HomeMy WebLinkAbout11 - 4210 River AvenueCITY COUNCIL AGENDA
ITEM NO. 11
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
SEPTEMBER 271993
TO: MAYOR AND CITY COUNCIL
FROM: DEPUTY CITY MANAGER
BY THE: CITY C(-..t,
CITY OF NEWPORT BEP,CH !
SEP 2 71993
SUBJECT: 4210 RIVER AVENUE
ACTION: If desired, approve sale of subject property for the amount of
$362,500 and authorize Mayor and City Clerk to execute all
transfer documents.
BACKGROUND: Based on an 1989 appraisal between $325,000 and $350,000, the
City Council approved the sale of this property for a price of $350,000 based on a
contemplated bid procedure. On April 29, 1993 the highest bid yielded a cash offer of
$315,000, and consequently on June 28th the Council approved listing the property with
Cannery Village Realty for $405,000 with a 5% commission. There has been little
activity on the property until the last few weeks when four offers have been received.
One offer was for $400,000 with $220,000 in cash and a trade for another duplex with a
$350,000 mortgage and supposedly $180,000 in equity. The City Attorney however
determined this to be an assumption of public debt which is illegal without a two-thirds
public vote. Another offer was for $330,000 subject to a construction loan, but was a
FAX with no earnest money and no clear responsible party. Another offer was a
resubmittal of the original $315,000 bid, all cash, 45 day escrow, no contingencies and
no commission.
The current offer of $362,500 entails a commission of $18,125 which when combined
with title insurance and other fees should net to the City approximately $341,600. The
escrow period is 90 days contingent upon receiving a clear soils report and obtaining
building permits for a single family dwelling. A $2,000 per month penalty is assessed to
the buyer if he fails to close escrow within the 90 day period. The prospective buyer has
lived in the area for 13 years, has good financial references and appears to be a
qualified buyer.
RECOMMENDATION: The subject offer is a result of extensive negotiation with
multiple offers and counter-offers. Considering the current slow real estate market, the
appraised value and the qualifications of the buyer, staff recommends acceptance of
this offer.
KJD:mb
_:�� Jenneth J. Deli
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TO:
FROM:
SUBJECT:
ACTION:
CITY COUNCIL AGENDA
ITEM NO. 11
SUPPLEMENTAL REPORT
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
SEPTEMBER 27 1993
MAYOR AND CITY COUNCIL
DEPUTY CITY MANAGER
4210 RIMER AVENUE
CITY CF NDLLOC) ,T l
SEP 2 71993
0
If desired, approve sale of subject property for the amount of
$367,000 and authorize Mayor and Clay Clerkk to execute aft
transfer documents.
BACKGROUND: The previous staff report forwarded with the agenda package
referenced a price of $362,500 with a 90 day escrow. That offer was negotiated by this
office SUBJECT TO APPROVAL BY THE CITY COUNCIL.
In the interim, another offer was received for $367,000 all cash, 30 day escrow with
$10,000 non-refundable earnest money. The buyers are local business owners and
investors and appear qualified. This offer with a commission of $18,350 which when
combined with title insurance and other fees will net to the City approximately $345,650.
DISCUSSION: While not entirely consistent with typical practice regarding the
sequence of accepting offers, this higher offer can be accepted by the City Council
because of the contingency for Council approval contained in the first offer.
RECOMMENDATION: Approve the latest offer of $367,000.
KJD:mb Kenneth J. D ino