1 STAFF REPORT
DATE: August 22, 2023
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Department Director BY: Simone McFarland, Assistant Community Development Director
SUBJECT: Approval of the Sale of City-Owned Property (APN 2463 -015-902) to Adjacent Homeowner at 2600 Vanowen Street
RECOMMENDATION
1) Find that the sale of the Property at 2600 Vanowen St (Attachment 1) is exempt from California Environmental Quality Act ( CEQA) pursuant to CEQA Guidelines Section 15312 - Surplus Government Property Sales
2) Approve the Purchase and Sale Agreement (Attachment 2), selling the Property to the adjacent homeowner at 2600 Vanowen Street
BACKGROUND
The property located at 2600 Vanowen Street (Property) is a small, triangular-shaped remnant parcel of land that is adjacent to prospective purchaser’s single-family residence at 2600 Vanowen Street, which is situated at the corner of Vanowen Street and Frederic Street (Attachment 1). The homeowner at 2600 Vanowen Street made an unsolicited offer to purchase the Property. This sale request is supported by the fact that the City has no specific use for the Property nor realizes any benefit from its ownership.
Upon the request to purchase the remnant property, staff asked the potentially affected departments if there were concerns related to a potential sale of the Property. Concerns were not reported and subsequently a real estate appraisal was obtained to det ermine the Property’s value. The Property description is below:
Property Description
Assessor’s Parcel Number: 2463-015-902
Location: Southwest corner of Vanowen Street and Frederic Street Size: Width 26’±; length 125±; 0.0375 acres or 1,633.5 square feet
COMMUNITY
DEVELOPMENT
2 DISCUSSION
Appraised Value
The appraiser used an off-site inspection review of market data and a valuation analysis to determine a market value of $91,500 for the Property (Attachment 3).
Staff shared this value with the homeowner who then made an unsolicited offer to purchase in the amount of $95,000 that includes fees for escrow, title, and a partial offset for appraisal fees. Title and escrow are estimated to cost $1,600. The appraisal fee was $5,800.
Staff met with Council in closed session on May 9, 2023, to discuss price and terms of payment for the Property based on the appraised value and the unsolicited offer and to recommend accepting the offered price with the considerations discussed below.
Potential Liability
There are two very large trees situated on the existing property that are nearing the end of their life expectancy and have the homeowner concerned about them falling on the house. If the City were to continue to own the P roperty, these large trees would need extensive trimming to reduce the City’s potential liability.
The homeowner would like to eventually remove the trees at an approximate, estimated cost of $2,100. The sale of the property would relieve the City from this potential cost and liability.
Encroachments
Currently, there are private encroachments that exist on the Property. These include a portion of a previously permitted detached garage, a portion of a concrete driveway, grass landscaping, and chain link fencing. The sale of the property would remove encroachment concerns and relieve the City of any additional liabilities associated with these encroachments.
Intrinsic Value
The property does not have any intrinsic value to the City. There are no underground utilities or street/sidewalk improvement improvements located on this parcel. The City would retain the strip of land adjacent to the Vanowen Street side of the Property that includes the sidewalk.
One-time Revenue
The sale of the property would bring one- time General Fund revenue to the City. This would be approximately $87,600 after fees and closing costs.
Surplus Land Act (SLA) - Declaration of Exemption
To complete the sale, Council is required to follow SLA requirements. The sale of the Property was declared exempt from the SLA by Council Resolution # 23-29,439 (Attachment 4) on the basis it satisfies the exemption criteria as set forth in Government Code section 54221(f)(1)(B) and SLA Guidelines, section 103(b)(3)(B):
3 “(A) Small Surplus Land Parcels sold to an owner of contiguous land that is: (i) less than 5,000 square feet in area; (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less; or (iii) has no record access, is less than 10,000 square feet in area, and is not contiguous to land owned by a state or local agency that is used for open-space or low and moderate income housing purposes.”
The City submitted the adopted resolution to the California Department of Housing and Community Development (HCD) on June 27, 2023, in compliance with Section 400(e) of the SLA Guidelines. Staff received HCD’s written reply on July 24, 2023, confirming that the Property is “exempt surplus land” and the City is permitted to proceed with the sale of the Property (Attachment 5).
ENVIRONMENTAL REVIEW
The Property is exempt from CEQA pursuant to CEQA Guidelines Section 15312 - Surplus Government Property Sales. The Property has been declared exempt surplus property pursuant to the Surplus Land Act and is not located in an area of statewide, regional, or areawide concern identified in CEQA Guidelines Section 15206(b)(4).
FISCAL IMPACT
There were no fiscal impacts to the General Fund by declaring 2600 Vanowen Street as exempt from the SLA Guidelines at the June 25, 2023, Council meeting. However, should Council approve this sale, as requested above, a budget appropriation will be made to account 001.CD000.58999 to accept funds from the sale. The exact appropriation amount will be determined after the sale of the property has closed and all related fees have been processed as summarized in the “Discussion” section of this staff report.
CONCLUSION
The sale of this Property relieves the City of potential future liabilities while also creating approximately $87,600 in one-time General Fund revenue. The Property has no intrinsic use nor utility for the City and the sale meets the declaration of exemption under the Surplus Land Act Guidelines.
ATTACHMENTS
Attachment 1 – Property Description
Attachment 2 – Purchase and Sale Agreement
Attachment 3 – Appraisal (Effective Date 11/30/22)
Attachment 4 – Resolution No. 23-29,439 Approving the Sale of the Property Attachment 5 – Exemption Letter from HCD