Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: MEMORANDUM OF UNDERSTANDING, SANTERO WAY
APARTMENTS
Date: January 13, 2026
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council authorize the City Manager by motion to execute a nonbinding memorandum of understanding with South Rock Ventures, LLC regarding the sale of a City-owned property on Santero Way.
Background
The City of Cotati owns a small property on Santero Way (APN 144-320-033) without an address, for which there is no planned public purpose. The location of this property is indicated on the attached map.
The City recently completed an update to the Santero Way Specific Plan (SWSP) for the area (February 2025), which included extensive input from our community and was unanimously supported by our Planning Commission and City Council. The subject property was included in the previous Cotati Station entitlement to facilitate development, extend Depot Way for the required secondary emergency access and generally further community goals for the SWSP area and staff continue to anticipate the parcel being used in any future developments.
With the strong community desire to see the goals of this SWSP achieved, the most beneficial use of the City property is to be incorporated into the planned uses of the adjacent parcels, for a cohesive development that best implements the community vision. Therefore, at the July 8, 2025 City Council meeting, the City Council adopted a resolution declaring the property as ”exempt surplus property”. This was the necessary first step to enter into discussions with interested parties to sell or otherwise exchange the property to further the community vision.
Analysis/Discussion
Concurrently with the City Council action on July 8, 2025, staff commissioned a third-party appraisal to verify the fair market value of the property. The appraisal, which is attached, found the fair market value of the property to be $450,000.
Staff subsequently entered into discussions with a development group (South Rock Ventures, LLC) that is interested in pursuing re-entitlement and development of the adjacent vacant parcels, between Depot Way and the existing Santero Way housing, as well as the vacant land south of the existing housing on Santero Way. The attached non-binding Memorandum of Understanding (MOU) is the product of those discussions.
The proposed MOU essentially is a statement of intent for both parties that the City intends to sell the property to the development group and the development group intends to provide the City with currently undefined additional improvements that at least equals the fair market value of the property. The additional public improvements must be acceptable to the City and beyond the scope of the planned development (not already required for the development). The actual improvements built would be determined during the entitlement process and subject to a later binding development agreement.
Financial Considerations
There are no direct financial impacts at this time, as this MOU is not binding. However, the MOU does express a future intent to exchange the property at fair market value for future public improvements of equal value or more.
Environmental Issues
Where it can be determined 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 review.
This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.