HomeMy WebLinkAboutItem 5g - Authorize Acquisition of Real Property at 975 Board Street, APN 002-412-010 Item 5g
Department: Administration
Cost Center: 1001
For Agenda of: 5/19/2026
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Robert Hill, Sustainability & Natural Resources Official
Natalie Harnett Policy and Project Manager
SUBJECT: AUTHORIZE ACQUISITION OF REAL PROPERTY LOCATED AT 975
BROAD STREET, SAN LUIS OBISPO, CA, IDENTIFIED AS ASSESSOR
PARCEL NO. 002-412-010
RECOMMENDATION
1. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San
Luis Obispo, California, authorizing the acquisition of real property located at 975
Broad Street, San Luis Obispo, California, identified as Assessor Parcel Number 002-
412-010.” (Attachment A).
2. Authorize the City Manager to sign any and all escrow documents or other associated
documents necessary to complete the transaction.
3. Appropriate $1,387,500 for property acquisition and $300,000 as needed for property
maintenance and required improvements using reimbursement funds received from
the Federal Emergency Management Agency from the City’s Assigned Fund balance.
POLICY CONTEXT
The purchase of the 975 Broad Street property is recommended in furtherance of
implementation of the City’s Downtown Concept Plan (2017). This parcel is uniquely
situated as the only residential property specifically noted in Block 10 of the Downtown
Concept Plan as a future community-serving space (defined as government facilities,
museums, churches, and schools). Block 10 is the anchor location of the Cultural Arts
District.
The City’s Financial Management Manual o utlines criteria for Real Property Acquisition
and Disposal based on adopted plans and policies at Section 475. The acquisition of 975
Broad Street is consistent with the City’s long‑range vision for the downtown area, which
is specifically contemplated at Section 475. Because property acquisitions by the City are
infrequent, when opportunities do arise, they are considered on a case‑by‑case basis
and undertaken with a multi‑departmental team approach as directed by the City
Manager.
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Item 5g
DISCUSSION
Background – 975 Broad Street
Purchase Considerations
On March 20, 2026, the property at 975 Broad Street was listed for sale. The seller is the
Mello Family Trust. The listing agent is Denise Silva Topham with Better Homes and
Gardens Real Estate in San Luis Obispo. The property was listed for $1.75 million. The
property contains an existing single-family home built in 1961 with the listing indicating
three bedrooms and three baths.
Following Council direction received in closed session on April 7, 2026, staff engaged a
local real estate agent to learn more about the property, assess value and current market
conditions, facilitate due diligence inspections, and negotiate an offer to purchase the
property. Following a productive series of offers and counter-offers, the City has reached
an agreement with the sellers to purchase the property at a price of $1,387,500. This
agreement is expressly contingent on a finding of General Plan Conformity with the
Planning Commission (scheduled for May 13th) and final approval by the City Council.
To inform negotiations and to serve as a basis for determining fair value for the property,
a total of ten comparable sales were located within downtown and the nearby surrounding
area. These sales ranged between $580 per square foot and $1,043 per square foot, with
an average of $767 per square foot. The listing for 975 Broad Street indicates that the
home is 1,809 square feet; at a purchase price of $1,387,500, the cost is $767 per square
foot, falling at exactly the midpoint of the expected range.
Staff reviewed existing general home inspection reports, a termite inspection report, and
an existing sewer lateral inspection report. In addition, an additional home inspection
report was conducted on behalf of, and addressed to, the City to confirm the f indings of
the existing reports. Staff also procured a foundation inspection report. In summary, the
general inspection reports show that the structure has normal wear and tear for the age,
although there are quite a few areas where actions should be taken to repair older
equipment, safely secure the home, and prevent modest water damage and drainage
issues along the westerly and rear sides of the building. The foundation inspection, life
expectancy of the roof, and sewer lateral reports were all favorable. Accordingly, due
diligence inspection contingencies were waived after the agreed upon review period
following the opening of escrow and in coordination with the sellers.
Staff have also reviewed a current preliminary title report prepared by First American Title
Company. Staff’s review of the report indicates that all taxes are current, there are no
prior easements or other problematic exceptions to title, no judgments or liens, and no
other observable title defects. A prior mortgage will need to be paid in full and the Deed
of Trust securing that loan will need to be reconveyed and removed from title, although
this is customary during the escrow process.
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Item 5g
Planning Considerations
Planning staff in the Community Development Department have prepared a Fact Sheet
for the property (Attachment B). Key points include:
1. The site is a 5,000‑square‑foot parcel containing a one‑story,
1,809‑square‑foot residence reportedly built in 1961, located at the edge of the
Downtown Commercial zone and directly across from the Mission and Mission
Plaza along the “dogleg” portion of Broad Street.
2. It is within the Historic Preservation (H) Overlay Zone and adjacent to two listed
historic resources—the Manderscheid House (a Mills Act property) and the
Carnegie Library/History Center.
3. The parcel is zoned Medium‑High Density Residential (R‑3‑H), allowing a range
of residential, community‑serving, and hospitality uses, and is identified in the
Downtown Concept Specific Plan as a potential community‑serving site.
4. The site could be developed with residential units in a variety of ways, with the
potential to add three 2-bedroom units, four 1-bedroom units (between 600 and
1,000 square feet), or another combination within the allowed density.
5. Any redevelopment or major alteration is subject to the City’s Historic Preservation
Ordinance, review for impacts on adjacent historic resources and historic context,
and associated findings.
Background – Downtown Concept Plan
While the City does not typically intervene in private real estate t ransactions, the listing of
975 Broad Street represents a unique and extraordinarily rare opportunity for the City to
advance the goals and objectives of the Downtown Concept Plan and the Cultural Arts
District. The 975 Broad Street parcel is uniquely situated as the only residential property
specifically noted in Block 10 of the Downtown Concept Plan (Figure 3.1 and narrative
description page 3.6) as a future community-serving space (defined as government
facilities, museums, churches, and schools). More specifically, Block 10 is described as
follows:
“A new parking structure on the corner of Palm and Nipomo Streets is envisioned
to include office mixed use along Nipomo Street, the Theatre relocated along
Monterey Street, and public use of the rooftop. An expansion of the History Center
is shown on the City-owned parking lot on Monterey Street, wrapping around the
building to the property on Broad Street. If it is not all needed for the History Center,
then it may be used for other community-serving use in the Cultural District.”
It should also be noted that the area around Block 10 is identified for the treatment of
Monterey Street and Broad Street as “Street Type D” (see Figure 4.1 Street Types
Diagram, pg. 4.2 and narrative description, pg. 4.8) wherein the modal priorities are 1.
Pedestrians, 2. Bicycles, and 3. Slow Automobiles.
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Item 5g
Whether for short-term Mission Plaza special events and activations, long-term
conversion of this area to Street Type D features, or consideration of possible future
treatment of the “dogleg”, 975 Broad Street represents a key property insofar as it is the
only private property with a driveway fronting this block of Broad Street. Over the years,
the City has only been able to provide short-term closures of this block for Mission Plaza
special events with cooperation from the owner of the 975 Broad Street property.
Next Steps – Interim and Future Uses
If the transaction to acquire 975 Broad Street is successful, it is envisioned that interim,
non-public uses of the property and existing structure by the City would be enacted to
ensure basic maintenance and an ongoing, visible pattern of use to ensure safety and
prevent trespass and vandalism. Staff recommend a future Council-directed process for
engaging with community stakeholders and partners to identify a long-term use for the
property be undertaken as a work program item during the 2027-29 Financial Plan period.
Annual maintenance costs are expected to be relatively modest, including normal
replacement costs, landscape, utilities, and waste collection. It should be noted that the
property is located within a Cal Fire designated High Fire Hazard Severity Zone and,
therefore, is subject to the City’s Wildland Urban Interface (WUI) Code. The property is
not located in a FEMA designated flood zone.
Previous Council Action
The City Council conducted a closed session conference in accordance with the Brown
Act to discuss real property price and terms for the subject property on April 7, 2026, and
May 5, 2026. At the beginning of the regularly scheduled City Council meetings that
immediately followed, the City Attorney reported that the City Council had provided sta ff
with directions to work towards acquisition of the property.
The Downtown Concept Plan was approved by Resolution No. 10829 (2017 Series) on
September 5, 2017. The approving Resolution notes the plan’s consistency with other
General Plan policies, including the Land Use Element and the Circulation Element, as
well as the role that the Downtown Concept Plan in serving as a guide for both public and
private investment in the Downtown.
