DEPARTMENT Real Estate Services Division AGENDA NO. 13
MEETING DATE April 12, 2022
APPROVAL:
COMMISSION
SECRETARY Donna Hood
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Real Estate Agreement (Agreement for Sale of Real Estate): Regular Calendar Deputy General Manager: Michael Carlin
Real Estate Director: Rosanna Russell
Adopt a Declaration of Surplus Property and a Declaration of Exempt Surplus Pro perty pursuant to the California Surplus Land Act
Summary of
Proposed
Commission Action:
Adopt findings declaring as surplus to the S an Francisco Public Utilities Commission’s (SFPUC) utility needs under Charter Section 8B.121 and as “surplus land” and “exempt surplus land” under the California Surplus Land Act (Cal. Gov’t Code Section 54220 et seq.), approximately 10,925 square feet of real property designated as portions of Assessor’s Parcel No. 104-28- 066 in the City of Sunnyvale, Santa Clara County, California (P roperty, identified as P arcel 3), owned by the City and County of San Francisco (City), under the jurisdiction of the SF PUC; recommend that the Board of Supervisors authorize the City’s Director of Property to execute a quitclaim deed conveying Parcel 3 to Santa Clara Valley Water District ( “Valley Water”); and authorize the General Manager to execute an Agreement for Sale of Real Estate ( Sale Agreement ) upon approval from the Board of Supervisors and Mayor to convey Parcel 3 to Valley Water for $33,000.
Background: The City, through the SFPUC, owns the Property adjacent to Manzano Way at Oak Creek Way, east of Calabazas Creek in the Ci ty of Sunnyvale, Santa Clara County, and designated as a portion of Santa Clara County Assessor’s Parcel Number 104-28-066. A portion of the Property is improved with (1) a concre te ramp structure that is a segment of a pedestrian/bicycle trail; and (2) a segment of a Valley Water service road extending north and south.
The SFPUC proposes to sell the Property to raise needed funds for the Water Enterprise. The SFPUC has no utility use for the Property , which was deemed unde rutilized per an SFPUC statemen t of underutilizatio n for the Property, dated December 18, 2015, signed by the Assistant General Managers of the Water, Wastewater, and Power Enterprises.
The Property is “surplus land,” as defined in California Government Co de Section 54221(b), because it is owned in fee simp le by City and not Agreement: Authorize Sale of Manzano Way Parcel 3 Property in Sunnyvale, California Commission Meeting Date: April 12, 2022
necessary for the City’s use.
The Property is “exempt surplus land,” as defined in California Government Code Section 54221(f)(1)(D), because it is surplus land that City is transferring to another local agency for the agency’s use . Under Section 23.3 of the Administrative Code, the City may convey the Property to Valley Water without a competitive bidding process if the Board of Supervisors determines that a competitive process “is impractica l, impossible, or is otherwise not in the public interest.”
In this case, a competitive bidding process is impractical and otherwise not in the public int erest because the sale of the Property to Valley Water will avoid the expense, time, effort, and risk of eminent domain litigation where Valley Water intends to continue use of Parcel 3 for Valley Water’s district purposes, including accessing their nearby facilities and the SFPUC does not wish to continue owning and licensing property that it does not require for its operations.
The Property is subject to three re vocable permits with Valley Water’s predecessor in interest, the Santa Clara Coun ty Flood Cont rol and Conservation District, and one revocable permit with the City of Sunnyvale (together, the Permits). City and Valley Water acknowledge that, aside from the permit to the City of Sunnyvale, the Property is under the possession and control of Valley Water, as provided in the Permits. Pending approval of the sale, City will revoke the Permit to the City of Sunnyvale prior to closing the sale in accordance with the Sale Agreement.
