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HomeMy WebLinkAboutItem No. 10 - Declare Certain City-Owned Lands Surplus Minthorn Site City of Lake Elsinore 130 South Main Street Lake Elsinore,CA 92530 CITY OF ,cam LADELSIIYOIZE www.lake-elsinore.org DREAM City Council Agenda Report File Number: ID#22-081 Agenda Date: 2/22/2022 Version: 1 Status:Approval Final In Control: City Council/Successor Aqency File Type: Council Consent Calendar Agenda Number: 10) Declare Certain City-Owned Lands Surplus (Minthorn Site, APN 377-180-037; Pottery/Spring Site, APNs 374-062-005, -006, -015, and -020) and Authorize the City Manager to Send Notices of Availability as to the Surplus Lands Adopt a Resolution of the City Council OF THE CITY of Lake Elsinore, California, DECLARING CERTAIN CITY-OWNED REAL PROPERTIES TO BE SURPLUS PURSUANT TO STHE SURPLUS LAND ACT(GOV. CODE § 54220 et seq.). City of Lake Elsinore Page 1 Printed on 211712022 CITY OF LAKE LSINOKE L ` DREAM EXTREME, REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Jason Simpson, City Manager Date: February 22, 2022 Subject: Declare Certain City-Owned Lands Surplus (Minthorn Site, APN 377-180- 037; Pottery/Spring Site, APNs 374-062-005, -006, -015, and -020) and Authorize the City Manager to Send Notices of Availability as to the Surplus Lands Recommendation Adopt a Resolution of the City Council of Lake Elsinore, California, Declaring that Certain City- Owned Real Properties to be Surplus Pursuant to the Surplus Land Act (Gov. Code § 54220 et seq.) Background 1. Minthorn Site: In 2005, the former Redevelopment Agency of the City of Lake Elsinore acquired a 2.15 acre parcel on W. Minthorn Street (the "Minthorn Site"). The Minthorn Site is directly southeast of the Riverside County Department of Public Social Services building. The former Redevelopment Agency paid $468,000 to acquire the Minthorn Site. In 2011, the California Legislature enacted Assembly Bill 1 x26 to eliminate redevelopment agencies. In January 2012, the City elected to serve as the Successor Agency to the former Redevelopment Agency. As part of that dissolution process, the Successor Agency became successor in interest to certain properties formerly owned by the Redevelopment Agency, including the Minthorn Site. Thereafter, the Successor Agency submitted a proposal to the California Department of Finance (DOF) proposing that the Minthorn Site be conveyed to the City and held for future development. DOF approved the conveyance to the City subject to a Compensation Agreement signed by all affected taxing entities. A Compensation Agreement was entered in 2017 with the affected taxing entities and ownership was transferred to the City. 2. Pottery/Spring Site: In 2009, the former Redevelopment Agency acquired four contiguous parcels located on the northwest corner of Pottery Street and Spring Street (the "Pottery/Spring Site"). As part of the dissolution process noted above, the Successor Agency became the successor in interest to Pottery/Spring Site. In 2017, the City, acting in its capacity has the housing successor to the former Redevelopment Agency, acquired the Pottery/Spring Site for the appraised value of $370,000. The Pottery/Spring Site was acquired with Low and Moderate Income Housing Assets Funds as a future affordable housing development. However, this site was subsequently identified by the United States Postal Service (USPS) as the preferred location for a new post Declaration of Surplus Property February 22, 2022 Page 2 office facility and the City entered into a Purchase And Sale Agreement with the USPS in November 2019. The proceeds of the sale would have been deposited into the Low and Moderate Income Housing Asset Fund devoted to affordable housing purposes. In February 2021, the USPS terminated the Purchase and Sale Agreement making a future disposition of this property subject to the newly enacted requirements of the Surplus Lands Act. 3. Surplus Land Act: The City is ready to engage in discussions regarding proposed uses and disposition of the above-referenced properties. However, for those discussions to progress, the City must also satisfy additional State law requirements. Beginning in January 2021, properties like the Minthorn Site and the Pottery/Spring Site became subject to the California Surplus Land Act. The Surplus Land Act defines surplus land broadly as "land owned in fee simple by any local agency for which the local agency's governing body takes formal action in a regular public meeting declaring that the land is surplus and not necessary for the agency's use." (Gov. Code § 54221(b)(1).) In addition to requiring a formal declaration of surplus for nearly any disposition of a local agency's land, Assembly Bill 1486 made various amendments to the Surplus Land Act concerning the process for disposition of surplus land by cities and other local agencies. These new laws became effective January 1, 2020 with a primary intent to prioritize and facilitate development of affordable housing around the State. The California Department of Housing and Community Development (HCD) Is charged with the oversight and enforcement of the surplus property inventory and notification process. The new law requires that any land "not necessary for the agency's use" be declared surplus prior to disposition of the land. Any land that is declared as surplus must be noticed to other public agencies and prospective affordable housing developers that have registered with HCD prior to any solicitation or negotiation with other developers or interested parties. Noticed agencies and registered housing developers have 60 days from the date of notice to express interest in the property and 90 days to complete good-faith negotiations. If terms are not agreed upon between the interested party and the City within this 90-day period of good faith negotiations, the City may negotiate with other developers or interested parties for the disposition of the surplus land. Discussion This section further describes the properties the City owns that staff recommends be designated as surplus land. The properties are listed in Table 1, illustrated in Figure 1, and are discussed in more detail below. While the City owns other sites that may be considered for surplus in the future, only the sites recommended by staff are discussed in this report. Table 1: Potential Surplus Lands Site Name Assessor Parcel Address/Location