Figure 3.1 from the Downtown Concept Plan, Block 10
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Item 5g
Public Engagement
The Downtown Concept Plan was supported by the Council-appointed Creative Vision
Team (CVT). The approving Resolution notes that the Downtown Concept Plan reflects
public engagement and input stakeholder focus groups, an open house, two project
workshops, two neighborhood meetings, an online survey, and 1 3 CVT meetings. The
Downtown Concept Plan also received input from the Planning Commission, Parks and
Recreation Commission, and Architectural Review Commission, as well as the Mass
Transportation Committee, Bicycle Advisory Committee (currently titled the Active
Transportation Committee), and the Cultural Heritage Committee.
Any member of the public may provide written comment or public testimony pertaining to
this specific item at the May 19th City Council Meeting.
CONCURRENCE
An inter-disciplinary and inter-departmental team have been assembled to support the
recommended action to purchase 975 Broad Street resulting in concurrence from the
Community Development Department, Public Works and Utilities Department, and
Finance Department.
The City Attorney’s Office has reviewed the purchase and sale agreement and associated
transaction documents and provided their concurrence as to the form and content of those
documents.
The Planning Commission will review this item for General Plan Conformity in accordance
with California Government Code Section 65402 on May 13, 2026. Due to the timing of
the escrow established for this transaction, the Planning Commission’s review will occur
after the publication of the City Council Agenda on May 12th for the meeting occurring on
May 19th. Staff will, therefore, provide a separate Council Memorandum indicating the
outcome of the Planning Commission determination.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
actions in this report because the actions do not constitute a “Project” under CEQA
Guidelines Sec. 15378, as it does not commit the City to a specific project or result in a
direct or reasonably foreseeable physical change in the environment. The action c an be
considered an organizational or administrative activity of government that will not result
in direct or indirect physical changes in the environment (CEQA Guidelines §
15378(b)(5)). This project is also exempt pursuant to Section 15301 of the CEQA
Guidelines, which applies to the operation, repair, maintenance, permitting, leasing,
licensing, or minor alteration of existing public or private structures, facilities, mechanical
equipment, or topographical features, involving negligible or no expansion o f existing or
former use. Any future development or change in use of the property would be subject to
separate environmental review in accordance with CEQA.
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Item 5g
FISCAL IMPACT
Budgeted: No Budget Year: 2025-26
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other: FEMA
Reimbursement
Funds from
2023 Storm
Events
$1,900,000 $1,687,500 $212,500
$10,000-
15,000
estimate
Total $1,900,000 $1,687,500 $212,500 $10,000-
15,000
The City has recently received reimbursement funds from the Federal Emergency
Management Agency (FEMA) associated with damages sustained to City infrastructure
during the January and March 2023 storms in the amount of $1.9 million which is in the
City’s Assigned Fund Balance. Additional, future reimbursement is also anticipated.
Because the timing and amount of reimbursement has been uncertain, receipt of funding
is no longer assumed in the budget and Council has discretion to direct the use of these
funds in accordance with Council policies and procedures.
Of the total $1,687,500 million recommended for appropriation, $1,387,500 would be
used for property acquisition. The remaining $300,000 would be used as needed to
maintain the property in its current state or for required improvements as an interim, non-
public use as previously described. Any changes in use would be subject to applicable
land use approvals, and any remaining funds would be returned to the City’s Unassigned
Fund Balance.
Annual ongoing costs will be determined after initial property maintenance occurs and
incorporated into the development of the 2027–29 Financial Plan but are currently
estimated at $10,000–15,000 per year including utilities.
ALTERNATIVES
The City Council has several alternatives it may choose. Council may identify another
funding source to complete the transaction. Council may identify a specific interim use
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Item 5g
and / or process for identification of a long-term use of the property at this time. Council
may also elect not to proceed with the final acquisition of the property.
