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 Actions pertaining to the acquisition of fee title interest of parcels to benefit the Blackstone McKinley BNSF Grade Separation Project (Council Districts 1 and 7): 1. HEARING to consider a Resolution of Necessity for acquisition of fee title interest for rights of way for public street purposes of Assessor Parcel Numbers 446-232-36 and 446-232-40, owned by Maninder Singh and Palwinder Kaur Singh, for the construction of the Blackstone McKinley BNSF Grade Separation Project; 2. ***RESOLUTION - Determining that public interest and necessity require acquisition of fee interest for rights of way for public street purposes of Assessor's Parcels Numbers 446-232-36 and 446-232-40, owned by Maninder Singh Sandhu and Palwinder Kaur Sandhu, for the construction of the Blackstone McKinley BNSF Grade Separation Project and authorizing eminent domain proceedings for public use and purpose. (Requires 5 affirmative votes) (Subject to Mayor's Veto) ..Body RECOMMENDATIONS Staff recommends the City Council (1) conduct a public hearing to consider the adoption of a Resolution of Necessity for the acquisition of Assessor's Parcel Numbers (APNs) 446-232-36 and 446-232-40, a combined 0.5795-acre (25,241 square feet) improved parcel (Property), for the construction of the Blackstone McKinley BNSF Grade Separation Project (Project), owned by Maninder Singh Sandhu and Palwinder Kaur Sandhu (Owner), and (2) adopt the attached Resolution of Necessity, which states that public interest and necessity require acquisition of fee interest for rights of way for public street purposes of APNs 446-232-36 and 446-232-40, owned by Maninder Singh Sandhu and Palwinder Kaur Sandhu for the construction of the Blackstone McKiney BNSF Grade Separation Project and authorizing eminent domain proceedings for public use and purpose, pursuant to California Code of Civil Procedure �1245.230. EXECUTIVE SUMMARY The acquisition of APNs 446-232-36 and 446-232-40 will provide the City with fee title interest of the real property located at 1614 and 1632 North Blackstone Avenue, Fresno, California, which is necessary to construct the Blackstone McKinley BNSF Grade Separation Project and will eliminate two existing at-grade crossings by grade separating North Blackstone Avenue and East McKinley Avenue under the BNSF Railway Mainline Track. The Project requires the fee title acquisition of the Property, improved with a commercial structure containing an owner-occupied storage space and Napa Genuine Parts Company. The City needs to acquire the property interest described above to certify the Project and construct the proposed Project improvements. The Resolution of Necessity authorizes the City Attorney to initiate an eminent domain action and obtain an order of possession of the Property. In order to obtain fee title interest in the Property, the City must obtain a court order through the Eminent Domain process. This action requires five affirmative votes and is subject to veto by the Mayor. BACKGROUND The Blackstone Avenue and McKinley Avenue corridors serve as primary routes for the community, as well as the City's Bus Rapid Transit system and emergency vehicles. They are also part of the Blackstone Avenue Smart Mobility Plan, which provides 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 at any at-grade crossing on the BNSF corridor. The 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 Project. UFS retained CBRE Valuation and Advisory Services (CBRE) to prepare an appraisal report of fair market value of the Property for the Project. On July 12, 2023, CBRE prepared an appraisal report determining the fair market value of the Property to be $1,350,000 as defined by Section 1263.320 of the Code of Civil Procedure. The appraisal was reviewed by David S. Mason, Inc., who concurred with the value given by CBRE. Pursuant to Section 7267.2 of the Government Code, an offer of just compensation in the full amount of the appraisal was personally delivered to the Owner by UFS on August 29, 2023. A subsequent, supplemental offer to purchase the Improvements Pertaining to the Realty (IPR) on the property was made on March 14, 2024, in the amount of $61,625. The total combined purchase price for the Property and IPRs is $1,411,625. The Owner desired to obtain an independent appraisal and requested reimbursement for it, pursuant to California Code of Civil Procedure Section 1263.025, the City reimbursed the Owner $5,000 for the independent appraisal. The Owner's independent appraisal determined the fair market value of the Property to be $1,560,000. On July 18, 2024, the City offered a settlement amount of $1,560,000 for the Property and $12,850 for the IPR. The total combined settlement amount of $1,572,850 has not been accepted by the Owner. Since the date of the initial offer, UFS acquisition consultants have contacted the Owner a total of 28 occasions by email, phone calls, and in-person visits to discuss the offer to purchase and to move forward with the acquisition and relocation process. To date, the City has not yet received an executed Agreement. Staff recommends beginning the process of acquiring the Property from the Owner through the eminent domain process. Starting the eminent domain process now allows the City to obtain an order of possession from the court while giving the Owner a forum in which to make their claim for just compensation. For each property interest to be acquired, a Resolution of Necessity must be adopted prior to the commencement of eminent domain proceedings (see Attachment, Resolution of Necessity Requirements). The City Attorney's Office has reviewed and approved the Resolution of Necessity 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 on 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: Resolution of Necessity (RON) Resolution of Necessity Requirements Vicinity Map Location Map Staff Presentation