Coversheet


Agenda Item 3.5.4


TRANSPORTATION AGENCY FOR MONTEREY COUNTY *Memorandum*

To:	Board of Directors
From:	Michael Zeller, Director of Programming & Project Delivery
Meeting Date:	December 5, 2018
Subject:	17 Station Place Settlement

RECOMMENDED ACTION:

17 Station Place Settlement Agreement:

APPROVE the real estate acquisition settlement agreement with Elaine Molinari for one parcel located at 17 Station Place for the Rail Extension to Monterey County project by increasing the $651,000 currently deposited in the State Condemnation Fund as just compensation for the property by $64,000 to a not-to-exceed amount of $715,000;
APPROVE the payment of statutory costs not to exceed the amount of $4,000;
AUTHORIZE the Executive Director to execute the agreement and changes to the agreement if such changes do not increase the Agency's net costs, subject to approval by Agency Counsel; and
AUTHORIZE the use of no more than $68,000 from Agency funds budgeted to this project for a total settlement not-to-exceed amount of $719,000.

SUMMARY:
The property owner for 17 Station Place is prepared to settle the acquisition of the property. The settlement amount exceeds the TAMC Board-authorized amount.

FINANCIAL IMPACT:

The Salinas Rail Extension project includes funding for right-of-way acquisition. At the March 2017 meeting, the Transportation Agency Board approved depositing $651,000 with the State Condemnation Fund as just compensation for the property, as determined by the Agency's property appraisal. Staff believes that this settlement amount is more cost-effective than taking the property owner to court, and can be funded out of existing project revenues. Staff proposes to use Traffic Congestion Relief Program or Proposition 116 bond funds for the additional $68,000 in settlement expenses. The total project budget is estimated at $70 million to $80 million; the total right-of-way phase is estimated to cost $17.4 million.

DISCUSSION:

The Transportation Agency for Monterey County is making capital improvements required to accommodate new passenger rail service from Santa Clara County to Salinas. The service is scheduled to start with two round trips, expanding to up to six round trips as demand warrants.

The property in question is approximately 0.27 acres located at 17 Station Place in the City of Salinas, California, known as Monterey County Assessor’s Parcel No. 002-171-007. The parcel is needed for the extension of Lincoln Avenue for the Salinas Rail Station. A Phase I environmental review found no contamination on the property.

At the March 22, 2017 meeting of the Transportation Agency Board of Directors, the Board approved proceeding with the condemnation process on 17 Station Place for the Salinas Rail Station project. This action included establishing just compensation for the property at $651,000 (based on the agency's fair marker value appraisal) and depositing that amount with the State Condemnation Fund. Since that time, the Agency was awarded possession of the property.

The Agency's real estate acquisition consultant, Overland, Pacific, & Cutler, and special legal counsel, Meyers Nave, have been negotiating with the property owner, Elaine Molinari, to finalize the purchase price. The property owner retained an appraiser to value the property, and their report resulted in an estimated value of $815,000. Due to the large gap in values between the Agency’s and the property owner’s appraisals, negotiations were at an impasse and a court date of August 11, 2019 was set to resolve the matter.

In a final attempt to avoid litigating the case in court, the property owner accepted an offer by the Transportation Agency’s special counsel to engage with mediation services, which occurred on November 1, 2018. At the conclusion of the mediation, the owner agreed to sell the property at $715,000. The Agency's representatives agreed to this proposed price, pending Board approval. TAMC is also legally required to pay for the property owner's statutory costs in this process, which are filing fees and interest, estimated to be less than $4,000.

As such, Agency staff is seeking Board approval of an additional $68,000 to add to the amount on deposit with the State Condemnation Fund, for a total negotiated settlement (inclusive of statutory costs) of $719,000 to finalize acquisition of the property.