Title
A. RESOLUTION NO. 2017-162 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING CITY-OWNED LAND AS NOT NEEDED FOR CURRENT OR FUTURE USES; ACCEPTING AN OFFER TO PURCHASE THE CITY-OWNED LAND BY CALTRANS FOR THE CONSTRUCTION OF THE I-805 EXPRESS LANES; AUTHORIZING THE CITY ATTORNEY TO MAKE SUCH MODIFICATIONS TO THE RIGHT OF WAY CONTRACT AND GRANT DEED FOR THE CITY-OWNED LAND AS DEEMED NECESSARY FOR THE BENEFIT OF THE CITY; AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO EFFECTUATE THE SALE OF THE CITY-OWNED LAND
B. RESOLUTION NO. 2017-163 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING AS SURPLUS LAND A CITY-OWNED PARCEL OF REAL PROPERTY LOCATED SOUTH OF AND ADJACENT TO 150 BONITA ROAD; ACCEPTING AN OFFER TO PURCHASE THE CITY-OWNED PARCEL FROM SILVERGATE DEVELOPMENT, LLC; AUTHORIZING THE CITY ATTORNEY TO MAKE SUCH MODIFICATIONS TO THE PURCHASE AGREEMENT FOR THE CITY-OWNED PARCEL AS DEEMED NECESSARY FOR THE BENEFIT OF THE CITY; AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO EFFECTUATE THE SALE OF THE CITY-OWNED PARCEL
C. RESOLUTION NO. 2017-164 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING AS SURPLUS LAND A CITY-OWNED PARCEL OF REAL PROPERTY LOCATED NORTH OF EASTLAKE PARKWAY AND WEST OF STATE ROUTE 125; ACCEPTING AN OFFER TO PURCHASE THE CITY-OWNED PARCEL FROM GARDENLIFE-SALVA, LLC; AUTHORIZING THE CITY ATTORNEY TO MAKE SUCH MODIFICATIONS TO THE PURCHASE AGREEMENT FOR THE CITY-OWNED PARCEL AS DEEMED NECESSARY FOR THE BENEFIT OF THE CITY; AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO EFFECTUATE THE SALE OF THE CITY-OWNED PARCEL
D. RESOLUTION NO. 2017-165 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A PURCHASE OPTION AGREEMENT TO SELL CITY-OWNED LAND LOCATED NORTH OF E STREET AND WEST OF I-5 TO LAND DEVELOPERS & ASSOCIATES FOR USE IN THE DEVELOPMENT OF ADJACENT LAND
E. RESOLUTION NO. 2017-166 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE CAPITAL IMPROVEMENT BUDGET FOR FISCAL YEAR 2017/2018 AND APPROPRIATING $500,000 FROM THE SALE OF EXCESS PROPERTIES FOR THE DEMOLITION OF CITY-OWNED PROPERTY LOCATED AT 707 F STREET (4/5 VOTE REQUIRED)
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolutions.
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SUMMARY
The City has received multiple offers to purchase city owned land as more thoroughly described below. All offers to purchase presented either an appraisal or staff prepared a comparable analysis of recent real estate transactions to determine value. Staff recommends the disposition of the below mentioned properties because these properties are not needed for city purposes. The disposition of these properties will support right of way improvements on interstate 805 (CalTrans), facilitate the development of in fill housing on a vacant parcel located south of E Street and west of I-805 (Silvergate), establish an agricultural farm along the SR-125 (Gardenlife) and facilitate the development of a new hotel on the Chula Vista Bayfront (LDA). In addition, the funds are recommended to be appropriated to a new capital improvement project (CIP) that would remove the improvements at the city’s former corporation yard and prepare the site for solicitation of development for high density transit oriented uses (residential, hotel and retail) which is anticipated to go out as a Request for Proposal (RFP) in 2018.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The Project qualifies for a Class 12 Categorical Exemption pursuant to Section 15312 (Surplus Government Property Sales) of the California Environmental Quality Act State Guidelines.
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Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class 12 Categorical Exemption pursuant to Section 15312 (Surplus Government Property Sales) of the State CEQA Guidelines. Thus, no further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
The City has received multiple offers to purchase city owned land as more thoroughly described below. All offers to purchase presented either an appraisal or staff prepared a comparable analysis of recent real estate transactions to determine value. Staff recommends the disposition of the below mentioned properties because these properties are not needed for city purposes.
Caltrans Sale
CALTRANS is currently preparing to construct the I-805 South Express Lane Project. In order to complete construction of this project it is necessary for CALTRANS to acquire a portion of City owned land located at the northwest corner of H Street and I-805 (Exhibit “A”). CALTRANS has made an offer to the City in the amount of $132,000 to purchase the needed 0.70 acres as well as a 0.46 acre Temporary Construction Easement that will expire at the end of 2020. The proposed area will be used to reconstruct the shoulders of I-805 approaching H Street to accommodate the widening needed to construct the new HOV and express lanes.
Staff has reviewed the appraisal that is the basis of the State’s offer and determined that the report accurately reflects the value of the rights sought. While we are entitled to secure our own appraisal at CALTRANS’ expense (up to $5,000) it was determined that an additional appraisal would not produce a higher value than currently offered. Further, the land to be acquired is currently vacant and not necessary for current or future City operations.
Silvergate Sale
The City currently owns a vacant parcel of land located adjacent to and immediately south of 150 Bonita Road ( Exhibit “B”). This parcel is currently shown on City mapping as a portion of Vista Drive although it has never been dedicated for street use. The property was a remnant left after the construction of State Route 805 and was acquired by the City at no charge. It is approximately 0.56 acres in size and is unimproved except for asphalt paving which is in poor condition. The City has no current of future use for this parcel.
Silvergate Development is currently processing a multi-family development south of and adjacent to the City land. In order to provide additional parking for their project they have made an offer to purchase the land from the City. The offer is in the amount of $225,000 with escrow to close upon issuance of grading permits or building permits for the project, but in no case later than June 30, 2018. Staff has reviewed the offer, performed a comparative land sale’s analysis and has determined the value to be appropriate for this parcel and recommends that Council accept the offer and approve the sale.
Gardenlife-Salva Sale
The City currently owns a vacant parcel on the north side of Eastlake Parkway and immediately west of State Route 125 (Exhibit “C”). The property was a remnant left after the construction of State Route 125 and was acquired by the City at no charge. It is approximately 5.71 acres in size, has irregular topography and is unimproved. The western 100 feet of the property is encumbered with an SDG&E easement which prohibits structures. Current zoning limits uses to agricultural, recreational and open space. The City has been marketing the site for sale for approximately five years and recently received an offer to purchase from Gardenlife-Salva. The City has an existing lease for a cell phone tower attachment on the SDG&E tower that is in the first year of a five year term. The proposed offer is $75,000 dollars for the land and an additional $81,173 dollars to buy out the remaining four years of the cell site lease ($156,173 total). Staff has reviewed the appraisal and lease acquisition offer and determined the value to appropriate for this parcel and recommends that Council accept the offer and approve the sale.
LDA Option
In February of 2015 Land Developers & Associates (LDA) purchased two parcels owned by the successor to the Chula Vista Redevelopment Agency. These parcels are located north of E Street immediately adjacent to I-5. Directly to the west and abutting these parcels is a strip of land owned by the City that was at one time the northerly prolongation of Bay Boulevard (Exhibit “D”). LDA has requested an option to purchase this parcel to facilitate of a new hotel on the two parcels they acquired from the former Redevelopment Agency. LDA has offered $25,000 for this land and two hundred dollars $200 dollars to secure the option. The option payment is payable upon execution of this Option Agreement. Given that this parcel is not independently developable and the City has no current or contemplated future use for this land, staff recommends disposing of this property. Further, the parcel, once purchased will generate property tax revenue and help to facilitate the development of a new hotel bringing jobs and additional tax revenue to the City.
The option is proposed to allow LDA the time necessary to obtain their entitlements for their development. The option provides LDA the exclusive right to purchase the city property but only after receiving their approvals for development of a hotel on the sites. The option would be open for a period of five years at the proposed purchase price.
Capital Improvement Project (CIP)
The City owns approximately 6 acres of property (707 F Street) located immediately adjacent to the E Street Trolley Station that is zoned for high density mixed use development (Exhibit “E”). The property previously served as the City maintenance facility and has fallen into disrepair. It has become an attractive nuisance for the homeless and has experienced numerous instances of graffiti and petty crime. The removal of the improvements will prepare the property for redevelopment in the near future. Cleaning up the site will enhance its marketability and eliminate the attractive nuisance that it has become. After removal of the improvements it is staff’s intention to solicit Request for Proposals (RFP) for the development of the property. The marketability of the property will be greatly enhanced by the removal of the improvements along with continued progress on the implementation of the Chula Vista Bay Front Master Plan. The proposed CIP will allow staff to prepare a hazardous materials abatement report, prepare the demolition bid specifications and remove the improvements.
The E Street Transit Oriented Development site represents a unique opportunity for the City to utilize its real estate holdings to increase revenue and job growth in the City. The site has the highest density allowed in Western Chula Vista and allows for heights of up to 210 feet with a Floor Area Ratio (FAR) equal to that of densities found in Downtown San Diego. The value of the property will be realized through a competitive solicitation process (RFP) seeking the development of hotel(s), residential and/or commercial uses. Because each land use will generate a different residual land value and/or leasehold value it is difficult to provide an estimate on the return for the property. Recently, the City received two unsolicited offers to purchase the property that were above recent comparable land sales, however, these offers were not accepted. City staff will prepare an RFP for the property in 2018 that will seek to maximize the long term financial return to the City and create an opportunity for additional job growth.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 500 feet of the boundaries of the properties which are the subject of this action. Consequently, these items do not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The actions proposed in this agenda support the Economic Vitality goals of the City.
CURRENT YEAR FISCAL IMPACT
There will be no current year fiscal impact to the general funds because these sale proceeds are unanticipated one-time revenues and are being applied to offset the cost of a new capital improvement project.
ONGOING FISCAL IMPACT
The on-going fiscal impact to the City will be increased property tax revenue for sites sold to private parties and Transit Oriented Tax (TOT) revenue received upon completion of the LDA hotel project. The E Street TOD site on-going fiscal impact was not evaluated as part of this report but will be analyzed prior to the issuance of an RFP for the property.
ATTACHMENTS
1. CALTRANS Right-of-Way Deed Map
2. CALTRANS Right-of-way Contract
3. Silvergate Agreement
4. Gardenlife-Salva Agreement
5. LDA Purchase Option Agreement
Staff Contact: Rick Ryals, Real Property Manager