PISMO BEACH CITY COUNCIL STAF REPOR
Agenda Item #12.C
Meetin Date: Februar 3, 2026
TITLE:
Declaration of City-Owned Property as Surplus Land and Implementation of Procedures Under the State of California Surplus Land Act and Making a Finding of Exemption under the California Environmental Quality Act RECOMMENDATION:
Adopt a Resolution declaring that real properties owned by the City located at APN’s 010-302-030 and 010-302-031 are surplus land and not necessary for the City’s use pursuant to Government Code Section 54221, authorizing the City Manager to comply with the procedures under the surplus land act, and finding that such declaration and authorization is exempt from environment review under the California Environmental Quality Act.
DISCUSSION:
Assembly Bill 1486 (AB 1486, 2019) provides that land shall be declared either “surplus land” or “exempt surplus land” before a local agency may take any action to sell or lease land that the agency owns. AB 1486 further added provision prohibiting local agencies from negotiating any disposition of the property prior to compliance with the procedural requirements of the California Surplus Land Act.
The City currently owns property known as the Chapman Estate at 1243 Ocean Boulevard, Pismo Beach, which is approximately 1.55 acres and is made up of two parcels, APN 010-302-030 and APN 010-302-031. In August 2024, the City Council received an assessment of the Chapman Estate’s physical condition, operational and maintenance activities, and financial summaries. The City Council determined that operating and maintaining the Chapman Estate was not financially prudent nor was it reasonable to continue to operate and maintain. As such, the City Council directed staff to take the necessary steps needed to dispose of the property. To sell or lease the Chapman Estate, the City must now comply with the Surplus Land Act as amended by AB 1486.
On August 19, 2025, the City Council adopted Resolution R-2025-061 declaring the subject property exempt surplus land due to use restrictions applying to the property from the Distribution Agreement Dated December 30, 2013, limiting use of the property to recreational and general public use purposes only. The California Department of Housing and Community Development (HCD) subsequently rejected the City’s finding that the property qualified as exempt surplus land and directed the City to move forward with the regular Surplus Land Act process.
Procedure
As noted above, the amended Surplus Land Act, Government Code Sections 54220 et seq., requires the City to first declare this property to be surplus land and offer such surplus land to various entities, subject to Government Code Section 54227(b), first Council Agenda 2-3-2026 12.C-1
priority shall be given to entities that agree to continue use of the property for park, open space or recreation purposes with second priority given to entities that agree to use the property for housing where at least twenty-five percent of the units will be affordable to lower income households, pursuant to Government Code Section 54222.5 before it can privately negotiate any disposition and dispose of the land. This action is consistent with the Distribution Agreement (Attachment 2), which transferred the property to the City.
Therefore, pursuant to the amended Surplus Land Act, City staff must send a written Notice of Availability (NOA) of the City-owned properties by email or certified mail to HCD and all parties identified on the HCD’s expressions of interest list.
If one of the entities/agencies receiving the NOA desires to purchase or lease the property, it must notify the City of its interest to do so in writing within 60 days of receiving the City’s notice, and the City must negotiate in good faith with the entity/agency responding for at least a period of 90 days. If no one replies within 60 days of issuance of NOA, the City may dispose of the property subject to Government Code Section 54223.
If the City disposes of the property to an entity that uses the property for ten or more residential units, the City shall record a covenant or restriction against the property prior to any land use entitlement that requires not less than fifteen percent of any residential units be affordable units.
If the City receives a single reply to the NOA, it must enter negotiations with that entity. If multiple notices of interest are received, the Surplus Land Act establishes priorities. In the event no agreement is reached between the City and any interested entity/agency after the 90-day good faith negotiation period, the land may then be disposed of subject to the same recorded covenant restriction noted above.
Environmental
Staff has determined that the designation of this property as surplus does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under the California Environmental Quality Act pursuant to State CEQA Guidelines Section 15060(c)(3) because it is not a project as defined by CEQA Guidelines Section 15378.
Conclusion and Recommendation
Staff recommends that the City Council adopt a resolution (Attachment 1) declaring that real properties owned by the City located at APNs 010-302-030 and 010-302-031 are surplus land and not necessary for the City’s use pursuant to Government Code Section 54221, authorizing the City Manager to comply with the procedures under the Surplus Land Act, and finding that such declaration and authorization is exempt from environmental review under the California Environmental Quality Act.
