REPORT TO THE CITY COUNCIL FROM: RANDALL W. MORRISON, PE, Director Capital Projects Department SCOTT L. MOZIER, PE, Director Public Works Department BY: ANTONIO M. BUELNA, PE, Assistant Director Capital Projects Department, Capital Administration Division NANCY BRUNO, Supervising Real Estate Agent Capital Projects Department, Capital Administration Division SUBJECT ..Title Approve the Agreement for Purchase and Sale of Real Property and Escrow Instructions to acquire fee interest of a 0.17-acre (7,405 square feet) improved parcel, identified as Assessor's Parcel Number 451-134-06, owned by RR-M Reyna, Inc., a California corporation, for an amount of $357,725, for the construction of the Blackstone McKinley BNSF Grade Separation Project. (Council Districts 1 and 7) ..Body RECOMMENDATION Staff recommends the City Council approve the Agreement for Purchase and Sale of Real Property and Escrow Instructions to acquire fee interest of a 0.17-acre (7,405 square feet) parcel improved with two auto retail/repair storefronts located at 1483-1487 North Blackstone Avenue, identified as Assessor's Parcel Number (APN) 451-134-06 (Subject Property), owned by RR-M Reyna, Inc., a California corporation, for an amount of $357,725 for the construction of the Blackstone McKinley BNSF Grade Separation Project (Project), and authorize the Capital Projects Director or his designee to sign all documents necessary to complete the subject acquisition. EXECUTIVE SUMMARY The acquisition of APN 451-134-06 (Subject Property) will provide the City with fee title interest of the real property located at 1483-1487 North Blackstone Avenue, Fresno, California, which is necessary to construct the Blackstone McKinley BNSF Grade Separation Project. The Project requires the fee title acquisition of the Subject Property, owned by RR-M Reyna, Inc., a California corporation (Owner), improved with two commercial establishments known as Sound City and Smith Auto Care. The City needs to acquire the property interest described above to certify the Project and construct the proposed Project improvements. The Owner and the City came to a mutually agreed upon total amount of $357,725 as just compensation for the acquisition of the Subject Property. Raul Reyna and Kathy Reyna, representatives of the Owner, signed the Agreement for Purchase and Sale of Real Property and Escrow Instructions on July 17, 2024. The Subject Property has two (2) tenants, both of whom are entitled to relocation assistance pursuant to the Uniform Relocation Act. The City's relocation consultant has contacted the tenants, and they are aware of the Project and the necessity of Subject Property. Both tenants are working with the relocation consultant to find replacement properties for their businesses. All costs for this agreement are funded with Measure C and California Local Partnership Program Formulaic grant funds. BACKGROUND The Blackstone Avenue and McKinley Avenue corridors serve as primary routes for the community, the City's Bus Rapid Transit system, emergency vehicles, and is also part of the Blackstone Smart Mobility Plan providing Class IV protected bicycle facilities along Blackstone Avenue through the Project area. The Project location has experienced the highest traffic volumes and number of accidents of any at-grade crossing on the BNSF corridor. The Blackstone McKinley BNSF Grade Separation Project will eliminate two existing at-grade crossings by grade separating North Blackstone Avenue and East McKinley Avenue under the BNSF Mainline Track. The City is progressing through the preliminary engineering and right-of-way phases of the Project. The Project costs for the right-of-way phase are funded by Measure C Grade Separation Program funds and Local Partnership Program Formulaic grant funds. The City retained Universal Field Services, Inc. (UFS) to acquire parcels on its behalf for the Blackstone McKinley BNSF Grade Separation Project. UFS retained CBRE Valuation and Advisory Services (CBRE) to prepare appraisal reports of fair market value of the properties for the Project. An appraisal report prepared by CBRE with a date of May 24, 2023, determined the total value of the RR-M Reyna, Inc. property (APN 451-134-06) (Subject Property) to be $270,000. The appraisal was reviewed by David S. Mason, Inc. (DSM), who concurred with the value given by CBRE. On September 1, 2023, UFS personally presented a formal offer to Raul Reyna, CEO of RR-M Reyna, Inc. (Owner) from the City to purchase the Subject Property. On March 14, 2024, a supplemental offer was made to the Owner which included the unsegregated Improvements Pertaining to Realty (IPRs) in the amount of $37,545. The total combined amount offered to the Owner for the Subject Property and the IPRs was $307,545. The Owner did not agree with the amount of compensation and chose to order an independent appraisal. Pursuant to California Code of Civil Procedure Section 1263.025, the Owner was reimbursed by the City the amount of $5,000 for their independent appraisal report. The appraisal ordered by the Owner was prepared by Scott Appraisal Company (SAC), who determined the fair market value of the Subject Property was $325,500. After further negotiations, the owner advised, after discussion with his tenants, the value of the IPRs due to the Owner was $32,225. The total counteroffer by the Owner to the City was $357,725, and this amount was mutually agreed upon as just compensation for the acquisition of the Subject Property and the IPRs. The Owner signed the Purchase and Sale Agreement and associated Deed on July 17, 2024. Staff recommends the City Council authorize the Capital Projects Director or his designee to sign all documents necessary to complete the subject acquisition. The City Attorney's Office has reviewed and approved the Purchase and Sale Agreement as to form. ENVIRONMENTAL FINDINGS This Project was found to be statutorily exempt by Fresno City Council on June 25, 2020, pursuant to California Public Resources Code Section 21080.13(a) and 15282(g) of the California Environmental Quality Act (CEQA) Guidelines. The Notice of Exemption was thereafter recorded with the Fresno County Clerk on July 30, 2020. The statute of limitations for challenges to this exemption has run pursuant to CEQA Guideline Section 15062(d). This Project will eliminate two railroad crossings and grade separate North Blackstone Avenue and East McKinley Avenue under the BNSF Mainline Track. LOCAL PREFERENCE Local preference was not considered because this agreement does not include a bid for or award of a construction or services contract. FISCAL IMPACT The proposed Blackstone McKinley BNSF Grade Separation Project is within Council Districts 1 and 7. These acquisitions will have no impact to the General Fund. All Project costs for the right of way phase are funded with Measure C and California Local Partnership Program Formulaic grant funds. All funds necessary for the acquisition are included in the current fiscal year budget as previously adopted by the City Council. Attachments: Purchase and Sale Agreement Vicinity Map Location Map