City to sell Old Town property to developer

One interesting facet of Town Center redevelopment is the total dollars Yorba Linda will receive in the sale of city-owned properties to a private developer the City Council selected to build a retail district on 12 acres in Old Town, a project that should substantially boost the city's sales tax income.

Negotiations on price and terms of purchase for several properties are currently underway behind closed doors between city staffers, led by new City Manager Mark Pulone, and Zelman Retail Partners, the firm granted exclusive negotiating rights for the project in June 2012.

The five elected council members are updated on the progress of negotiations during executive sessions before each regular council meeting. Council input guides the city position in the Zelman talks, and members will approve a final agreement in public session.

The city purchased 27 of the 33 parcels needed for the downtown district through the now-disbanded Redevelopment Agency, dating from 1990, at prices ranging from $129,846 to a $2,712,864 tab for a two-lot package, with a 27-parcel total of $12,880,865.

Two of the lots, fronting Lemon Drive between Lakeview and Valencia avenues, just east of the fire station, total 13,709 square feet and are labeled as sites in the “cottage sub-district,” according to the city's 19-page Long Range Property Management Plan.

The plan, adopted earlier this month by a weightily named Oversight Board of the Successor Agency to the Yorba Linda Redevelopment Agency, was viewed by council before transmittal to the state Department of Finance for final approval. (The council is the “successor agency.”)

The “cottage sub-district” parcels, purchased for $178,941 and $181,297 in 1991, are planned for the “possible relocation of certain city-owned residential structures” that have “potential for restoration to period architecture” that will add to Town Center's “urban form and character.”

The lots are today worth $135,929 and $150,315, according to a city-hired consultant, due to “limited use of the land constrained by the Town Center Specific Plan,” as adopted by council.

The other 25 lots, also “constrained” by the Specific Plan, cost $12,520,627 and are now worth $4,612,460, based on “gross residual land value,” since “commercial land value is determined by deducting site improvements, soft costs and building construction costs” from “capitalized market value.”

Consultant Don Lamm of Diamond Star Associates pegged the “net land value” of the 25 “commercial district” parcels at $821,461, after trimming $3,790,999 in road and parkway, utility, traffic and lighting improvements and Lakeview Avenue storm drain costs.

Interestingly, only one of the city-owned parcels, occupied by the Original Pancake House, currently earns revenue for the city, at a yearly rent of $95,000. Zelman intends to relocate the restaurant within the project, assuming terms can be reached between the two parties.

Zelman also is negotiating with the owners of six project-area parcels not owned by the city.