A RESOLUTION DECLARING CITY OWNED PROPERTY SURPLUS LAND PURSUANT TO GOVERNMENT CODE 54221, APPROVING THE NOTICE OF AVAILABILITY, AND FINDING THAT SUCH DECLARATION IS EXEMPT FROM ENVIRONMENTAL REVIEW UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

There is not a direct fiscal impact associated with this action.

The City currently owns real property located at a portion of 2200 East Philadelphia Street identified with Assessor’s Parcel Number (APN) 0113-281-13, described and depicted in Exhibit "A" of the attached Resolution, which constitutes approximately 6 acres (“Property”) of the total 54.169 acres. The Property is not needed for agency purposes and, as a result, the City desires to dispose approximately 6 acres.

Effective January 1, 2020, AB 1486 amended the Surplus Land Act, Government Code Section 54220 et seq. (“SLA”), which prescribes the process for disposal of surplus land. Before taking any action to dispose of the Property, the City must first comply with the SLA. The SLA requires all local agencies to prioritize affordable housing, as well as parks and open space, when disposing of surplus land. New legislation which took effect on January 1, 2020, requires that before a local agency takes any action to dispose of land, the land must be declared either “surplus land” or “exempt surplus land,” as supported by written findings. “Surplus land” means the land owned by a 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 is not necessary for the agency’s use.

Staff has determined the Property is “surplus land” that is subject to the SLA process, and that no exceptions apply. Accordingly, before taking steps to dispose of the Property, the City needs to comply with the SLA by taking formal action to declare the property surplus. Adoption of the attached Resolution would declare the Property as surplus land.

The SLA process for “surplus land” involves several steps. After designating real property as non-exempt surplus land, the City must send Notices of Availability to affordable housing developers, public agencies, and other entities required to receive notice under the SLA. Any party receiving a Notice of Availability and interested in acquiring the surplus property must notify the City in writing within 60 days after the Notice of Availability is transmitted. If such notice is received, the City must enter into good faith negotiations to determine a mutually satisfactory sale or dispose of price and terms. Nothing in the SLA prevents the City from obtaining fair market value for the disposition of surplus land.

Accordingly, the City has the power to sell or dispose of surplus land at fair market value or at less than fair market value (Gov't Code § 54226). If the price or terms cannot be agreed upon after a good faith negotiation period of not less than ninety days, the land may be disposed of without further regard to SLA procedures, other than submitting a report to the California Department of Housing and Community Development ("HCD") and recording an affordability covenant on the Property.

After the City has sent Notices of Availability and concluded attempts to negotiate in good faith with any interested party, the City must provide a report to HCD. HCD then has thirty days to notify the City whether it has violated the SLA. The City would then have sixty days to correct the violation or to submit findings as to why the law was not violated. If the City is not notified of a violation by HCD within thirty (30) days after submitting the required materials, the City receives “safe harbor” and is not subject to the SLA’s penalty provisions. The City will also have to record an affordability covenant on the Property that will apply if ten or more residential units are developed on the Property.

Adopting the attached Resolution will declare that the property is “surplus land” under the SLA and direct Staff to comply with the SLA. Staff has determined pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”) that the designation of the Property as non-exempt surplus, approval of the form of Notice of Availability, and authorization for the City Manager to comply with the Act will not result in a direct or reasonably foreseeable indirect physical change in the environment and as such is exempt from further review under CEQA pursuant to State CEQA Guidelines Section 15060(c)(3).