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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE SPECIAL CITY COUNCIL
AGENDA ITEM
Report: Consideration of Processes to Lease City Owned Property
1. Motion: Provide direction to staff regarding the preparation of resolutions with findings to support Surplus Land Act exemptions for certain City-owned property, and direction to commence preparation of requests for proposals for the possible future disposition and or development of property the State Department of Housing and Community Development has found exempt from the Surplus Land Act.
COUNCIL ACTION
Item Type: Action Item
Approved for April 2, 2024 calendar
EXECUTIVE SUMMARY
As part of a City budget balancing presentation to the City Council in late 2023, Council expressed interest in exploring opportunities to lease City owned parking lots. Council gave staff direction to begin the process of potentially rezoning parcels that did not have a zoning designation that would encourage redevelopment, and identify the process and opportunities of other sites. The purpose of this report is to identify the various paths forward, and to seek direction from the Council regarding submitting findings to the State Department of Housing and Community Development (HCD) for sites that are potentially exempt from the State Surplus Land Act (SLA), and to draft Requests for Proposals (RFP) for sites that could be leased and developed.
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RECOMMENDATION
Direct staff to prepare and submit resolution(s) with written findings supporting determinations of exemption from the Surplus Land Act for four City-owned parcels for review and approval by the Council, and authorize staff to submit those Council-approved resolution(s) to HCD for review and final approval. Authorize staff to commence drafting RFPs to identify leasing and development opportunities for the four City-owned parking lots for which HCD has granted exempt surplus status. To the extend City-owned land is not exempt surplus, staff will return to Council for direction on whether staff should commence the SLA process of sending out Notices of Availability pursuant to Gov’t Code section 54222 which is a pre-requisite to any disposition of City-owned non-exempt surplus land.
ANALYSIS
In 2023 the City Council directed staff to consider ground leasing and redeveloping City- owned parking lots as a means to generate revenue towards future budget balancing strategies, as well as assisting in meeting the City’s affordable housing goals. At the same meeting, Council also directed staff to begin studying potential zoning changes that would be required for some parcels with zoning that does not support development. As part of this process, staff identified approximately a dozen sites (Exhibit 1) that have development potential and could generate revenue for the City.
Before any disposition of City-owned property can occur, the City must consider the SLA; it is a “right of first refusal” law that requires all local agencies to offer non-exempt surplus land for sale or lease to affordable home developers and certain other entities before selling or leasing the land to any other individual or entity. Sites can either be categorized as “exempt surplus” or “surplus” based on site acreage (e.g., less than a half-acre), or whether the site qualifies for a specified exemption (e.g., public use or unsuitable parcel exemptions), among and other requirements. The SLA applies to leases that are more than five (5) years or where demolition or redevelopment will occur. Prior to finalizing any property disposition, the surplus land must be approved by HCD.
For non-exempt surplus properties, the SLA requires an open solicitation process whereby HCD, local governmental entities, and State listed housing sponsors are provided a Notice of Availability, and procedures are provided for negotiations and documentation; and prioritization of negotiations based on the number and level of affordability in cases with multiple interested parties.
The SLA defines several categories of “exempt surplus” properties, the two most relevant for the City sites are:
1)Small Surplus Land Parcel: Property that is less than one-half acre (21,780 SF).
This exemption requires the City Council to adopt a resolution with findings that the property qualifies as exempt surplus. The adopted resolution is then sent to HCD for review, and if approved, the City can proceed with this disposition. Except for minor noticing requirements and continued HCD monitoring and enforcement obligations, no other SLA requirements apply to small parcels. 3{{section.number}}2
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2) Exempt Surplus Land for Affordable Housing: To qualify for this exemption a site must be between one to ten acres and developed with a mixed-use project with a minimum 300 residential units of which at least 25% are restricted to lower- income households. This exemption also requires the City Council adopt a resolution with findings supporting the exemption, and to send the resolution to HCD for review and approval. In addition, the City must follow its open competitive solicitation process or put the property out to open bid with a Notice of Availability sent to the HCD, local governmental entities, and State listed affordable housing sponsors. A covenant with the affordable requirements must also be recorded. The minor noticing requirements and continued HCD monitoring and enforcement obligations would apply. Other SLA requirements pertaining to negotiations, documentation, and prioritizing developer selection based the number of affordable units and level of affordability would not apply.
As noted, for a property that is one to ten acres, the City must send a Notice of Availability or follow its own open competitive bid process. Staff recommends the City develop a program for potential development of sites exceeding one-acre similar to the Housing Authority’s approach for the Pioneer affordable housing project where the scale and other key design criteria for the site were pre-determined, and then follow the City’s open competitive bid process. This would allow the City to select a developer that best meets the City’s objectives while also meeting the affordable housing requirements set by HCD.
The above requirements can apply to non-adjacent sites less than one-acre that are combined and developed jointly and together exceed one-acre.
For Small Surplus Land Parcels, after the resolutions with findings are submitted to the HCD and are approved, the City may move forward with its own competitive bidding process. A site could be developed with housing or non-housing development consistent with the City’s land use regulations.
Next Steps:
In order to move forward with the potential disposition and development of certain City- owned sites, staff is requesting Council direction to prepare a resolution with findings supporting a Exempt Surplus Land for Affordable Housing determination for following properties that exceed one-acre:
•Glendale Community College Lot 30
•Montrose Lot 3
It should be noted that while the City owns additional sites exceeding one acre, unless otherwise directed by Council, staff believes a phased approach is appropriate to maintain a balanced workload, and to begin working through a select number of sites to ensure potential development does not occur at the same time.
Further, staff is also requesting direction to prepare a resolution with findings supporting a Small Surplus Land Parcel exemption determination for the following properties that are 4{{section.number}}2
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less than one-half acre:
•Downtown Lot 4
•Downtown Lot 2
Staff is also requesting direction to develop RFPs for these smaller sites. Upon completion of the draft RFPs, staff would return to Council for review to ensure that the Council priorities have been appropriately defined, which may include affordable housing, community benefits, or other goals and priorities of the Council. If Council provides direction to move forward with developing the findings and RFPs, staff will return to hold a public meeting where Council may choose to declare that the properties are exempt surplus land and release the RFPs.
The next steps would be to select a preferred developer, execute an exclusive negotiating agreement, and develop terms that are acceptable to the Council. These would all be addressed at future Council meetings.
STAKEHOLDERS/OUTREACH
N/A
FISCAL IMPACT
There is no fiscal impact associated with this report. The next steps of ground leasing City owned properties have no direct cost to the City, but if the properties are leased, there are opportunities for the City to generate revenue into the General Fund.
ENVIRONMENTAL REVIEW (CEQA/NEPA)
CEQA does not apply to projects where the lead agency determines "with certainty that there is no possibility that the activity in question may have a significant effect on the environment." CEQA Guidelines (14 Cal. Code Regs.) § 15061(b)(3). Here, the action involves obtaining direction from Council on preparation of resolutions as a prerequisite to an SLA exemption determination. There is no possibility that the action requested in this report may have a significant effect on the environment.
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
1. Provide direction regarding preparation of a Council resolution with findings supporting an SLA exemption for certain City-owned properties, and development of RFPs. This would allow the City to begin the process of potentially developing City-owned parcels to generate revenue for the General Fund.
2. Decline to provide direction regarding preparation of a Council resolution with findings supporting an SLA exemption findings for City-owned properties, and development of RFPs. This would postpone considerations of developing the City- owned properties for additional revenue.
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3.Any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Bradley Calvert, Director of Community Development
Prepared by:
Bradley Calvert, Director of Community Development
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS