Title
Adoption of Resolution Declaring That the Property Located at 2350 Fifth Street is Exempt Surplus Land Pursuant to Government Code Section 54221(f)(1)(D); [SACIC]
Adoption of Resolution Authorizing the Conveyance of the Property Located at 2350 Fifth Street to the City of Alameda in Accordance with the Terms of a Purchase and Sale Agreement Between the Successor Agency to the Community Improvement Commission of the City of Alameda and the City Reflecting a Purchase Price of $430,000; and Authorizing the City Manager, or Designee, as Executive Director of the Successor Agency, to Execute the Purchase and Sale Agreement and Take Other Actions Necessary to Complete the Conveyance of the Property; [SACIC] and
Introduction of Ordinance Authorizing Acceptance of the Property Located at 2350 Fifth Street from the Successor Agency to the Community Improvement Commission of City of Alameda in Accordance with the Terms of a Purchase and Sale Agreement Between the City and the Successor Agency to the Community Improvement Commission of City of Alameda; and Authorizing the City Manager, or Designee, to Execute a Purchase and Sale Agreement Reflecting a Purchase Price of $430,000 with the Successor Agency to the Community Improvement Commission of City of Alameda, Execute and Record Necessary Affordable Housing Covenant for Approximately 55 Years, and Take Such Other Actions Necessary to Complete the Conveyance of the Property. [City Council] Sale of Surplus Government Property is Exempt from CEQA Review Pursuant to CEQA Guidelines Section 15312 (Surplus Government Property Sales). (Community Development 10061832)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Pursuant to the Long Range Property Management Plan (LRPMP), the parcel located at 2350 Fifth Street (Parcel) in the City of Alameda (City) is the last property owned by the Successor Agency to the Community Improvement Commission of the City of Alameda (SACIC) to be disposed of pursuant to the LRPMP. The 35,719-square-foot (0.82 acres) Parcel is undeveloped and without any utilities. The utilities will need to be constructed by the developers of the site.
Prior to disposal of the Parcel, the Parcel must be declared “surplus land” or “exempt surplus land” pursuant to the Surplus Land Act (SLA). Staff recommends that the Parcel be declared “exempt surplus land” as described below.
In October 2022, Runde and Partners, provided an updated appraisal of the Parcel, and determined “that the market value of the fee simple interest in the subject property, in its present, as-is condition, as of July 23, 2022, is estimated to be: four hundred thirty thousand dollars ($430,000).” In light of this appraisal update, staff recommends that the SACIC convey the Parcel to the City for a purchase price of $430,000, such that the Parcel can be used to develop a project that includes 47 units of supportive homeless housing referred to as Dignity Village (Homekey project).
Staff also recommends that the City Council authorize the City Manager, or designee, to execute a Purchase and Sale Agreement between the SACIC and the City to memorialize the terms and conditions of the transaction and allow the conveyance to be consummated. The Homekey project will be constructed by a developer known as DignityMoves. Following the conveyance of the Parcel to the City, staff will coordinate with the City Manager to cause the short-term license that allows DignityMoves to access the Parcel for construction purposes to be assigned from the SACIC to the City.
BACKGROUND
In February 2012, redevelopment agencies throughout the State were dissolved and successor agencies were established and charged with unwinding the affairs of their respective redevelopment agencies. The City’s Community Improvement Commission (CIC) was dissolved and succeeded by the SACIC. The SACIC prepared and submitted the LRPMP to the State Department of Finance (DOF). DOF approved the LRPMP, which now governs the disposition of real property assets of the CIC. The LRPMP requires that the Parcel be disposed of by sale with proceeds distributed among the taxing agencies.
Staff marketed the Parcel on multiple occasions. On two prior occasions, the SACIC negotiated a purchase and sale with prospective buyers. The first prospective buyer was Loisos + Ubbelohde, an architectural firm; those negotiations did not result in a signed purchase and sale agreement. The second prospective buyer was Branagh Land, Inc., a residential developer, and those negotiations resulted in a signed purchase and sale agreement. Ultimately, both prospective buyers determined that they could not feasibly develop the Parcel. As a result, the negotiations with was Loisos + Ubbelohde ended, and the purchase and sale agreement with Branagh Land, Inc. was terminated. One of the main challenges with developing the Parcel was the cost of providing infrastructure to the Parcel.
DISCUSSION
The Parcel is the final SACIC parcel to be disposed of under the LRPMP.
