City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #: 23-1055 Agenda Date: 1/10/2024
Version: 1 Item #: 5.
Report regarding a resolution authorizing the City Manager or designee to purchase several remnant parcels (Assessor Parcel Numbers 091022010, 091022020, 091022030, 091025010, 091034080, and 015031090) with outstanding delinquent taxes in South San Francisco subject to an upcoming County of San Mateo Chapter 8 tax sale. (Nell Selander, Economic & Community Development Director; Greg Mediati, Parks & Recreation Director; and Adena Friedman, Chief Planner)
RECOMMENDATION
Staff recommends City Council adopt a resolution authorizing the City Manager or designee to purchase several remnant parcels along Westborough Boulevard between Oakmont Drive and Olympic Drive (APNs 091022010, 091022020, 091022030, 091025010, 091034080) and a remnant right-of-way parcel on Sylvester Road north of Associated Road (APN 015031090) with outstanding delinquent taxes in South San Francisco subject to an upcoming County of San Mateo Chapter 8 tax sale.
BACKGROUND
With some exceptions, such as for publicly owned lands, all properties are required to pay property taxes. In San Mateo County, these taxes are collected by the San Mateo County Tax Collector’s Office. Some property owners become delinquent in paying their property taxes and other special assessments and liens that appear on the property tax bill. In these cases, the Tax Collector’s Office follows lengthy procedures to collect such debts, but eventually may sell these properties at tax auctions if the debts remain unpaid.
Typically, properties are sold at what is known as a Chapter 7 public auction, which notices tax defaulted properties to the public and allows anyone to participate in the auction to purchase a property. Once a list of tax defaulted properties is established for a Chapter 7 public auction, the County provides notice of this list to local jurisdictions. Local jurisdictions can object to the public sale of certain properties and request that those properties be held over for a Chapter 8 tax sale. At a Chapter 8 sale, public agencies may purchase tax defaulted properties for public purposes.
In May 2023 the City received notice that the San Mateo County Tax Collector’s office would be conducting a Chapter 7 public auction for tax defaulted properties. Staff discussed the possible acquisition of some of these tax defaulted properties with Council in closed session on July 12, 2023 and October 25, 2023 and received direction to submit a letter to the County objecting to the inclusion of certain properties in the public auction, instead requesting these properties be subject to a Chapter 8 sale. Below is a discussion of the properties the City objected to selling at the Chapter 7 sale and will instead be available for purchase at the Chapter 8 sale, which is anticipated to be held in early 2024.
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File #: 23-1055 Agenda Date: 1/10/2024
Version: 1 Item #: 5.
DISCUSSION
Remnant Frontage Parcels on Westborough Boulevard
APNs 091022010, 091022020, 091022030, 091025010, 091034080 These remnant frontage parcels are 10-foot-wide strips along the southern edge of Westborough Boulevard, between Oakmont Drive and Olympic Drive (see Attachment 1 for a map of these parcels and images of recent conditions). These parcels contain numerous trees and unkept ground level vegetation spanning the area between the street and the rear yards of the homes backing up to Westborough Boulevard. The property owners have not maintained these properties for many years and, as a result, many of the trees now warrant significant trimming and/or removal. In recent years, Code Enforcement staff has cited one of the property owners, based out of Florida, to resolve hazardous tree issues and tall weeds, however, the property owner has been unresponsive. Several years ago, the City mitigated some hazardous trees and placed a lien against one of the properties to recoup these expenses.
The delinquent taxes owed on these properties amount to $109,804, meaning the City would have to pay that amount plus any additional fees imposed by the Tax Collector’s Office to purchase the properties at the Chapter 8 tax sale. A portion of the outstanding tax liability is a lien imposed by the City, so those funds will flow back to the City offsetting some of the acquisition cost. Additionally, the City would need to spend approximately $150,000 to remove trees, shrubs, and any refuse on the properties shortly after acquisition ensuring the properties are safe, unblighted, and in good condition for long-term, routine maintenance. Staff estimates ongoing annual costs will be roughly $10,000 for weed abatement and litter pick up.
While the acquisition of these parcels provides short-term stability to these properties - ensuring they are maintained in good order and relieving the City of the time and cost associated with protracted Code Enforcement actions - it also provides longer-term opportunities for adding right-of-way, creating pathways, and adding more attractive landscaping. The need for these improvements and budget to support them have not yet been identified, but owning the properties allows for flexibility should the City wish to make these changes in the future.
Portion of Sylvester Road
APN 015031090
This property is a 17,162 square foot section of Sylvester Road north of Associated Road (see Attachment 2 for a map of this parcel and images of recent conditions). It is vacant right-of-way that is currently privately owned and surrounded by other privately-owned rights-of-way in the middle of a fully entitled life sciences redevelopment project at 120 E. Grand Avenue led by the Trammell Crow Company.
