Title
Introduction of Ordinance Declaring Six Submerged Parcels on the Alameda Side of the Oakland Inner Harbor Tidal Canal Surplus Property; and Authorizing the City Manager to Execute Purchase and Sale Agreements, Deeds and All Other Necessary Documents Between the City of Alameda and Various Purchasers to Sell the Submerged Parcels at Fair Market Value. [Requires four affirmative votes]
The City previously adopted an Initial Study/Negative Declaration applicable to this project. Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15162, none of the circumstances necessitating further CEQA review are present. (City Attorney 31041520)
Body
To: Honorable Mayor and Members of the City Council
From: Yibin Shen, City Attorney, Jennifer Ott, City Manager
EXECUTIVE SUMMARY
On October 3, 2023, the City Council adopted the Final Map for Tract 8570 (Exhibit 1) creating seven (7) total submerged parcels on 26.7 acres: one large open water parcel of approximately 26.26 acres and six (6) small parcels, ranging in size from 0.06 to 0.10 acres. The small parcels are adjacent to six upland residential properties on Fernside Boulevard, four of which are encumbered by public access easements and two of which are encumbered by scenic easements. The subdivision was for the purpose of transferring ownership from the City of Alameda (City) to the adjacent property owners. At a subsequent closed session, City Council authorized staff to update an earlier appraisal (Exhibit 2) and discuss the terms and conditions of the sale of the properties with the homeowners. Based on the updated appraisal, it is anticipated that the sale price for the six small parcels in Tract 8570 will total approximately $73,000. Before the sales may be completed, City Council must comply with the State Surplus Land Act by formally declaring the properties as “surplus” and offering them to any local public entity, including school districts and park districts within the jurisdiction of the City as well as to housing sponsors that have notified the State of their interest in surplus property. Given their submerged status it is unlikely that any local entity or housing sponsor will have an interest in the properties. Following the expiration of the time for such entities or housing sponsors to respond (60 days) the City Manager would be authorized to execute purchase and sale agreements with the adjacent property owners, along the terms authorized by Council. Revenues from the sales will be allocated toward future pathway improvements projects, once designed and approved by regional regulatory agencies and City Council.
BACKGROUND
In 2016, City Council took action to resolve what had been a long-standing issue of ownership of submerged land along the Oakland Inner Harbor Tidal Canal. The City coordinated a series of real estate transactions involving the Army Corps of Engineers (Corps), the City and over 90 Alameda property owners who owned property (commercial and residential) adjacent to the submerged land. This resulted in the City Council approving a final map creating 99 lots. The Corps retained five of these lots on the Oakland side with the intent to sell them to the East Bay Regional Park District. The City then sold 92 of the lots to the adjacent owners at fair market value. Eight of these were sold to non-residential property owners and the remaining 84, the average size of which was about 3,500 square feet, were sold to residential property owners at a uniform price of $10,000 per parcel, based on an appraisal done at that time.
As part of that transaction, the City retained ownership of two of the lots related to submerged area to the midline of the estuary. A portion of this retained submerged area was retained because of issues of the ownership of certain pathways on six residential properties that led from Fernside Boulevard to the water’s edge. Rather than waiting on the outcome of those discussions, during the 2016 final map approval, City Council specifically excluded sale of submerged land behind these six properties and, as stated above, sold 84 submerged parcels which were not connected to the issues concerning the public access pathways.
For a number of reasons, the discussions between the City and six property owners concerning the pathways took considerable time to resolve. There were complexities concerning the public access pathways on these properties and, over time and inadvertently, some pathways had been encroached with landscaping or other improvements. Those issues, however, were resolved in 2021. City Council approved documents that were recorded to clarify (i) ownership of the easement/pathway areas, (ii) the use of the easement/pathway areas by the public and the property owners, and (iii) maintenance of the easement/pathway areas. Of the three, one at Fairview Avenue was closed to the public for safety reasons but a view corridor easement was recorded on that area. The other two pathways (near High Street and at Monte Vista Avenue) remain subject to public access easements (although the legal descriptions of the easements were revised) and are open to the public.
