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12. Surplus Property City Hall 10300 Torre Avenue Cupertino, CA 95014-3255 (408) 777-3354 FAX: (408) 777-3333 CITY OF CUPEIUINO PUBLIC WORKS DEPARTMENT Summary AGENDA ITEM I J.... AGENDA DATE: October 3,2006 SUBJECT AND ISSUE Adopt a resolution setting December 5, 2006 as the date to conduct an auction of surplus property on San Juan Road in Cupertino and Ontario Drive in Sunnyvale. BACKGROUND Ever since the 1960's, the City has owned two vacant parcels of land originally purchased for Cupertino's water company. A residential hillside view lot on San Juan Road was the site of a redwood tank that was dismantled in the late 1960s after the water tank on Mercedes Road was built. The second lot is located in the City of Sunnyvale on Ontario Drive and is zoned for multi-family residential. The Ontario lot was originally the site of a farming well, but has since been abandoned by the City per Santa Clara Valley Water District specifications. The properties are no longer needed for City use and therefore it is advised that the City sell the properties and use the proceeds for other City activities. STAFF RECOMMENDATION It is recommended that the City Council approve Resolution No. 0& -I lit" setting December 5, 2006 as the date to conduct an auction of surplus property on San Juan Road in Cupertino and Ontario Drive in Sunnyvale. Submitted by: Approved for submission: :t}A~a1~ U UW~ Director of Public Works qat :t!-{ {2lu::lt: 7~ c/~ David W. Knapp [I' City Manager /2-1 Printed on Recycled Paper DRAFT RESOLUTION NO. 06-166 A RESOLUTION OF THE CUPERTINO CITY COUNCIL DECLARING ITS INTENTION TO SELL SURPLUS REAL PROPERTY ON DECEMBER 5,2006 WHEREAS, the City of Cupertino, hereinafter referred to as "City" is now the owner of that certain real property which is located at San Juan Road, Cupertino, California, and Ontario Drive, Sunnyvale, California, and more particularly described in Exhibit "A", attached hereto and incorporated herein, WHEREAS, said property is not needed for any governmental purpose and that it is the judgment of the City Council of the City of Cupertino, for the best interests of the City, that said property be sold to the highest responsible bidder or bidders under the authority of Section 37350 et seq, of the Government Code of the State of California, WHEREAS, the City has complied with all the legal requirements established for the sale of surplus property including the requirements specified in Section 54220 et seq. of the Government Code of the State of California, NOW, THEREFORE, it is hereby determined and ordered that said property shall be offered for sale under the following terms and conditions: 1. BIDDING DATE The City of Cupertino shall offer for sale one (1) residential lot and one (1) multi-family residentia11ot. The bidding session is to be held on Tuesday, December 5,2006, at 6:00 P.M, on the Main Level, Conference Room "A" of City Hall, 10300 Torre Avenue, City of Cupertino, 2. WRITTEN BIDS Written bids shall be presented on the Bid Form as shown in Exhibit "B." Bidders can use the attached form or obtain additional copies of the Bid Form as noted in Paragraph 14 of this Resolution. The Bid Form must be received by the City Clerk of the City before 6:00 P.M. on the date of the bidding session. The Bid Form should be completed and placed in a sealed envelope along with the appropriate deposit as described in Paragraph 5. The outside of the envelope should state that it is a "SEALED BID". The bid can be mailed or hand carried to the City Clerk, City of Cupertino, 10300 Torre Avenue, Cupertino, California 95014, Mailed bids should be placed in a second envelope and addressed accordingly, 3. MINIMUM BID The minimum acceptable written bid shall be as follows: . San Juan Road APN 342-17-025 $900,000 . Ontario Drive APN 323-34-006 $725,000 /2- ?- Resolution No, 06-166 All bids submitted must be cash bids, Bids for less than the minimum bid amount will be rejected. 4, TERMS Bids shall consist of an unconditional offer to purchase a lot for cash, payable in full, in cash, cashier's or certified check at the close of escrow. A successful bidder shall be given three (3) days after acceptance of bids to execute a purchase contract (Exhibit "C") and thirty (30) days thereafter to close escrow unless extended by written mutual consent ofthe parties. 