As of February 25, 2021, a City-retained MAI appraiser, Clifford Advisory, LLC, valued Parcel 3 at $33,000, and City’s Director of Property approved the appraisal on May 26, 2021. As of December 20, 2021, Clifford Advisory, LLC, issued an Appraisal Update Report confirming that the value of Parcel 3 has n ot changed. On January 19, 2022, City’s Director of P roperty approved the A ppraisal Update Report. Valley Water agreed to pu rchase Parcel 3 for $33,000 pursuant to the terms of the Let ter of Intent , dated April 7, 2021, and the Sale Agreement.
The City, through the SFPUC, inte nds to sell Parcel 3 to Valley Water on an “as is-where is basis.”
The proposed conveyance of Parcel 3 is subject to approval by the Board of Supervisors and the Mayor.
Environmental
Review:
This sale of surp lus prop erty by the SFPUC does not constitut e a project under California E nvironmental Quality Act (CEQA) Guidelines Section 15378 because there would be no physical change in the environment.
Result of Inaction: A delay in adopting the attached res olution could deny the SFPUC the opportunity to sell Parcel 3 and further delay the SFPUC’s receipt of revenue from the sale of Parcel 3 for the Water Enterprise’s Fun d Balance, which supports the Water Enterprise’s core mission and provides reserves requi red under the debt (bonds) indenture.
Agreement: Authorize Sale of Manzano Way Parcel 3 Property in Sunnyvale, California Commission Meeting Date: April 12, 2022
Budget & Costs: City, through the S FPUC, proposes to sell Parcel 3 for $33,000. Valley Water will pay all escrow fees and recording charges and any other costs and charges for the sale.
Description of Sale
Agreement:
Parties to Agreement
for Sale of Real Estate:
City and County of San Francisco, acting
through the SFPUC, and Santa Clara Valley
Water District.
Purpose: The sale of approximately 10,925 square feet of land partially improved with a concrete ramp
structure that is a segment of a
pedestrian/bicycle trail, and also contains a
segment of the Santa Clara Valley Water
District’s service road extendi ng north and
south.
Location: The Property is adjacent to Manzano Way at
Oak Creek Way, east of Calabazas Creek in the
City of Sunnyvale, Santa Clara County, State of
California, and designated as a portion of
Santa Clara County Assessor’s Parcel
Number 104-28-066.
Effective Date: The date on which each of the following has been completed: (a) the SFPUC has adopted a
resolution approving and authorizing the Sale
Agreement; and (b) the City’s Board of
Supervisors and Mayor have adopted or
enacted a resolu tion or an ordinance approving
and authorizing the Sale Agreement; and (c) the
Sale Agreement has been mutuall y executed
and delivered by both parties.
Closing Date: The date that i s (a) not more than thirty (30) days after the Effective Date or (b) such earlier
date and time as Valley Water and the SFPUC
may mutually agree upon in writing.
Recommendation: SFPUC staff recommends that the Commission approve the sale of Par cel 3 to Valley Water for $33,000.
