City Owned Property Disposition Discussion
City Council- October 22, 2024
Tobi Liebermann, Housing and Economic Development Manager City Owned Property Disposition Report
City currently owns and manages 3 residential properties acquired at time of Redevelopment Agency (RDA) dissolution in 2012:
• 730 El Camino – group home for developmentally disabled adult residents.
• 503 Crest View Ave - 6 Bed Intermediate Care nursing home for the developmentally and physically disabled residents (ICF/DD-Nursing)
• 1000 O’Neill Ave (Emmett House) Moderate Income duplex City sold other residential assets in 2022 (2 condos and 1 SFR) 2 730 El Camino Real
3 • Built around 1900
• 0.17 acres
• Group home
• Operated since 1999 by
Kainos, a non-profit
organization
• Enables developmentally
disabled residents to live
independently
• Total monthly rent to
City is $1,500
• Deferred maintenance
estimated at $110,000
503 Crest View Ave
4 • Built in 1953
• 0.19 Acres
• Group home
• Operated by Family
Home, Inc.
• 6 long term residents
with disabilities
• ICF/DD-Nursing
• Monthly rent to City is
$1,000
• Deferred maintenance
estimated at $160,000
1000 O’Neill Ave (Emmett House)
5 • Original home built in
1885
• 0.3 acres
• Moved to current location
in 2008
• Converted to Duplex in
2011
• 2 Current Households
• Moderate Income
Restrictions (120% of AMI)
• Total monthly rent about
$4,600 for both units
• Deferred maintenance
estimated at $160,000
Current Challenges with Properties
6 • City staff not well equipped to manage residential assets given competing priorities
• Ongoing operating expenses exceed current revenue
• Properties have significant deferred maintenance and
repair costs
• Limited opportunities to increase revenue due to affordable housing/social service uses
• Properties carry certain liabilities with ownership, e.g. HVAC breakdowns
Benefits of Divestment
7 Divesting from the properties would allow the City to:
• Prioritize the use of our Affordable Housing Fund to
support the development of new local affordable housing opportunities, in greater alignment with the City Strategic Plan and Council priorities
• Recover staff time currently directed to overseeing the property management
• Reduce legal liability associated with ensuring that each property’s conditions do not pose a risk to health or safety of the tenants
Recommendation – 503 Crestview
8 • Transfer ownership to Family Homes, the existing operator, or to a non-profit owner willing to lease the property back to its current operator.
• Further investigation and negotiations are needed to
determine which option is optimal.
• Medically fragile residents, so avoiding displacements of the current residents is important.
• Continuity of the use would be ensured via deed restriction.
Recommendation – 730 El Camino
9 • Staff recommends transferring ownership to its current nonprofit operator, Kainos. • This option would avoid displacing the property’s current special needs residents.
• Kainos has expressed an interest in assuming ownership of the property and owns many of the other properties that they operate as group homes within the County.
• Continuity of the use would be ensured via deed restriction.
Recommendation – 1000 O’ Neill
10 • Historic status of building provides protections against significant modifications or future demolition.
• Staff recommends either:
A. Transferring ownership of the property to a non-profit through a request for proposals (RFP) process
• Based on preliminary conversations with nonprofits, most likely use would be as a group home • Lack of interest in operating as a rental BMR
property given small scale
• Continuity of the use would be ensured via deed
restriction.
B. Selling the property at market rate, with proceeds
going to the Affordable Housing Fund for new
affordable housing developments.
Disposition Process
11 • Should the Council direct staff to pursue the disposition of one or more properties, the City must follow the specific process outlined under the State Surplus Lands Act (SLA) • Properties likely exempt under SLA due to size
• Staff required to prepare “reuse” appraisal based on
restricted uses.
• Reuse appraisal is different than fair market appraisal, takes into account use restrictions on property.
• Determine potential RFP process as outlined in Staff Report (most likely for Emmett House)
• All proceeds from any sale must go to affordable housing fund – due to original source of funding .
City Council Direction
1. Interest in exploring the disposition of one or more of the properties
2. Preferences on the options for the potential disposition of the Emmett House property
12 Questions?
13