EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: March 21, 2023
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: Melvin Gaines, City Manager
SUBJECT: Acquisition of the Site Located at the Corner of Bay Road and Pulgas Avenue for Potential Use as New Public Library
Recommendation
Adopt a Resolution:
1. Authorizing the City Manager to negotiate and execute the Purchase and Sale Agreement (“PSA”), in a form approved by the City Attorney, between the City of East Palo Alto and the East Palo Alto Youth Arts & Music Center, LLC for the acquisition of the property located near the corner of Bay Road and Pulgas Avenue (APN: 063-240- 490) (“Site”) for use as a public library or community center and other uses set forth therein;
2. Authorizing the City Manager, in consultation with the City Attorney, to extend the term of the PSA for up to 90-days in the event of unforeseen issues prior to the close of the transaction;
3. Accepting the San Mateo County Library JPA’s (SMCL) $1,918,000 contribution toward site acquisition;
4. Appropriating $1,194,200 in General Fund Reserves and the $1,918,000 SMCL contribution for purchase price;
5. Authorizing the City Manager to negotiate and execute a Certificate of Acceptance and Declaration of Covenants, Conditions and Restrictions in conjunction with purchase of the site; and
6. Adopting the Initial Study and Mitigated Negative Declaration and Mitigation and Monitoring and Reporting Program for site acquisition.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 4: Improve Public Facilities and Infrastructure Priority No. 6: Create a Healthy and Safe Community
Background
In 2015, the John and Marcia Goldman Foundation (Foundation) purchased 1.07 acres of land at the corner of Bay Road and Pulgas Avenue, APN 063-240-490 (Site). In 2017, the East Palo Alto City Council approved the project entitlements for the new EPACENTER Arts facility on a portion of the Site, with construction to be completed in Fall 2020. The Goldman Foundation has stated that they are interested in leasing or selling the remaining parcels, located at the Site, and allocating the revenue from a land lease or sale to support the future operations of EPACENTER Arts. Possible uses of these parcels include a new public library building.
In 2019-2020, the San Mateo County Library JPA (SMCL) embarked on a community-led design process to design a future library on the Site. As shown in Attachment 2 – East Palo Alto Library Conceptual Design Presentation, the SMCL proposed the location of the new library to be at the Site, creating a Civic Commons with the EPACENTER Arts facility. The two properties were designed in a way to provide the community with an educational hub where residents would access services and complementary common areas offered by both EPACENTER Center Arts and the library.
While the community-led design process did not result in a finalized physical design for the library, it was intended to explore possibilities and community priorities for a new library. Any future library design would be required to go through the City’s planning review process.
In addition to leading the envisioning process of the new library in East Palo Alto, SMLC has committed approximately $1,918,000 in Measure K funding towards the acquisition of the Site.
Since Fall 2020, the City and Foundation have continued discussions regarding the possibility of entering into an agreement for the Site, while further considering the potential placement of a new library.
In February 2021, the City commissioned an appraisal, which determined the Site’s value to be $3,260,000.
On September 7, 2021, the City Council directed the City Manager to execute a Letter of Intent (LOI) to develop terms of a Purchase and Sale Agreement (PSA) for the Site. On December 7, 2021, the City Council approved the terms of the PSA, as shown in Table-1 below:
Table 1 - Key Deal Terms
Item Term
Parties
The City of East Palo Alto and East Palo Alto Youth
Arts & Music Center, LLC (an affiliate of the
Foundation)
Site 1950 Bay Road, APN: 063-240-490
Term
9-months of the PSA Effective Date – January 31,
2023
Price $3,260,000
Deposit/Earnest Money $97,800
Due Diligence Period 90-days of the PSA Effective Date
Covenants, Conditions, and
Restrictions (CC&R’s)
As a condition of closing, City and Foundation will
negotiate final CC&R language acceptable to all
parties.
On September 6, 2022, and February 7, 2023, the City Council agreed to extend the term of the PSA to provide additional time for staff to complete the processes required by the California Environmental Quality Act (CEQA) prior to purchasing the Site. The City circulated an Initial Study/Mitigated Negative Declaration (IS/MND) on February 17, 2023 for a 30-day public review period, which ends on March 20, 2023. With the Council’s adoption of the IS/MND, CEQA requirements for the acquisition of the Site will be complete.
The purpose of this staff report is to obtain City Council approval to enter into a PSA pursuant to the terms articulated in Table 1 and further described below.
Analysis
Cost Summary to Acquire the Site
The cost summary to acquire the Site is shown in Table 2 below:
Table 2 – Cost Summary
Element Amount
City’s Initial Deposit (already appropriated) $97,800
City’s Second Deposit (already
appropriated)
$50,000
SMLC’s Contribution $1,918,000
City’s Final Payment (not yet appropriated) $1,194,200
Total Cost to Acquire the Site $3,260,000
Staff recommends that the City Council appropriate the remaining $1,194,200 necessary for the City to acquire the Site from the City’s General Fund Reserve. In total, the City will contribute $1,342,000 to acquire the site.
