REPORT TO COUNCIL
SUBJECT
Title
Per City Council Policy 042: Reconsideration of Council Action-Reconsideration of Council action taken March 7, 2023 regarding a Resolution Declaring City-Owned Property Located at 2319 Gianera Street as Surplus Land as Required by State Law [APNs: 104-05-052] (Deferred from April 4, 2023)
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara owns a single-family home located at 2319 Gianera Street (Property). The City purchased the property on October 14, 1983 for $155,000 from the General Fund (Attachment 1). On the same Agenda, the Council also approved the authorization to prepare legal notices for the lease of the property at a minimum rate of $800 per month. It is assumed the property was likely leased between 1983 and 1998, however staff was not able to locate those records.
In 1998, the Redevelopment Agency of the City of Santa Clara approved $25,000 in Affordable Housing Funds for the rehabilitation of the property. Later in 1998, a Master Lease Agreement (Attachment 2) was approved between the Redevelopment Agency and Project Match to be used as shared housing for low-income seniors. The property was last used as affordable housing around 2012-2014. It is staff’s understanding that Project Match cited difficulties in managing a single, and there were not enough economies of scale. The City did not have capacity to manage it as a rental unit, and it has been vacant since that time.
A description of the property is provided below:
• Single Family Home
• Gross Building Area - 1,140 SF
• Lot size - 12,478 SF
• Built in the 1960's
• Current Appraisal - $1.59 million
The appraisal (Attachment 3) provides pictures of the current condition of the property.
While there have not been day-to-day operational needs to maintain the property, it is maintained on an as needed basis. As an example, previously landscaping, weed management, tree trimming, and back fence replacement had to be completed and currently a fence replacement will be required and is being planned for both side and front fences. In addition, staff has requested assistance from the Police Department to enforce trespassing in the property as a homeless individual had previously broken into the home.
DISCUSSION
Staff considered near-term and long term uses for the property and none were identified. When the City desires to dispose of land not necessary for agency use, it must first declare the land surplus at a regular public meeting and make written findings supporting the declaration that the land is “surplus land.”
The SLA and the Surplus Land Declaration
Effective January 1, 2020, Assembly Bill (AB) No. 1486 amended the SLA by prohibiting local agencies from commencing negotiations over the sale or lease of surplus property prior to sending notices about available, surplus local public land to designated entities (Eligible Entities), including:
• California Department of Housing and Community Development (HCD).
• Any local public entity within the jurisdiction where the surplus local land is located.
• Developers who have notified HCD of their interest in developing affordable housing on surplus local land.
Importantly, AB 1486 now requires a local agency to declare property as “surplus land” before taking any actions to dispose of such property. The declaration must be made by the legislative body of the local agency.
Following the declaration of surplus, the City must provide a NOA to the Eligible Entities for specified uses, including affordable housing, parks and recreation, and schools. An Eligible Entity desiring to purchase or lease the surplus land for any of the purposes described above must notify the City in writing of its intent to purchase or lease the land within 60 days after the receipt of the City’s notification of intent to dispose of the land.
If the City receives notice of interest from any Eligible Entities, the SLA mandates a 90-day negotiation period with any designated entities that submit timely offers. If no notice of interest is received or negotiations do not result in a disposition, the City may proceed with disposing of the land. The SLA does not require the City to dispose of surplus land at less than fair market value. (In fact, State Dissolution Laws require that the City dispose of the property at the highest value.) However, the SLA requires that, at a minimum, any subsequent development of 10 or more residential units on the site must designate at least 15 percent of units as affordable.
Generally, the Surplus Land Act (SLA) identifies three categories of land: (1) land necessary for “agency use,” (2) land no longer necessary for agency use but exempt from most of the SLA (“exempt surplus land”), and (3) land no longer necessary for agency use that is not exempt (“Surplus Land”). “Agency use” is defined as land that is being used or that has a planned use “pursuant to a written plan adopted by the local agency’s governing board.” Agency use does not include commercial or industrial uses, including retail, entertainment, office, or any property disposed of for the sole purpose of investment or revenue generation. (Gov. Code § 54221(c).)
The proposed Resolution (Attachment 4) declares the Property as Surplus Land. Approval of the Resolution would provide that the Council finds that the City owns the Property in fee simple, the City does not currently use the Property, and the City has no written or adopted plan for future use of the Property. Further findings include that the Property is no longer necessary for the City’s use or operations and thus should be declared surplus.
If Council adopts the proposed Resolution declaring the 2319 Gianera Street as surplus, staff will proceed with the disposition process by issuing a Notice of Availability (NOA) (Attachment 5) to certain parties as designated by HCD Guidelines. (Gov. Code §54222; HCD Guidelines, 201.) The anticipated process is outlined below.
The anticipated process is outlined below:
Notices of Availability and Noticing Period
Per the SLA, after City Council issues the surplus declaration, staff will issue NOAs to the Eligible Entities, beginning a minimum 60-day noticing period. Staff will release NOAs. During the 60-day noticing period, the SLA restricts City discretion in negotiating with potential buyers, prioritizing NOA responses, and limiting project design features. State law requires the City to first respond exclusively to Eligible Entities and to give priority to proposals that provide at least 25 percent of a project’s housing units affordable to lower-income households (at or below 80 percent of area median income). If multiple proposals provide at least 25 percent affordable units, State law requires prioritizing the project with the greater number of affordable units. If multiple proposals contain the same number of affordable units, staff are required to prioritize projects that provide the deepest average level of affordability for its affordable units. The City is also prevented from negotiating terms that would prevent residential use (even if not permitted by the existing zoning), reduce density below what is allowed by zoning, or impose design requirements that would have a substantial adverse effect on viability for affordable housing.
90-Day Negotiation with Eligible Entities
If staff receives a notice of interest from one or more Eligible Entity, staff will begin negotiations for a period of no less than 90 days.
Project Selection and Return to Council
If negotiations lead to development of a potential project, staff will return to Council to present the recommended project proposal for public comment and Council authorization for an Exclusive Negotiation Agreement (ENA). If no notices of interest are received or if negotiations conclude with no recommended project proposals, the City can proceed with its regular process for disposition of the city owned properties.
ENVIRONMENTAL REVIEW
The declaration of the Property as surplus land and posting of the Notice of Availability is not a project within the meaning of the California Environmental Quality Act (“CEQA”) under CEQA Guidelines section 15206(b)(4), 15312 and 15061(b)(3) because it can be seen with certainty that there is no possibility that the declaration and associated activities will have a significant effect on the environment because no development or construction is proposed.
FISCAL IMPACT
There are no additional costs anticipated at this time. If the property is sold, proceeds from the property sale, by City Council Policy, are recommended to be placed in the General Fund Land Sale Reserve.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
ALTERNATIVES
1. Approve Resolution Declaring City-Owned Property Located at 2319 Gianera Street Surplus.
2. Do not approve Resolution Declaring 2319 Gianera Street Surplus.
3. Any other Council Direction.
RECOMMENDATION
Recommendation
Alternative 1: Approve a Resolution Declaring City-Owned Property Located at 2319 Gianera Street Surplus.
Staff
Reviewed by: Manuel Pineda, Assistant City Manager
Approved by: Office of the City Manager
ATTACHMENTS
1. 1983 Minutes
2. 1998 Lease
3. Property Appraisal Report
4. Resolution
5. Notice of Availability
6. Post Meeting Material - PowerPoint Presentation Given at March 7, 2023 Council Meeting
7. Resolution 23-9203