ATTACHMENTS
A - Draft Resolution authorizing the acquisition of 975 Broad Street
B - Property Fact Sheet for 975 Broad Street
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R ______
RESOLUTION NO. _____ (2026 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
LUIS OBISPO, CALIFORNIA, AUTHORIZING THE ACQUISITION OF
REAL PROPERTY LOCATED AT 975 BROAD STREET, SAN LUIS
OBISPO, CALIFORNIA, IDENTIFIED AS ASSESSOR PARCEL NUMBER
002-412-010
WHEREAS, the City of San Luis Obispo has adopted policies and procedures for
the acquisition and management of real property for public purposes through its Financial
Management Manual, Section 475, Real Property Acquisition and Disposal Policy,
adopted by City Council Resolution No. 10175 (2010 Series); and
WHEREAS, the City of San Luis Obispo adopted the Downtown Concept Plan by
Resolution No. 10829 (2017 Series), which set forth a future vision for the downtown area
on a block-by-block basis, identifying commercial, residential, cultural, and public uses,
as well as a suite of transportation and circulation goals and policies; and
WHEREAS, property located at 975 Broad Street was recently listed for sale,
opening an opportunity for the City of San Luis Obispo to purchase the property in
furtherance of implementation of the Downtown Concept Plan, specifically community-
serving uses within Block 10 and the Cultural Arts District , as identified and described in
the Downtown Concept Plan; and
WHEREAS, following Council direction received in closed session on April 7, 2026,
a local real estate agent was engaged to learn more about the property, assess value
and current market conditions, facilitate due diligence inspection s, and negotiate an offer
to purchase the property; and
WHEREAS, the City has reached an agreement with the sellers to purchase the
property at a price of $1,387,500. This agreement is expressly contingent on an
affirmative finding of General Plan Conformity with the City’s Planning Commission in
accordance with California Government Code section 65402, which took place on May
13th, and final approval by the City Council; and
WHEREAS, if the transaction to acquire 975 Broad Street is successful, it is
envisioned that interim, non-public uses of the property and existing structure by the City
would be enacted to ensure basic maintenance and an ongoing, visible pattern of use to
ensure safety and prevent trespass and vandalism, followed by a future Council-directed
process engage with community stakeholders and partners to identify a long-term use for
the property.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
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Resolution No. _____ (2026 Series)
R ______
SECTION 1. Recitals. The recitals set forth above are hereby adopted as findings
of the City in approving the real property transaction described herein.
SECTION 2. Environmental Review. The City of San Luis Obispo is the lead
agency for the environmental determination necessary under the California
Environmental Quality Act and has determined that an action to acquire the real property
at 975 Broad Street does not constitute a “Project” under CEQA Guidelines Sec. 15378,
as it does not commit the City to a specific project or result in a direct or reasonably
foreseeable physical change in the environment. The action can be considered an
organizational or administrative activity of government that will not result in direct or
indirect physical changes in the environment (CEQA Guidelines § 15378(b)(5)). Once
acquired, an interim, non-public use of the property and existing structure by the City of
San Luis Obispo would also be exempt pursuant to Section 15301 of the CEQA
Guidelines, which applies to “the operation, repair, maintenance, permitting,
leasing, licensing, or minor alteration of existing public or private structures, facilities,
mechanical equipment, or topographical features, involving negligible or no expansion of
existing or former use.” Interim uses of the property will include operation, repair, and
maintenance of the structure and any changes to the structure or use will be negligible.
Because a long-term use has not yet been identified, there is no reasonably foreseeable
project that can be evaluated at this time.
SECTION 3. 975 Broad Street – Real Property Acquisition. The City Council
hereby approves the contingent purchase and sale agreement and authorizes the
purchase of real property located at 975 Broad Street San Luis Obispo, California,
identified as Assessor Parcel Number 002-412-101, based on the following findings:
a) The purchase of 975 Broad Street is in furtherance of the City’s Downtown
Concept Plan (2017), which, in turn, has been found consistent with various
City of San Luis Obispo policy documents including the Land Use and
Circulation Elements of the General Plan (2014).
b) The purchase of 975 Broad Street is consistent with the City of San Luis
Obispo’s policies and procedures for real property acquisition and disposal
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) and Resolution No. 10175 (2010
Series). Specifically, acquisition of property in the Downtown area and
identification of both interim and long-term uses are consistent with Section
475 acquisition and management real property.
c) The purchase price of $1,387,500 million for 975 Broad Street is supported
by ten comparable sales within the downtown and nearby surrounding area
and represents the midpoint of the expected value range for similar
properties, and therefore the expenditure to purchase the property at the
agreed upon contract price represents a prudent use of City assets.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
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Resolution No. _____ (2026 Series)
R ______
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 26.
___________________________
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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975 BROAD STREET FACT SHEET
Prepared by: Community Development Department
Prepared for: City Council
ADDRESS: 975 Broad Street (R-3-H)
SUMMARY
1.1 Site and Setting
The project site is a residential parcel at the edge of the Downtown Commercial (C-D-H) zone,
across Broad Street from the Mission and Mission Plaza (see Figure 1, Aerial View). The parcel
is approximately 5,000 square feet and contains a one-story 1,809 square foot residence. The
adjacent property located north of the site is zoned Medium-High Density Residential Mixed Use
(R-3-H-MU), and the two properties located south of the property are zoned Public Facilities (PF-
H) (see Figure 2, Zoning Map).
