Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute Amendment No. 4 to the Purchase and Sale Agreement (PSA) for the Nimitz Motel Located at 555 Lewelling Boulevard, Assessor's Parcel Number: 412-1-4-1
Staffreport
COUNCIL PRIORITY
* Housing and Homelessness
* Race and Equity Initiatives
* Community & Business Development
SUMMARY
The existing purchase and sale agreement (PSA), which the City Council approved on March 21, 2022, to acquire the Nimitz Motel located at 555 Lewelling Blvd expires on October 28, 2022. Therefore, the City and motel owner, Parshotam, Inc., seek to extend the PSA through March 15, 2023 to continue negotiations, re-apply for State Project Homekey funding, and move closer to purchasing the motel for the interim navigation center/shelter and eventual longer-term permanent supportive housing.
RECOMMENDATIONS
Staff recommends that the City Council adopt the resolution to approve Amendment No. 4 to the PSA for the Nimitz Motel to extend the existing PSA through March 15, 2023. There is no additional deposit or funding to release by the City as part of this extension.
BACKGROUND
On March 21, 2022, the City Council approved the existing PSA to acquire the Nimitz Motel for a total estimated cost of $6.235 million: $6.15 million sales price plus estimated $85,000 in due diligence/closing costs. Upon opening escrow, the City deposited $184,500 from its Affordable Housing Trust Fund as required by the PSA. The City also conducted an appraisal, which appraised the value of the property at $5.8 million.
On April 18, 2022, the City Council approved submittal of a Project Homekey 2.0 application to the State Housing and Community Development Department (HCD) to convert the motel into a short-term navigation center with shelter for approximately 3 to 5 years. During this interim period, the City and its nonprofit partners would seek additional public financing to convert the Property into long-term supportive and ...
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