Surplus Land Act
Before the SACIC may take any action to dispose of the Parcel, the SACIC must comply with the SLA. Under the SLA, land owned by a local government agency that is not necessary for the agency’s use must, prior to any disposition of the land, be declared either “surplus land” or “exempt surplus land” by the agency’s governing body as supported by written findings. “Exempt surplus land” is exempt from most SLA provisions, including the requirement that the local agency notify interested parties of the land’s availability for the purpose of developing affordable housing.
Government Code Section 54221(f)(1)(D) defines “exempt surplus land” to include surplus land “that a local agency is transferring to another local … agency for the agency’s use.” The SACIC is transferring the Parcel to the City for the City to develop a supportive homeless housing project pursuant to a grant from the State Housing and Community Development Department’s (HCD) Project Homekey Round 2 fund (“Homekey”). Therefore, staff recommends that the SACIC determine that the Parcel qualifies as “exempt surplus land” under the SLA.
Dissolution Law
Under the Dissolution Act (Health & Safety Code Section 34181(a)(1), 34191.5), the SACIC is required to dispose of all its assets and properties pursuant to the LPRMP. Based on the updated appraisal, the fair market value of the Parcel for purposes of the LRPMP is $430,000. Accordingly, staff recommends that 1) the SACIC authorize conveyance of the Parcel to the City in exchange for a purchase price of $430,000 from the City to SACIC, and 2) the City authorize the payment to and acceptance of the Parcel from the SACIC. To memorialize the terms and conditions of the purchase and sale, staff also recommends that the City Council authorize the City Manager, or designee, to execute a Purchase and Sale Agreement for the Parcel between the SACIC and the City.
Following the execution of the purchase and sale agreement, a grant deed will be recorded with the County of Alameda along with a 55 year affordable housing covenant, executed by the City Manager pursuant to this pending Council authorization, for the property (see example Exhibit 3). This covenant is required by Homekey and its language is subject to approval by HCD, which is pending.
ALTERNATIVES
• Authorize the City Manager to execute the Purchase and Sale Agreement transferring the Parcel from the SACIC to the City in exchange for a purchase price of $430,000, and take related actions, including the execution of a 55 year affordable housing covenant.
• Direct staff to provide additional information regarding alternatives to conveyance of the Parcel from the SACIC to the City.
• Direct staff not to proceed with the conveyance of the parcel at this time.
FINANCIAL IMPACT
Based on the updated appraisal, the purchase price of the Parcel is $430,000 for purposes of the LRPMP. Funding was previously budgeted in the General Fund for this acquisition.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Sale of the Parcel is consistent with State law and the approved LRPMP.
ENVIRONMENTAL REVIEW
Declaration of the Parcel as “exempt surplus land” under the SLA, is not a “project” pursuant to Public Resources Code Section 21065 and California Environmental Quality Act (CEQA) Guidelines Section 15378. Additionally, sale of surplus government property is exempt from CEQA review pursuant to CEQA Guidelines Section 15312 (Surplus Government Property Sales). Therefore, no further CEQA review is required.
CLIMATE IMPACTS
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Recommendation to the SACIC:
1. Declare that the Parcel located at 2350 Fifth Street is exempt surplus land pursuant to Government Code Section 54221(f)(1)(D);
2. Authorize conveyance of the Parcel located at 2350 Fifth Street to the City in accordance with the terms of a Purchase and Sale Agreement between the SACIC and the City reflecting a purchase price of $430,000; and
3. Authorize the City Manager, or designee, as Executive Director of the SACIC, to execute the Purchase and Sale Agreement reflecting a purchase price of $430,000 and to take other actions necessary to complete conveyance of the Parcel and authorizing the City Manager, as Executive Director of the SACIC, to execute the Purchase and Sale Agreement and take other actions necessary to complete conveyance of the Parcel.
Introduce an ordinance:
1) Authorizing acceptance of the Parcel located at 2350 Fifth Street in the City of Alameda from the Successor Agency to the Community Improvement Commission of City of Alameda in accordance with the terms of a Purchase and Sale Agreement between the City and the Successor Agency to the Community Improvement Commission of City of Alameda reflecting a purchase price of $430,000; and
2) Authorizing the City Manager, or designee, to execute the Purchase and Sale Agreement reflecting a purchase price of 430,000 with the Successor Agency to the Community Improvement Commission of City of Alameda, execute and record a 55 year affordable housing covenant and take other actions necessary to complete conveyance of the Parcel.
Respectfully submitted,
Lisa Maxwell, Community Development Director
By,
Lois Butler, Economic Development and Community Services Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Property Map
2. Purchase and Sale Agreement
3. Affordable Housing Covenant Example
cc: Erin Smith, City Manager