DATE: May 21, 2024
TO: Board of Supervisors
SUBMITTED BY: Edward Hill, Chief Operating Officer/Interim Director of Internal Services/Chief Information Officer
SUBJECT: Surplus and Sale of County Property - Cantua Creek
RECOMMENDED ACTION(S):
TITLE
Adopt Resolution declaring County-owned property located at 29595 W. Latta Ave, Cantua Creek, CA 93608 (APN 038-343-15), containing approximately 30,492 square feet of land with improvements, surplus land and declaring the Board’s intention as to such property that includes the following:
a. The property shall be sold on an "as is" and “where is” basis at the minimum net cash amount of at least $10,000, subject to the successful “Qualified Entity” buyer's payment of all escrow and closing costs in connection with the consummation of the sale, and compliance with certain minimum terms and conditions of sale to the County's satisfaction, as stated in the Sale and Purchase Agreement & Escrow Instructions to be entered into with the successful “Qualified Entity” buyer;
b. The County shall first attempt to sell the property to a qualified public entity or housing sponsor (“Qualified Entity”) specified in the statutorily required “surplus land sales” procedures under the Surplus Land Act (Government Code section 54220 et seq.) and the Department of Internal Services (“Department”) will return to the Board within six months under the following circumstances, as applicable:
i. The Department, through the Chief Negotiator, will recommend that the Board approve the proposed sale of the property to the timely responding Qualified Entity that presents the best proposal to the County, as determined by the County’s Chief Negotiator, under the Surplus Land Act and the requirements of the recommended Resolution; or
ii. If the price or terms cannot be agreed upon with a responding Qualified Entity after a 90-day good faith negotiation period, or if no Qualified Entity gives the County written notice of its interest in purchasing the Property within 60 days after the County gives its Notice of Availability of County Surplus Land, the Department will return to the Board within six months to recommend that the Board authorize the County to undertake public bidding for the sale of the property, under the same terms and conditions, above (Government Code section 25526 et. seq.);
c. Designate that the County Administrative Officer and the Director of Internal Services/Chief Information Officer are, each of whom may act alone as, the Board’s chief negotiator (“Chief Negotiator”);
d. Approve the forms of documents required to initiate and complete the sale of the property as surplus land to a successful “Qualified Entity” buyer, including a form of the Notice of Availability of County Surplus Land, a form of Sale and Purchase Agreement & Escrow Instructions, and a form of Grant Deed;
e. Authorize and direct the Director of Internal Services/Chief Information Officer, the County Administrative Officer, the Clerk of the Board, and their respective designees, to take all necessary actions to carry out the foregoing resolution and the requirements of the Surplus Land Act related to the resolution; and
f. The sale shall be subject to approval by County Counsel, as to legal form, and by the Auditor-Controller/Treasurer-Tax Collector as to accounting form.
REPORT
The Internal Services Department (ISD) requests your board approve the recommended action containing the initial necessary steps to ultimately sell the real property located at 29595 W. Latta Ave, Cantua Creek, CA 93608 (“Property”), as surplus land to a “Qualified Entity” buyer.
Approval of the recommended action will make a finding that the Property is not necessary for County use and declare the Property as surplus land. Government Code section 54220 et seq. (the Surplus Land Act), require that certain public entities as well as housing sponsors (“Qualified Entity”), be given the first opportunity to purchase County surplus land for certain public purposes, such as open space, parks and recreation, or development of affordable housing. Such Qualified Entities must be given a written notice of availability to purchase the Property in accordance with the Surplus Land Act, after which these Qualified Entities will have 60 days to notify the County of their interest in purchasing the Property. Thereafter, if the price or terms cannot be agreed upon with all responding Qualified Entities after a 90-day good faith negotiation period, or if no Qualified Entity gives the County written notice of its interest in purchasing the Property within 60 days after the County gives such notice of availability, the Property may be sold upon the same terms and conditions through a public bidding process pursuant to Government Code, section 25526 et seq.
This item pertains to a location in District 1.
ALTERNATIVE ACTION(S):
The Board may set a higher sale price for the Property than the recommended purchase price, decline to approve the recommended actions and direct the Department to continue to pursue other real property sale opportunities, or elect to keep the Property.
As to other real property sale opportunities, Government Code § 54222(f)(1) in the Surplus Land Act provides that if a sale of surplus land is to a local, state, or federal agency for its use, such sale is “exempt surplus land,” meaning that the County need not undertake the “notice of availability” provisions or record the restrictive covenant for affordable housing under the Surplus Land Act. In that case, (1) the Board first would need to make such a finding of the Property, as “exempt surplus land,” before authorizing the sale to such a public agency, (2) then, the County would need to give the California Department of Housing and Community Development (“California HCD”) at least 30 days’ prior notice of such sale to allow the California HCD to assist in clarifying whether the land indeed qualifies as “exempt surplus” land, and (3) if such sale is to a local, state, or federal agency, the sale must be at the same or higher sale price for the Property than the recommended purchase price. The County does not currently have any entity, which meets the definition of a local, state, or federal agency, that is interested in the purchase of the property.
FISCAL IMPACT:
The fiscal impact would be determined by the ultimate final sale price. County costs associated with the sale of the Property include a cost of a Preliminary Title Report and the cost to advertise the sale of the Property, together estimated at $10,000. Currently, maintenance costs for the Property average approximately $2,500 annually, funded from the CAO Interest and Miscellaneous Expenditures Org 2540. The funds are used for routine facility and landscape maintenance, utilities, and security.
