City of Sacramento
City Council - 5PM Report
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File ID: 2023-00181 3/21/2023 Consent Item 4.
(Redevelopment Agency Successor Agency) Purchase and Sale Agreement for RASA-Owned Property at 1022 and 1030 Del Paso Boulevard File ID: 2023-00181
Location: 1022 and 1030 Del Paso Boulevard, District 2 represented by Councilmember Loloee Recommendation: Pass a Redevelopment Agency Successor Agency Motion: a) approving a Purchase and Sale Agreement with Phoenix Enterprises, Inc. for the sale of the Redevelopment Agency Successor Agency-owned properties at 1022 and 1030 Del Paso Boulevard (Assessor Parcel Numbers 275-0163-005 and 275-0163-006) in the total amount of $420,000; and b) authorizing the City Manager or the City Manager’s designee to execute the attached Purchase and Sale Agreement and related documents and take any additional necessary actions to implement the Purchase and Sale Agreement.
Contact: Leslie Fritzsche, Economic Investment Manager, (916) 808-5450, Office of Innovation and Economic Development; Bill Sinclair, Real Property Agent, (916) 808-1905, Public Works Department
Presenter: None
Attachments:
1-Description/Analysis
2-Site Location
3-Photos of the Site
4-Purchase and Sale Agreement with Phoenix Enterprises, Inc.
Description/Analysis
Issue Detail: The Redevelopment Agency Successor Agency (“RASA”) owns property in the North Sacramento area on Del Paso Boulevard between Baxter Avenue and Globe Avenue (APNs 275-0163-005, and 275-0163006), referred to as the “Site,” as shown in Attachment 1.
In accordance with the redevelopment dissolution law, RASA is to dispose of its real property holdings and distribute the sales proceeds to various taxing entities. The Oversight Board for RASA and the California Department of Finance approved RASA’s Long Range Property Management Plan (“Plan”) in 2015. The Plan included an inventory of all RASA properties and specified the type of disposition and use for each property. In 2016, the Oversight Board
File ID: 2023-00181 3/21/2023 Consent Item 4.
and specified the type of disposition and use for each property. In 2016, the Oversight Board delegated authority to RASA to sell properties at fair market value based on an appraisal or the highest bid. Accordingly, RASA is authorized to proceed with disposition of its real property assets.
Disposition of the Site is also subject to the California Surplus Land Act (“Act”). The first step in the process of disposing property under the Act is for the property to be declared surplus.
All of RASA’s real property holdings were deemed “surplus” through adoption of the Plan, pursuant to Government Code section 54221(b)(2) of the Surplus Land Act. To further comply with the Act, RASA staff sent out a Notice of Availability (“NOA”) on December 8, 2021 to all required recipients, including affordable housing developers on the list managed by the California Housing and Community Development department (“HCD”), affordable housing developers on a list maintained by the Sacramento Housing and Redevelopment Agency, and public agencies.
The NOA informed recipients that the Site was available for affordable housing and, if interested, entities should submit an offer within 60 days of the NOA. Staff received one offer from an entity that proposed to use the Site for an industrial use of heavy equipment rentals.
Given this offer did not propose to use the Site for affordable housing, it was declared non- responsive.
The Site was subsequently listed on the open market by the local brokerage firm Laverty- Chacon. A Letter of Intent for $420,000 (the listing price) from Phoenix Enterprises, Inc. dba SKK Developments (“Buyer”) was received, and on October 1, 2022, the City entered into an Exclusive Right to Negotiate Agreement for the Site with Buyer. Since that time, Buyer has embarked on due diligence to evaluate the Site for development of housing.
In accordance with the Act’s requirements, RASA notified HCD of RASA’s proposed sale of the Property to Buyer and HCD sent RASA a letter on February 17, 2023 approving this proposed property disposition. RASA has determined that the purchase price represents the fair market value of the Site and it was the highest bid received for the Site. The attached Purchase and Sale Agreement contains the negotiated terms for the sale of the Site, including a 90-day due diligence period, and closing of the sale upon the earlier of: (i) June 30, 2024; or (ii) 30 calendar days following the final approval of Buyer’s entitlements for its mixed-use project. These time periods will allow Buyer time to develop plans, secure financing, and start the City entitlement process.
Policy Considerations: The recommendations in this report are in accordance with California redevelopment agency dissolution laws (Health & Safety Code § 34170 et seq.) and the California Surplus Land Act (Government Code § 54220 et seq.).
