Report Prepared by: Joe Cardoso PLS, City Surveyor
Title
SUBJECT: Approval of a Fourth Amendment to the Purchase and Sales Agreement Between the City of Merced and Valley Children’s Healthcare for the Parcel Located at 301 West Yosemite Ave
REPORT IN BRIEF
Consider modifying the terms of the purchase and sales agreement with Valley Children’s Healthcare to the purchase the vacated 64-foot right-of-way.
RECOMMENDATION
City Council - Adopt a Motion:
A. Approving the Fourth Amendment to the Purchase and Sales Agreement between the City of Merced and Valley Children’s Healthcare; and,
B. Authorizing the City Manager or Deputy City Manager to execute all related documents.
Body
ALTERNATIVES
1. Approve as recommended by staff; or
2. Approve, subject to condition as specified by City Council; or
3. Deny the request; or,
4. Refer back to staff for reconsideration of specific items as requested by the Council; or,
5. Defer action until a specified date.
AUTHORITY
Charter of the City of Merced, Section 200.
Government Code Title 5, Article 8, Surplus Land, Section 54221(f)(1)(E)
CITY COUNCIL PRIORITIES
Provide the community with much needed children’s healthcare facilities.
DISCUSSION
Valley Children’s Healthcare entered into an agreement to purchase 4.54 acres form the City of Merced (Purchase and Sales Agreement) on February 19, 2019 as approved by the City Council. The subject site was purchased at a price of $2.1-million and the City received the funds. A deed was later recorded as Grant Deed 2020-042266, Merced County Records. This purchase did not include any portion of the 64-foot road right-of-way north of the subject property and between Mansionette Drive and Sandpiper Avenue.
During Valley Children’s Healthcare’s design process to construct a medical facility, their team noticed the need to add land to incorporate into their design and make this a better project for the community. This was brought to the attention of City Staff and it was determined that the 64-foot road right-of-way was no longer need. The City owned the underlying fee title to the southern 32 feet of the 64-foot road right-of-way and could simply vacate that portion of the road right-of-way. City Council took action March 2, 2021, to vacate the southern 32 feet of the road right-of-way and approved Resolution 2021-12, which was recorded in Document 2021-009866, Merced County Records.
It was later determined that retaining the northern 32-feet of right-of-way was no longer needed. City Council took action on June 21, 2021, to vacate the northern 32 feet of the 64-foot road right-of-way and approved Resolution 2021-46, which was recorded in Document 2021-027893, Merced County Records. The property would revert back to the original owners, which are Shelley Cox, Executor of the Estate of Della Wathen, Probate Case No. CE PR 00885, Superior Court of California, County of Fresno, and Shelley Cox, Terry Lombardi and Cindi Wathen, Successors Co-Trustees of the Spalding G. Wathen Q-Tip Trust.
The property owners later contacted staff with the desire to transfer the northern 32 feet of the vacated right-of-way to the City of Merced at no cost. On February 22, 2022, City Council took action to accept this strip of land in fee and recorded Grant Deed 2022-010600, Merced County Records.
During ongoing negotiations with Valley Children’s Healthcare, it was suggested that the vacated 64 foot of right-of-way be transferred to Valley Children’s Healthcare to allow for the expansion of their medical facility and to better serve the community. Subject to City Council approval.
Both the southern and northern 32 feet of the vacated right-of-way are “exempt surplus land under the under California Government Code section 54221(f)(1)(E) for surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
The Fourth Amendment Key Changes:
Covenant to Construct: The construction would start within 24 months after close of escrow.
Escrow: Escrow shall open within 5 days after full execution of the agreement and will close not later than 120 days thereafter. Buyer shall pay all escrow fees and title insurance.
Repurchase Rights: The repurchase rights will include the southern 32 feet and the northern 32 feet of the abandoned right-of-way.
Parcel Merger: the original parcel along with the southern 32 and the northern 32 feet of abandoned right-of-way would need to be merged into one parcel at the time of closing of escrow.
Staff is recommending Council approve the Fourth Amendment to the Purchase and Sales Agreement.
Project Description: As a reminder, Valley Children’s Healthcare plans to expand services in Merced, by developing a pediatric primary and specialty care medical office building on the Former Police Headquarters Site. Valley Children’s pediatricians and pediatric specialists would be the occupants of the medical office building. The first phase of the building may consist of 15,000 to 20,000 square feet. They anticipate that demand for pediatric services in Merced could grow to require a 40,000-square-foot medical office at full build- out.
IMPACT ON CITY RESOURCES
No appropriation of funds is needed.
ATTACHMENTS
1. Fourth Amendment Purchase and Sales Agreement
2. Location Map
3. Grant Deed 2010-015020
4. Grant Deed 2022-010600