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HomeMy WebLinkAbout07 RESOLUTION DECLARING ASSESSOR’S PARCEL NUMBERS 430-371-27, 430-371-29, 430-371-30, 430-371-31Docusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7 MEETING DATE TO FROM Agenda Item 7 AGENDA REPORT Reviewed: Initial City Manager a`V� Finance Director N/A OCTOBER 1, 2024 ALDO E. SCHINDLER, CITY MANAGER RYAN SWIONTEK, DEPUTY DIRECTOR OF REAL PROPERTY SUBJECT: RESOLUTION DECLARING ASSESSOR'S PARCEL NUMBERS 430-371-27, 430-371-29, 430-371-30, 430-371-31, 430-371-33, 430- 381-65, 430-381-67, 430-381-74 AND 430-381-95 AS SURPLUS LAND SUMMARY: Resolution 24-68 will declare Assessor's Parcel Numbers 430-371-27, 430-371-29, 430- 371-30, 430-371-31, 430-371-33, 430-381-65, 430-381-67, 430-381-74 and 430-381-95 as surplus land pursuant to California Government Code Section 54221. RECOMMENDATION: It is recommended that the City Council take the following actions: Adopt Resolution 24-68: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DECLARING CERTAIN REAL PROPERTY COMPRISED OF ASSESSOR'S PARCEL NUMBERS 430-371-27, 430-371-29, 430-371-30, 430-371-31, 430-371-33, 430-381-65, 430-381-67, 430-381-74 AND 430-381-95 AS SURPLUS LAND PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 54221. 2. Authorize the City Manager to circulate a Notice of Availability and submit the appropriate documentation to the California Department of Housing and Community Development in connection with the Resolution. FISCAL IMPACT: Adoption of Resolution 24-68 itself does not have a financial impact to the City, however noticing and negotiating disposition of property as required under the Surplus Land Act may have financial impacts to the City. CORRELATION TO THE STRATEGIC PLAN: Docusign Envelope ID: 7AB05F87-574B-4CBB-8B1 1 -B9D77ED61 BD7 City Council Agenda Report Surplus Land Declaration October 1, 2024 Page 2 The declaration of Surplus Land for Assessor's Parcel Numbers 430-371-27, 430-371-29, 430-371-30, 430-371-31, 430-371-33, 430-381-65, 430-381-67, 430-381-74 and 430-381- 95 contributes to the fulfillment of the City's Strategic Plan Goal A: Economic and Neighborhood Development. Specifically, this item implements Strategy 1 which is to develop critical phases of Tustin Legacy. BACKGROUND AND DISCUSSION: The Surplus Land Act (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 the City's use. The SLA sets general timelines for posting notification of available surplus property, defines the process for negotiating with an affordable housing developer in the event one expresses interest, and the process for disposition absent any notification of interest or in the event negotiations do not result in a sale to a qualifying affordable housing developer. Assembly Bill 1486 (Ting, 2019) significantly amended the terms of the SLA, as well as added substantial penalties for noncompliance. The California Housing and Community Development (HCD) Surplus Land Act Guidelines (HCD Guidelines) for compliance with the SLA were published in April 2021. Assembly Bill 480 (Ting, 2023) and Senate Bill 747 (Caballero, 2023) clarified elements of the SLA and provided new or consolidated exemption options for surplus land. HCD has also issued Final Updated Surplus Land Act Guidelines (Final Updated SLA Guidelines) to reflect new legislation which were adopted on August 1, 2024. Prior to January 1, 2020, the City did not consider any City owned property within the Tustin Legacy Specific Plan area 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 Marine Corps Air Station Tustin (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. 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 City owned property within the Tustin Legacy Specific Plan area, that the City has an Docusign Envelope ID: 7AB05F87-574B-4CBB-8B1 1 -B9D77ED61 BD7 City Council Agenda Report Surplus Land Declaration October 1, 2024 Page 3 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. 