The use contemplated for the Site is in accordance with the goals of the former
File ID: 2023-00181 3/21/2023 Consent Item 4.
The use contemplated for the Site is in accordance with the goals of the former Redevelopment Agency of the City of Sacramento’s North Sacramento Redevelopment Plan and the Implementation Plan.
Economic Impacts:
The actions recommended in this report will result in cost savings for RASA, since it will no longer have to maintain the Site. In addition, the sale will return the Site to private ownership subject to payment of property taxes and the Site’s potential redevelopment will further increase the tax base while stimulating additional patron traffic to Del Paso Boulevard.
Environmental Considerations:
California Environmental Quality Act (CEQA): The City Council declaration that a parcel is surplus property is in compliance with a statutory requirement and is not part of a project that has been identified, designed or funded. No physical change in the environment would occur. The action is an administrative action that would not result in direct or indirect physical changes in the environment and is not a project as defined in CEQA. (CEQA Guidelines section 15378(b)(4); 15060(c)(3)).
Sustainability: Not applicable
California Environmental Quality Act (CEQA): The sale of surplus property described in this report is exempt from environmental review under CEQA Guidelines Section 15312 (Surplus Government Property Sales) because the Site is not located in an area of statewide, regional or areawide concern; it does not have significant values for wildlife habitat; the use of the Site and adjacent property has not changed since the time of purchase; and the Purchase and Sale Agreement does not approve development of the Site.
This report only proposes execution of a Purchase and Sale Agreement for RASA’s sale of the Site. Buyer will have to obtain any necessary land use entitlements and conduct any necessary environmental review under CEQA before the Site can be developed. The Purchase and Sale Agreement does not limit changes to the site plan or limit imposition of mitigation measures to reduce environmental impacts of the proposed project.
Sustainability: This report does not directly address any sustainability issues.
Commission/Committee Action: On January 25, 2016, by Resolution 2016-0001, RASA’s Oversight Board delegated authority to RASA to sell properties without the need for further Oversight Board approval, provided the properties were sold at fair market value as determined by appraised value or the highest bid. This approval was sought to aid in
File ID: 2023-00181 3/21/2023 Consent Item 4.
streamlining the disposition process.
Rationale for Recommendation: The Site consists of two vacant contiguous parcels with a combined land area of 21,000 square feet. Photos of the Site are included as Attachment 2.
The Site is located on the southeast corner of Baxter Avenue and Del Paso Boulevard. It is immediately adjacent to a larger privately-owned site comprised of 105 Globe Avenue, 1000 Del Paso Boulevard, and 1010 Del Paso Boulevard. The privately-owned site is also under contract for purchase by Buyer. The combined area comprises a half-block of property on Del Paso Boulevard stretching from Baxter Avenue to Globe Avenue and totals 58,292 square feet.
Buyer’s proposed development of the entire half-block area is a mixed-use, multi-storied project with at least 200 total housing units. The proposed use for the RASA parcels contains approximately 75 housing units and will serve a variety of incomes with at least 15% of the housing units constructed on the RASA parcels being affordable per the requirements of Government Code section 54233 of the Act. Buyer’s project advances the vision of introducing housing to the Del Paso Boulevard corridor, a long-held goal to aid in the corridor’s revitalization and to increase housing supply.
Financial Considerations: As part of the redevelopment dissolution process, RASA- owned properties are to be disposed of at fair market value based on the appraised value or the highest bid. The price offered by Buyer of $420,000 was the listed price for the Site and was the highest bid received.
If approved and the transaction closes, the net sales proceeds (net of the broker’s fee, transaction, and escrow costs) will be sent to the County Auditor-Controller for distribution to the taxing entities. The City’s portion will be deposited into the Innovation and Growth Fund (Fund 2031)
Local Business Enterprise (LBE): Not applicable.
DEL PASO BLVD
BAXTER AVE
DEL PASO BLVD LOCHBRAE RD ALY
BARSTOW ST
0 50 10025
Feet
JC | 09/21/20
1022-1030 Del Paso Boulevard
Vicinity Map
City of Sacramento, Geographic Information System
APN 275-0163-005-0000
APN 275-0163-006-0000
Attachment 1
1022
1030
Attachment 2
Photographs of 1022 – 1030 Del Paso Boulevard Site
Site Location looking Southeast – Corner of Baxter Avenue and Del Paso Boulevard