Report Prepared by: Frank Quintero, Deputy City Manager and Director of Economic Development
Title
SUBJECT: Direction to Staff Regarding Valley Children’s Hospital’s Request for Approval for a Second Amended and Restated Grant Deed Continued from the City Council Meeting of August 19, 2024
REPORT IN BRIEF
Valley Children’s Hospital (VCH) is requesting approval of Second Amended and Restated Grant Deed with changes to the terms related to Covenant to Construct and Repurchase Price.
RECOMMENDATION
City Council -
A. Provide Direction to Staff Regarding the Extended Time Request for the Covenant to Construct, and the Amended Language to the Exercise to Repurchase Option and Repurchase Price Terms Contained in the Second Amended and Restated Grant Deed; and,
B. Provide Direction to Staff Concerning Recording the Proposed Second Amended and Restated Grant Deed with the Merced County Recorder’s Office.
Body
ALTERNATIVES
1. Approve, providing direction to staff; or,
2. Provide alternative staff direction; or,
3. Refer to staff for reconsideration as requested by the City Council; or,
4. Defer action until a specific date; or,
5. Deny
AUTHORITY
Section 200 of the Merced Municipal Code.
CITY COUNCIL PRIORITIES
As adopted in the Fiscal Year 2024-2025 Budget.
DISCUSSION
At the City Council meeting of August 19, 2024, staff presented Valley Children’s Hospital’s (VCH) request for approval of a Second Amended and Restated Grant Deed (Attachment 1.) The City Council voted and approved to consider and discuss VCH’s request as a Closed Session Item on September 3, 2024. Staff is seeking direction from the City Council as to approving the Second Amended and Restated Grant Deed and proceeding with filing the said document with the Merced County Recorder’s Office.
Project Description
As a reminder, VCH proposed to develop a pediatric primary and specialty care medical building on the former City-owned site. The first phase of the building may consist of 15,000 to 20,000 square feet. Depending on demand for services, the building may expand up to 40,000 square feet.
Background
Council approved a Purchase and Sale Agreement with VCH for a 4.54-acre site located at 301 E. Yosemite Avenue for $2.1 million. Escrow closed and the Grant Deed was recorded on November 16, 2020. Subsequently, VCH secured Site Plan Review approval from the City on January 20, 2020.
During the Site Plan Review meeting, the City and VCH agreed that vacating the right-of-way for the proposed Children’s Way Street. Proceeding with vacating the right-of-way for Children’s Way required multiple hearings by the Planning Commission and City Council. Since vacating the right-of-way took longer than expected, VCH submitted a request to the City Council to approve a Fourth Amendment to the Purchase and Sale Agreement which included the first Amended and Restated Grant Deed (Attachment 2.) The request was approved on April 4, 2022, and the Grant Deed recorded on October 5, 2022.
The 24-month Covenant to Construct expires on October 5, 2024. Per the first Amended and Restated Grant Deed, the City has the right to repurchase the property at the original sales price but must provide notice within 5 days of expiration.
IMPACT ON CITY RESOUCES
No appropriation of funds is needed at this time.
ATTACHMENTS
1. Admin Report of August 19, 2024
2. Admin Report of April 4, 2022