5, DEPOSIT (a) Amount of Deposit All submitted written bids must be accompanied by a certified cashier's check in the amount of thirty-five thousand dollars ($35,000,00). The deposit should be made payable to the City of Cupertino. (b) Number of Deposits An individual or entity may submit written bids for one or two lots offered at the bidding session. The amount of the deposit needed to accompany a written bides) should equal $35,000.00 per lot. An individual or entity who is an unsuccessful bidder with respect to any given bidding round, may apply hislher deposit to any subsequent bidding round, If any individual or entity desires to purchase more than one lot, the submitted written bid should denote the number of lots desired to be purchased along with a deposit amounting to $35,000.000 for each lot which the individual or entity desires to purchase. A bidder who has submitted a deposit for one lot and is the successful high bidder on one of the offered lots, will not be permitted to bid on any subsequent lot offered unless the bidder has tendered additional deposit monies prior to the commencement of the oral bidding as defined in paragraph 5( c) of this Resolution, A bidder who has submitted a deposit on two lots can continue to bid on lots offered until two successful bids have been made on two lots, All bidders have the right to increase their deposits at the bidding session in accordance with the terms outlined in Paragraph 5( c) of this Resolution. (c) Deposits Required of Oral Bidders Those individuals or entities planning on participating in the oral bidding but who have not submitted a written bid with deposit shall be required to tender prior to the commencement of the oral bidding, a deposit amounting to forty-five thousand dollars ($45,000,00), per lot to be bid upon, The deposit must be in the form of a certified or cashiers check made payable to the City of Cupertino, If the bidder desires to bid on two lots during the oral bidding, a deposit in the amount of $90,000.00 is required, All bidders who have submitted a $35,000.00 deposit with a written bid which complies with the terms herein, shall not be required to submit any additional funds to participate in the oral bidding unless that bidder desires to increase their deposit monies in order to purchase an additiona110t. Page 20[6 { ~-3 Resolution No. 06-166 (d) Forfeiture of Deposit In the event a bid is accepted and the bidder fails, within the time allotted herein, to execute any documents related to the sale, including the purchase contract, or otherwise does not perform according to the terms of the bid, then said bidder will forfeit an amount equal to $35,000.00 for the lot successfully bid upon and subsequently not purchased, The difference, if any, remaining after subtracting the $35,000.00 forfeiture from the original deposit will be refunded to bidder upon the determination that bidder does not desire to consummate the sale. (e) Return of Deposits Deposits of unsuccessful bidders will be returned after the City's final acceptance of the successful bid, but in no case, will such period extend beyond ten (10) days after the bidding session, City shall pay no interest on any deposits, 6. TITLE Title to the property shall be conveyed by Grant Deed subject to all liens, encumbrances, or other cloud on title which may affect the property, A copy of the preliminary title report is available at the City Offices, Department of Public Works, 10300 Torre Avenue, Cupertino, CA. 7. LOT INFORMATION An informational binder pertaining to the two lots is available for the public's review in the public works department, Monday - Thursday 7:30 a,m, to 5:30 p,m. and Friday 7:30 a.m, to 4:30 p.m, The binder contains assessor parcel maps and preliminary title reports, Any questions regarding development requirements for the lot on San Juan Road may be referred to the appropriate City of Cupertino departments: Building (777-3228), Planning, (777-3308), or Public Works (777-3354), Development questions regarding the lot on Ontario Drive may be referred to the appropriate City of Sunnyvale departments: Building and Planning (730-7444), or Public Works (730-7415). 