CITY COUNCIL STAFF REPORT
DATE: November 12, 2025 CONSENT CALENDAR
SUBJECT: ADOPT A RESOLUTION ENTITLED, “A RESOLUTION OF THE CITY OF
PALM SPRINGS ADOPTING INVENTORY REPORT FOR EXCESS,
EXEMPT, AND NON-EXEMPT SURPLUS LAND PURSUANT TO
GOVERNMENT CODE § 54223.”
FROM: Scott C. Stiles, City Manager
BY: Housing & Community Development Department
SUMMARY:
The Surplus Land Act (the “Act”), as amended, requires that on or before December 31 of each year, each county and city in the state must “make a central inventory of all surplus land ... and all lands in excess of its foreseeable needs … within the jurisdiction of the county or city that the county or city or any of its departments, agencies, or authorities owns or controls” (the “Inventory Report”) and submit the Inventory Report to the California Department of Housing and Community Development (HCD) by April 1 of action each year as part of the county or city’s annual Housing Element progress report.
This would have the City Council review and approve the Inventory Report.
RECOMMENDATION:
Adopt a Resolution entitled, “A RESOLUTION OF THE CITY OF PALM SPRINGS
ADOPTING INVENTORY REPORT FOR EXCESS, EXEMPT, AND NON-EXEMPT SURPLUS LAND PURSUANT TO GOVERNMENT CODE § 54223.”
BACKGROUND:
Government Code § 54230 mandates that California cities and counties prepare, by Dec. 31 of each year, an inventory of all “surplus land,” as that term is defined in the Act, and all “lands in excess of its foreseeable needs,” as that phrase is used in Government Code § 50569. HCD provides the practical difference between these two categories of land is essentially one of timing. “Surplus land” is land that is no longer necessary for an agency’s use and has been officially declared “surplus” by the local agency’s governing body. “Excess land” is land that is beyond an agency’s foreseeable needs but has not yet been declared surplus.
City Council Staff Report
November 12, 2025 -- Page 2
Surplus Land Resolution
In January 2024, SB 747 amending the Surplus Land Act went into effect. This amendment exempted properties from the Surplus Land Act if they were less than one- half acre in area or if they were transferred to be used for affordable housing. The Gene Autry Trail and Mission Drive properties (Reference No. 1 on the attached resolution) will be used for an affordable housing project (Juniper Mission) and is identified as “Exempt Surplus”.
In addition, three single family parcels located at 233 West Tramview Road (APN 501- 401-010), El Dorado Boulevard (APN 501-401-039), and Rosa Parks Road (APN 669- 353-001) were all less than one-half acre and were to be transferred for use as affordable housing. As such, these three properties are identified as “Exempt Surplus.” STAFF ANALYSIS:
To be “necessary for [an] agency’s use,” land must be “used, … planned to be used pursuant to a written plan adopted by the local agency’s governing board for, or … disposed [of] to support … agency work or operations, including, but not limited to, utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes, related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, wastewater treatment plants.” [Government Code § 54221(c)(1).]
The Act requires that a local agency declare property as “surplus” before any action may be taken to dispose of the property. Parcels the local agency wishes to sell, that are not exempt from the Act, must be made publicly available for purchase, which includes distribution of the parcel(s) to a list of affordable housing developers prepared and updated regularly by HCD. The notification must also be posted on the City’s website and sent to HCD for notification on their website. The notification must stand for sixty (60) days, in which time staff shall take proposals from any interested entity, affordable housing or otherwise. However, the Act is prescriptive on which developer must be selected regarding affordable housing; and that is, priority must be given to an affordable housing project regardless of underlying land use. If multiple affordable housing projects are proposed, then staff must prioritize the project with the greatest and deepest affordability. Once a developer is selected, staff must negotiate in good faith for a minimum of ninety (90) days with the developer that proposed the greatest and deepest affordability. Two outcomes may result from this process:
1. If the City and developer come to terms within the proscribed timeline, then the regular development processes would begin; or
2. If after good-faith negotiations the City and the developer cannot come to terms, the surplus land being notified is no longer required to be listed for public notification under the Act and may be marketed or sold according to the standards of the authority or agency which owns the parcel(s) in question. This comes with a firm caveat: future proposals on surplus land that propose more than ten (10) units of housing are required to provide 25% of the proposed units as affordable.
City Council Staff Report
November 12, 2025 -- Page 3
Surplus Land Resolution
A local agency may be liable for a penalty of 30 percent of the final sale price of land sold in violation of the Act, and 50 percent for any subsequent violation. As the current law is written, the state may, via the Act, cancel disposition agreements and force local agencies to comply with the Act after December of 2022 and prior to selling to a developer who is not proposing affordable housing, whether a disposition agreement is in effect or not.
Additionally, the City Council may designate a property as available for continued City use through one of its non-profit partners. For example, City Council could adopt a plan to lease a property to only a non-profit that is providing a City service via a contract between the City and the non-profit and that service or the non-profit work in general (such as homeless services, childcare and/or dental or medical care) is supported by the City through partnerships and/or is the recipient of City grant funding. In such a case, the property is not surplus because it is still needed for City services; therefore, the Act does not apply. In such a situation, the City will still use the RFP process to lease the property.
The term “Agency’s use” does not include “commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development.” In addition, “property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agency’s use.”
Nothing in the Act establishes what information must be included in the Inventory Report.
However, Government Code § 54230(a)(2) provides guidance. Under that section, “each county and each city” must report to HCD, “a description of each parcel described in [such county or city’s Inventory Report] and the present use of the parcel … [by] no later than April 1 of each year, beginning April 1, 2021, in a form prescribed by [HCD], as part of its annual progress report submitted pursuant to paragraph (2) of subdivision (a) of Section 65400.” [Govt. C. § 54230(a)(2)(A).] While no such form has yet been issued by HCD, it will, at a minimum, contain blanks for the following information for each parcel of surplus land:
i. Street address or similar location information.
ii. Assessor’s parcel number.
iii. Existing use.
iv. Whether the site is surplus land or exempt surplus land. v. Size in acres.
As noted above, the Gene Autry Trail and Mission Drive properties and the three single family properties in the Desert Highland Gateway Estates Neighborhood previously listed as “Excess” are now exempt from the Surplus Land Act as these properties were either less than one-half acre and/or were to be transferred for use as affordable housing.
The proposed Inventory Report of this year’s surplus properties and excess properties are included in the attached resolution (Attachment A).
City Council Staff Report
November 12, 2025 -- Page 3
Surplus Land Resolution
City Council Staff Report
November 12, 2025 -- Page 4
Surplus Land Resolution
ENVIRONMENTAL ASSESSMENT:
The actions contemplated by this report do not constitute a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines, because they have no potential for resulting in physical change in the environment, directly or indirectly. The actions do not authorize any specific development or installation on any specific piece of property within the City’s boundaries. Moreover, when and if a development application is submitted, the City will at that time conduct a preliminary review of the application in accordance with CEQA. Alternatively, even if the above- described actions are a “project” within the meaning of State CEQA Guidelines section 15378, such actions would be exempt from CEQA review under the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. (State CEQA Guidelines, Section 15061(b)(3).) ALIGNMENT WITH STRATEGIC PLANNING:
The Broad Goal in the Strategic Plan Framework that is addressed by this action is Housing.
FISCAL IMPACT:
There is no fiscal impact associated with approving the Inventory Report.
REVIEWED BY:
Department Director: Jay Virata
Assistant City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENTS:
A. Resolution