Trustee of Money Maker Title Holding Trust, for the purchase of property located at 205-211 S. Euclid Street (Assessor's Parcel Number 298-067-10 and 298-067-11 in the amount of $1,355,000;

B.  Approve and authorize the City Manager to execute the Purchase and Sales Agreement and all related documents;

C.  Approve a Standard Industrial/Commercial Single-Tenant Lease (Lease) for a lease back to the Seller from December 21, 2021, to December 31, 2021, in the amount of $1,637.50 and authorize the City Manager to execute the Lease;

D.  Approve the appropriation of $1,370,000 from the General Fund property acquisition reserve to fund the purchase of 205-211 South Euclid Street, including related escrow and closing cost fees; and,

E.  APPROVE AND ADOPT RESOLUTION NO._____ ENTITLED:  A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA, CALIFORNIA, APPROVING THE PURCHASE OF 205-211 SOUTH EUCLID STREET FROM BLUE B12, LLC, TRUSTEE OF MONEY MAKER TITLE HOLDING TRUST.

The project was reviewed pursuant to California Environmental Quality Act (CEQA) and determined to be Categorically Exempted pursuant to Section 1506 (b)(3) "Review of Exemption of the California Environmental Quality Act Guidelines," because the purchase of the property will have no significant effect on the environment.

In September 2021 City staff became aware that the property at 205-211 South Euclid Street, Assessor's Parcel Number 298-067-10 and 298-067-11 (Property), was listed for sale on the open market. The list price for the Property was $1,365,000. The Property, which consists of two adjacent parcels, is owned by Blue, B12, LLC, Trustee for Money Maker Title Holding (Seller). The parcel located at 205 South Euclid Street is 5,227 square feet and includes a 1,050 square foot commercial building; the parcel located at 211 South Euclid Street is 9,583 square feet and includes a 2,880 square foot commercial building.  Combined, the two parcels total 14,810 square feet.  
 
Shortly after learning the Property was on the market, the broker representing the Seller informed the City that the Seller had decided to accept another offer.  On October 5, 2021, the broker contacted staff to let them know that the property fell out of escrow and was, once again, available for purchase.  On October 18, 2021, City Council authorized the City Manager to negotiate the purchase of the Property.  On October 21, 2021, the City submitted an offer to purchase the property for $1,355,000 contingent upon an appraisal and, on October 22, 2021, staff received the accepted offer from the Seller.  In addition to the offer to purchase the property, the Seller is requesting to leaseback the building from December 21, 2021, to December 31, 2021, in order to remove belongings from the building.  The Seller will pay the City $1,637.50 for the term of the lease.

The City retained the services of DMD Appraisals to complete an appraisal of the property (Exhibit C), which has been appraised at $1,360,000.  The major terms of the proposed purchase are as follows:

1. Purchase Price:                                         $1,355,000
2. Deposit to Escrow:                                    $   100,000
3.  Escrow Closing:                                       On or before December 20, 2021
4.  Escrow Company:                                    Arden Escrow Services, Inc.
5. Leaseback to Seller:                                 December 21, 2021, to December 31, 2021

The City Attorney's Office has reviewed the Purchase and Sales Agreement and the Standard Industrial/Commercial Single-Tenant Lease and approved the contents of both documents.

The agreed upon purchase price is $1,355,000.  In addition, approximately $15,000 will be required to fund escrow and closing cost fees.  Staff recommends that City Council approve an appropriation of $1,370,000 from the General Fund property acquisition reserve to fund the purchase of the two adjacent properties. There is sufficient General Fund reserves to cover the cost of this proposed purchase.