8, ACCEPTANCE OF BIDS The accepted bid, this Resolution and exhibits thereto and the executed Purchase Contract (Exhibit "C") shall constitute the contract of purchase in accordance with the terms outlined in these documents. The City Council of the City of Cupertino reserves the right to accept a bid that at its sole discretion deems to be in the City's best interest. The City Council of the City of Cupertino reserves the right to reject any and all bids, waive any irregularities, be the sole judge of the responsiveness ofthe bids and to determine which bid constitute the greatest return to the City, 9, CLOSE OF ESCROW The transaction shall be consummated through an escrow to be opened by the buyer (successful bidder) at Alliance Title Company; 10275 N. De Anza Blvd.; Cupertino, CA 95014. All escrow and other costs including title insurance, any taxes, charges, or fees assessed by local, Page 3 of6 {1-L( Resolution No, 06-166 state, or federal governments as a result of the subject property transfer, shall be borne by the buyer. 10, POSSESSION The City shall turn over possession of the premises to the purchaser at the close of escrow. The City shall maintain existing insurance coverage on the property prior to close of escrow, The successful bidder may have reasonable access to the premises for the purpose of studies related to the development of the property prior to the close of escrow, The successful bidder will hold the City harmless for any damage to, or loss of personal property, or personal injury incurred by the successful bidder, or representatives, agents or employees of the bidder, should such damage, loss or injury occur on the subject property so long as the City retains ownership and occupancy of the property. 11. REAL ESTATE BROKERAGE COMMISSIONS The City agrees to pay a brokerage commission to licensed real estate brokers, in an amount not to exceed 3% of the purchase price, provided that such commission and the person to whom it is payable is specified in that bid which is finally accepted by the City as the highest responsible bid, and provided that the amount of any such bid shall be determined net of any commission so specified. Such real estate commission shall be payable out of escrow at close of escrow, 12, ATTORNEY FEES In the event that any legal action or litigation is undertaken by the City to enforce the provisions of the bid offer or any subsequent written agreement to execute such offer, the successful bidder agrees to pay reasonable attorney fees incurred by the City. 13, BIDDING PROCEDURES The following procedure will be used in conducting the sale of the property herein, (a) All written bids must be delivered to the City Clerk ofthe City, 10300 Torre Ave" Cupertino, no later than 6:00 p.m. on the date ofthe bidding session, December 5, 2006, The Clerk will open the written bids at the commencement of the bidding session which shall be 6:00 p,m. The bidding session shall be held in Conference Rooms "A", main level, City Hall. (b) The Clerk will announce the highest written bid for the first lot. The criteria used to determine the highest responsible bidder would be the bid that generates the highest net revenue to the City of Cupertino (net revenue is defined as that amount to be paid to the City after subtracting the brokerage commission, if any, from the bid price), (c) Thereafter, oral bids for the first lot will be solicited, The first oral bid shall exceed the highest written bid by at least $5,000.00, Each subsequent oral bid must exceed the prior oral bid by at least $1,000.00. Again, oral bids may be made by parties who have, or who have not submitted written bids, provided, however, only those parties who have submitted a deposit either prior to the commencement of the oral bidding or with a written bid will be allowed to participate in the oral bidding, Page 4 of6 (1-) Resolution No, 06-166 (d) Upon completion of the oral bidding, the highest individual bidder and the second individual bidder shall immediately cause the bid to be reduced to writing on the appropriate form (Exhibit "B"), (e) The Clerk will tentatively