The property is located within the Historical Preservation (H) Overlay Zone and is located adjacent
to one Mills Act property (Manderscheid House, 963 Broad) on the north property line, and the
Landmark Historic Carnegie Library (History Center of San Luis Obispo County, 696 Monterey
Figure 1 - Aerial View Figure 2 - Zoning Map
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975 Broad St Page 2
Fact Sheet –March 25, 2026
Street) on the south property line.
1.1 Allowed Uses
975 Broad Street is identified in the Downtown Concept Plan as a potential Community Serving
use, which includes schools, places of worship, museums, and government facilities , or Hospitality
use, which includes hotels and convention/conference centers
The allowed uses on the R-3 zoned site are as follows, those in italics could be considered
Community Serving/Hospitality uses:
Allowed Minor Use Permit Required Conditional Use Permit
Required
Community Garden
Religious Assembly Facilities
Bed and Breakfast
Establishment
Park and Recreation
Facilities
Schools – Primary and
Secondary
Hostel
Homeless Shelter
Continuing Care Community
Boarding House
Single-Unit Dwellings,
Detached
Elderly and Long-Term Care
Hospice In-Patient Facility
Figure 3 - Downtown Concept Plan
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975 Broad St Page 3
Fact Sheet –March 25, 2026
Allowed Minor Use Permit Required Conditional Use Permit
Required
Multi-Unit Residential
Residential Care Facilities – 7
or More Residents
Cemetery
Caretakers Quarters
Day Care Center
Safe Parking
Family Day Care (Small and
Large)
Convenience Store
Mobile Home Park
Educational Conference
Housing (Temporary Use)
Residential Care Facilities – 6
or Fewer Residents
Supportive and/or
Transitional Housing, with
On- or Off-Site Services
1.2 Medium-High Density Residential Zone Development Standards
The R-3 zone is intended to provide housing opportunities for attached dwellings, with common
outdoor areas (Municipal Code Section 17.20.010). The R-3 zone has a maximum residential
density of 20 units per net acre, with three density units allowed on the parcel regardless of acreage.
The maximum building height is 35 feet, with a maximum lot coverage of 60% (Municipal Code
Section 17.20.020). Based upon the Municipal Code, this site is eligible for up to 3 density units
(DU) as currently zoned.
1.3 Density
The site could be developed with residential units in a variety of ways, with the potential to add
three 2-bedroom units, four 1-bedroom units (between 600 and 1,000 square feet), or another
combination within the allowed density. As specified in Municipal Code Section 17.70.040,
density units are calculated based on the net area of a property subject to thresholds established
per zone. Density units in the R-3 zone as calculated as follows:
Dwelling Type Density Units
Studio and one-bedroom dwellings under 600 square feet
.50
One-bedroom dwellings between 600 and 1,000 square feet
.66
Two-bedroom dwelling
1.00
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975 Broad St Page 4
Fact Sheet –March 25, 2026
1.4 Historical Background
975 Broad St. is a “Local Register” historic resource and was added to the City’s inventory of
historic resources in 1983. Local Register Resources are defined as “an individual local
designation that may be applied to a historic resource that has been found significant at the local
level under one or more of the criteria described in Section 14.01.060, and that retains sufficient
integrity to convey its significance.” Based upon the Sanborn Map from April 1926 (Figure 4), it
appears that prior to the existing residence the parcel contained a smaller residential unit. It does
not appear that any historical uses of interest were located on the property, although a complete
understanding of the property’s historicism is not yet known.
The property is included in the historical overlay zone, which serves to identify and preserve and
enhance the setting of historical resources so that surrounding land uses and structures do not
detract from the historic or architectural integrity of designated historical resources (Municipal
Code Section 14.01.080). For the property to be re-developed or significantly altered the property
would have to be evaluated for potential delisting or any new development or alterations would
have to be found consistent with the City’s Historic Preservation Ordinance including the Secretary
of Interior Standards and Historic Preservation Program Guidelines.
Three-bedroom dwelling
1.50
Dwelling with four or more bedrooms 2.00
Figure 4 - Sanborn Map (April 1926)
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