City Council Agenda Report
December 5, 2023
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: John P. Ramirez, AICP, Director of Community Development Arnold M. Alvarez-Glasman, City Attorney
John W. Lam, Assistant City Attorney
Austin Ching, Deputy City Attorney
SUBJECT: RESOLUTION NO. 23-70 – MAKING FINDINGS UNDER SURPLUS LAND ACT
AND APPROVING THE PURCHASE AND SALE OF REAL PROPERTY
LOCATED AT 12843 NORWALK BOULEVARD
Background:
In 2008 the Norwalk Redevelopment Agency acquired by eminent domain, the real property located at 12843 Norwalk Boulevard, Assessor’s Parcel Number: 8047-005-903 (“Property”) from Wilshire Group Funding, Inc. (“WGF”). The Property was subsequently transferred to the City by the Successor Agency to the Norwalk Redevelopment Agency upon dissolution. The Resolution of Necessity associated with the acquisition of the Property through eminent domain stated that the Property would be used for public parking purposes.
California Code of Civil Procedure (“CCP”) Section 1245.245 requires that if a property acquired by eminent domain is not used for the public purpose stated in the Resolution of Necessity within ten years of its adoption and a new or reauthorization resolution was not adopted, the City must offer a right of first refusal to the person or persons from whom the Property was acquired.
On January 29, 2019, WGF filed a Writ of Mandate against the City to enforce its right of first refusal pursuant to CCP Section 1245.245(b), alleging that the City had not used the Property for public parking within 10 years and had not adopted a resolution reauthorizing the use for public parking purposes.
The City filed a Demurrer to the Writ of Mandate, and on May 2, 2019, the Court overruled the City’s Demurrer. Following the Court’s ruling, the City and WGF entered into settlement negotiations regarding the sale of the Property pursuant to WGF’s right of first refusal. The City
Resolution No. 23-70 – Surplus Land Act Findings and
approval of the Purchase and Sale Agreement for
12843 Norwalk Boulevard
December 5, 2023
Page No. 2
7 2
4 and WGF agreed to terms including a purchase price based on two independent appraisals with a date of value of April 15, 2018, and entered into a Settlement and Tolling Agreement on July 24, 2020. The terms of the sale are presented in the Purchase and Sale Agreement and Escrow Instructions, attached hereto as Attachment 2.
In July of 2023, the City Attorney’s Office sought concurrence from the California Department of Housing and Community Development (“HCD”) that the proposed sale of the Property to WGF was in compliance with the Surplus Land Act. On July 10, 2023, HCD stated that:
“Therefore, the granting of first right of refusal to WGF to purchase the Property under CCP Section 1245.245(f) is not a disposition of surplus land. Therefore, the Property is not subject to the Surplus Land Act. If, however, WGF decides to not purchase the Property, the disposition (sale or lease) of the Property by the City is subject to the Surplus Land Act.”
In addition, to the extent that the Surplus Land Act applies, the Property also constitutes “exempt surplus land” under the Surplus Land Act pursuant to Government Code (“Gov. Code”) Section 54221(f)(1)(G) as land that is “subject to valid legal restrictions that would make housing prohibited. . .”
As the Property is subject to WGF’s right of first refusal pursuant to CCP Section 1245.245, the City is prohibited from offering the Property for housing if WGF has exercised its statutory right of first refusal. This restriction is imposed by State law and was not imposed or created by the City, is not under the City’s authority or discretion, and cannot be feasibly mitigated or avoided, which constitutes a valid legal restriction pursuant to Gov. Code Section 54221(f)(1)(G), thus qualifying the Property as “exempt surplus land.”
Environmental:
The Surplus Land Act’s findings and the approval of the Purchase and Sale Agreement are exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15312 – Class 12 – Surplus Government Property Sales and also the common sense exemption pursuant to CEQA Guidelines Section 15061(b)(3) and none of the exceptions to the exemptions under CEQA Guidelines Section 15300.2 apply.
Fiscal Impact:
The Property is being sold for $750,000 in accordance with the Agreement of Purchase and Sale and Escrow Instructions with the WGF which is based on the date of value of April 15, 2018.
Citizens Advised:
N/A
Resolution No. 23-70 – Surplus Land Act Findings and
approval of the Purchase and Sale Agreement for
12843 Norwalk Boulevard
December 5, 2023
Page No. 2
7 2
4 Recommended Action:
Staff recommends City Council adopt Resolution No. 23-70, MAKING FINDINGS UNDER
SURPLUS LAND ACT AND APPROVING THE PURCHASE AND SALE OF REAL PROPERTY LOCATED AT 12843 NORWALK BOULEVARD.
Attachments:
Attachment No. 1 - Resolution No. 23-70
Attachment No. 2 - Agreement of Purchase and Sale and Escrow Instructions