DATE: September 2, 2026
TO: Honorable Mayor and City Council Members
FROM: Economic Development Department
2026-033
REQUEST FOR CITY COUNCIL ACTION
SUBJECT:
RESOLUTION DECLARING FIVE DOWNTOWN PROPERTIES AS EXEMPT FROM
THE SURPLUS LAND ACT REGULATIONS
EXECUTIVE SUMMARY:
This staff report asks the City Council to declare certain the North Mall properties exempt from the Surplus Land Act under Government Code 54221(f)(1)(G) and adopt resolution 2026-093. 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 2026-093, 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 their 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 for the redevelopment of a mixed-use project on this key downtown property. The City now owns all of the properties within the North Mall site that were designated for acquisition and redevelopment.
The City Council has provided significant guidance on the design and composition of this important redevelopment project. On November 19, 2025, during discussion of North Mall development options, the City Council recieved information related to the state statute that governs the disposition of City owned property, the Surplus Land Act (SLA). During the December 3, 2025 City Council meeting, staff provided additional information on the SLA, specifically as it relates to the North Mall redevelopment project. At the January 7, 2026 City Council meeting, staff presented guidance from the California Department of Housing and Community Development (HCD), including a path to accomplish the Council’s objective of retaining control over the design and function of the site by pursuing an exemption pursuant to Government Code Section 54221(f)(1)(G). That exemption can be used when pursuing a mixed-used development that includes at least 300 residential units, with 25% of those units designated as affordable, on a site between 1 and 10 acres in size.
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 SLA process. Without the exemption, the area would likely yield a higher residential count, without any design or operation controls, and likely 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 action to sell or enter into a long-term lease for an agency owned property. At the February 4, 2026 City Council Meeting, City Council approved Resolution 2026-007, which identified 29 City owned parcels in the North Mall as exempt surplus land.
Adoption of Resolution No. 2026-093 would formally declare five additional City owned properties in the North Mall as exempt surplus land. These five parcels, presented in Exhibit 1, were not included in Resolution 2026-007 because three parcels are likely to become future public right-of-way dedications, and the remaining two parcels, 462 and 496 Corona Mall, were not owned by the City at the time.
HCD has recommended that the City declare, as exempt surplus land, any remaining City owned parcels that are planned to be included in the North Mall project. This action will allow HCD to evaluate the appropriateness of the SLA exemption to the entire project site without having to return for a determination for any remnant parcels.
Resolution No. 2026-093 will complete the SLA required designation of all city owned properties in the North Mall and will be submitted to HCD for its 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. 2026-093 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. 2026-093