Council moves ahead with sale of Ti Amo property

By SARA HALL

City Council unanimously agreed this week to move ahead with the sale of the former Ti Amo restaurant property, now owned by the city.

Councilmembers voted 4-0 on Tuesday (April 23) to move ahead with the sale of the property and direct staff return in closed session with price and terms, as well as an option to acquire brokerage services. Mayor Pro Tem Alex Rounaghi was absent for the item (he attended virtually earlier in the meeting).

Following a brief staff presentation this week, council discussed the next steps for the city-owned property at 31727 and 31735 Coast Highway (formerly occupied by Italian restaurant Ti Amo by il Barone).

All councilmembers agreed that selling the property would be their first choice. Several also noted that leaving the possibility for an exchange open as an option would also be a good idea.

“Maybe there’s something that comes out of that,” said Councilmember Bob Whalen.

It could also be less expensive to ask the previous appraiser to update their most recent assessment, rather than get another “full-blown” appraisal again, he added.

During the process of getting the property declared as surplus land, the city received an appraisal of approximately $3 million, confirmed Assistant City Manager Jeremy Frimond.

“Since then, going through this process and having multiple conversations with brokers, we’ve been reassured that it’s not $3 million, it’s higher,” he said. “We should anticipate higher on the market.”

Councilmember Mark Orgill suggested getting the opinion of three brokers. They won’t charge, he explained, as they will want the business.

During public comment, the only speaker was long-time resident John Thomas, who suggested that if the city secured a broker opinion of value, they could solicit brokers to do a “mini appraisal.”

Thomas also recommended that the city reserve the right to use a property in exchange deal.

“If you are looking to buy a property and you can exchange Ti Amo, it may help you buy something,” he said.

Click on photo for a larger image

Photo by Mary Hurlbut

Council agrees to move ahead with selling the city-owned property formerly occupied by Ti Amo restaurant

At the Jan. 24, 2023 meeting, council declared the city-owned site as surplus property and “not necessary for the city’s use.” The item was originally scheduled for the Jan. 10, 2023 meeting, but was removed from the agenda by the city manager.

In November, the state determined that the city has completed the requirements consistent with the surplus land act, explained Housing Program Coordinator Jennifer Savage during Tuesday’s presentation. That’s an important step so council could consider the options for the property. The California Department of Housing and Community Development notified the city on November 16 that all the requirements were met under the Surplus Land Act and Laguna Beach is permitted to proceed with the sale of the property, should the city desire to do so.

Staff is now seeking direction regarding next steps for the subject property.

On Tuesday, council considered several options, including, but not limited to:

–Sell the property. The city could list the property for sale in the open market. If the city receives an acceptable offer, the sale of the property would result in one-time revenues.

–Lease the property. The city could maintain ownership of the property and issue an RFP for a long-term development lease. If the city receives an acceptable proposal, the long-term lease of the property would result in ongoing revenues.

–Other uses. The city could consider the property for other uses as directed by the council.

In terms of selling the property, that could create a one-time revenue, Savage noted, while leasing the property could provide ongoing revenue.

Since council agreed to move forward with selling the property, next steps would include a discussion of price and terms in a closed session meeting, Savage said. That conversation could also include an option to acquire broker services and, if directed to pursue that, bring a contract for broker services to an open session for consideration and then initiate the sale process thereafter.

The city also recently sent out an RFP for brokerage services, so staff could also present the results of that during the closed session, she added.

The most recent appraisal was done in early 2023.

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“An appraisal certainly helps give you an idea of the value of the land, but it certainly does not set the ceiling,” Savage said. “We would anticipate that, even with any appraisal, on the open market the property would go above that appraisal price.”

It would not set the market price, but it would provide an assessment of the value of the potential price, she explained.

The former restaurant property was originally purchased in 2021 by the city for civic uses, including a potential future fire station in South Laguna.

In a 3-2 vote on June 15, 2021, council authorized an agreement with Rincon Consultants Inc. in the amount of $89,199 to provide consulting services for the preparation of an initial study for the acquisition of the Ti Amo property and for a possible mitigated negative declaration, if determined to be appropriate. Councilmembers Toni Iseman and George Weiss dissented.

The Planning Commission voted 5-0 on Aug. 4, 2021, to approve city staff’s recommended General Plan consistency determination for the location. Commissioners and staff emphasized that they were only affirming GP consistency for possible future public benefit use, and not a specific use (such as a fire station).

In another split vote on Aug. 24, 2021, council certified the initial study/mitigated negative declaration for the acquisition of the property. The city entered into escrow to acquire the property and offered $2.7 million. Council directed staff to complete any steps necessary to close escrow on the subject property.

On Jan. 5, 2022, the Planning Commission considered a temporary use permit for a parking lot on the empty lot adjacent to the former Ti Amo restaurant, but couldn’t figure out the ingress and egress. They ultimately continued the item to a future meeting, when the idea failed to find a majority of support.

Iseman requested on June 7, 2022, that the council agendize a future item to consider selling the Ti Amo property. While there was no official vote or action at the June meeting, there was general consensus on the dais to obtain an appraisal at the appropriate time in the future when the city might be in the position to sell the property.

Click on photo for a larger image

Photo by Mary Hurlbut

The city acquired 31796 South Coast Highway for use as a future fire station

Council voted 5-0 on Sept. 20, 2022, to approve moving forward with the acquisition of the property at 31796 South Coast Highway (dental building), which was found to be a superior site for a replacement fire station. After more than a year of contentious split votes on the Ti Amo site and applying the potential pressure of eminent domain on the owner of the 31796 Coast Highway property, there was a consensus of support for the new location. The city closed escrow on the new property on Jan. 4, 2023.

The move to declare the Ti Amo site as surplus came shortly thereafter.

At the September 2022 meeting, when the city purchased the former dental building site for the fire station, council direction included repaying the loan from the vehicle replacement fund, if the city sold the Ti Amo property, Savage explained.

Selling the property could generate revenue, including the opportunity to repay that loan from the vehicle replacement fund, she noted.

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Sara Hall covers City Hall and is a regular contributor to Stu News Laguna.


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