HomeMy WebLinkAboutItem 5f. Declaration of Certain Real Property as Exempt Surplus under Gov. Code Section 54221b (610 and 614 Monterey, 972 Nipomo, City Parking Lot No. 14) Item 5f
Department: Administration
Cost Center: 1005
For Agenda of: 1/16/2024
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 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, and 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)).
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Item 5f
On October 11, 2023, the Governor signed Assembly Bill No. 480 amending Government
Code Section 54234, which specifies that where a local agency has entered into an
approved Exclusive Negotiating Agreement prior to September 30, 2019, for surplus
property, and where the disposition of that property occurs before December 31, 2027
(extended from December 31, 2022) the local agency is only required to comply with the
Act’s requirements as they existed on December 31, 2019 (declaration of land as “surplus
or “exempt surplus”), not the Act’s current noticing and availability requirements (the
“Grandfathering Exemption”).
This City of San Luis Obispo’s policies and procedures for real property acquisition and
disposal are found in 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. 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 relo cation (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 for other public uses, such as
an expansion of City Hall. Such planned re-use 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 i n preparation
for the long-standing plan for SLO REP to construct and 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 for the Monterey Site, 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.
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Item 5f
The Monterey Site is not needed at this time for “agency use” as defined by the Act, but
under the provisions of Assembly Bill No. 480, as codified under Government Code
54234(a)(1), Exclusive Negotiating Agreements entered into prior to September 30, 2019,
are not subject to the SLA’s current noticing and availability requirements so long as the
land is disposed of prior to December 31, 2027. The City and SLO REP continue to make
progress in identifying deal points for SLO REP’s prospective lease of the Monterey Site
and it is reasonable to anticipate that a final lease will be completed by December 31,
2027, subject to further Council consideration and action.
As such, given the requirements of the California Surplus Land Act, as described i n the
Policy Context section, above, it is prudent that the City Council formally declare the
Monterey Site as “exempt surplus” property pursuant to the Grandfathering Exemption.
The City and SLO REP entered into the Exclusive Negotiating Agreement on May 22,
2019, prior to the cut-off date of September 30, 2019, and as the present intention is to
dispose of the property via lease prior to December 31, 2027.
Upon Council’s adoption of the Resolution formally declaring the Monterey Site as
“exempt surplus” land 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. On September 15, 2023, the City Council approved a prior resolution
declaring the subject property as “exempt surplus” pursuant to a different statutory
exemption, but at the suggestion of HCD, staff recommends Council declare the Monterey
Site as “exempt surplus” pursuant to the Grandfathering Exemption given its direct
applicability to the executed ENA 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.
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Item 5f
ENVIRONMENTAL REVIEW
The recommended action is not considered a Project under the California Environmental
Quality Act, Section 15378.
FISCAL IMPACT
Budgeted: N/A Budget Year: 2023-24
Funding Identified: N/A
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund N/A - - -
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.
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 in conformance with the timelines specified
under Government Code Section 54234 and is consistent with prior plans and objectives
for both properties guided by City Council action.
ATTACHMENTS
A - Draft Resolution declaring certain real property as Exempt Surplus Land (Gov. Code
§54221(b)
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R ______
RESOLUTION NO. _____ (2024 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 PURSUANT TO GOVERNMENT CODE
SECTION 54234
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 for which a local agency has entered into
an Exclusive Negotiating Agreement prior to September 30, 2019 and is disposed of prior
to December 31, 2027 (pursuant to recently enacted AB 480) is “exempt surplus” land
(Government Code Section 54234) (the “Grandfathering Exemption”); and
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Resolution No. _____ (2024 Series) Page 2
R ______
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
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, the Grandfathering Exemption, codified in Section 54234 of the Act,
provides that if a local agency entered into an Exclusive Negotiating Agreement to
dispose of property before September 30, 2019, and the disposition is completed by
December 31, 2027, such property is “exempt surplus” and the provisions of the Act as it
existed on December 31, 2019, shall apply to the disposition of the property; and
WHEREAS, the City and SLO REP have been working diligently to identify deal
points for SLO REP’s lease of the Monterey Site, and it is reasonable to anticipate that
the City and SLO REP will be able to execute a lease by December 31, 2027, subject to
further Council consideration and action, in satisfaction of Section 54234.
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
54234, the City Council hereby declares that the Monterey Site is not necessary for the
City’s use and is “exempt surplus land” pursuant to the Grandfathering Exemption.
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Resolution No. _____ (2024 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).)
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 24.
___________________________
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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