Fremont City Council Meeting: 05/03/22 07:00 PM
3300 Capitol Avenue Div/Dept: Public Works
Fremont, CA 94538 Category: Property Acquisitions & Dispositions
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4593) DOC ID: 4593
Updated: 4/29/2022 8:47 AM by Alberto Quintanilla Page 1 DISPOSITION OF REMNANT PARCELS ON CAPITOL AVE - To Consider Quitclaim of Remnant Parcels on Capitol Avenue To Sunhill Enterprises, LLC; Take Further Actions In Accordance With the Sunhill Settlement Agreement Approved by Council, Including Appropriating $1 Million from the General Liability Reserve; and Make Findings of CEQA Exemptions (Disposition of Excess City Land Is Categorically Exempt Under CEQA Pursuant To Section 15312, and Action Involving Funds Appropriation Is Not Subject To the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 21065 and 15061).
Contact Persons:
Name: Ian Champeny Hans Larsen
Title: Real Property Agent Public Works Director
Div/Dept: Public Works Public Works
Phone: 510-494-4759 510-494-4722
E-Mail: [email protected] [email protected]
Note: A companion item appears on tonight’s City Council agenda.
Executive Summary: In January 2022, the City Council authorized a settlement agreement with Sunhill Enterprises, LCC (“Sunhill”), owner of the Fremont Plaza shopping center. The settlement agreement was executed in February 2022. To implement the settlement agreement, staff recommends that the City Council appropriate $1 million from the City’s General Liability Reserve to pay Sunhill and quitclaim two remnant parcels of unused, excess right of way to Sunhill, as described in this report.
BACKGROUND: In October 2012, the City Council adopted the Downtown Community Plan (DCP), which sets forth a vision to create an urban mixed-use, sustainable, vibrant, pedestrian-oriented downtown. The most significant street in downtown is its main street Capitol Avenue. The City had to acquire a parcel that formerly contained a Citibank building for public street purposes in order to extend Capitol Avenue to Fremont Boulevard. In 2015, the extension of Capitol Avenue between State Street and Fremont Boulevard was completed. As part of this project, the City closed previous access points that adjacent property owner Sunhill claims to have historically used for ingress and egress to their property from the former Citibank parcel. Sunhill subsequently filed a lawsuit against the City related to the closure of these access points.
As part of the settlement agreement, the City must pay Sunhill $1 million, quitclaim remnant parcels deemed by the City as excess land to Sunhill, and allow the opening of two access points along Capitol Avenue, one closer to Fremont Boulevard and the other closer to State Street. The opening of the two new access points would be at the sole cost and expense of Sunhill. The curb cut closer to State Street would be allowed only temporarily, until redevelopment of the adjacent building. The DCP and Downtown zoning district prohibit the construction of curb-cuts (or new driveways) along Capitol Avenue, and therefore, to facilitate the authorized settlement, the DCP and FMC Section 18.47 must be amended. This item is before the City Council under the companion item for tonight.
Staff Report (ID # 4593) Meeting of May 3, 2022
Updated: 4/29/2022 8:47 AM by Alberto Quintanilla Page 2 On March 24, 2022, the Planning Commission recommended that City Council approve the amendments under the companion item and found that the proposed disposition of the remnant parcels to Sunhill would be in conformance with the General Plan in accordance with California Government Code 65402(a).
DISCUSSION/ANALYSIS: Staff recommends the City Council take the proposed actions in order to meet the City’s obligations set forth in the settlement agreement previously approved by Council. This includes appropriation of funds for the payment of $1 million and approval to quitclaim the remnant parcels to Sunhill. If the City fails to take these actions, the settlement agreement would automatically terminate, and Sunhill may seek final resolution of the lawsuit in court.
Quitclaim of Remnant Parcels: As part of the DCP, adopted by City Council in 2012, the City extended Capitol Avenue between State Street and Fremont Boulevard. The street extension resulted in unused, remnant parcels, considered excess land, which is not needed to serve a public purpose. Sunhill would combine the excess land to their parcel for future redevelopment of their property facing Capitol Avenue. The proposed disposition of the remnant parcels is consistent with the General Plan.
Pursuant to Government Code Section 54221(f)(1), the proposed disposition of the remnant parcels is considered “exempt surplus land” because: 1) the remnant parcels themselves have no record access and are less than 10,000 square feet in area, individually or cumulatively1, and are not contiguous to land owned by a state or local agency that is used for open-space or low- or moderate-income housing purposes; and/or 2) the remnant parcels were part of a larger parcel that was acquired by the City as former right of way to extend Capitol Avenue, from State Street to Fremont Boulevard, that are no longer needed for a public purpose and can be conveyed to an owner of an adjacent property, Sunhill.
FISCAL IMPACT: The amount of $1 million would be appropriated from the General Liability Reserve into the City’s Risk Management Fund (Fund 609) to pay Sunhill.
ENVIRONMENTAL REVIEW: The appropriation of funding to pay Sunhill as a condition of the settlement agreement is not subject to CEQA pursuant to CEQA Guidelines Sections 21065, Project, and 15061, Review For Exemption, in that the action is not defined as a “project” under CEQA and that the action is covered by the common sense exemption that CEQA applies only to projects which 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 or action in question may have a significant effect on the environment, the activity or action is not subject CEQA.
The proposed disposition of the land to Sunhill is an action that is categorically exempt under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15312, Surplus Government Property Sales.
1 The two remnant parcels total 6,032 square feet (Parcel 501-1130-060 is 509 square feet and Parcel 501-1130-062 is 5,523 square feet).
Staff Report (ID # 4593) Meeting of May 3, 2022
Updated: 4/29/2022 8:47 AM by Alberto Quintanilla Page 3 ATTACHMENTS:
• Exhibit A - Plats and Legals for Remnant Parcels
• Draft Resolution Quitclaim Surplus Land to Sunhill
RECOMMENDATIONS: That the City Council take the following actions:
1. Find that the action involving the appropriation of $1 million from the City’s Risk Management Fund to pay Sunhill is not subject to the California Environmental Quality Act (CEQA) pursuant to, without limitation, CEQA Guidelines Sections 21065 and 15061.
2. Appropriate $1 million in the Risk Management Fund (Fund 609) and direct the City Finance Director to issue payment to Sunhill in the exact amount of $1 million in accordance with the terms and conditions of the Settlement Agreement and Release dated February 11, 2022 by and between the City and Sunhill Enterprises, LLC.
3. Adopt a resolution approving the proposed Quitclaim of remnant parcels to Sunhill Enterprises, LLC, as shown in Exhibit “A” (plat and legal).