The 120 E. Grand project, approved by the Planning Commission in May 2023, consists of two new office / R&D buildings, an amenity building, and a parking garage. The project requires access via Sylvester Road, either via acquisition of the roadway parcel or via easement, as well as a dedication to the City of a Public Utility Easement. This was included as part of the project’s Conditions of Approval (Mapping and Agreements City of South San Francisco Page 2 of 4 Printed on 1/5/2024 powered by Legistar™
File #: 23-1055 Agenda Date: 1/10/2024
Version: 1 Item #: 5.
Utility Easement. This was included as part of the project’s Conditions of Approval (Mapping and Agreements Condition #15).
Trammell Crow had intended to acquire the parcel at the public Chapter 7 tax auction, but the County Tax Collector’s Office withheld the property for sale at the Chapter 8 auction because it is a right-of-way parcel.
Given complications with the public sale of rights-of-way in San Francisco over the past several years (most notably Presidio Terrace where both former Speaker Pelosi and the late Senator Feinstein lived), the County has instituted the practice of withholding right-of-way parcels for Chapter 8 auctions for public agencies to acquire.
The City likewise objected to the sale of the property at the Chapter 7 sale and will have the ability to purchase it at the Chapter 8 sale.
It is the City’s intention to acquire the property at the Chapter 8 sale and then sell it to Trammell Crow to recoup the City’s costs. The City intends to sell it to Trammell Crow with protections put in place to preserve it as right-of-way, rather than maintain public ownership of the land, given the private ownership of the surrounding street network. This will facilitate the efficient and orderly development of the life science development.
Staff estimates that an appropriate sale price would be roughly $20,000 to $30,000 to cover staff time to facilitate the property transaction, the delinquent tax bill of approximately $4,100, and any fees imposed by the County.
Next Steps
City staff is staying in close communication with County Tax Collector staff to understand the Chapter 8 tax sale process. Because these sales happen so infrequently (it has been several years since the last Chapter 7 sale and many more years since the last Chapter 8 sale), the County is still working through procedure, fees, and exact timing of the sale. County staff has indicated to the City that the sale is anticipated to occur early in 2024.
Staff is seeking Council authorization to purchase the properties now in the event the sale is scheduled before the next regular Council meeting. Council may note that the authority granted by the accompanying resolution is broad to address most eventualities that may arise during the sale process. The resolution has been drafted in this way to avoid the worst-case scenario - where staff do not have appropriate authority to act on behalf of the City at the Chapter 8 auction and therefore miss the opportunity to purchase the properties for several more years.
FISCAL IMPACT
The precise impact to the City’s General Fund associated with adopting the resolution is not known as this time.
What the City knows is that there are the immediate acquisition costs of $109,804 for the Westborough properties and $4,100 for the Sylvester Road property, along with transaction fees imposed by the County (which have not yet been provided, but staff estimate to be several thousand dollars for all of the properties).
Given these costs, staff estimate the acquisition cost to be approximately $120,000 for all of the properties. As noted above, any and all costs incurred to acquire the Sylvester Road right-of-way and transfer it to Trammel Crow will be entirely borne by the developer - fully reimbursed upon transfer. This includes the delinquent City of South San Francisco Page 3 of 4 Printed on 1/5/2024 powered by Legistar™
File #: 23-1055 Agenda Date: 1/10/2024
Version: 1 Item #: 5.
Crow will be entirely borne by the developer - fully reimbursed upon transfer. This includes the delinquent taxes, fees paid to the County, consultant time, staff time, and City Attorney time.
Additionally, there are the costs associated with the substantial deferred maintenance of the Westborough properties, which staff estimates to be $150,000 and the ongoing cost of $10,000 per year. All told, the impact in Fiscal Year 2023-2024 to the General Fund will be about $270,000 and $10,000 annually thereafter.
Because the precise amount is not known, or if costs may be apportioned to various impact fee funds or special funds, staff is not seeking an appropriation at this time. Staff intends to address the budget impacts of these transactions in the Mid-Year Budget Adjustment anticipated to be presented to Council in late January or early February 2024. In the meantime, these costs will be borne by the Economic & Community Development Department and Parks & Recreation Department operating budgets.
CONCLUSION
Staff recommends City Council adopt a resolution authorizing the City Manager or designee to purchase several remnant parcels along Westborough Boulevard between Oakmont Drive and Olympic Drive to ensure it is maintained in a safe and unblighted manner and a remnant right-of -way parcel on Sylvester Road north of Associated Road to facilitate more orderly development and continued public access.
Attachments:
1. Map and Images of Westborough Boulevard Properties
2. Map and Images of Sylvester Road Property
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Atachment 1: Westborough Parcels Loca�on Map and Images Attachment 2: Sylvester Parcel Location Map and Images