Report to Mayor and City Council
Tuesday, February 04, 2020
Consent
SUBJECT:
Title
CONSIDERATION OF RESOLUTION NO. 20-023 APPROVING THE PURCHASE OF ENVIRONMENTAL INSURANCE FOR THE NEW CITY YARD PROPERTY LOCATED AT 18620 SOUTH BROADWAY & 18601 SOUTH MAIN STREET IN THE CITY OF CARSON (CITY COUNCIL)
Body
I. SUMMARY
On June 18, 2019, the City Council approved an "Exchange Agreement under Threat of Condemnation and Joint Escrow Instructions" ("Exchange Agreement") with Prologis Targeted U.S. Logistics Fund, LP ("Prologis") that provided for the City to exchange its existing City Yard property, located at 2390/2400 E. Dominguez St. ("City Property"), for Prologis' property located at 18620 South Broadway & 18601 South Main Street in the City of Carson (the "Prologis Property").
The City's primary objective in pursing the Exchange Agreement is to acquire the Prologis Property for use as the City's new corporate yard. Under the Exchange Agreement, the City Property was valued at $25,824,000, whereas the Prologis Property was valued at $15,624,000, with the net difference of $10,200,000 payable to the City making certain improvements to existing building(s) on the Prologis Property for City's future use (the "Improvements").
One of the requirements of the Exchange Agreement is for the City to provide Prologis with evidence of having obtained an environmental insurance policy in favor of the City (or the Carson Reclamation Authority, as applicable), which shall be in effect as of the date of closing of escrow for the property exchange transaction (defined to be 45 days after substantial completion of the Improvements by Prologis; hereinafter, the "Closing").
Prologis included an additional $200,000 in the valuation of the City Property in the Exchange Agreement and to thereby increase the net amount payable to the City by $200,000 to cover the costs of purchasing the insurance.
Adoption of the proposed resolution would approve the purchase of a policy of pollutio...
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