Covenants, Conditions, and Restrictions (CC&R)
As part of the original PSA, the City and Foundation agreed to negotiate final CC&R language acceptable to all parties to ensure that the Site is developed in a way that is mutually agreeable to all parties. The City and Foundation have negotiated this language and recommend the key elements identified below be included in a covenant that would be recorded on the Site prior to the close of escrow.
• Permitted Uses – the property may be used for the development of a public library and/or community center, including, but not limited to, ancillary uses such as administrative offices, event spaces, open spaces, and parking. • Prohibited Uses – any uses inconsistent with those of the EPACENTER, including, but not limited to: (i) a police station; (ii) a jail or other correctional facility; (iii) ; (iv) an environmental waste facility; (v) a recycling facility; (vi) a water or sewage treatment plant; (vii) an electrical substation; or (viii) a charging station. For clarity, a “police station,” as a Prohibited Use, does not include office space within the Permitted Use for security services or a resource officer; electric vehicle charging stations would be permitted.
• Meet and Confer – in the event the City desires to use the property for a use other than a Permitted Use, the City shall propose the use to the Foundation. If the Foundation does not approve, the City and Foundation shall meet and confer to arrive at a resolution. If no resolution occurs, the City shall provide the Foundation the right to buy back the property.
Next Steps
In December 2022, as a result of support from former Congresswoman Jackie Speier, the City was notified that $1.5 M from the 2023 Consolidated Appropriations Act would be awarded to the City to facilitate the completion of the final design for the library. In addition, on October 18, 2022, the City Council set aside an additional $400,000 in American Rescue Plan Act (ARPA) Funding to be used towards the future design and cost of the Plans, Specifications, and Estimates required prior to bidding the library project. These combined funding sources offer a current total of $1.9 M to design the library building.
Staff is in the process of issuing a Request for Proposals/Qualifications to identify eligible firms that may be interested in assuming the role of lead consultant to design the future library. At the conclusion of this process, staff will bring a recommendation forward to the City Council for consideration. Once a consultant firm is selected, and the contract is in place, the design work will commence immediately.
Fiscal Impact
Staff recommends that the City Council appropriate $1,194,200 from the General Fund reserve and accept the SMLC’s contribution in the amount of $1,918,000 with spending authority for the acquisition of the site.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto. The Notice of Intent to Adopt a Mitigated Negative Declaration for the Library acquisition was published in the San Mateo Daily Journal, on the City website CEQA page (https://www.cityofepa.org/planning/page/ceqa-notices), Sent to San Mateo County and the California Office of Planning & Research and posted at1960 Tate Street.
Environmental
The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. The City, acting as the lead agency, circulated an Initial Study/Mitigated Negative Declaration (IS/MND) on February 17, 2023 for a 30-day public review period, which ends on March 20, 2023. As of the publication of the staff report, staff has not received comments from any public agencies or members of the public. Based on the Initial Study, it was determined that with mitigations, there would be no significant environmental impacts due to the project. Accordingly, a Notice of Intent to adopt a Mitigated Negative Declaration has been published for City Council’s consideration.
The Draft IS/MND, including the mitigation and monitoring plan, is included in Attachment 4 and can also be found on the City’s CEQA webpage:
https://www.cityofepa.org/sites/default/files/fileattachments/planning/page/12911/noi_mnd_co mbined_library_project.pdf. The current proposal is for the acquisition of a property for the potential development of a public library. The library development plans are currently conceptual and will be further developed after the City purchases the property and proceeds toward development. Therefore, precise details about the construction and operation of the library are not yet known and will be further developed at a later date, and subject to projectlevel environmental review. As the project scope primarily consists of site acquisition, the Initial Study discusses the library at a level of detail that currently exists and provides program-level review of the library development project. The City will complete supplemental environmental review, i.e., project-level, as necessary and as more project details become available prior to approval of a contract to construct the library.
In sum, the IS/MND finds that some activities related to acquisition and development that are known at this time may result in some potentially significant impacts, but that all the potential impacts can be mitigated to a level of less than significant through mitigations set forth therein.
Mitigation has been included to protect air quality during construction, reduce construction noise and vibration, avoid impacts on birds, to ensure proper treatment of any cultural or tribal cultural resources in the unlikely event that they are found to be present during construction, ensure adequate water supplies, and to ensure the safety of workers and nearby residents from contaminants that may be present in soils or air. Additionally, the IS/MND identifies that there is a potential impact on water supply and mitigation so that there would be a less than significant impact. The mitigation measures confirm that the City is already implementing programs to provide adequate water via the construction of the Pad D project, existing and future agreements within the SFPUC for water purchase and improvements to incorporate the use of recycled water.
Attachments
1. Resolution
2. Library Conceptual Design
3. Declaration of Covenants, Conditions and Restrictions
4. Draft Initial Study / Mitigated Negative Declaration