Size (` Number(s) Action W. Minthorn St., Minthorn Site 377-180-037 southeast of 2.15 Declare Surplus Riverside County Dept of Public Declaration of Surplus Property February 22, 2022 Page 3 Social Services Building Pottery/Spring 374-062-005, - Northwest corner Site 006, -015, and - of Pottery St. and 1.41 Declare Surplus 020 Spring St. Figure 1: Proposed Surplus Lands Minthorn Site Pottery/Spring Site ., +■ r NIK „ram H'rr • Minthorn Site — This site was originally acquired by the former Redevelopment Agency for unspecified public/redevelopment purposes. The current zoning designation is Public Institutional. Staff recommends declaring this site surplus. • Pottery/Spring Site — The site was acquired by the City for future affordable housing development. The current zoning designation is Residential Mixed Use. The site's location and overall modest size has, so far, made it unattractive for affordable housing development. In light of the USPS termination of the Purchase and Sale Agreement, staff recommends declaring this site surplus. As part of the proposed action, staff also seeks authorization for the City Manager to send out written notices of availability to appropriate public agencies and prospective affordable housing developers, as designated by the Surplus Land Act. As noted above, recipients of the notice would then have 60 days to indicate their interest in the purchase of the surplus land. If a Declaration of Surplus Property February 22, 2022 Page 4 recipient timely express interest in the purchase, the City must enter into good faith negotiations for a period of not less than 90 days. The City would not be required to convey the land to the interested party. If terms of sale are not agreed upon following the good faith negotiation, the land may be otherwise disposed of or sold by the City. California Environmental Quality Act (CEQA) The City Council's declaration that a parcel is surplus property is in compliance with a statutory requirement and is not part of a project that has been identified, designed or funded. No physical change in the environment would occur. The action is an administrative action that would not result in direct or indirect physical changes in the environment and is not a project as defined in CEQA. (CEQA Guidelines § 15378(b)(4); 15060(c)(3)). Fiscal Impact Proceeds from the sale of the Minthorn Site will be allocated to the respective taxing entities in accordance with the 2017 Compensation Agreement. The allocations to the taxing entities is in proportion to their shares of the base property tax, as determined by the County Auditor- Controller pursuant to Health and Safety Code Section 34188. The City is expected to receive approximately 10% of the proceeds from the sale of the Minthorn Site. Proceeds from the sale of the Pottery/Spring Site will be treated differently. Because this site was acquired using Low and Moderate Income Housing Asset Funds, any proceeds from the sale of this site must be deposited into that fund and used for affordable housing purposes. In addition, in the event that the sale results in the site being used for a non-affordable housing purpose, the City will be required to confirm findings that the site is no longer necessary for affordable housing and that the alternative use provides for greater public benefit. Attachments A— Resolution RESOLUTION NO. 2022- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DECLARING CERTAIN CITY-OWNED REAL PROPERTIES TO BE SURPLUS PURSUANT TO THE SURPLUS LAND ACT (GOV. CODE § 54220 ET SEQ.) Whereas, the Surplus Land Act, Government Code Section 54220, et seq., defines surplus property as land owned by any local agency that is not necessary for the agency's use; and, Whereas, staff has identified certain sites that may not be necessary for the City's use as defined in State law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1: The foregoing recitals are true and correct and are hereby incorporated into these findings by this reference. Section 2: Those certain City-owned properties, and any rights, title, and interest therein, listed in the table below are declared surplus pursuant to Government Code Section 54220 et seq.: Address/LocationSite Name Assessor Parcel • •- Number(s) W. Minthorn St., southeast of Minthorn Site 377-180-037 Riverside County 2.15 Surplus Dept of Public Social Services Building Pottery/Spring 374-062-005, - Northwest corner Site 006, -015, and - of Pottery St. and 1.41 Surplus 020 Spring St. Section 3: The aforementioned lands are not necessary for the City's use. The Minthorn Site, as identified above, is subject to a Compensation Agreement with other affected taxing entities in which the City has committed to seek a sale of the site. Section 4: The Pottery/Spring Site is located in an area that, so far, has not been attractive for affordable housing development and the Notice of Availability process as contemplated by the Surplus Land Act will allow for a more robust review of the site's potential by affordable housing developers or other alternatives. Section 5: The City Manager or authorized designee is authorized to prepare and send all notices required by State law related to the declaration of the above-identified surplus property CC Reso. No. 2022- Page 2 of 2 including, without limitation, notices of availability of the surplus property as provided for by State law. Section 6: The City Council declaration that the aforementioned properties are surplus property is in compliance with a statutory requirement and is not part of a project that has been identified, designed or funded. No physical change in the environment would occur. Accordingly, the action herein is an administrative action that will not result in direct or indirect physical changes in the environment and is not a project as defined in CEQA. (CEQA Guidelines § 15378(b)(4); 15060(c)(3)). Section 7: This Resolution shall take effect immediately upon its adoption. Section 8: The City Clerk shall certify to the adoption of this Resolution and enter it into the book of original Resolutions. Passed and Adopted on this _tn day of 2022. Timothy J. Sheridan Mayor Attest: Candice Alvarez, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2022- was adopted by the City Council of the City of Lake Elsinore, California, at the regular meeting of 2022, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Candice Alvarez, MMC City Clerk