HomeMy WebLinkAboutItem 5d. Declaration of Surplus Exempt status under CA Surplus Land Act for City-owned property (610 & 614 Monterey Street; portion of Parking Lot 14) Item 5d
Department: Administration
Cost Center: 1005
For Agenda of: 9/5/2023
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Robert Hill, Sustainability & Natural Resources Official
SUBJECT: DECLARATION OF CERTAIN REAL PROPERTY AS EXEMPT SURPLUS
(610 AND 614 MONTEREY STREET, A PORTION OF 972 NIPOMO
STREET, AND A PORTION OF CITY PARKING LOT NO. 14) UNDER THE
CALIFORNIA SURPLUS LAND ACT
RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis
Obispo, California, declaring pursuant to Government Code Section 54221(b) that certain
real property owned by the City located at 610 and 614 Monterey Street, a portion of 972
Nipomo Street and a portion of City Parking Lot 14, identified as Assessor’s Parcel Nos.
002-412-011, 002-412-012, 002-412-002 (portion) and 002-412-004 (portion) is not
necessary for the City’s use and is Exempt Surplus Land.”
POLICY CONTEXT
The California Surplus Land Act (“SLA” or the “Act”) requires that local government
agencies notify and offer “surplus land” for sale or lease to affordable home developers
and certain other entities before selling or leasing the land to any other individual or entity.
Under the Act, the City Council must formally declare land “surplus” or “exempt surplus”
at a public meeting, supported by written findings, prior to disposition of the land in
accordance with City policies and procedures.
Surplus land is defined as “land owned in fee simple for which a local agency’s governing
body takes formal action at a regular public meeting declaring land to be surplus and not
necessary for a local agency’s use.” (Cal. Gov. Code § 54221(b)(1)). “Agency use”
includes, but is not limited to, land that is being used, is planned to be used pursuant to
a written plan adopted by the local agency’s governing board, provided that “agency’s
use” shall not include commercial or industrial uses or activities, including
nongovernmental retail, entertainment, or office development. (Cal. Gov. Code §
54221(c)(1),(2).) As more fully discussed below, if agency-owned land is declared
“exempt surplus,” the local agency is not required to further comply with the Act’s noticing
and availability requirements.
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Item 5d
This City of San Luis Obispo’s policies and procedures for real property acquisition and
disposal are found at Section 475 of the Financial Management Manual, which further
incorporates City Charter Article IX, Section 906 and City Council Resolution No. 10052
(2009 Series).
DISCUSSION
Background
For many years, the City has leased buildings, land, and facilities along the lower
Monterey Street corridor to non-profit organizations for public benefit purposes.
Beginning in 1993, the City leased the former City/County library site located at 888 Morro
Street to the San Luis Obispo Little Theatre (now known, and hereafter referred to, as the
San Luis Obispo Repertory Theatre, or “SLO REP”) for interim theater operations (the
“Morro Site”). During the same timeframe, City Council directed staff to identify a
permanent site for SLO REP’s theater operations and suggested that currently identified
as a portion of City-owned Parking Lot 14, City-owned 610 and 614 Monterey Street, and
a portion of 972 Nipomo Street, could be an appropriate site for such permanent
relocation (collectively referred to as the “Monterey Site”). The Morro Site, where SLO
REP’s theatre currently exists, is located next door to City Hall and has long been
considered for a future expansion of City Hall public facility uses. Such planned re -use by
the City is documented in the Facilities Master Plan, adopted by Council in 2018, which
identifies the Morro Site as a future expansion/annex to City Hall for ongoing public,
municipal uses.
Staff have been working diligently with SLO REP over the past five years in preparation
for the long-standing plan for SLO REP to construct and permanently operate a new
theatre building on the Monterey Site, while vacating the existing theatre at the Morro Site
(all owned by the City). On May 22, 2019, the City entered into an Exclusive Negotiating
Agreement with SLO REP, as allowed for under Section 475 of the Financial Management
Manual, that sets forth certain parameters and project milestones as conditions precedent
to entering into a long-term lease for the new theatre site. Exclusive Negotiating
Agreements entered into prior to September 30, 2019, were not subject to the SLA’s
noticing and availability requirements so long as the land was disposed of prior to
December 31, 2022. The parties have made progress in identifying deal points for SLO
REP’s lease of the Monterey Site but were unable to execute a lease by December 31,
2022.
