The City is the owner of certain real properties (“Properties”) identified and described on the Surplus Land List (Exhibit A) and Exempt Surplus Land List (Exhibit B). Under the Surplus Land Act, Government Code Sections 54220-54223 (“Act”), land that is not necessary for the City’s use shall be declared either surplus land or exempt surplus land. The disposition of surplus land is governed by the Act while land that has been declared exempt surplus land pursuant to the Act may be disposed of without further regard to the Act.
Surplus Land Declaration
Under the Act, surplus land is property owned in fee simple by the City for which the City has no direct public use. For all such property, the Council must take formal action, in a regular public meeting, declaring the land is surplus and not necessary for the City’s use.
Under the Act, land necessary for the City’s use must be identified in a written plan adopted by the City Council. The Act specifies that the City’s use does not include commercial or industrial uses, and land that is disposed of for the sole purpose of investment or generation of revenue is not necessary for the City’s use.
The Properties identified in Exhibit A -Surplus Land List are vacant parcels that are not currently being used by the City. Staff evaluated the Properties for their potential use for City work or operations, including City facilities, but found them not suitable. These Properties are zoned for commercial and industrial uses and Staff identified no potential City uses.
Staff recommends that the City Council declare that the Properties identified in Exhibit A are surplus land and not necessary for the City’s use (“Surplus Property”).
Notice of Availability and Good Faith Negotiation Requirements for Surplus Property
The Act requires that before the City disposes of Surplus Property, or engage in negotiations to dispose of Surplus Property, the City must send a written notice of availability (“NOA”)to certain designated entities. Negotiations do not include commissioning an appraisal, due diligence, discussions with brokers or agents who are not representing a potential buyer, studies to determine value or the best use of the land, the issuance of a request for qualifications, development of marketing materials, or discussions exclusively among local agency employees and officials.
The City must send the NOA by email or certified mail to the designated entities set forth below:
a) Certified Housing Sponsors that have notified the Department of Housing and Community Development (“HCD”) of their interest in receiving notices of availability (for the purpose of developing low- and moderate-income housing).
b) Local public entities within whose jurisdiction the Surplus Property is located (for the purpose of developing low- and moderate-income housing). “Local public entities” include cities, counties, cities and counties, the governing bodies of Indian reservations or rancherias, tribally designated housing entities, housing authorities, and any State agency, public district or other political subdivision of the State, and any instrumentality thereof, authorized to engage in or assist in the development of or operation of housing for low or moderate income households. “Local public entities” also include joint power authorities and the HCD.
c) The park or recreation department of any city or county within which the Surplus Property is located; any regional park authority having jurisdiction within the area in which the Surplus Property is located; and the State Resources Agency, or any agency that succeeds to its powers (for open space purposes).
d) Any school district in whose jurisdiction the Surplus Property is located (for land suitable for school facilities construction or use by a school district for open space purposes).
e) If the Surplus Property land is located in an infill opportunity zone or an area covered by a transit village plan adopted pursuant to the Transit Village Development Planning Act of 1994, any county, city, city and county, successor agency to a former redevelopment agency, public transportation agency, or housing authority within whose jurisdiction the Surplus Property is located.
If a designated entity is interested in purchasing or leasing the Surplus Property for an authorized purpose, it must notify the City in writing within 60 days after the City sends the NOA by email or certified mail.
If the City does not receive any notices of interest within the 60-day period, or the notices of interest do not comply with the Act, the City may dispose of the Surplus Property without further regard to the requirements of the Act. However, if ten or more residential units are developed on the Surplus Property, not less than 15% of the total residential units developed on the Surplus Property must be made available at an affordable housing cost or affordable rent to low income households pursuant to a covenant recorded against the land. The City must provide a copy of the covenant to HCD.
If the City receives a notice of interest from one or more designated entities within the 60-day period that comply with the Act, the City must enter into good faith negotiations with the designated entity, or entities, in an attempt to agree to a mutually satisfactory sales price and terms or lease terms. If the City does not agree on price and terms with any of the entities after a negotiation period of at least 90 days, the City may dispose of the Surplus Property without further regard to the Act, except as described above regarding a residential development of ten or more units.
In negotiating with designated entities, the City can not require terms as a condition of the sale or lease of the Surplus Property that disallow residential use, except:
• If required to mitigate impacts to public health and safety, or to city operations;
• To reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or the General Plan; or
• To require any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a low and moderate income housing development, other than the minimum standards required by General Plan, zoning and subdivision standards and criteria.
Residential uses are an acceptable use of the Surplus Property for the purposes of good faith negotiations. The City may impose a limit on residential use or density if necessary to avoid a specific, adverse impact (supported by written findings) upon the public health or safety, or the operation or facilities of a local agency and there is no feasible method to mitigate the impact.
The Act does not restrict the City’s authority or discretion to approve land use, zoning or entitlement decisions in connection with the Surplus Property or limit the power of the City to sell or lease the Surplus Property for fair market value or less than fair market value.
If the City does not agree to price and terms with a designated entity, or if no designated entity responds to the NOA, the City can proceed to sell or lease the Surplus Property to any buyer.
Exempt Surplus Land Declaration
The properties identified in Exhibit B (Exempt Surplus Land List) are not currently being used by the City. However, staff evaluated the properties and determined that the Properties to be exempt. Section 54221(f)(1) of the Act defines exempt surplus land and provides numerous categories for exemption. Staff recommends that the City Council declare that the Properties identified in Exhibit B are exempt based on the following eligible categories:
• Exemption D - Surplus land a city is transferring to another local, state, or federal agency for that agency’s use.
• Exemption G - Surplus land subject to valid legal restrictions that are not imposed by the City and that would make housing prohibited.
Following the adoption of the attached resolution, the City may proceed to sell or lease the Exempt Surplus Property without further regard to the requirements of the Act except for the requirements related to a property qualifying as exempt surplus land under the Act.
Environmental Review
Staff determined that the proposed land sales are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15312 (Class 12) of the State CEQA Guidelines because the land sale involves the disposal of surplus public properties not located in areas of Statewide concern. Under this Section, disposal of these parcels can be exempted under the following conditions:
• Said properties either have no identified significant values for wildlife habitat or other environmental purposes; and/or
• Said properties involve sites for development that could be exempted under Section 15332 of the CEQA Guidelines (Infill Development Projects); and/or
• The disposal will permit the sale of the property to another party to preserve the significant environmental resources (Section 15325 Transfer of Ownership of Land to Preserve Existing Natural Conditions and Historical Conditions)