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The city hears two offers from separate interests on land at 160 Calle Magdalena, where the Public Works Yard currently is situated. Both offers were rejected, as the city has no plans to sell. Photo by Tony Cagala
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City rebuffs public works yard offers

ENCINITAS — Encinitas officials recently turned down two offers to purchase a coveted piece of city-owned property that serves as the site of the public works yard.

The City Council was prepared to consider the two offers during a closed-session meeting on Sept. 14, but Mayor Kristin Gaspar announced during the regular meeting that the council decided against adjourning to closed session and declined to discuss the offers.

The two bids, made nearly 18 months apart, were for the 4.4-acre property at 160 Calle Magdalena, the location of the city’s public works yard. The land used to be the site of a Chevrolet dealership before the city bought the land in July 2006 and moved its public works operations there in early 2009.

The initial bid was made in May 2015 by Guesthouse Hotel Development, LLC, a Scottsdale-based hotel development chain. The city fielded a second offer on Aug. 16 from Orange County-based Patriot Equity Partners, a retail development chain.

City officials said both offers were unsolicited, and the city has not made the property available.

“The city has given no indications of wanting to sell this property,” said Bob McSeveney, a senior management analyst for the city. “The unsolicited nature of the offers is likely due to the location.”

City Public Works Director Glen Pruim, who oversees the yard where the public works department stages its vehicles and equipment, said he could understand why the property is attractive to developers.

“It has easy access to the 5 Freeway, it’s near one of the biggest streets in the city, Encinitas Boulevard,” Pruim said. “In fact, many of the reasons it’s attractive to developers are reasons we think it works as a public works yard.”

The city declined to comment on the details of the offers, citing the confidentiality of real property negotiations, but the president of one of the companies, Guesthouse, revealed that they offered the city $30 per usable square foot of property, or just more than $4 million.

McSeveney said that the city did not take action on the initial offer because it was during the time when the city did not have a permanent city manager and the initial offer expired after five days. Guesthouse Development renewed its offer in August after Patriot Equity Partners solicited its offer.

Jordan Scott, president of Guesthouse Development, said the company learned about the property for one of its brokers that scout out potential hotel sites across the country.

“We were kind of throwing spaghetti on the wall and seeing what stuck,” Scott said. “We’re disappointed to hear that they aren’t going to consider the offer, we think it would be a great location for a hotel.”

Encinitas Chamber of Commerce CEO Bob Gattinella said he wasn’t surprised that the city didn’t consider the offers, but said the city has a shortage of hotel rooms that needs to be addressed at some point.

“Encinitas is a tourist town, but we don’t have the hotel infrastructure that we really should have,” Gattinella said. “But there is a segment of the population here that doesn’t want to see that grow.”

Gattinella said that a public works yard might not be the highest and best use from a revenue-generating perspective, but doesn’t expect the city to give up the property any time soon.

“I was pretty sure that the city wasn’t going to sell the property after they just purchased Pacific View,” Gattinella said. “It wouldn’t make sense for them to sell it, but it is a very large piece of property and any company would be happy to put something there, as the city is.”

Pruim said he hopes the city holds on to the property for the yard.

“I don’t see a downside of having the yard there,” Pruim said.

1 comment

citywatch September 22, 2016 at 10:17 pm

The Council’s memory should be refreshed on what a previous Council paid for the car dealership property, now the public works yard. Somewhere in the vicinity of $10.5 million with the addition of several more million to fix up the turnkey property. Add to that the $3 million that the San Dieguito Water District was forced to pay to have a home after the Council/Board transferred the SDWD land to the city for a paltry amount of money.
And the Council actually entertained the thought of $4 million for the public works yard? What a deal for the buyer – a $15 million dollar piece of city property for $4 millon.

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