FISCAL IMPACT:
There is no direct financial impact associated with declaring the Chapman Estate surplus property. However, depending on the number of responses to the NOA, City staff may need to spend multiple hours negotiating with multiple entities. Subsequent actions, Council Agenda 2-3-2026 12.C-2
should the City find an interested party, will have a financial impact and will be evaluated as part of those actions.
ATTACHMENTS:
1. Resolution
2. Chapman Estate Distribution Agreement
Submitted by: Scot Graham, Community Development Director City Manager Approval:
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RESOLUTION NO. R-2026-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA DECLARING THAT REAL PROPERTIES OWNED BY THE CITY LOCATED AT APNs 010-302-030 AND 010-302-031 ARE SURPLUS LAND AND NOT NECESSARY FOR THE CITY’S USE PURSUANT TO GOVERNMENT CODE SECTION 54221, AUTHORIZING THE CITY MANAGER TO COMPLY WITH THE
PROCEDURES UNDER THE SURPLUS LAND ACT, AND FINDING THAT SUCH
DECLARATION AND AUTHORIZATION IS EXEMPT FROM ENVIRONMENT REVIEW
UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS, the City of Pismo Beach ("City") is owner in fee simple of certain restricted real property located at APNs 010-302-030 and 010-302-031, commonly known as the Chapman Estate and depicted in Exhibit A ("Property"); and WHEREAS, when the City owns surplus land in fee simple and such land is no longer necessary for the City use, then under the Surplus Properties Land Act, Government Code Sections 54220–54233 ("Act") the City must either declare the land surplus land or exempt surplus land; and
WHEREAS, the City Council desires to declare the property non-exempt surplus land and not necessary for City use; and
WHEREAS, the City received title to this Property through a disposition agreement with a restriction that the owner shall use the land for recreational and general public use purposes only; and
WHEREAS, pursuant to the Surplus Land Act, staff will send a written notice of availability of the property by electronic mail or by certified mail to all of the entities identified in Government Code section 54222; and
WHEREAS, subject to Government Code section 54227(b), priority shall be given to an entity that agrees to continue to use the Property for park or recreation purposes; if one of the entities desires to purchase or lease the property after having received notice, it must indicate its interest to do so in writing within 60 days of receiving the notice, and the City and the entity responding to the notice may negotiate price and terms for the disposition of the Property; and
WHEREAS, pursuant to Government Code 54223, if the City does not agree to price and terms with an entity to which notice and an opportunity to purchase or lease are given and disposes of the Property to an entity that uses the Property for ten or more residential units, the City shall record a covenant or restriction against the Property prior to approval of any land use entitlements that requires that not less than fifteen (15) percent of any residential units be Affordable Units; and
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Attachment 1
WHEREAS, the Act requires that, before City Council disposes of surplus land or engages in negotiations to dispose of surplus land, the City must support such a determination with written findings and shall provide a copy of the written determination to the California Department of Housing and Community Development (HCD) at least 30 days prior to disposition.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach as follows:
1. The previous recitals are true and correct and a substantive part of this resolution.
2. The City Council hereby finds and declares the property described in Exhibit A and consists of as non-exempt surplus land and is not currently necessary for City use. The subject property is commonly known as the Chapman Estate, located at 1243 Ocean Boulevard, Pismo Beach, California, and consists of Assessor’s Parcel Numbers 010-302-030 and 010-302-031.
3. The City Council directs the City Clerk or designee to send this resolution by electronic mail to the California Department of Housing and Community Development (“HCD”) in compliance with HCD's Surplus Land Act Guideline and to send a Notice of Availability (NOA) by electronic mail or by certified mail to all of the entities identified in Government Code section 54222
4. The City has reviewed this resolution with respect to applicability of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA"). City staff has determined that the designation of this property as non- exempt surplus does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines Section 15060(c)(3) because it is not a project as defined by the CEQA Guidelines Section 15378. Adoption of this resolution does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
5. The City Council authorizes the City Manager and other City officers and staff, jointly and severally, to do all things which they deem necessary or proper to effectuate the purposes of this resolution and ratifies and confirms any such actions previously taken. Such actions include negotiating in good faith in accordance with the requirements of the Act with any of the Designated Entities that submit a written notice of interest to purchase or lease the Properties in compliance with the Act.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 3rd day of February 2026, by the following vote:
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Attachment 1
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and official seal of the City of Pismo Beach on _______________________.
________________________
Erica Inderlied, City Clerk
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