City Council Agenda Report
December 3, 2024
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Alex Hamilton, Interim Director of Community Development SUBJECT: RESOLUTION NO. 24-61- APPROVING A PURCHASE AND SALE
AGREEMENT BY AND BETWEEN THE STATE OF CALIFORNIA AND CITY OF NORWALK FOR REAL PROPERTY LOCATED AT 13200 BLOOMFIELD
AVENUE (APN NO. 8045-008-902)
Background:
On October 2, 2018, the City adopted an Economic Development Opportunities Plan that identified various areas throughout the City that could promote economic development. The site is a key node identified for its redevelopment potential given its location, size, and access to transportation. That plan was updated October 17, 2023.
The project site was originally developed in 1943 as an all-male youth correctional facility operated by the California Youth Authority (CYA). In 2011, the CYA facility operations ceased, and the project site remained vacant until 2019, at which time the facility was temporarily utilized by the California Department of State Hospitals (DSH) due to the Coronavirus Disease (COVID- 19) pandemic. The project site was being used by the DSH as a temporary satellite mental hospital facility to mitigate the effects of “surge space” at local state hospitals until early 2022.
The facility was housing primarily COVID-negative mental forensic inmates; however, all inmates have been moved out of the facility. Currently, the Department of General Services (DGS), who currently own the property, use the facility on an as-needed basis.
Assembly Bill (AB) 518, which was enacted in 2020 and effective January 1, 2021, authorizes the Director of the Department of General Services acting on behalf of the State of California, until January 1, 2025, to sell the property to the City at fair market value upon terms and conditions the Director determines are in the best interests of the State. The bill authorizes the director, notwithstanding those provisions, to sell the property below fair market value for purposes of providing housing to persons and families of low or moderate income. The bill, after January 1, 2025, authorizes the Director to dispose of the property in accordance with specified procedures and priorities otherwise applicable to the disposal of surplus property by DGS.
City Council December 3, 2024
Resolution No. 24-61 - Approving the Purchase and Sale Agreement Between the State of California and the City of Norwalk for Real Property located at 13200 Bloomfield Avenue
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Under the provisions of AB 518, which amended Government Code Section 11011.28, the City is pursuing the purchase of the project site from the State and proposes the Norwalk Transit Village Specific Plan (the Project) for the sites’ mixed-use development.
On July 10, 2024, the Planning Commission held a public hearing for review and consideration of the Norwalk Transit Village project and recommended approval with a 5-0 vote.
On November 19, 2024, the City Council completed the public hearing for review of the project and as a first reading, adopted the Norwalk Transit Village Specific Plan, and certified the project Final Environmental Impact Report (FEIR) with a 5-0 vote.
Analysis:
California Government Code Section 65402 requires that the acquisition and disposition of real property be submitted to and reported upon by the Planning Agency (Planning Commission) as to conformity with the adopted General Plan. On November 25, 2024, the Planning Commission voted unanimously to adopt Resolution No. 24-12 to find that the proposed acquisition and disposition of the Subject Site is consistent with the City’s General Plan.
Summary of Key Terms of the Purchase and Sale Agreement:
While the key points of the DGS Purchase and Sale Agreement between the State and City (DGS PSA) are summarized below, it is important to note that concurrent with the DGS PSA, a separate Disposition and Development Agreement (DDA) between the City and Lewis Land Developers, LLC (Lewis) would be entered into by the parties and both the DGS PSA and DDA, if approved by City Council, would have concurrent escrows. Under this DDA, Lewis agrees to perform all of the DGS PSA terms and conditions to the close of escrow, including payment of the purchase price for the property as outlined below.
The DDA by and between the City and Lewis will be the subject of separate consideration and action by City Council.
Below is a summary of the key points of the PSA:
•Purchase Price: Twenty Million Three Hundred Thousand Dollars ($20,300.00). Said purchase price was pursuant to the site’s fair market value as determined by the State’s appraiser. Said appraisal report was dated August 16, 2023, and was based on the assumption of an entitled project as set forth in the Norwalk Transit Village Specific Plan. •Opening of Escrow: Open but initiated upon Effective Date of Escrow company receiving fully executed PSA and Escrow Instructions.
