The Turlock city Council approved the purchase of two parcels at the Regional Transit Center Tuesday night at a price point that is 18 percent above the appraised value.
In a unanimous vote the Council agreed to the purchase of the two parcels at N. Golden State Boulevard and Hawkeye Avenue for $1.53 million plus escrow closing costs. The total cost cannot exceed $1.54 million.
The parcels are being purchased as part of the second phase of development at the Regional Transit Center. Ultimately, the land would likely be built up to include more bus platforms, a taxi stand, and even lay the ground work for future passenger rail options.
The city has been in lengthy negotiations with the seller, Santa Barbara-based Tiare LLC, who had indicated to the city that they might walk away from the deal if it wasn’t completed soon. They were also firm on the price of the parcels.
“If we don’t pull the trigger we could potentially lose the sellers,” City Manager Roy Wasden said.
The purchase was approved amid some concerns Turlock Real Estate Broker Jim Theis raised prior to the meeting about the value of the property.
“The price paid comes out to $21 or $22 per square foot, which is really high for the area,” Theis said. “The city should have been asking if it was a good value and if it was my money I would have answered no.”
Even though the purchase price was higher than the appraised value, it was far less than it would have cost to go through the eminent domain process, said Maryn Pitt, the city’s Real Estate and Housing Program manager.
There also was the possibility the seller could have sold to a private business, which would have left the city with some hefty costs down the line when the property is needed.
“The risk exposure to pay more was looming and large,” Pitt said.
The money for the purchase of the parcels comes from the Local Transportation Fund and Prop 1B and has been included in the $2.2 million Transit Hub Property budget for this year.
The funds come with the condition that they be expended in 12 months time. Because the parcels still have to undergo some lengthy processes and reviews, the time to act to stay in the 12 month deadline and retain the funding was rapidly approaching, Pitt said.
“In this process 12 months can suddenly become tomorrow,” she said.
The Regional Transit Center opened last year at an initial cost of $1.65 million.