Newport Beach begins due diligence to buy $30.5-million property for new police station
The Newport Beach Police Department may move to Dove Street following City Council action Tuesday night that will allow city staff to begin the process of purchasing a 3.59-acre property for $30.5 million to house new police headquarters sometime in the next decade.
With a 5-1 vote in favor of the purchase, the city will enter an agreement with AG Dove Owner, L.P. and begin escrow for the property at 1201 Dove Street.
Community Development Director Seimone Jurjis said Wednesday the city will have a 120-day due diligence period to review title documents and lease agreements, and to inspect the property.
The city will have roughly 30 days from the end of that period to determine if it wants to move ahead with the purchase.
“We want to make sure that we know what we’re buying from an asset standpoint,” Jurjis said. “Once we complete our due diligence, we have to make a decision. Is the property in a state that we want to purchase it? If it is, we move forward ... or if it’s not, we have to make the decision to drop escrow or not.”
About $24.1 million of the purchase price would come from the city’s existing budget surplus for the last fiscal year, $5.5 million from the facilities financial planning fund and $1.5 million would come from the general fund’s capital improvement plan fund.
He also noted that the purchase of the land does not immediately preclude the demolition of the existing office building that sits on the property or the construction of a new police station. That still remains, at a minimum, 10 years out from the current date, he said, but the purchase is occurring now because of the property’s unique size.
“It’s about 3.6 acres. We were looking for something that was at least 3.5 ... and to find a property of that size that was contiguous; that’s a big challenge,” Jurjis said. “There’s properties out there that are fully developed. You can try to purchase smaller properties and try to assemble it. But that could take a long time for us. The sale of this property happened to come up at the right time for us and the seller was interested in selling it to us.”
City staff said the existing police headquarters, which shares a 4-acre parcel with Fire Station No. 3, was built in 1973. A needs assessment determined the department has significantly outgrown the 49,284-square-foot facility, which is within 10 years of the end of its useful life.
The assessment determined the future facility, already included in the city’s capital improvement plan to be completed in the next decade, will need to be at least 73,000 square feet to accommodate the patrol division and a firearms training and shooting range, according to a staff report.
Jurjis said the Dove Street property has a positive cash flow that will offset the cost of purchase. Real property administrator Lauren Wooding Whitlinger noted that between the time the property is purchased and the time the building is potentially demolished to make way for the new police department headquarters, it could generate roughly $15 million in income for the city.
“I remember eight years ago, the first forum that we attended: They asked me the question of ‘Where’s the police station going?’ I said, ‘I don’t know.’ I was trying to be humble, but also I really didn’t know. I actually think this is the best location, given the proximity to both sides of [Newport] Bay,” said Mayor Kevin Muldoon.
Yet is was Muldoon who cast the lone dissenting vote. He said the timing could be better as it is his belief the real estate market is inflated and due for a correction.
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