The City then processed a final map to further subdivide the remaining submerged lots still in City ownership. That final map, approved in November 2023 by City Council, created seven additional submerged lots, six of which adjoin property owners along Fernside Boulevard (referenced above), and the seventh lot remaining a City owned submerged parcel to the midline of the estuary. On four of the newly created (submerged) parcels, i.e., those adjacent to the properties that have a pathway subject to a public access easement, the final map approved in November 2023 created a public access easement on those four submerged parcels. On the other two submerged parcels, the final map created only a scenic/view corridor easement. All of the easements on the submerged parcels mirror the easements on the landside pathways.
The City will retain the remaining open water parcel (approximately 26.26 acres) along the Oakland/Alameda city line to ensure that the navigable portion of the Tidal Canal remains open to recreational and commercial traffic.
On the four submerged parcels encumbered by a public access easement, the easement is for public, vehicular and emergency access from the shoreline and, within the easement area, nothing is to be constructed that blocks such access or views of the water. It should be noted, however, that within the submerged parcel areas, the property owners have existing docks and similar improvements that staff recommends be allowed to remain within the easement area.
On the other two submerged parcels, the scenic/view corridor easements are for scenic view purposes and, like the other easements, nothing is to be constructed within the easement that blocks views of the water. And, as with the other owners, these owners also have existing docks and related facilities within the submerged parcel area that likewise staff recommends be allowed to remain.
DISCUSSION
The six parcels to be conveyed vary in size, ranging from 2,710 square feet to 4,524 square feet because each parcel was drawn around existing dock infrastructure. This process and the average square footage (3,462 square feet) is comparable to the 84 parcels sold in 2016 at a sales price of $10,000.
Price Discussions
As stated above, four of the existing landside lots are currently encumbered by public access easements that run from Fernside Boulevard to the water’s edge. Accordingly, a member of the public would have the right to use that easement to access the water, for example, to launch a kayak or canoe. Such right, at the current time, is theoretical because, as provided in the documents recorded in 2021, the City has exercised its right to construct a fence at the terminus of the easements. These fences were installed for public safety as City Council directed in 2016. Moreover, it is likely the fence will remain for the foreseeable future for safety purposes. It is also not possible to safely launch a watercraft from either of these pathways given the existing physical constraints.
At City Council’s request, staff requested an updated appraisal report from Watts, Cohn and Partners, the firm that provided the appraisal of the other submerged lots in 2016. On May 21, City Council met in closed session to discuss the updated appraisal.
The below table summarizes the appraiser’s conclusions:
|
Adjoining Property |
Appraised Value |
Public Access Easement Width |
Scenic View Easement |
|
3227 Fernside |
$10,000 |
17.5 feet |
|
|
3229 Fernside |
$10,000 |
17.5 feet |
|
|
3267 Fernside |
$12,500 |
9 feet |
|
|
3301 Fernside |
$12,500 |
9 feet |
|
|
3335 Fernside |
$14,000 |
None |
Yes |
|
3341 Fernside |
$14,000 |
None |
Yes |
The differences in the appraised values for the parcels with the public access easements are because one easement (on each parcel) is 17.5 feet wide (appraised at $10,000) and the other easement (on each parcel) is only nine feet wide (appraised at $12,500). The parcels with only a scenic view easement were appraised at $14,000. Staff also specifically asked the appraiser if the City agreed not to build any improvements on those submerged parcels that are encumbered by public access easements whether that would change the appraised value; the appraiser stated that it would not.
Staff shared the appraisals with the adjoining owners and most, if not all, appear amenable to the price. The major objection to the price is that some of the owners feel the City was largely responsible for the lengthy delay is resolving the issues concerning the pathways and, had those issues been resolved more expeditiously, the difference, if any between the 2016 appraisal and the 2024 appraisal would not have been so great. Nevertheless, the owners’ primary concern has been their desire to retain and replace in kind their existing docks and to be consulted when the City considers public improvements affecting such docks. In response to concerns voiced by those owners, staff recommends including the language in the deed to convey the submerged parcel to:
(a) allow the owners to retain and maintain their existing docks
(b) allow replacement of docks in the future that is similar in kind, size and within the existing dock footprint (so long as such replacement complies with regulations of any regulatory agency such as BCDC)
(c) provide that the City would meet and confer with them before constructing any improvements in the easement area that the City deemed necessary
(d) take into consideration the owners’ dock when the City is considering such public improvements
(e) indemnify them for injuries to members of the public using the easement area
Surplus Property Findings
The California Surplus Land Act (Gov. Code, § 54220 et seq.) requires local agencies disposing of surplus land to take specified actions prior to disposal. First, a local agency must declare property as “surplus” supported by written findings before any action may be taken to dispose of the property. Second, prior to disposing of surplus property, the local agency must provide a 60-day notice of availability to specified entities, such as school districts and park districts within the City’s jurisdiction, and housing sponsors that have notified the California Housing and Community Development (HCD) of their interest in surplus land. If the local agency receives a notice of interest, the local agency is required to engage in good faith negotiations with the entity desiring to purchase or lease the surplus land but the City is not required to sell the property to such entity.
