TO: HONOR ABLE MAYOR FROM: Nanci Klein
AND CITY COUNCIL Jim Shannon
S
UBJECT: SEE BELOW DATE: August 28, 2023
Approved Date
9/7/23
CO
UNCIL DISTRICTS: 6 & 9
S
UBJECT: LAND EXCHANGE BETWEEN THE CITY OF SAN JOSE AND SAN
JOSE WATER COMPANY FOR PROPERTIES LOCATED AT SUNOL
STREET, W. HOME STREET, EMORY STREET, HARVEST MEADOW
COURT AND BRANHAM LANE
RECOMMENDATION
(
a) Adopt a resolution:
(1) Declaring 12,800 square feet of land, identified as a portion of Assessor’s Parcel Numbers 264-11-024, “exempt surplus land” under Cal. Gov. Code §54221(f)(1)(C) as exchange of land for another property necessary for the City’s use; (2) A pproving the sale of 12,800 square feet of City -owned property located at the southeast corner of W. Home and Sunol Streets, to San Jose Water Company in the amount of $1,090,000, to exchange for the properties identified as Assessor’s Parcel Numbers 264- 11-034, 259-07-075, 459-02-004, 459-02-008 in fee interest and an approximately 12,000 square foot easement encumbering APN 458-18-012, for the total amount of $270,000; and
(3) Authorizing the City Manager or designee, to negotiate and execute a Purchase and Sale Agreement and an Easement Agreement between the City of San José and San Jose Water Company for the subject parcels and to execute all other documents necessary to effectuate the property exchange.
(b
) Adopt the following 2023-2024 Appropriation Ordinance and Funding Sources Resolution Amendments in the Construction Tax and Property Conveyance Tax Fund: Parks Purposes Council District #6:
(1
) Establish an estimate for Revenue from Other Revenue in the amount of $820,000; and (2) Establish the Del Monte Park Phase III Development Reserve appropriation in the amount of $820,000.
COUNCIL AGENDA: 9/19/23
FILE: 23-1227
ITEM: 2.8
HONORABLE MAYOR AND CITY COUNCIL
August 28, 2023
Subject: Land Exchange Between the City of San José and San Water Company for Properties Located at Sunol Street, W. Home Street, Emory Street, Harvest Meadow Court a nd Branham Lane
SUMMARY AND OUTCOME
Adoption of this resolution will allow staff to complete the negotiation and execution of a Purchase and Sale Agreement and an Easement Agreement with the San Jose Water Company for the property exchange as described and depicted in the Attachment: Legal Descriptions of Subject Properties. Net proceeds in the amount of $820,000 will be deposited into the Council District 6 Construction Tax and Property Conveyance Tax Fund.
BACKGROUND
As part of the San Jose Water Company’s (SJWC) System Improvement projects, SJWC plans to use a pressure regulator at its Home Street Station located at the easterly end of W. Home Street (APN 264-11-034) adjacent to the City’s Del Monte Park and Los Gatos Creek. Installation of the regulator on the existing SJWC property would require a pipeline run through Home Street.
SJWC believes a more practical location for the regulator facility would be at the corner of Sunol Street and Home Street, on a City-owned parcel (a portion of APN 264-11-024). SJWC approached the City with the desire to acquire approximately 12,800 square feet of the City- owned land in exchange for SJWC’s existing Home Street Station property.
In discussions with the SJWC, City staff identified multiple SJWC properties that are a priority for the City to acquire for parks-related uses, and the parties have agreed to a multiple-property swap arrangement.
San José Municipal Code Chapters 4.20.030 and 4.20.050 permit the sale of City-owned surplus property upon a City Council finding and determination that the transaction is consistent with the Surplus Land Act, which is a State law controlling the City’s ability to dispose of surplus property, and where the transaction is an exchange of properties, respectively, by direct negotiation.
ANALYSIS
City Property to be Conveyed to SJWC
The subject property is approximately 12,800 square feet (0.29 acres), identified as a portion of Assessor’s Parcel Number 264-11-024, located at the southeast corner of W. Home Street and Sunol Street. The City acquired this property in 2017, to be included in the Del Monte Park Phase III Project. The site has a General Plan designation of Neighborhood/Community Commercial and zoning of Heavy Industrial. The site is fenced off with no building improvements. It has historically been used as a contractor’s yard but is currently vacant. Per a City-commissioned appraisal, the highest and best use of the property is as an industrial contractor’s yard, and the appraised value is $1,090,000.
HONORABLE MAYOR AND CITY COUNCIL
August 28, 2023
Subject: Land Exchange Between the City of San José and San Water Company for Properties Located at Sunol Street, W. Home Street, Emory Street, Harvest Meadow Court a nd Branham Lane
SJWC Properties to be Acquired by City
City staff identified four SJWC properties that are desirable for the City’s use. SJWC agreed to convey these properties to the City as an exchange to offset the cost of its acquisition of the City’s Home Street parcel. The properties to be conveyed to the City are listed below.
1. W. Home Street (APN 264-11-034): This property is approximately 31,916 square feet, located at the eastern end of W. Home Street. The property is situated between the Los Gatos Creek Trail on the west and the Los Gatos Creek on the east. The General Plan designation for this site is Open Space, Parklands, and Habitat, and zoning is heavy industrial. The site is currently improved with water system infrastructure. According to a City-commissioned appraisal, the highest and best use of the site is open space and habitat, and the appraised value is $60,000. The property will be used to add to the adjacent site as part of the Del Monte Park/Los Gatos Creek Trail and could potentially provide mitigation. SJWC will be responsible for the removal of all water-related infrastructure.
2. Emory Street (APN 259-07-075): This property is approximately 3,120 square feet, located along the south side of Emory Street within the city’s Guadalupe Gardens area.
The General Plan designation for this site is Open Space, Parklands, and Habitat, and the zoning is agriculture. The site is currently used as open space and all well-related infrastructure and improvements have been removed. According to a City-commissioned appraisal, the highest and best use of the site is open space and habitat, and the appraised value is $50,000. The property will be used as part of the Guadalupe Gardens, within the Guadalupe River Park. Conveyance of the SJWC parcel will extinguish a related SJWC access easement on the City’s Guadalupe Gardens parcel (APN 259-07-113).
3. Harvest Meadow Court (APN 459-02-004 & 008): The property consists of two contiguous parcels totaling approximately 196,455 square feet, located on the east side of Almaden Expressway. The property abuts Thousand Oaks Park, and the Guadalupe River passes through the site. The General Plan designation for this site is Open Space, Parklands, and Habitat, and the zoning is single family residential. Five capped wells remain on the property, and SJWC removed all other well-related infrastructure and improvements. According to a City-commissioned appraisal, the highest and best use of the site is open space and habitat, and the appraised value is $155,000. The property will be used as part of the Guadalupe River Trail and for mitigation, consistent with the City Council-approved master plan for Guadalupe River Trail development.
4. Branham Lane Easement (a portion of APN 458-18-012): The recreation trail easement is a portion of the SJWC’s parcel, approximately 12,279 square feet in size. The easement is located at the junction of Branham Lane and the Guadalupe River. The easement allows for the development of the Guadalupe River Trail Reach 12 Project per the City Council- approved Guadalupe River Trail Master Plan. The Guadalupe River Trail will traverse an existing dirt road that is currently used by SJWC and the Santa Clara Valley Water District for access to existing infrastructure, maintenance of the Guadalupe River riparian
HONORABLE MAYOR AND CITY COUNCIL
August 28, 2023
Subject: Land Exchange Between the City of San José and San Water Company for Properties Located at Sunol Street, W. Home Street, Emory Street, Harvest Meadow Court a nd Branham Lane
corridor, and flood control purposes. The General Plan designation for this site is Open Space, Parklands, and Habitat, and the zoning is single family residential. According to a City-commissioned appraisal, the highest and best use of the site is open space and habitat, and the appraised value of the trail easement is $250. SJWC has agreed to transfer the easement for the price of $5,000, which is sufficient to cover SJWC staff time spent on the preparation and execution of easement and transaction documents.
In the exchange, the City will transfer 0.29 acres, worth $1,090,000 in value, to SJWC and SJWC will transfer 5.31 acres and a 0.28 acre easement, worth $270,000 in value, to the City.
SJWC will pay the balance of value in cash to the City, or $820,000, at the time of transfer. A summary of the properties to be exchanged is listed in the table below.
