For City Council Meeting [September 14, 2021]
TO: Honorable City Council
APPROVAL: Marcus Fuller, City Manager
FROM: Marcus Fuller, City Manager
Eric Vail, City Attorney
Title
Request City Council to Adopt Resolution No. 7770 Declaring that Certain 3.39 Acre City-Owned Property Located at the Southeast Corner of Linden Avenue and Miro Way as Surplus Land and Directing the City Manager to Follow the Procedures Set Forth in the Surplus Land Act, California Government Code Section 54220 et seq., as Amended on January 1, 2020, for the Sale of Surplus Land.
Body
BACKGROUND
The City owns a 3.39-acre parcel of land generally located at what would be the southeast corner of Linden Avenue and Miro Way within the Renaissance Specific Plan (the “Property”). The Property is not within the area of land controlled by Lewis-Hillwood Rialto Company (LHR) pursuant to the Second Amended and Restated Contract of Sale for Areas B, C and D approved by the City Council on September 25, 2012, (the “Agreement”). The Property is generally shown in red outline in relation to the area subject to control by LHR pursuant to the Agreement in Figure 1 below.
Figure 1
The Property is located within the boundaries of the Renaissance Specific Plan, and pursuant to the original Specific Plan the Property was established with a land use designation of “Employment” consistent with existing uses located to the south of the Property as shown in Figure 2 below.
Figure 2
In September 2016 the City Council adopted an amendment to the Renaissance Specific Plan that implemented changes to the development pattern within the easterly portion of the Specific Plan, deleted the extension of Miro Way to Ayala Dr., changed land use designations, including a new 13-acre school site and the establishment of a new 20-acre public park. The Property itself is currently designated as part of the 20-acre public park.
The City is currently evaluating the feasibility of developing the 20-acre public park site separate from Jerry Eaves Park, and in the context of no known plans in the near future for Rialto Unified School District’s acquisition and development of the site designated for a new school.
The current land use designations and development pattern identified in the amended Renaissance Specific Plan is identified in Figure 3 on the next page.
Figure 3
ANALYSIS/DISCUSSION
The City received an unsolicited request to consider disposition of the Property to the owner of the property located immediately south of the Property as a means of expanding the existing industrial/commercial business operations. In order to consider disposing of real property, the City is required to comply with state law identified as the “Surplus Land Act.”
Enacted in 1968, the Surplus Land Act requires all local agencies to prioritize affordable housing, as well as parks and open space, when disposing of surplus land. Before local agencies may dispose of surplus land, they are required to give notice to local public entities and organizations involved in affordable housing development. If a preferred entity expresses interest, the parties must enter into good faith negotiations to determine a sales price or lease terms. Assembly Bill 1486 brings clarity and improves enforcement of the Surplus Land Act to increase the supply of affordable housing.
According to the Surplus Land Act, surplus land must be put out to open, competitive bid by a local agency, provided all entities identified in subdivision (a) of Government Code Section 54222 will be invited to participate in the competitive bid process, for either of the following purposes:
1. A housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
2. A mixed-use development that is more than one acre in area, that includes not less than 300 housing units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing.
Pursuant to the Surplus Land Act, a written notice of availability of the availability of the Property must be provided for 60 days to the following entities:
• Any local public entity, as defined in Section 50079 of the Health and Safety Code, within whose jurisdiction the surplus land is located.
• Housing sponsors, as defined by Section 50074 of the Health and Safety Code, that have notified the Department of Housing and Community Development of their interest in surplus land shall be sent a notice of availability of surplus land for the purpose of developing low- and moderate-income housing.
Given the Property is limited in size at 3.39-acres, it is not likely a housing developer will pursue acquisition of it for affordable housing development. However, as the Property is also designated for potential future public park purposes, the City is required to notify the following entities:
• To any park or recreation department of the county within which the land is situated.
• To any regional park authority having jurisdiction within the area in which the land is situated.
• To the State Resources Agency or any agency that may succeed to its powers.
• A written notice of availability of land suitable for school facilities construction or use by a school district for open-space purposes shall be sent to any school district in whose jurisdiction the land is located.
This action is a first step in disposing of the Property and will allow the City to issue a written notice of availability to those entities listed by statute and allow those entities to bid. These entities include park or recreation departments of the county, or any regional park authority having jurisdiction and the State Resources Agency as well as affordable housing developers and school districts who may have an interest in the property.
After the 60-day notice period lapses, and without any notification of interest in the Property from these entities or agencies, the City can proceed to negotiate the disposition of the Property with other interested parties.
The City Manager is currently soliciting proposals for an appraisal of the Property; any consideration in the disposal of the Property will ensure that it is sold at fair market value as determined by the City Council.
ENVIRONMENTAL IMPACT:
The sale of the Property as surplus is exempt from environmental review under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15312 (Surplus Government Property Sales). However, if development was proposed on the Property by a subsequent buyer, then that development would be reviewed under CEQA.
GENERAL PLAN CONSISTENCY:
This action is consistent with Guiding Principle 3A of the General Plan:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW:
The City Attorney prepared and approved this staff report, resolution, and ordinance.
FINANCIAL IMPACT:
Operating Budget Impact
None at this time; however, upon disposition of the Property the City will realize unanticipated revenue based on the value of the Property sold.
Capital Improvement Budget Impact
None.
RECOMMENDATION:
Staff recommends that the City Council adopt the proposed Resolution.