accept the high and second highest bid for both lots, adjourn the bidding session and deliver the two high bids to the City Council. The City Council, at its sole discretion, will resolve both the method of sale of the lot being offered in a given round of bidding and the respective successful bidder. The City Council reserves the right to accept a bid which it determines to be in the City's best interests, The City Council also reserves the right to reject any and all bids and call for a new bidding session, (f) Final acceptance of the high bid for any lot shall be made by the City Council. The Council will determine which bid is in the best interests of the City. (g) Upon final acceptance of the highest responsible bid for each lot by the City Council, the Purchase Contract (Exhibit "C") for each lot shall be executed within three days of said acceptance and an escrow shall be established by the successful bidder at Alliance Title Company; 10275 N. De Anza Blvd.; Cupertino, CA 95014. Escrow shall close within thirty (30) days from the date of executing the Purchase Contract. At escrow closing, buyer shall deposit in cash with said escrow company an amount equal to the bid less deposit plus all closing costs, loan fees, and any other costs required to close the sale, Upon close of escrow, the City shall receive the net cash amount as provided by the escrow officer and the buyer shall receive a grant deed to the property as provided in Paragraph 6, 14. REQUESTS FOR ADDITIONAL FORMS AND PROCEDURES Additional Bid forms and copies ofthis Resolution which serve as the instructions to bidders will be forwarded to interested parties by mail or telephone request or can be downloaded from the city's website at http://www,cupcrtino,org/, Write to or call the following: CITY OF CUPERTINO Public Works Department 10300 Torre Avenue Cupertino, CA 95014 Phone: (408) 777-3354 Page 5 of6 /2- - (p Resolution No. 06-166 15. PUBLICA nON AND POSTING The City Clerk is directed to cause to be published a notice of intention to sell real property in a newspaper of general circulation within the City of Cupertino for a period of four weeks prior to the bidding session and is also directed to post the property with a copy of said notice at least thirty (30) days prior to the bidding session, PASSED AND ADOPTED by the City Council of the City of Cupertino, this 3rd day of October 2006, by the following vote: V ote: Members of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: City Clerk Mayor, City of Cupertino Page 6 of6 (2-7 EXHIBIT A PLAT MAP & DESCRIPTION Lot 168, as shown on that certain Map entitled II Map of Inspiration Heights Monte Vista", which is filed for record in the Office of the Recorder of the County of Santa Clara, State of California, on April 11, 1917 in Book lip" of Maps at page(s) 13 0.34 Acres APN: 342-17-025 D N (2 -0 EXHIBIT A PLAT MAP & DESCRIPTION Beginning at a point on the westerly line of that certain 10 acre tract of land described in the Deed from May R. Clark, a widow, to Frank Menacho, et ux dated July 27, 1936, recorded July 28,1936 in Book 785 of Ottical Records, at page 20 Santa Clara County Records; distant thereon North 868.00 feet from the southwesterly corner thereof on the center line of Homestead Road; thence North along the said westerly line of the 10 acre tract, 75.00 feet; thence at right angles East, 125.00 feet; thence at right angles South 75.00 feet; thence at right angles West, 125.00 feet to the point of beginning and being a portion of the westerly 1/3 of the Easterly 3/4 of the Southwest 1/4 of the Northwest 1/4 of section 12, Township 7 South, Range 2 West, M.D.B. & M, 0.22 Acres APN: 323-34-006 -0_"_- ___'._. --j i j I i L_.__..____,_,._..__~ ,----.---) ili.J n z J.U ..~ I ~ ~ to IZ :w 1-1 :-1 ,-- --10 I II , I i I i ____ ___._ __1.. ___ --~.-/ Ii N \---.....---.. .-.-----.---...-i. i I I I , r--'--I T------r-L--- ! I I ( ! '. '-'-- _.L._... -l_..._.___._.--L- .___n_ KIRKLAND DRIVE .........- ...(....- -_.-._-_._....~\ I . I I - ._~-------- I jt__ "._u. I ,..---- --- ~-'-- -.- -"-" r------ I I ') (---... j ! ~----...I I I r---- ---- -- t;~.oo: II -t-I-~-{ f--- I (:). I r-.--- r.--------- --~- ~ r---- ! ------.- ( \.