DEL MAR — Going once. Going twice. The contract to sell a piece of city-owned property by auction went to Del Mar resident Steve Uhlir of SURE Real Estate Group during the Aug. 2 City Council meeting.
SURE was one of eight firms to submit bids following a July 16 request for proposal to sell a 22,215-gross-square-foot panhandle-shaped lot at 2160 Balboa Ave. Companies were evaluated on their approach to marketing the property, technical competence, experience with high-end properties, past performance and cost.
Staff narrowed the choice to three vendors — Bob Angello of Willis Allen Real Estate, San Diego’s Finest Real Estate and SURE.
“Ultimately, the review team selected Steve Uhlir SURE Real Estate Group based upon his firm’s specialty in marketing properties for auction,” the staff reports states.
“We’re very excited,” Uhlir said. “We feel it’s in our wheelhouse. That’s our niche.”
Uhlir said he began receiving inquiries about the auction within days of being awarded the contract. “I think there will be strong demand for it,” he said. “Finding a buildable view lot in Del Mar is like finding a needle in a haystack.”
The lot, currently vacant and zoned for residential use, offers ocean or mountain views from any direction. The city is seeking to sell the site and use the proceeds to retire the debt on a 5.3-acre lot known as the Shores property it bought from the Del Mar Union School District for $8.5 million in 2008. A balloon payment of about $3.245 million is due Nov. 13, 2011. The principal balance payoff as of July 1 is $3.480 million, according to a chart on the city website.
City officials hope the Balboa sale will net enough money to pay off the Shores debt and provide some funding to replace the aging 17th Street safety center, a $2.7 million to $3 million project.
The city attorney recommended selling the Balboa property by auction. It is scheduled for noon on Sept. 29 at Powerhouse Community Center. Uhlir said auctions normally take place on site, but because the lot is on a cul-de-sac, it may not accommodate the expected crowd. Information on the process is available at www.balboalotauction.com.
It will be a live auction subject to seller confirmation, meaning the city can decline all bids if its desired minimum offer is not submitted. Uhlir said by choice he hasn’t asked for the appraised value of the lot. He also wasn’t yet sure what the starting minimum bid would be.
“People who are serious can read between the lines,” he said, adding that using comparable sales in the area wasn’t an appropriate way to determine where the bids should start.
“The truth is, there are no comps,” he said.
Del Mar purchased the Shores lot, located on the southwest corner of Camino del Mar and Ninth Street, because it is a rare piece of open space in the city. A citizens group raised more than $5 million for a down payment, but donations have dropped off significantly since then.
The city negotiated a short-term bank loan to avoid high payments to the school district. The current 2 percent interest rate expires in November.
Friends of Del Mar Parks initially made the approximately $75,000 quarterly payments and is still holding events to raise money and awareness, but the group is no longer advancing funds to the city, Barbara Mandel Pache, the campaign coordinator, said.
For the fiscal year that ended this past June 30, Friends of Del Mar Parks gave the city $108,000, which includes $35,000 forwarded in January. The group doesn’t have enough to cover a full payment so the city has been using money from the open space fund.
“We continue to be dedicated to the preservation and enhancement of the park,” Mandel Pache said, adding that money will be needed for park development and improvements once the debt is retired.
The city bought the Balboa lot from Del Mar Utilities in 1965 for $250,392. At the time, it housed a pressure treatment plant and cement water reservoir tank. Eventually deemed obsolete, the plant and tank were demolished in 1992.
At the Aug. 2 meeting, council members also authorized the use of $36,000 from the open space fund. Of that, $20,000 will go to SURE for marketing and consulting services. The remaining $16,000 will be used for a preliminary title report and property survey which must be done in advance. Both are not-to-exceed figures.
Council members previously approved the $20,000 marketing fee and had hoped to pay that after the sale. But all eight proposals expected payment for their marketing efforts prior to and not contingent on the sale, City Manager Karen Brust said.
A 10 percent buyer’s premium will be added to all top bids. At the close of escrow, SURE will rebate half of that so the city is guaranteed to receive 105 percent of the accepted top bid, according to the staff report.