•Closing Date: Upon recordation of grant deed or not later than 6 months from Effective Date.
•DGS offset purchase price: DGS to credit City $465,036.28 as an offset to purchase price as reimbursement for environmental due diligence activities including costs for City Council December 3, 2024
Resolution No. 24-61 - Approving the Purchase and Sale Agreement Between the State of California and the City of Norwalk for Real Property located at 13200 Bloomfield Avenue
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environmental testing, investigations, and reports done by City’s consultant (lead, asbestos, etc.).
•Remediation holdback: DGS set aside costs to cover estimated City remediation costs not to exceed Five Million Dollars ($5,000,000).
•Property Reappraisal provision: DGS requires that any subsequent, substantial or significant changes in the project entitlements is subject to a property reappraisal for a period of five years after close of escrow.
Environmental Assessment:
AB 518, exempts the sale of the property from the State DGS to the City from the California Environmental Quality Act (CEQA). Also, the adoption of the Resolution approving the PSA by and between the State and City is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption), which states that an activity is covered by the common sense exemption that CEQA only applies to projects that 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 in question may have a significant impact on the environment, the activity is not subject to CEQA review.
The adoption of this Resolution is limited to the approval of the PSA and associated findings and will not result in a physical change in the environment and none of the exceptions under CEQA Guidelines Section 15300.2 apply. Moreover, Government Code Section 11011.28(e) exempts the sale of the Property from the State to the City from CEQA. Moreover, the adoption of this Resolution is consistent with those actions taken by City Council on November 19, 2024, during which the City Council certified the Final EIR and approved a Mitigation and Monitoring and Reporting Program and adopted a Statement of Overriding Considerations in connection with the Norwalk Transit Specific Plan through City Council Resolution No. 24-58. The acquisition of the Property by the City was evaluated and contemplated by the Final EIR and is in compliance with the requirements of CEQA.
Fiscal Impact:
The purchase price and other costs associated with the PSA will be passed through to and borne by Lewis pursuant to the terms of the DDA subject to review and approval of City Council.
Citizens Advised:
N/A
City Council December 3, 2024
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Strategic Plan 2023 Implementation and General Plan:
The recommended actions will further the City’s Strategic Plan Goals 2 and 3 to work in partnership with our community to achieve safe and livable neighborhoods to create and sustain a resilient and economically prosperous city.
In addition, the acquisition of the Subject Site under the PSA is consistent with the City’s General Plan by furthering the goals and policies of the City’s adopted Housing Element and increasing affordable housing opportunities, increasing homeownership, creating safe and integrated neighborhoods, encouraging and facilitating a range of housing to encourage a variety of housing types to meet the existing and future needs of City residents, and assisting in the development of adequate housing and providing resources to meet the needs of low-and moderate income households. In addition, the acquisition of the Subject Site also facilitates and furthers progress towards meeting the City’s Regional Housing Needs Assessment obligations of 5,034 residential units.
The acquisition of the Property is also in conformance with the Land Use Element objectives and policies in that the acquisition would provide for a larger comprehensive development along the City’s major arterials which will enhance the overall character of the streetscape and will include adequate parking, buffering, and landscaping consistent with Objectives and Policy 4a.
Recommended Action:
Staff recommends City Council:
a. adopt Resolution No. 24-61 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NORWALK APPROVING THE PURCHASE AND SALE AGREEMENT BY AND BETWEEN THE STATE OF CALIFORNIA AND CITY OF NORWALK; and b. authorize the City Manager to make any non-substantive minor modifications and execute the Purchase and Sale Agreement on behalf of the City, in a form approved by the City Attorney.
City Council December 3, 2024
Resolution No. 24-61 - Approving the Purchase and Sale Agreement Between the State of California and the City of Norwalk for Real Property located at 13200 Bloomfield Avenue
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Attachments:
1. Resolution No. 24-61.
2. Purchase and Sale Agreement and Joint Escrow Instructions
3. Planning Commission Resolution No. 24-12