Owner Location APN Area
(sq ft) Proposed Use Transaction
Value
City of San
José Sunol Street 26411024
(portion of) 12,800 Water Station $1,090,000
San Jose Water W. Home Street 26411034 31,916
Park/Trail/Mitigation $60,000
San Jose Water Emory Street 25907075 3,120 Parkland/Open Space $50,000
San Jose Water Harvest Meadow Court 45902004 and
45902008 196,455 Trail/Mitigation $155,000
San Jose Water Branham Lane
Easement
45818012
(portion of) 12,279 Trail $5,000
The value received in the swap furthers the City’s objectives to provide park and trail amenities for the public. The loss of 0.29 acres of potential Del Monte Park expansion area along Sunol Street is more than offset by the addition of 0.73 acres to the park on the eastern boundary. This swap would expand the useful Del Monte Park area adjacent to the existing dog park and field, and provide an opportunity to incorporate the Los Gatos Creek trail more directly in the park experience. In addition, the 4.5-acre property adjacent to Thousand Oaks Park adds considerable value to that park and has the potential for mitigation, the removal of the Guadalupe Gardens SJWC inholding parcel consolidates the City’s ownership and improves the City’s management of the area, and the Branham Lane Easement advances the City’s efforts to construct the Guadalupe River Trail Reach 12 Project. The cash payment ensures that the swap is for fair market value.
The Environmental Services Department reviewed environmental reports for the four properties to be acquired by the City and found no significant environmental concerns for the proposed City uses of the properties to be acquired. SJWC will remove all above-ground infrastructure prior to transfer, retire all wells to Santa Clara Valley Water District standard requirements, and mitigate a few small areas of shallow soil contamination at the W. Home Street and Emory Street properties. There will be no open wells remaining on the property, with wellheads cut off below the surface. The Purchase and Sale Agreement will be conditioned on SJWC performing this site decommissioning to the satisfaction of the City.
HONORABLE MAYOR AND CITY COUNCIL
August 28, 2023
Subject: Land Exchange Between the City of San José and San Water Company for Properties Located at Sunol Street, W. Home Street, Emory Street, Harvest Meadow Court a nd Branham Lane
EVALUATION AND FOLLOW-UP
Approval of the recommendations directs staff to negotiate and execute a Purchase and Sale Agreement and an Easement Agreement conditioned on satisfaction of final title and environmental due diligence, such as the appropriate decommissioning of the wells on the SJWC W. Home Street parcel, and complete the exchange of the subject properties.
After the property exchange, the Parks, Recreation, and Neighborhood Services Department will complete the Master Plan for Del Monte Park Phase III. Master plans have been completed to guide future improvements at Guadalupe Gardens and the Guadalupe River Reach 12 Trail.
COST SUMMARY/IMPLICATIONS
Budget actions in this memorandum include recognizing $820,000 in revenue and appropriating the proceeds from the properties exchange to establish the Del Monte Park Phase III Development Reserve in the Council District #6 Construction Tax and Property Conveyance Tax Fund. The City’s property at the corner of W. Home Street and Sunol Street was originally purchased in 2017 for the Del Monte Park expansion using funding from the Council District #6 Construction Tax and Property Conveyance Tax Fund and Subdivision Park Trust Fund.
With the approval of the recommendations in this memorandum, the total funding available for the Del Monte Park Phase III Development Reserve is $6.0 million in the Subdivision Park Trust Fund and $820,000 in the Council District #6 Construction Tax and Property Conveyance Tax Fund. City staff is currently surveying the area and clearing the parcel in anticipation of starting the master planning process in the summer of 2024.
BUDGET REFERENCE
The table below identifies the funds and appropriations to establish and appropriate proceeds of the properties exchange recommended as part of this memorandum.
Fund
#
Appn
# Appn Name Current Total
Appn
Rec. Budget
Action
2023-2024
Proposed
Capital
Budget
Page*
Last Budget
Action (Date,
Ord. No.)
384 R130 Other Revenue $0 $820,000 N/A N/A
384 8532 Del Monte Park
Phase III
Development
Reserve
$0 $820,000 N/A N/A
* The 2023-2024 Adopted Capital Budget was approved on June 13, 2023, by the City Council and adopted on June 20, 2023.
