HomeMy WebLinkAbout14 SURPLUS PROPERTY DECLARATION FOR APN 430-361-11Agenda Item _______
Reviewed:
City Manager _______
Finance Director _______
MEETING DATE: NOVEMBER 15, 2022
TO: MATTHEW S. WEST, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: SURPLUS PROPERTY DECLARATION FOR ASSESSORS
PARCEL NUMBER 430-361-11
SUMMARY
Resolution 22-59 will declare APN 430-361-11 as surplus property pursuant to California
Government Code Section 54221.
RECOMMENDATION
It is recommended that the City Council take the following actions:
1.Adopt Resolution 22-59: A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUSTIN, CALIFORNIA, DECLARING CERTAIN REAL PROPERTY
COMPRISED OF ASSESSORS PARCEL NUMBER 430 -361-11 AS SURPLUS
PROPERTY PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION
54221.
2.Authorize the City Manager to direct staff to submit the appropriate documentation
to the California Department of Housing and Community Development in
connection with the Resolution.
FISCAL IMPACT
Adoption of Resolution 22-59 itself does not have a financial impact to the City, however
noticing and negotiating disposition of property as required under the revised Surplus
Land Act (SLA) may have financial impacts to the City.
BACKGROUND
The SLA defines the process for local agencies to follow when disposing of surplus
parcels of land owned in fee that are no longer needed for a government purpose. The
SLA set general timelines for posting notification of an available surplus property, defined
the process for negotiating with an affordable housing developer that expressed interest,
and the process of disposition absent any notification of interest or in the event
AGENDA REPORT
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N/A
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Agenda Report – Surplus Property Declaration
November 15, 2022
Page 2
negotiations do not result in a sale to a qualifying affordable housing developer . While the
parcel identified in the declaration is identified in the Tustin Legacy Specific Plan as
“Commercial/Business,” per the revised SLA both residential and non-residential property
are subject to the same process.
Assembly Bill 1486 (Ting, 2019) revised the SLA and significantly changed the terms of
the SLA, as well as added substantial penalties for noncompliance. The revised SLA
became effective January 1, 2020. The Final Housing and Community Development
Department (HCD) Guidelines (Final HCD Guidelines) for compliance with the SLA were
published in April 2021.
Prior to January 1, 2020, the City did not consider any property at Tustin Legacy as
“surplus property” for a variety of reasons, including:
- Method of Acquisition: The City and the United States of America executed a
Memorandum of Agreement in May 2002 that conveyed a vast majority of former
MCAS Tustin to the City. The conveyance method was an Economic Development
Conveyance (EDC) that requires the City to focus on job creation to replace those
lost due to the base closure and housing for the surrounding community in
accordance with a federally approved Reuse Plan for former MCAS Tustin. The
City believes that this “contract” between the City and United States of America
should supersede any state law requirements for disposition of property owned by
the City.
- Infrastructure Requirements: Tustin Legacy requires the installation of the
modern major and local infrastructure needed as part of the redevelopment of a
former military base at significant cost to the City. When the City began receiving
property at former MCAS Tustin in 2002, none of the former military utilities were
suitable for new development. Major drainage, streets, parks and utilities must be
installed prior to advancing new development of residential neighborhoods and
commercial employment centers. Remnant parcels of “surplus property” that a
public agency no longer has an intended use for typically involve smaller parcels
already connected to existing infrastructure, and does not take into account
property, such as Tustin Legacy, that the City has an established intended use for
per a federal Reuse Plan and an adopted Specific Plan and requires significant
remaining infrastructure investment.
- Revenue Needed to Continue with Development: The City, acting as Executive
Developer for Tustin Legacy, must have the ability to generate revenue from land
sales or lease proceeds for reinvestment purposes to continue to advance
residential and non-residential development progress at Tustin Legacy. A
significant portion of revenues generated from land sales at Tustin Legacy are
essential as they are reinvested back into the base to install the major
infrastructure needed to open up more parcels for development, and to provide
amenities like parks, schools and public services for the Tustin Legacy community.