__~_ (--- -----~ 12500' i r~1 . r ~- I I I w----j I : l...___._. I::> 1'--\----1..-1--0 r---'-- ..- ---- -_1,' -- m t -- -4. \\ I . I . !' I I i ~ 1 ~. .----._-~.__-__ I I I "" ,.-.--- /' "----.- i--' -------.----; l l -----{ I .f----- -...--- 0 -- ... 1 / '>__.-"-----,-' i i I ~ -...--~---:~? I II if -~-=--I'- -- --/ ~ I 1:/ I: i! ~ --. -. ---1 B r .-----r.--r..--l-.-.-.~Ii ---r-I \111: ; I r----.- '.~I I i j U! : I I \_.--.__~....L-..__.. ,.' -==-=j Ii I \ i , I i L -" ';1. HOMESTEAD ROAD /;-; /2 -1 Resolution No, 06-166 EXHIBIT "B" BID FORM FOR LOT ON SAN JUAN ROAD AND/OR ONTARIO DRIVE TO: CITY OF CUPERTINO City Clerk's Department 10300 Torre Avenue Cupertino, CA 95014 1. THE UNDERSIGNED HEREBY PROPOSES AND OFFERS TO PURCHASE: Check appropriate boxes), o ASSESSOR'S PARCEL NUMBER: 342-17-025, San Juan Road: LOT 168, as shown on the "Map oflnspiration Heights Monte Vista", Book "P" of Maps, page 13; located on the northerly side of San Juan Rd. between Stevens Canyon Rd. and Cordova Rd. o ASSESSOR'S PARCEL NUMBER: 323-34-006, Ontario Drive: Located on the West side of Ontario Dr. between Homestead Rd. and Ontario Ct. CASH BID PRICE: Bidder hereby tenders $ of lots, representing a deposit or deposits for the purchase If the successful bidder fails to complete the purchase in accordance with the specified terms, $35,000,00 of the deposit shall be forfeited, 2, Bidder's Name (Principal) Entity Individual, Partnership, Corporation Address Street City State Zip Code 3, Telephone number: Day Night 4, The undersigned bidder submits this bid subject to all the terms and conditions of the Resolution of Intention to Sell Surplus Real Property, passed and adopted on October 3, 2006, and agrees to bound thereby. Signature: If partnership and/or corporation: Title: State of Incorporation: Exhibit B Page 1 of2 (). -/0 Resolution No, 06-166 BROKER'S COMMISSION The following information should be completed if a real estate commission is to be paid to a duly licensed real estate broker in the event this offer is accepted. Such commission is to be deducted from the stated cash bid price to determine the net bid If this bid is finally accepted and sale of the property is consummated in accordance with the bid as provided in the resolution, City shall pay a commission of Dollars ($ ). Said commission shall not exceed three percent (3%) of the cash bid price stated herein. The commission is to be paid in accordance with the terms of Resolution passed and adopted on October 3, 2006. Real Estate Brokers Signature: Real Estate Broker's Name: Broker's Address: Bidder's Signature: Bidder's Name: If Applicable: Company Name: Title: Exhibit B Page 2 of2 (2-1 ( Resolution No. 06-166 EXHIBIT "C" PURCHASE CONTRACT RECEIPT FOR DEPOSIT AND ESCROW INSTRUCTIONS This Agreement dated this day of , 2006, is made by and between the City of Cupertino ("Seller ") and ("Buyer") RECITALS: 1. Pursuant to the appropriate provisions of the California Government Code, Buyer has made a bid to purchase the property described herein and Seller has accepted such bid, 2. Seller has received from Buyer the sum of Dollars, $ ("Deposit") evidenced by a certified or cashier's check payable to the CITY Of CUPERTINO, as a deposit on account of purchase of: Check appropriate boxes): o ASSESSOR'S PARCEL NUMBER: 342-17-025 LOCATION/ADDRESS: San Juan Road; LOT 168, as shown on the "Map ofInspiration Heights Monte Vista", Book "P" of Maps, page 13; located on the northerly side of San Juan Road between Stevens Canyon Road and Cordova Road o ASSESSOR'S PARCEL NUMBER: 323-34-006 LOCATION/ADDRESS: Ontario Drive; located on the West side of Ontario Drive between Homestead Road and Ontario Court NOW, THEREFORE, the parties hereto agree as follows, 1, Agreement of Purchase and Sale Subject to the term and conditions as set forth herein, Seller shall sell and Buyer shall purchase the property for a total purchase price of $ 2. Payment of Purchase Price The purchase price for the property shall be paid as follows: 2.1 Buyer has already paid Seller a deposit of $ Exhibit C Page 1 of4 /2-/2- Resolution No. 06-166 2,2 No later than thirty days after this agreement is executed Buyer shall deposit with the Escrow Holder for delivery to Seller at