Staff requests the City Council to classify the six submerged parcels as surplus property as they are no longer required for City use and the public interest is best served by their disposal. The attached ordinance contains the required findings.
Purchase and Sale Agreements
Once the requirements of the Surplus Land Act are complied with, staff requests Council approval to execute Purchase and Sale Agreements containing the price and terms for the City’s sale of individual parcels from the City to private purchasers at fair market value and deeds substantially in the form attached hereto as Exhibit 3 and 4, respectively.
ALTERNATIVES
• Declare land as surplus and sell to the adjacent homeowners for the appraised value.
• Declare land as surplus and sell to the adjacent homeowners for less than the appraised value.
• Declare land as surplus and sell to the adjacent homeowners for more than the appraised value.
• Elect to use the land for a City use and not sell to the adjacent owners.
FINANCIAL IMPACT
The subdivision in 2023 was for the purpose of transferring ownership from the City to the adjacent property owners. Based on the updated appraisal and previous sales of comparable submerged parcels from Tract 8337, it is anticipated that the sale price for the six small parcels in Tract 8570 will be approximately $73,000 total. It is also anticipated that each buyer will pay for the closing costs associated with each property sold, up to $1,000 and the City will be responsible for any closing costs in excess of $1,000. Estimated closing costs will be $2,661 for each lot.
Revenues from the parcel sales will be received in the Tidelands Fund (Fund 216) and closing costs over $1,000 will be covered by funds budgeted in the Tidelands Fund. Historically, the City allocated proceeds from the sale of Tidal Canal real estate to appropriate capital improvements. Staff recommends that this practice continues and proceeds from the sale of these six parcels in Tract 8570 be allocated to the Fernside Eastshore Pathways Capital Improvement Project (CIP C73000).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
As described in findings in the Ordinance, the sales are consistent with the Subdivision Map Act, the Alameda General Plan, and the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
On September 20, 2016, in accordance with CEQA the City adopted an Initial Study/Negative Declaration (“IS/ND”) for the parcelization and acquisition of the Alameda side of the Oakland Inner Harbor Tidal Canal which addressed all potential environmental impacts associated with the proposed transfer and subsequent transfers into private ownership, amendments to the Estuary District Zoning, and the proposed subdivision map application. The IS/ND concludes that the proposed project would not cause any potentially significant environmental impacts, and accordingly, no mitigation measures would be required as part of the project. No further review is required pursuant to Public Resources Code § 21166 and CEQA Guidelines § 15162 because the environmental effects of the project were considered and disclosed in the IS/ND and there have been no changes to the project or the circumstances in which it is undertaken that would result in new significant or substantially more severe environmental effects than was identified in the previously adopted IS/ND. Any proposed future improvements along the Tidal Canal will be subject to separate review and discretionary approval by the City.
CLIMATE IMPACTS
There are no identifiable climate impacts related to this action. The map preserves the existing physical conditions on the submerged parcels. The proposed map does not entitle or approve any new development. Any future proposal to improve facilities on the submerged parcels will require separate entitlements at that time.
RECOMMENDATION
Introduce an ordinance:
1) Declaring six submerged parcels on the Alameda Side of the Oakland Inner Harbor Tidal Canal Surplus Property; and
2) Authorizing the City Manager to execute purchase and sale agreements, Deeds and all other necessary documents between the City of Alameda and various purchasers to sell the submerged parcels at fair market value.
Respectfully submitted,
Amy Woolridge, Assistant City Manager
Michael Roush, Special Counsel
Financial Impact section reviewed,
Margaret L. O'Brien, Finance Director
Exhibits:
1. Final Map Tract 8570
2. Appraisal report by Watts, Cohn and Partners for Six Submerged Parcels
3. Sample Purchase and Sale Agreement
4. Sample Deed