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Agenda Report – Surplus Property Declaration
November 15, 2022
Page 3
A portion of revenue at Tustin Legacy is also used for projects in other areas of the
City, to pay down unfunded liabilities, or to help offset revenue losses that occur
during an economic downturn or a crisis such as the COVID-19 pandemic. Given
the City’s role as Executive Developer for Tustin Legacy, revenue generation is a
necessary government function to advance development, and meet its financial
and federal Reuse Plan obligations to create a mix of residential, institutional,
employment opportunities and parks and open space.
Absent a specific exemption for former military bases, or case law over conflicts with other
laws and/or federal base closure law preemption, the revised SLA appears to place all
City owned portions of Tustin Legacy within the newly defined meaning of “surplus land”
and therefore the City is approaching all dispositions as subject to the SLA. While the
City maintains the assertion that due to the direct conveyance of land from the federal
government, Tustin Legacy should not be subject the SLA, the City has not challenged
the SLA on this basis. Therefore, the City has chosen to comply with the law as
prescribed in order to avoid tying property up in lawsuits, and continue to expedite
development of Tustin Legacy until such time as further clarification or judgment is
rendered related to Federal Reuse Plans and former military bases, given the threat of
substantial penalties for noncompliance (30%-50% of final land sale or lease price).
DISCUSSION
Should the City Council adopt Resolution 22-59, staff will then release the required Notice
of Availability (NOA) per the revised SLA and Final HCD Guidelines to the required
entities.
_______________________________
Christopher Koster
Director of Economic Development
_______________________________
Kenneth Piguee
Senior Management Analyst
ATTACHMENTS
- Resolution 22-59
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RESOLUTION NO. 22-59
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, DECLARING CERTAIN REAL
PROPERTY COMPRISED OF ASSESSORS PARCEL
NUMBER 430-361-11 AS SURPLUS PROPERTY
PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTION 54221.
WHEREAS, the City of Tustin (City) owns certain real property consisting of
approximately 21 acres (Site) at Tustin Legacy (former Marine Corps Air Station Tustin)
comprised of APN 430-361-11; and
WHEREAS, in 1992, the City was designated by The United States Department of
the Defense as the Lead Agency or Local Reuse Authority for preparation of a reuse plan
for MCAS Tustin in order to facilitate the closure of MCAS Tustin and its reuse in
furtherance of the economic development (including the creation of jobs and housing) of
the City and surrounding region; and
WHEREAS, in May 2002, The United States of America approved an Economic
Development Conveyance (EDC) and agreed to convey approximately 1,153 acres of
former MCAS Tustin to the City; and
WHEREAS, on May 13, 2002, a total of approximately 977 acres were conveyed
by The United States of America to the City by quitclaim deed, in accordance with the
provisions of a Memorandum of Agreement by and between The United States of America
and the City dated May 13, 2002, and
WHEREAS, the additional approximately 177 acres were made subject to a ground
lease by the City from The United States of America and portions thereof have
subsequently been conveyed to the City pursuant to subsequent quitclaim deeds; and
WHEREAS, the City believes the Site (and all portions of Tustin Legacy owned or
to be owned by the City) to be assets to be held, used, and portions sold or leased to
enable the City to meet its responsibilities to fund ongoing and future infrastructure,
development and maintenance costs at Tustin Legacy that are borne by the City as
Executive Developer in order to provide housing, employment, public services and
recreation to City residents; and
WHEREAS, the City, acting as Executive Developer for Tustin Legacy, carefully
plans neighborhoods within the 1,600-acre footprint to account for infrastructure costs,
market conditions, and community benefits prior to initiating a disposition process for
certain parcels; and
WHEREAS, the City, acting as Executive Developer for Tustin Legacy, has acted
in its role to provide market rate and affordable housing at Tustin Legacy, with 3,856
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residential units (ownership and rental) constructed or under construction to date, 688 of
which are deed restricted for various levels of affordability; and
WHEREAS, the Site is located within portions of Planning Areas 9-12 of the Tustin
Legacy Specific Plan which does not currently allow for residential as a permitted or
