City Owned Property Disposition Update
City Council - October 28, 2025
Kathy Kleinbaum, Assistant City Manager
Background
• City currently owns and manages 3 small residential properties originally purchased by the Redevelopment Agency:
o 730 El Camino Real – group home for developmentally disabled adult residents
o 503 Crest View Avenue - 6 Bed Intermediate Care nursing home for developmentally and physically disabled residents (ICF/DD-Nursing) o 1000 O’Neill Avenue (Emmett House) – Duplex, previously leased to moderate income tenants, currently vacant
• City also owns a small vacant parcel at 780 El Camino Real • City previously sold other residential assets in 2022 (2 condos and 1 SFR) and used proceeds to fund new affordable housing developments 2 Current Challenges with Properties
3 • 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
• Limited staff resources to oversee ongoing maintenance and upkeep • Properties carry liabilities with ownership, if not well-maintained Prior Council Direction
4 • October 2024 – City Council approved exploration of disposition of the 3 residential properties
• Transfer 730 El Camino Real to non-profit operator
• Transfer 503 Crest View to either for-profit operator or non-profit for lease back to operator
• Options for Emmett House
A. Sale for market value to fund future new affordable
construction
B. Transfer to non-profit for housing use
• February 2025 – City Council declared the properties as Exempt Surplus Land under State Surplus Lands Act
Progress to Date on Disposition
5 • Market rate appraisals completed
• Reuse (restricted use) Appraisals in process
• Loan forgiveness granted for existing $260,000 County loan for 730 El Camino Real
• Drafting potential deed restrictions
• Due diligence discussions underway for property transfers – specific updates for each property
Remaining Steps in Process:
• Public Hearing for adoption of Reuse Appraisal and approval of Purchase and Sale Agreement
730 El Camino Real
6 • Group home
• Operated since 1999 by Kainos
• Enables developmentally disabled
residents to live independently
• Total monthly rent to City is $1,500
• Deferred maintenance estimated at
$113,000
• Market value- $2.17 million
• Draft Reuse value - $0
Staff Recommendation – 730 El Camino Real
7 • Kainos has capacity to assume ownership of the property and cover deferred maintenance expenses
• Staff recommends property be transferred to Kainos with deed restrictions to require current use continue or property be transferred to another non-profit for a similar use
• Property to be transferred for $1
• Public Hearing later this Fall/Early 2026
503 Crest View Ave
8 • Skilled nursing facility
• Operated by Family Home, Inc.
(private for-profit business)
• 6 long-term residents with physical
and developmental disabilities
• Monthly rent to City is $1,000
• Deferred maintenance estimated at
$160,000
• Market value- $1.9 million
• Draft Reuse value - $0
Current Update – 503 Crest View Avenue
9 • Staff is exploring an operating partnership between non-profits Brilliant Corners and the Golden Gate Regional Center (GGRC)
• Property to be transferred to Brilliant Corners and leased back to current operator, Family Homes
• Continuity of the use would be ensured via deed restriction • Brilliant Corners and GGRC would be responsible for ensuring long-term operations
• GGRC and Brilliant Corners have applied for State funding for property improvements, above and beyond just deferred maintenance – would ensure long-term viability of the property
• Property would be transferred for $1
• Families of residents at property support this model
1000 O’Neill Avenue (Emmett House)
10 • Original home built in 1885
• Originally located on Ralston Avenue
• Moved to current location in 2008
• Converted to Duplex in 2011
• Rental property for moderate-income
residents
• Currently vacant
• Deferred maintenance estimated at
$160,000
• Market Value - $2.23 million
Current Update - 1000 O’ Neill Avenue
11 • Staff recommends selling the property at market value – majority of Council supported this option in October 2024
• Proceeds would go to the Affordable Housing Fund for new affordable housing developments
• Loss of 2 affordable units but funds would leverage development of 100+ net new units or fund preservation and protections for existing housing stock
• City’s Affordable Housing Fund currently very limited due to lack of new commercial development
• Historic character to be preserved through deed restrictions limiting exterior modifications or future demolition
780 El Camino Real
12 • Vacant Parcel
• Acquired in 2008 for Affordable Housing
• Approximately 0.12 Acres
• Housing Element Inventory Site
• Challenging development site given size and slope of parcel • Possible opportunity for consolidation with adjacent parcel Staff Recommendation – 780 El Camino Real
13 • City must go through Surplus Lands Act process prior to any disposition • Site is categorized as Exempt Surplus Lands due to being less than ½ acre
• City still required adoption of resolution declaring land as surplus • Allows City flexibility for future disposition if desired • Does not commit City to disposition or any future action • Once approved, resolution must be reviewed and approved by HCD (60-day review period)
• Any future dispositions options will be brought forward to City Council for review and approval
Recommended City Council
Direction and Actions
1. Direct staff to complete transfer of 730 El Camino Real to Kainos with deed restrictions to ensure continued use
2. Direct staff to pursue transfer of 503 Crest View Ave to Brilliant Corners in operating/funding partnership with GGRC, continuation of Family Homes as operator with deed restrictions for continued use.
3. Direct staff to pursue market sale of 1000 O’Neill with deed restrictions for alteration of historic exterior/façade
4. Approve resolution declaring 780 El Camino Real as Exempt Surplus Land per the Surplus Lands Act
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