DISCUSSION:
Property Background
The Property was used by CalFire in the 1970’s for garaging its fire service vehicles. After CalFire vacated the Property in the early to mid-1980’s, it was converted into a daycare center in 1985. This remodel included an exterior office for use by the Sheriff’s Department. The daycare center was operated by the County through a third-party vendor through approximately 2005. Since 2005, the County has maintained the Property as a vacant building, continuing to pay for power, sewer, water, and alarm services for the building, as well as repairing the Property when necessary. The County has no current or future plans involving the Property.
The recommended action requests your Board to declare the Property as surplus land and initiate the sale process described in the Surplus Land Act for a minimum price and certain minimum terms and conditions summarized below. Within six months of your Board’s approval of the recommended action, the County’s Chief Negotiator will return to your Board and present the best proposal to the County under the Surplus Land Act and the requirements of the recommended Resolution.
Should the County be unable to successfully negotiate for the sale of the Property with any Qualified Entity under the Surplus Land Act, staff will return to your Board within the same six months to request your Board to initiate sale of the Property for the same minimum price and under the same minimum terms and conditions, as mentioned above, through a public bidding process (Gov. Code, § 25526 et seq.). Such public bidding may be conducted upon 4/5 vote of the Board, subject to prior publication notice.
Property Appraisal
The most recent appraisal of the property was completed in October of 2020. The appraised value of the site at that time was $73,000, with the highest and best use determined as “vacant.” Considering the reduced purchase price of $10,000 presented in the recommended action, an updated appraisal has not been ordered. Staff considers this valuation a reasonable approximation of the current Fair Market Value of the property because of the condition of the site and the previous non-valuation of the building.
Minimum Purchase Price.
Under the recommended action, the minimum net amount of the purchase price for the Property shall be at least $10,000 (“Purchase Price”).
Authority
Government Code section 54220 et seq. outlines the statutorily mandated procedure under the Surplus Land Act that must be followed before the County may otherwise sell the Property. Under the Surplus Land Act, the County must give a “notice of availability” of the Property for sale to certain Qualified Entities. Such Qualified Entities have 60 days to respond with a notice of interest to purchase the Property. If the price or terms cannot be agreed upon with all timely responding Qualified Entities after a 90-day good faith negotiation period, the County, upon 4/5 approval of the Board, may then sell the Property upon the same terms through a public bidding process described in Government Code section 25526 et seq. If more than one Qualified Entity timely responds with an offer, the County needs to give first priority to the Qualified Entity that agrees to use the Property for housing; and certain additional procedures establish priority among those Qualified Entities.
Under the Surplus Land Act, the County must give its notice of availability of the Property for sale to certain Qualified Entities including:
• The park and recreation department of any city or county, within which the surplus land is located, any regional park authority having jurisdiction within the area where the surplus land is located, and the State Resources Agency for park and recreation or open space purposes;
• Any school districts within those jurisdiction the surplus land is located, for the purpose of school facilities construction or open space; and
• Certain housing agencies within whose jurisdiction the surplus land is located for the purpose of developing low- and moderate-income housing.
The County’s notice of availability will will be sent to the appropriate Qualified Entities, informing them they need to provide timely written notice to the County if they are interested in purchasing the property. If a Qualified Entity purchases the Property under the Surplus Land Act procedures, the Grant Deed will contain an additional limitation on how the Property may be lawfully used.
If the County attempts to, but does not, sell the Property under the Surplus Land Act,
Government Code § 54233 in the Surplus Land Act provides the following requirements that will apply to the Property with respect to future owner who develops the Property for housing:
If 10 or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the parcels shall be sold or rented at affordable housing cost, or affordable rent, to lower income households. Rental units shall remain affordable to, and occupied by, lower income households for a period of at least 55 years for rental housing and 45 years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of Government Code Section 65915(c)(2). These requirements shall be contained in a covenant or restriction recorded against the surplus land prior to land use entitlement of the project, and the covenant or restriction shall run with the land and shall be enforceable, against any owner who violates a covenant or restriction and each successor in interest who continues the violation, by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5. The County shall provide a copy of any restrictions recorded against the Property to the State Department of Housing and Community Development on a form prescribed by the Department.
Staff’s Recommended Next Steps
If your Board approves the recommended action, the Department will issue the Notice of Availability of County Surplus Land to the Qualified Entities. The County’s notice of availability will include the form of Sale and Purchase Agreement & Escrow Instructions.
Within six months of your Board’s approval of the recommended action, the Department will return and recommend that the Board approve the proposed sale of the property to the timely responding Qualified Entity that presents the best proposal to the County under the Surplus Land Act and the requirements of the recommended Resolution.
The recommended Resolution provides that the Board reserves the absolute right to reject any and all proposals made by any Qualified Entity, following the 90-day good faith negotiating period specified in the Surplus Land Act, if the Board deems it best for the public interest.
If no Qualified Entity gives the County written notice of its interest in purchasing the Property within 60 days after the County gives its notice of availability of the Property for sale, or if the foregoing process does not result in a successful sale of the Property, the County may, upon 4/5 vote of the Board, sell the Property upon the same terms, to a private party or any other governmental agency, in compliance with the public bidding requirements in Government Code section 25526 et seq. A separate item will be brought before your Board within the same six-month period should the County need to enact this option.
ATTACHMENTS INCLUDED AND/OR ON FILE:
Attachment A - Site Map
On file with Clerk - Resolution to Declare Surplus Land and Board’s Intention to Sell
On file with Clerk - Form of Notice of Availability of County Surplus Land
On file with Clerk - Form of Sale and Purchase Agreement, Escrow Instructions, & Grant Deed
CAO ANALYST:
Ahla Yang