REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning & Development Department BY: DALTON BENNETT, Projects Administrator Planning & Development Department SUBJECT ..Title Actions pertaining to the demolition of a city owned building located at 735-741 H Street, Fresno CA 93721- Parcel Number 467-040-23 (District 3). 1. ***RESOLUTION - Approve an Interfund Loan Agreement between the General Fund and the Brownfields Revolving Loan Fund. (Requires 5 Affirmative votes) (Subject to Mayor's veto) 2. ***RESOLUTION - Declaring an Urgent Necessity for the Preservation of Life, Health, Property; and Authorizing the Planning & Development Director or Designee to Enter Into and Administer Contracts for the Demolition of Dangerous Structures, and Removal of Hazardous Materials Without Advertised Competitive Bidding; and Approve the Following Contracts: David Knott Incorporated tor Demolition Services In An Amount Not To Exceed $589,972 And Centec Construction For The Removal Of Hazardous Materials in an Amount Not To Exceed $99,360; and Authorize the Planning & Development Director to Sign Such Contracts (Requires 5 Affirmative Votes) (Subject to Mayor's Veto) 3. **RESOLUTION - Adopt the 25TH Amendment to the Annual Appropriation Resolution (AAR) No. 2023-185 to appropriate $540,000.00 in the General Fund for demolition of a city owned building located at 735-741 H Street, Fresno, CA 93721 (Requires 5 Affirmative Votes) (Subject to Mayor's Veto) 4. Approve an agreement with JSA Environmental Consulting in the amount of $50,160.00 for remediation of any hazardous materials. ..Body RECOMMENDATION Staff recommends the City Council approve actions pertaining to the demolition of the city owned building located at 735-741 H Street, Fresno CA 93721. EXECUTIVE SUMMARY The Property located at 735-741 H Street is vacant and has been subject to continuous break-ins, illegal occupancy and was subject to a fire in the basement on June 14, 2023. This fire added damage to the already compromised structure. The building in its current condition has been inspected by licensed engineers and is considered to represent a public and first responder safety hazard. The city wishes to demolish the building and assess the site for possible future development. An Analysis of Brownfield Cleanup Alternatives (ABCA) report was prepared to meet the requirements for funding the abatement and demolition through the EPA Revolving Loan Fund Grant. BACKGROUND This action will approve an Interfund Loan Agreement between the General Fund and the Brownfields Revolving Loan Fund. On December 3, 2009, Council adopted the Taxpayer Protection Act, amended on February 10, 2010, which provides in Article IV that borrowing between City funds requires a loan agreement. The funding for these actions will come from two sources. The current Brownfield's Revolving Loan Fund Grant (RLF) that was awarded to the City of Fresno by the Environmental Protection Agency (EPA) in 2021 and General Funds as required for grant match and non-eligible expenses. General Funds appropriated in the FY24 budget account for $210,000 of the budget. The remaining $540,000 will be appropriated in this action from the EPA Brownfield's RLF Grant. The term of the loan shall begin on the Effective Date and shall be repaid in full as of October 19, 2028. This action will adopt the 25th Amendment to the Annual Appropriate Resolution (AAR) No. 2023-185 to appropriate $540,000.00 in the General Fund for the demolition of the building. This action will approve a Resolution declaring an Urgent Necessity for the Preservation of Life, Health, Property. On March 23, 2023, Stantec Consulting Services, Inc. prepared an ABCA for the City (Attachment H). Based on this analysis and currently worsening structural conditions, the demolition of the building located at 735-741 H Street is an Urgent Necessity. The latest evaluation is based on a site visit that took place on July 12, 2023, due to the fire in the basement. The fire caused charring to the first-floor wood framing and extinguishing the fire caused significant flooding of the basement (i.e., there was at least two feet of water in the basement). The main goal of the visit was to re-evaluate the risk that building could cause to the public (i.e., collapse potential). Timeline of site visits and building evaluations: i. The first site evaluation occurred two years ago. Present for this initial visit were representatives from Parrish Hansen Structural Engineers, consultant, Eric Frampton (Supervising Professional Engineer, City of Fresno) and Robert Kern (Professional/Structural Engineer, City of Fresno). ii. Preliminary Structural Assessment Report by Parrish Hansen Structural Engineers dated February 16, 2022. iii. Structural evaluation based on most recent site visit on July 12, 2023. Present for the evaluation were Lupe Perez (Project Liaison/Program Administrator, City of Fresno), Dalton Bennett (Project Administrator, City of Fresno), Eric Frampton (Supervising Professional Engineer, City of Fresno), Richard Trimble (Professional Engineer, City of Fresno), and Robert Kern (Professional/Structural Engineer, City of Fresno). The main findings from the latest site visit can be summarized as follows: The flooding is adding to the deterioration of the basement walls and foundations. It should be noted that the report by Parrish Hansen already flags the basement walls as critical for a potential failure for gravity loading alone. A potential failure during a moderate seismic event could be even more catastrophic. The charring of the first-floor framing also further reduces the vertical load carrying capacity of the first floor. For reference, below is a summary of the most critical aspects from Parrish Hansen's report: * Brick and mortar deterioration of walls and foundations. * Diaphragm weaknesses: i. Weak/non-existent in-plane shear connections. ii. Weak/non-existent out-of-plane connection. iii. Limited diaphragm strength. * Wall weaknesses: i. Minimal wall piers at south wall. * Deficient capacity of roof framing. Based on these recent events (fire damage on June 14, 2023 as well as two other fires within the last two years), the earlier finding and recommendations by Parrish Hansen outlined in their report (dated February 16, 2022), along with the evaluation of City Staff, the building is a danger to the public and should be demolished as soon as possible. This action will approve an agreement with Environmental Consulting for remediation of any hazardous materials from the site. ENVIRONMENTAL FINDINGS This approval is statutorily exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15268 because the City has determined that issuance of a demolition permit is a ministerial action. The property has been assessed and is not eligible for the local Historic Register. LOCAL PREFERENCE David Knott Inc., CENTEC Environmental Construction and JSA Environmental Consulting are all local businesses, as defined by the Fresno Municipal Code. FISCAL IMPACT Total cost including demolition, monitoring, hauling, and dump fees is $739,492.00. Work will be performed according to Davis/Bacon requirements / General Decision Number CA20230018 dated 08/25/2023. Funding will be from two sources: 1. The current Brownfield's Revolving Loan Fund Grant (RLF) that was awarded to the City of Fresno by the Environmental Protection Agency (EPA) in 2021 2. General funds as required for grant match and non-eligible expenses General Funds appropriated in the FY24 budget account for $210,000 of the budget. The remaining $540,000 will be appropriated in this action from the EPA Brownfield's RLF Grant. The term of the loan shall begin on the Effective Date and shall be repaid in full as of October 19, 2028. Attachments: A. Interfund Loan Resolution with Agreement B. Urgent Necessity Resolution with Contracts C. 25TH Amendment to the Annual Appropriation Resolution No. 2023-185 D. Consultant Services Agreement JSA - Environmental Consulting Proposal E. Analysis of Brownfields Cleanup Alternatives (ABCA)