DATE: 02/04/2026
TO: Honorable Mayor and City Council Members
FROM: Economic Development Department
2026-41
REQUEST FOR CITY COUNCIL ACTION
SUBJECT:
RESOLUTION DECLARING CERTAIN REAL PROPERTY AT THE NORTH MALL AS
EXEMPT FROM THE SURPLUS LAND ACT REGULATIONS
EXECUTIVE SUMMARY:
This staff report asks Council to declare the North Mall properties exempt from the Surplus Land Act under Government Code 54221(f)(1)(G) and adopt resolution 2026-007. This exemption will advance the design and redevelopment of the North Mall as a catalyst project in the Downtown Revitalization Plan.
RECOMMENDED ACTION:
That the City Council:
a. Adopt Resolution 2026-007 declaring that certain parcels of real property located at the North Mall (northeast corner of main and sixth streets) are no longer necessary for the city’s use and are exempt surplus land under the surplus land act
b. Authorize the City Manager, or his designee, to follow applicable procedures related to the disposition of exempt surplus properties pursuant to the Surplus Land Act.
BACKGROUND & HISTORY:
Since 2004 the City has been working to acquire properties within the North Mall, to reassemble the fragmented ownership, and facilitate the redevelopment and revitalization of this key downtown property. After successful negotiations and acquisitions, the City now has purchase contracts or owns all but one property within the North Mall site that were designated for acquisition. These property assembly efforts have now yielded a site of sufficient size to deliver a catalytic project to assist in the revitalization of downtown.
On November 19, 2025, during discussion of North Mall development options, the City Council requested additional information related to Surplus Land Act (SLA) and provided additional direction to staff on the design of the planned redevelopment project. At the December 3, 2025 City Council meeting, staff provided responses to the City Council’s questions and direction, as well as provided additional information on the SLA as it relates to the North Mall redevelopment project.
At the January 7, 2026 City Council meeting, staff presented additional information on the SLA, guidance from HCD, and highlighted an exemption opportunity by pursuing a mixeduse redevelopment project that includes at least 300 residential units, where 25% of those units were designated as affordable. The City Council directed staff to pursue an exemption for the North Mall redevelopment project pursuant to Government Code Section 54221(f)(1)(G). Pursuing the exemption allows the City to retain the vision for the North Mall as a vibrant mixed-use site and reduces the uncertainty of the Surplus Land Act (SLA) process, which would likely yield a higher residential count, without design and operation controls, and would therefore not align with the goals of the Downtown Revitalization Plan.
ANALYSIS:
The SLA requires that a local agency declare property to be “surplus land” before taking an action to sell or enter into a long- term lease for an agency owned property.
Under the SLA, when disposing of surplus land, a local agency is required to issue a Notice of Availability (NOA) to certain entities for affordable housing, parks and recreation, school facilities, and other public uses, allowing 60 days for responses, and a 90-day period of good faith negotiations with all proposers before disposing of the property.
However, the SLA also allows for exceptions to this standard process for parcels and projects that qualify as and are declared by the local agency to be “exempt surplus land”.
Property declared to be “exempt surplus land” may be disposed of outside of the SLA’s NOA process.
There are various exemptions for different proposed uses. The characteristics of the envisioned North Mall project qualify the site for an exemption pursuant to Government Code Section 54221(f)(1)(G), which relates to projects of a certain size, development intensity, and operational characteristics.
The criteria to qualify for the exemption is as follows:
Surplus land that is subject to a local agency’s open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or non-adjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
As directed by the City Council, the North Mall redevelopment project will provide at least 300 residential units within a mixed-use development and at least 25% of those residential units will be designated as affordable, all on a site that is less than 10 acres in size. These three key project elements meet the criteria described in GC 54221(f)(1)(G) and therefore qualify this site for an exemption from the SLA.
Adoption of Resolution No. 2026-007 would formally declare the properties exempt surplus land. The City’s determination will be submitted to the California Department of Housing and Community Development (HCD) for their review and determination as required by law.
FINANCIAL IMPACT:
There is no financial impact associated with the declaration of the parcels as exempt surplus property.
ENVIRONMENTAL ANALYSIS:
This action before Council is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the Guidelines for CEQA, which states that a project is exempt from CEQA if the activity is covered by the common sense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Resolution No. 2026-007 declares that the North Mall properties are exempt surplus land and there is no possibility that this action will have a significant effect on the environment. Therefore, no environmental analysis is required.
PREPARED BY: ASHLEY ZARAGOZA, ECONOMIC DEVELOPMENT MANAGER REVIEWED BY: JOEL BELDING, ECONOMIC DEVELOPMENT DIRECTOR ATTACHMENTS:
1. Exhibit 1 – Resolution No. 2026-007