As such, given the requirements of the California Sur plus Land Act, as described in the
Policy Context section, above, it is prudent that the City Council formally declare the
Monterey Site as “exempt surplus,” thereby exempting the City from further complying
with the Act’s noticing and availability require ments. The Monterey Site is “exempt
surplus” because the site is not needed for “agency use” and the proposed transaction
constitutes an “exchange of surplus land.” Government Code Section 54221(f)(1)(C)
provides that “surplus land [Monterey Site] that a local agency is exchanging for another
property necessary for the local agency’s use [the Morro Site]” is “exempt surplus.”
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Item 5d
Upon Council’s adoption of the Resolution formally declaring the Monterey Site as
“exempt surplus” under the Act, the City is required to provide the Department of Housing
and Community Development (HCD) written notification of its declaration and findings in
a form prescribed by HCD. Within 30 days of receipt of the written notification and
findings, HCD shall notify the City if the department has determined that the local agency
is in compliance with the Act.
Previous Council Action
On December 4, 2018, the City Council approved the Exclusive Negotiating Agreement
with SLO REP.
Public Engagement
Any member of the public may comment on this item either in writing in advance of the
City Council meeting or by providing public comment during the hearing of this item.
CONCURRENCE
The City’s Public Works Department Parking Services Division concurs with the
recommendations contained herein.
ENVIRONMENTAL REVIEW
The recommended action is not considered a Project under the California Environmental
Quality Act, Section 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2023-24
Funding Identified: No
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund - - - -
State - - - -
Federal - - - -
Fees - - - -
Other: - - - -
Total $N/A $N/A $N/A $N/A
The recommended action is administrative only and does not have a fiscal impact in and
of itself.
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Item 5d
ALTERNATIVES
Council could decide not to adopt the Resolution declaring the subject City owned
real property as “exempt surplus” and instead engage in a surplus property Notice
of Availability process under the Act. This action is not recommended because this
transaction is specifically determined to be exempt under Government Code Section
54221(f)(1)(C) and is consistent with prior plans and objectives for both properties guided
by City Council action.
ATTACHMENTS
A - Draft Resolution declaring "Surplus Exempt" status under CA Surplus Land Act for
City-owned property
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R ______
RESOLUTION NO. _____ (2023 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, DECLARING PURSUANT TO GOVERNMENT
CODE SECTION 54221 THAT CERTAIN REAL PROPERTY OWNED BY
THE CITY LOCATED AT 610 AND 614 MONTEREY STREET, A
PORTION OF 972 NIPOMO STREET, AND A PORTION OF CITY
PARKING LOT NO. 14 IS NOT NECESSARY FOR THE CITY’S USE AND
IS EXEMPT SURPLUS LAND
WHEREAS, the City of San Luis Obispo is the owner in fee simple of that certain
real property located at 610 and 614 Monterey Street, a portion of 972 Nipomo Street,
and a portion of City Parking Lot No. 14 identified as Assessor’s Parcel Nos. 002-412-
011, 002-412-012, 002-412-002 (portion) and 002-412-004 (portion) (the “Monterey
Site”); and
WHEREAS, the City of San Luis Obispo is the owner in fee simple of that certain
real property located at 888 Morro Street and identified as Assessor’s Parcel No. 002-
321-003 (“Morro Site”); and
WHEREAS, pursuant to Section 54221(b) of the Surplus Land Act, Government
Code Sections 54220-54234 (the “Act”), agency-owned land must be declared either
“surplus land” or “exempt surplus land” prior to disposition of the land consistent with an
agency’s policies or procedures, including lease of the land; and
WHEREAS, “surplus land” is land owned in fee simple by the City for which the
City Council takes formal action in a regular public meeting declaring the land is surplus
and is not necessary for “agency use”; and
WHEREAS, the Act provides that “agency’s use” shall include, but not be limited
to, land that is being used or is planned to be used pursuant to a written plan adopted by
the local agency’s governing board for agency work or operations, provided that “agency’s
