Proposal:

Approve Contingency Purchase/Sales Agreement for Real Property Located at 9150 Flair Drive, El Monte, CA

Synopsis:

AQMD has been seeking proposals to sell the real property located at 9150 Flair Drive, El Monte, CA. Three proposals were received and, in closed session at the January 12, 1996 Governing Board meeting, the Board authorized staff to complete negotiations with one of the proposed purchasers. Staff concluded negotiations and now is prepared to enter into a contingency purchase/ sales agreement for the real property. This will initiate the escrow process and allow the buyer to negotiate an agreement with Los Angeles County.

Committee:

Administrative, September 20, 1996, Recommended for Approval

Recommended Action:

1. Authorize the Chairman to sign the contingency purchase/sales agreement for the real property located at 9150 Flair Drive, El Monte, CA 91731, and authorize the Executive Officer or designee to execute any documents necessary to complete the sale.

2. Approve the attached resolution (a) authorizing sale of the real property and, (b) as previously approved by the Governing Board, directing the disposition of proceeds from the sale of the El Monte Building.

James M. Lents, Ph.D.
Executive Officer

Background

Since the AQMD Headquarters operation moved from the El Monte facility in October, 1991, staff has been involved in efforts to secure a buyer for that property. In closed session at the January 12, 1996 Governing Board meeting, staff presented three proposed purchase offers to the Board for consideration. The Board directed the Executive Officer to complete negotiations with Commercial Developments International/West, Incorporated (CDI/West). Negotiations are complete and this action seeks Board approval of the contingency purchase/sales agreement with CDI/West. The agreement will initiate the escrow process and allow the buyer to enter into an agreement with Los Angeles County for a build- or renovate-to-suit lease.

Proceeds from the sale of the El Monte property will be placed in a Debt Service Fund to be used to pay down the debt of the Diamond Bar property. In 1992, the Governing Board approved refinancing of the Diamond Bar property to take advantage of lower interest rates. At that same time, the Governing Board also approved the use of proceeds from the eventual sale of the El Monte property to reduce the installment debt by buying down the bond obligations.

Resource Impacts

The reduction in bond obligations will provide budget savings beginning in FY 1999-00 of approximately $365,000 annually through the year 2009, saving approximately $4 million in total interest expense.

Attachment

Resolution

RESOLUTION NO. 96-

A RESOLUTION OF THE

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

CONVEYING TITLE TO CERTAIN PROPERTY OF THE DISTRICT AND

ORDERING DISPOSITION OF PROCEEDS FROM THE SALE OF SAID PROPERTY

WHEREAS, the South Coast Air Quality Management District Building Corporation (the "Corporation") conveyed certain improved real property described below (the "Property") to the South Coast Air Quality Management District (the "District") by Corporation Grant Deed dated July 26, 1992 and recorded in the Official Records of Los Angeles County on January 11, 1993 as Instrument No. 93 56593; and

WHEREAS, the Property consists of approximately 9.37 acres located at 9150 North Flair Drive, El Monte, California 91731, legally described as follows:

Parcel 1 of Parcel Map No. 360, in the City of El Monte, County of Los Angeles, State of California, as per Map filed in Book 115, Page 75 of
Parcel Maps in the Office of the County Recorder of said County; and

WHEREAS, the Property has been improved with a two story tilt-up building containing approximately 167,769 square feet (including 151,344 square feet, measured on two floors, and 16,425 square feet, measured from the interior walls, in a basement), a separate free-standing building containing approximately 14,400 square feet measured from the exterior walls, and a paved and striped parking area containing approximately 570 parking spaces; and

WHEREAS, the District had occupied the Property under a lease from the Corporation dated as of August 15, 1979 (the "Lease"), which Lease was terminated and merged into the deed upon the conveyance of the Property from the Corporation to the District, and the District has relocated its offices and operations to a building in Diamond Bar, California and no longer needs the Property for its operations; and

WHEREAS, the District desires to sell the Property and has received from Commercial Developments International/West, Inc. ("CDI/West") an offer to purchase the Property that is acceptable to the District and

WHEREAS, the District desires to enter into that certain Agreement of Purchase and Sale and Escrow Instructions for the Property dated with CDI/West as buyer (the "Purchase Agreement"); and

WHEREAS, the District wishes to utilize the proceeds from the sale of the Property (the "Proceeds") to retire certain outstanding bonds arising from the acquisition and development of the Diamond Bar facility, owing to the Corporation, as provided in Section 201 of Addendum No. 2 to the Installment Purchase Agreement relating to the South Coast Air Quality Management District Building Corporation, Installment Sale Revenue Bonds, Refunding Series 1992, dated December 1, 1992.

NOW THEREFORE, THE GOVERNING BOARD OF THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows:

SECTION 1. The District’s Chairman of the Governing Board is hereby authorized to execute the Agreement of Purchase and Sale and Escrow Instructions and to enter into the transactions contemplated thereby, including, without limitation, the sale of the Property to CDI/West for the price and on the terms and conditions set forth in the Purchase Agreement.

SECTION 2. The District’s Executive Officer, or Deputy Executive Officer designated by the Executive Officer, is hereby authorized and directed to execute any document necessary to complete the sale of the Property to CDI/West in accordance with the terms of the Agreement of Purchase and Sale and Escrow Instructions.

SECTION 3. The District’s Director of Finance is hereby authorized and directed to establish a Debt Service Fund to account for the Proceeds and, as provided in Section 206 of the Second Supplemental Trust Agreement relating to the Headquarters Facilities, apply the Proceeds to the redemption of Series 1992 Bonds balance of the Proceeds, if any, to redeem other Series 1992 Term Bonds in a manner to be determined by the Director of Finance.

Any balance under $5,000 in the Debt Service Fund which cannot be applied to the redemption of Bonds, shall be placed in the General Fund of the District. Pending redemption, amounts in the Debt Service Fund shall be invested in accordance with the requirements of the Bonds and in accordance with the policies of the District. To facilitate such redemption, the Director of Finance is authorized to arrange for the deposit of any or all of such moneys in the Debt Service Fund into an escrow directly with the bond trustee which may provide for the investment of the Proceeds pending redemption, as well as the notice of redemption and all other matters required to comply with the terms of the Trust Agreement.

The Chairman of the Governing Board or the Executive Officer of the District is authorized to execute any such escrow agreement, upon the advice of the District’s General Counsel and Stradling, Yocca, Carlson & Rauth, bond counsel in connection with the Bonds.

STATE OF CALIFORNIA )

) ss.

COUNTY OF LOS ANGELES )

I, Jackie Dix, Clerk of the Board of the South Coast Air Quality Management District, do hereby certify that the foregoing resolution was duly adopted by the Governing Board of said District at a regular meeting held on the 11th day of October, 1996, and that it was so adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

_____________________________________

Clerk of the Board

STATE OF CALIFORNIA )

) ss.

COUNTY OF LOS ANGELES )

I, Jackie Dix, Clerk of the Governing Board of the South Coast Air Quality Management District, do hereby certify that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 96 of said Board, and that the same has not been amended or repealed.

DATED: , 1996

JACKIE DIX, Clerk of the Governing Board

By___________________________________