Attachments: 1. Agreement for Sale of Real Estate
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The City and County of San Francis co (City) owns approximately 10,925 square feet of real property designated as portions of Santa C lara County Assessor’s Parcel No. 104-28-066 in Sunnyvale, California (Property, identified as Parcel 3); and WHEREAS, A portion of the Property is improved with a concrete ramp structure that is a segment of a pedestrian/bicycle trail and also contains a segment of the Santa Clara Valley Water Distri ct’s ( Valley Water ) service road extending north and south providing access to Valley Water facilities; and
WHEREAS, The SFPU C proposes to sell the Property to raise needed funds for the SFPUC’s Water Enterpri se. The SFPUC executed a statement of underuti lization for the Property, dated December 18, 2015, signed by the Assistant General Managers of the Water, Wastewater, and Power Enterprises; and
WHEREAS, The Property is “surplus land,” as defined in Californ ia Government Code Section 54221(b), because it is owned in fee simple by City and not necessary for City’s use; and WHEREAS, The Property is “exempt surplus land,” as defined in California Government Code Section 54221(f)(1)(D), because it is surplus land t hat City is transferring to another local agency for the agency’s use; and
WHEREAS, Under Section 23.3 of the Administrative Code, the City may convey the Property to Valley Wat er without a competitive bidding process if the Board of Supervisors determines that a competitive process “is impractical, impo ssible, or is otherwise not in the public interest;” and
WHEREAS, In this case, a competitive bidding process is impr actical and otherwise not in the public interest because the sale of the Property to Valley Water will avoid the expen se, time, effort, and risk of eminent domain litigation where Valley Water intends to continue use of Parcel 3 for Valley Water’s district purposes, including accessing their nearby facilities and the SFPUC does not wish to continue owning and licensing pr operty that it does n ot require for its operations; and
WHEREAS, As of February 25, 2021, a City-retained MAI appraiser, Clifford Advisory, LLC, valued the Property at $33,000, and City’s Director of Property approved the appraisal on May 26, 2021. As of December 20, 2021, Clifford Advisory, LLC, issued an Appraisal Update Report confirming that the value of Parcel 3 has not changed. O n January 19, 2022, City’s Director of Property approved the Appraisal Update Report; and WHEREAS, Valley Water has agreed to purchase the Property for $33,000 pursuant to the terms of the Agreement for Sale of Real Estate (Sale Agreement); and
WHEREAS, The City, through the SFPUC, will sell the Property to Valley Water on an “as is-where is basis;” and
WHEREAS, This sale of surp lus property by the SFPUC does not constitute a project under California Environmental Quality Act (CEQA) Guidelines Section 15378 because there would be no physical change in the environment.; now, therefore, be it RESOLVED, That this Commission hereby declares the Property surplus to the SFPUC’s utility needs in accordance with Section 8B.121(e) of the City Charter; and, be it FURTHER RESOLVED, That this Commission finds, in consideration of the foregoing, that the Property is “surplus land”, as defined in California Government Code Section 54221(b) because it is owned in fee simple by City and not necessary for City’s use; and, be it FURTHER RESOLVED, That this Commission finds, in consideration of the foregoing, that the Property is “exem pt surplus land” as defined in Government Code Section 5422l(f)(1)(D) because it is surplus land that City is transferring to another local agency for that local agency’s use; and, be it
FURTHER RESOLVED, That this Commission asks the Board of Supervisors to determine, in accordance with Section 23.3 of the Administrative Code, that a competitive bidding process is impractic al and otherwise not in the public inter est because the sale of the Property to Valley Water will avoid the expense, time, effort, and risk of eminent domain litigation where Valley Water intends to continue use of Parcel 3 for Valley Water’s district purposes, including accessing their nearby f acilities and the SFPUC does not wish to continue owning and licensing property that it does not require for its operations; and, be it FURTHER RES OLVED, That this Commission hereby approves the terms and conditions of the Sale Agreement; and, be it
FURTHER RESOLVED, That this Commission hereby authorizes the SFPUC General Manager to execute the Sal e Agreement upon approval from the Board of Supervisors and Mayor; and, be it
FURTHER RESOLVED, That this Commission hereby ratifies, approves, and authorizes all actions heretofore taken by any City official in connection with the Sale Agreement; and, be it FURTHER RESOLV ED, That, upon approval by City’s Board of Supervisors and the Mayor, this Commission authorizes and directs City’s Director of Property to exec ute the quitclaim deed to Valley Water; and be it
FURTHER RESOLVED, That this Commission her eby authorizes the City’s Director of Property and/or the SFPUC General Manager to enter into any amendments or modifications to the Sale Agreement, including without limitation, the exhibits, that City’s Director of Property and/or the General Manager determ ines, in consulta tion with the City Attorney, are in the best interests of City; do not materially increase the obligations or liabilities of City; are necessary or advisable to effectuate the purposes and intent of the Sale Agreement or this resolution; and are in compliance with all applicable laws, including the City Charter.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of April 12, 2022.
Secretary, Public Utilities Commission