HONORABLE MAYOR AND CITY COUNCIL
August 28, 2023
Subject: Land Exchange Between the City of San José and San Water Company for Properties Located at Sunol Street, W. Home Street, Emory Street, Harvest Meadow Court a nd Branham Lane
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office and the Departments of Environmental Services; Parks, Recreation, and Neighborhood Services; and, Planning, Building and Code Enforcement.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the September 19, 2023 City Council meeting.
COMMISSION RECOMMENDATION/INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.; PDC08-061 (Ohlone Mixed-Use FEIR), PP14-091 (Del Monte Park Land Acquisition and Building Demolition); PP17-027 (Guadalupe River Trail Master Plan); PP03-092 (Guadalupe River Trail, Reach 12).
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
NANCI KLEIN JIM SHANNON
Director of Economic Budget Director
Development and Cultural Affairs
HONORABLE MAYOR AND CITY COUNCIL
August 28, 2023
Subject: Land Exchange Between the City of San José and San Water Company for Properties Located at Sunol Street, W. Home Street, Emory Street, Harvest Meadow Court a nd Branham Lane
I hereby certify that there will be available funding for appropriation in the Construction Tax and Property Conveyance Tax Fund: Parks Purposes Council District #6 in Fiscal Year 2023-2024 monies in excess of those heretofore appropriated therefrom, said excess being at least $820,000.
JIM SHANNON
Budget Director
For questions, please contact Kevin Ice, Senior Real Estate Manager, Office of Economic Development and Cultural Affairs, at (408) 535-8197.
ATTACHMENT: Legal Descriptions of Subject Properties
ATTACHMENT
Legal Descriptions of Subject Properties
• Sunol Street
1 2
• W. Home Street
3 • Emory Street
4 • Harvest Meadow Court
The land referred to is situated in the County of Santa Clara, City of San Jose, State of California, and is described as follows:
Being a parcel of land containing 1.787 acres of land, more or less, and more particularly described as follows:
All of that certain 4.215 acre parcel of land shown on Record of Survey Map No. 153-A for San Jose Water Company Assessment Lot No. 205 recorded in Book 114 of Maps at Page 24, Santa Clara County Records.
EXCEPTING THEREFROM:
All of that certain .315 acre parcel of land shown as Parcel A on the Record of Survey Map recorded in Book 181 of Maps at
EXCEPTING THEREFROM:
A parcel of land containing 2.113 acres of land, more or less, and more particularly described as follows:
5 Commencing at the Southernmost corner of that certain 1.307 acre tract of land described in the Deed from Louise M.
Dudley, et al, to Charles B. Morton, et ux, recorded in Book 2710 of Official Records, Page 175, Santa Clara County Records, said Southernmost corner being in the Easterly boundary of Lot 13 of the Henderson Tract in the channel of the Guadalupe River, as said boundary is shown upon the Map of the Henderson Tract, recorded in Book "H" of Maps, Page 113, Santa Clara County Records, running thence along said Easterly boundary of Lot 13, South 42° 45' East 54.17 feet and South 6° 30' East 20.14 feet to an iron pipe marking the true point of beginning of this description; thence from said true point of beginning continuing along said Easterly boundary of Lot 13, South 6° 30' East 386.24 feet to an iron pipe set at the point of intersection thereof with the Southwesterly prolongation of the Northwesterly line of that certain 40.06 acre tract of land conveyed in the Deed from J.P. Dudley to S.I. Roper, recorded in Book 130 of Deeds, Page 292, Santa Clara County Records; thence leaving said Easterly boundary of Lot 13 and running along said Southwesterly prolongation and said Northwesterly line of said 40.06 acre tract of land, said Northwesterly line marked by an old redwood fence North 72° 42' 30" East 236.70 feet to an iron pipe, from which iron pipe the corner 4" x 6" redwood post of said fence, scribed "W. P.
P. 4", bears North 72° 42' 30" East; thence leaving said fence line and said Northwesterly line and running North 6° 30' West 405.31 feet to an iron pipe; thence South 68° 15' West 241.00 feet to the true point of beginning.
APN 459-02-008
6 • Branham Lane
7 8
9