The Salinas Rail Extension Kick Start project, which focuses on improvements to the Salinas Rail Station, requires acquisition of seven parcels, and it is critical that all the acquisition and relocations proceed according to all applicable state and federal laws. To this end, the Agency’s real estate acquisition consultant, Overland, Pacific & Cutler, and special legal counsel, Meyers Nave, have been negotiating the purchase of 17 Station Place in Salinas. The building is a single room occupancy long-term stay hotel, owned by the Elaine M. Molinari Revocable Trust.

Of the sixteen rentable units, nine are currently occupied and the renters are eligible for federally-mandated relocation assistance from the Transportation Agency after the property is acquired. However, prior to entering negotiations for the sale of the property, the owner requested, and the Transportation Agency Board approved, a lost-rent agreement. This agreement compensates the property owner for maintaining the vacancy of the seven currently unrented units, and for any units that become vacant during the property acquisition process at a rate of $400 per month per unit.  When the agreement was first approved, only five of the units were vacant.  The Agency has since relocated two of the tenants that were interested in moving voluntarily.

The benefit to the Transportation Agency of such an agreement is that paying to keep the existing seven vacant units unrented is less expensive than potential relocation costs if the owner were to rent them during the acquisition. The Transportation Agency would then be legally required to cover certain relocation expenses for these newly rented units.  This is an allowable, reimbursable cost from the State.

The Transportation Agency delivered an initial offer letter on the property on September 1, 2015.  Due to the prolonged nature of the negotiations, the Agency provided a revised offer letter on January 25, 2017 and subsequently, after not receiving a response to the revised offer, provided notice on February 23, 2017 of a Resolution of Necessity Hearing to be held on March 22, 2017. The term of the existing agreement expires March 1, 2017. The Agency and the property owner are seeking to extend the lost rent agreement until July 31, 2017 to allow the completion of the acquisition process.