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City of San Leandro City Council Meeting Date: March 6, 2023 Agenda Number: 13.a. Agenda Section: ACTION ITEMS File Number: 23-051 File Type: Staff Report Adopt a Resolution to Approve and Authorize the City Manager to Execute Amendment No. 5 to the Purchase and Sale Agreement (PSA) for the Nimitz Motel Located at 555 Lewelling Boulevard, Assessor’s Parcel Number: 412-1-4-1 COUNCIL PRIORITY ·Housing and Homelessness ·Race and Equity Initiatives SUMMARY The current extension for the purchase and sale agreement (PSA) to acquire the Nimitz Motel located at 555 Lewelling Blvd ends on March 15, 2023. The City and motel owner, Parshotam, Inc., seek to extend the PSA due diligence period through July 1, 2023 (Amendment No. 5), which would provide additional time for the City to re-apply for State Project Homekey funding and close escrow by or before August 30, 2023. The motel will be an interim navigation center/shelter for unhoused individuals and eventually converted to longer-term permanent supportive housing. The City will release $75,000 (of the $184,500 deposited when escrow was opened in March 2022) to the seller, which will still apply towards the purchase price and will be non-refundable. The City will have two (2) options to extend under Amendment No. 5 if needed: 1) if the first 30 day extension option is exercised, then closing would extend to September 30, 2023 or sooner and the City will deposit an additional $50,000 that will be non-refundable and applied towards the purchase price, and 2) if the second 30 day extension is exercised, then closing would extend to October 30, 2023 or sooner but no additional deposit would be required. RECOMMENDATIONS Staff recommends that the City Council adopt the resolution that approves and authorizes the City Manager to execute Amendment No. 5 to the PSA for the Nimitz Motel. BACKGROUND On March 21, 2022, the City Council approved the existing PSA to acquire the Nimitz Motel for a total estimated cost of $6.235 million: $6.15 million sales price plus an estimated $85,000 in closing costs. Upon opening escrow, the City deposited $184,500 from its Affordable Housing Trust Fund. On April 18, 2022, the City Council approved submittal of a Project Homekey 2.0 application to Page 1 City of San Leandro Printed on 3/1/2023