use” shall not include commercial or industrial uses or activities, including
nongovernmental retail, entertainment, or office development; and
WHEREAS, under the Act, surplus land that a local agency is exchanging for
another property necessary for the agency’s use is “exempt surplus” land;
WHEREAS, the Act provides that the City may dispose of property declared
“exempt surplus” land without further regard to the requirements of the Act; and
WHEREAS, from November 1992 through the present, the San Luis Obispo
Repertory Theatre (“SLO REP”), a long-standing community partner, has held a lease of
the City-owned facilities located at the Morro Site for use as an interim theater location
pending identification of a permanent location and adequate funding for construction of
new theater facilities; and
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Resolution No. _____ (2023 Series) Page 2
R ______
WHEREAS, the Morro Site has long been identified as a location necessary to
accommodate the City’s expanding workforce and operations and the City’s planned use
of the Morro Site is documented in the City Council adopted Facilities Master Plan (2018),
which identifies the Morro Site as a future expansion/annex to City Hall for ongoing public,
municipal uses; and
WHEREAS, the Monterey Site is not needed for “agency use” by the City as
defined by the Act; and
WHEREAS, at its December 4, 2018, meeting, pursuant to Section 475 of the
City’s Financial Management Manual, the City Council authorized staff to enter into an
exclusive negotiating agreement with SLO REP dated May 22, 2019, for the purpose of
negotiating the terms and conditions of an agreement for a ground lease of the Monterey
Site for SLO REP as a permanent site to construct and operate a new theater building, in
turn making the Morro Site available for the City’s re-use; and
WHEREAS, Section 54234 of the Act provides that if a local agency, as of
September 30, 2019, has entered into an exclusive negotiating agreement to dispose of
property, the provisions of the Act as it existed on December 31, 2019, shall apply to the
disposition of the property provided the disposition is completed no later than December
31, 2022;
WHEREAS, the City and SLO REP have been working diligently to identify deal
points for SLO REP’s lease of the Monterey Site, but due to the prolonged duration of the
COVID-19 pandemic and pertinent City staff’s attention to responsibilities required by the
City’s emergency response, the parties were unable to execute a lease by December 31,
2022 in satisfaction of Section 54234; and
WHEREAS, the Monterey Site is nonetheless “exempt surplus” as defined by the
Act because it is being exchanged for the Morro Site, which is necessary for the City’s
use.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The above recitals are true and correct and are a substantive part of
this Resolution.
SECTION 2. Findings. Pursuant to Government Code Sections 54221(b) and
54221(f)(1)(C), the City Council hereby declares that the Monterey Site is not necessary
for the City’s use and is “exempt surplus” land because the City’s use of the Monterey
Site is being exchanged for its re-use of the Morro Site to accommodate ongoing and
expanded municipal operations.
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Resolution No. _____ (2023 Series) Page 3
R ______
SECTION 3. Environmental Review. The passage of this resolution will not
cause a direct physical change in the environment , nor a reasonably foreseeable indirect
physical change in the environment, and therefore, this action does not constitute a
“project” under the California Environmental Quality Act (“CEQA”). (CEQA Guidelines §
15378(a).) The Final Environmental Impact Report (FEIR) for the Palm Nipomo Parking
Structure Project (now called the Cultural Arts District Parking Structure) was certified by
City Council in July 2018 (SCH # 2017051011) and subsequently amended in July 2019.
SECTION 4. City staff are hereby authorized and directed to provide a copy of this
Resolution to the California Department of Housing and Community Development
(“HCD”) in the form and manner required by HCD at least 30 days prior to the disposition
of the Monterey Site.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 23.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington, City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick, City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington, City Clerk
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