conditionally permitted use and is categorized as “Commercial/Business” and the existing
infrastructure on the Site has been designed, sized and installed to accommodate
commercial office use; and
WHEREAS, the City desires to implement the existing Tustin Legacy Specific Plan
on the Site, thereby creating employment opportunities such as office and retail uses
close to residential and public transit, and providing publicly accessible park space that
complements existing and future residential sites throughout Tustin Legacy; and
WHEREAS, existing law established the Surplus Land Act (SLA) for local agencies
to follow when disposing of surplus properties no longer needed for government use or
for revenue generation; and
WHEREAS, prior to January 1, 2020, the City did not consider the Site (and all of
Tustin Legacy) to be “surplus land” as defined in the SLA because it considered the
development of the Site (and all of Tustin Legacy) consistent with the Federal Reuse Plan
to be a continuing City use of the property, as well as due to the deed conveyance
mechanism whereby the City received the property with restrictions from The United
States of America as part of the Defense Base Realignment and Closure Act of 1990 as
amended; and
WHEREAS, on October 9, 2019, California Governor Gavin Newsom signed
Assembly Bill 1486 (Ting) into law, making substantive amendments to the SLA effective
January 1, 2020; and
WHEREAS, the amended SLA requires local agencies to declare land as “surplus
land” or “exempt surplus land” prior to disposing of property owned by the local agency;
and
WHEREAS, the Site (and all of Tustin Legacy) is not “surplus land” in any
traditional sense because the funds received from sales and leases of portions of the
Tustin Legacy, and the uses to which the property are put after such sale or lease, are
essential to accomplish the Federally- and City-approved military base Reuse Plan,
including but not limited to, providing the funding for the significant cost of infrastructure
needed to accomplish the planned redevelopment of a former military base; and
WHEREAS, although the City contends that it is not required to do so for the
reasons referenced herein, the City will send a written notice of availability for the Site by
electronic mail to all of the entities identified in Government Code section 54222 ; and
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WHEREAS, as contemplated by Government Code section 54222 and 54227, if
one of the entities/agencies desires to purchase or lease the Site after having received
the notice of availability, it must indicate its interest to do so in writing within 60 days of
receiving the City’s notice, and the City and the entity/agency so responding to the notice
will negotiate in good faith to determine whether price and terms for the disposition of the
Site can be agreed upon; and
WHEREAS, as contemplated by Government Code 54223 and 54227, in the event
no agreement is reached between the City and any interested entity/agency after a good
faith negotiation period of 90 days, the Site may be disposed of without further regard to
the SLA, except that the City will record a covenant indicating that if ten or more residential
units are ever constructed on the Site, 15 percent of the total number of units shall be
provided as affordable to lower income households.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF TUSTIN, THAT:
1. The foregoing recitals are hereby incorporated and adopted as the findings of
the City Council; and
2. This action results in no binding commitment by the City to authorize or
advance the disposition of the Site, will not result in a direct or indirect physical
change in the environment, and does not constitute an “approval” of a “project”
pursuant to CEQA Guidelines Sections 15004 and 15352; and
3. Subject to the findings above, and without waiving any claim or argument that
the SLA is inapplicable to property dispositions made consistent with the City’s
Federally-approved Reuse Plan, and for purposes of forestalling delays or
disputes that might arise if no finding is made under the amended SLA, the Site
comprised of APN 430-361-11 is hereby declared “surplus land”.
PASSED and ADOPTED by the City Council of the City of Tustin at a regular
meeting on 15th day of November, 2022.
_____________________________
AUSTIN LUMBARD,
Mayor
ATTEST:
____________________
ERICA N. YASUDA,
City Clerk
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STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is five; that the above and foregoing Resolution No 22-59 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 15th day
of November, 2022 by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
__________________________
ERICA N. YASUDA,
City Clerk
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