City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02531 4/18/2023 Discussion Item 4.
Surplus Land Act and Disposal of Surplus Real Property
File ID: 2022-02531
Location: Citywide
Recommendation: Receive and file.
Contact: Richard Sanders, Facilities & Real Property Superintendent, (916) 808-7034, [email protected] Department of Public Works Presenter: Richard Sanders, Facilities & Real Property Superintendent, (916) 808-7034, [email protected] Department of Public Works Attachments:
1-Description/Analysis
Additional Description/Analysis
Issue Detail: In response to an agenda item declaring City-owned land to be surplus in accordance with the California laws known collectively as the Surplus Land Act (California Government Code § 54220 et seq.), the City Council requested that staff present an item to the Law & Legislation Committee to discuss current City processes for the sale of surplus properties and potential changes, including requirements for potentially more affordable housing and workforce standards like local hire, apprenticeship, and healthcare standards on future disposals of surplus land.
Current City processes for disposal of surplus property include internal review of the property for any title restrictions, utilities, future projects, bond debt, reimbursement requirements, etc. Department clearance forms are circulated to determine if any departments object to the disposal, and if so, their reasons.
After clearance from all City Departments, the property can be declared surplus in accordance with California’s Surplus Land Act. The Surplus Land Act requires that City Council declare the property to be surplus in an open meeting. Following the declaration, the Surplus Land Act mandates that
File ID: 2022-02531 4/18/2023 Discussion Item 4.
Notices of Availability be sent to other government agencies and to affordable housing developers which have registered with the State’s Housing and Community Development Department (HCD).
Entities receiving the notification are given a 60-day window to respond with an offer to purchase the property (called a “Notice of Interest”). Developers must include the number of affordable units to be built as part of their offer, which must meet HCD minimums. A 90-day negotiation period with the developer proposing the most affordable units follows. Any agreement must include requirements to construct the agreed-upon number of affordable units.
If no agreement is reached within the 90-day negotiation period (or no offers are received), then the City may sell the property to any buyer on the open market. Upon sale, a deed restriction must be included which sets minimum requirements, per HCD, for affordable housing if more than 10 residential units are ever constructed on the property. It should be noted that this deed restriction does not limit development to affordable housing; the restriction is only applicable if housing is developed.
Adding other City requirements such as local hire, apprenticeship, healthcare standards, to the sale of surplus property may create barriers to a sale. These additional requirements could increase the cost to develop a property, which could have the effect of disincentivizing potential buyers. Such requirements may also lower the potential sales price. In addition, the City would have to designate staff resources in order to monitor and enforce the additional requirements. Such requirements would likely increase the timeframe and difficulty associated with selling developable surplus properties.
Policy Considerations: The information in this report is in accordance with the provisions of the Surplus Land Act.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): Not applicable.
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Staff was directed to present to the Law & Legislation Committee a discussion related to the Surplus Land Act and potential for adding more requirements to the sale of surplus land.
Financial Considerations: Not applicable.
File ID: 2022-02531 4/18/2023 Discussion Item 4.
Local Business Enterprise (LBE): Not applicable.