close of escrow, cash or a certified or cashier's check made payable to Alliance Title Company in an amount of $ (the full amount ofthe purchase price less deposit) plus closing costs necessary to close escrow. In the event that Buyer fails to deposit the total cash required within the time specified, Seller shall retain $35,000,00 of the previously paid deposit. The time specified may be extended by mutual agreement between Buyer and Seller, 3, The Closing of Sale Transaction Through Escrow 3.1 The purchase and sale of the property shall be completed within thirty (30) days after executing the Purchase Contract Receipt for Deposit. The closing of the sale shall be through an escrow to be opened at the following title company ("Escrow Holder"): Alliance Title Company 10275 N. De Anza Blvd. Cupertino, CA 95014 (408) 777-3000 Contact: Susan Trujillo 3,2 Instruments in respect to the purchase and sale shall be deposited in escrow by Buyer and Seller as follows: (a) Seller shall deposit, prior to close of escrow, a grant deed duly executed by Seller in recordable form. (b) Buyer shall deposit cash or a certified or cashier's check for the amount required to close escrow pursuant to Paragraph 2.2 of this agreement. 4, Notices Any notice, request, demand, instruction or other communication to be given to any party hereunder shall be in writing and delivered personally, or sent by registered or certified mail as follows: Seller: CITY OF CUPERTINO City Clerk 10300 Torre Avenue Cupertino, CA 95014 Buyer: Exhibit C Page 2 of4 { 2- -{ ] Resolution No, 06-166 Notice shall be deemed to have been given when delivered personally or two days after mailing to the above address if mailed, No notices shall be effective unless and until persons entitled to notice have been notified in accordance with the foregoing. The addresses for purposes of this paragraph may be changed by giving written notice of such change in the manner provided herein for giving notice. Unless and until such written notice is received, the last address and addressee as stated by written notice, or as provided herein if no written notice of change has been sent or received, shall be deemed to continue in effect for all purposes hereunder. 5. Further Assurances Buyer and Seller agree that at any time, or from time to time after the execution of this Agreement and whether before or after the close of escrow they will, upon request of the other, execute and deliver such documents and do such further acts and things as such party may reasonably request in order to effect fully the purposes of this Agreement. 6, Survival of Covenants Each of the covenants and agreements contained herein shall, to the extent applicable, survive the close of escrow, 7, Successors and Assigns This Agreement shall be binding upon and inure to the benefit of each of the parties hereto, and to their respective successors and assigns. 8, Captions The captions in the Agreement are inserted only as a matter of convenience and for reference and in no way define the scope or extent of this Agreement or the construction of any provisions herein or of any document or instrument referred to herein. 9, Time Time is of the essence in this Agreement. 10. Entire Agreement; Amendments This Agreement embodies the entire Agreement and understanding between the parties relating to the subject matter hereof and may not be amended, waived or discharge except by an instrument in writing executed by the party against which enforcement of such amendment, wai ver or discharge is sought. This Agreement supersedes all prior agreements and memoranda, The invalidity of anyone of the covenants, agreements, conditions or provisions of the Agreement, nor any portion thereof, shall not affect the remaining portions thereof or any part hereof and this Agreement shall be construed as if such covenant, agreement, condition or provisions had not been inserted herein, Exhibit C Page 3 of4 (2-(<{ Resolution No, 06-166 11. Attorney's Fees Should any suit be brought to enforce the terms of this Agreement or any obligation herein expressed, the prevailing party shall be entitled to reasonable attorney's fees, costs and expenses herein incurred. Exhibit C Page 4 of 4 (2 -/ 5'