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 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 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). Should the City Council adopt Resolution 24-68, staff will then release the Notice of Availability (NOA) as required by the SLA and Final Updated SLA Guidelines to the entities listed in California Government Code 54222. Once the NOA is released, a 60-day period begins for entities to respond to the NOA with a notice of interest to purchase or lease the property. If any notices of interest are received during the 60-day period, the City shall negotiate in good faith for up to 90 days with one or more responding entities to determine whether price and terms for the sale or lease of the property can be agreed upon. If no responses are received during the 60-day period, or if negotiations during the subsequent 90-day period are unsuccessful, the property may be disposed of without further SLA implications. The only remaining requirement is that the City must record a covenant prior to the sale or lease of the property indicating that if ten (10) or more residential units are ever constructed on the property, fifteen (15) percent of the total amount of units shall be provided as affordable to lower income households. Docusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7 City Council Agenda Report Surplus Land Declaration October 1, 2024 Page 4 Disposition documents and entitlements would be brought before the City Council at a future date with either (1) an entity that responded to the NOA, or (2) a future competitive process or sole source process for a development project that can occur after the NOA process is completed. ZAA ned by: Wtbt At Rya w �efcF4z6 Deputy Director of Real Property Attachments: 1. Parcel Map 430-37 2. Parcel Map 430-38 3. Resolution 24-68 Signed by: t4 f �. 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J8'7g, 3 1 33 LOT 2 SgBs• 1AC. v I9, p2. l3'N 0. 234 21.73' 9'S,7 LOT SSS rn 3 89. 50'%i: 29 31 0.003 AC. Q AC. 19 086'1.349 AC oESEE ra QQo A„n AVE WARNER AVENUE J 434-43 * PRIVATE STREET TRACT NO. 17404 M.M. 907-6 t0 42 incl. NOTE - ASSESSOR'S BLOCK & ASSESSOR'S MAP PARCEL NUMBERS BOOK 430 PAGE 38 SHOWN IN CIRCLES COUNTY OF ORANGE Docusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7 RESOLUTION NO. 24-68 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DECLARING CERTAIN REAL PROPERTY COMPRISED OF ASSESSOR'S PARCEL NUMBERS 430-371-27, 430-371-29, 430-371-30, 430-371- 31, 430-371-33, 430-381-65, 430-381-67, 430-381-74 AND 430-381-95 AS SURPLUS LAND PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 54221. WHEREAS, the City of Tustin (City) owns certain real property consisting of approximately 56 acres at Tustin Legacy (former Marine Corps Air Station Tustin) comprised of Assessor's Parcel Numbers (APNs) 430-371-27, 430-371-29, 430-371-30, 430-371-31, 430-371-33, 430-381-65, 430-381-67, 430-381-74 and 430-381-95 (the "Site"); 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 remaining approximately 177 acres of the 1,153 acres were made subject to a ground lease by the City from The United States of America (also known as a Lease in Furtherance of Conveyance) and portions thereof have subsequently been conveyed to the City pursuant to subsequent quitclaim deeds; and WHEREAS, pursuant to the City's role and its agreements made as the Local Reuse Authority under Federal law, the Site (and all portions of Tustin Legacy owned or to be owned by the City) are 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, Docusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7 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 4,258 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 Area 8 of the Tustin Legacy Specific Plan and is categorized as "Mixed -Use Urban" with a limited amount of residential units. Except as permitted by any applicable State law such as density bonus, a Specific Plan amendment may be necessary for residential development of the Site at levels above the allocated number of residential units, along with any other applicable required entitlements and infrastructure improvements; and WHEREAS, the California Legislature 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 (or any portion 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, and because such development is consistent with 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 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 (NOA) for the Docusign Envelope ID: 7AB05F87-574B-4CBB-8B1 1 -B9D77ED61 BD7 Site by electronic mail to all of the entities required by Government Code section 54222; and WHEREAS, notwithstanding and subject to the foregoing, the City Council is hereby declaring the Site to be "surplus land" for purposes of California Government Code section 54221(b)(1) and will participate in good faith in the process required by the SLA and WHEREAS, as contemplated by Government Code Sections 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 ninety (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 (10) or more residential units are ever constructed on the Site, fifteen (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: 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, the Site comprised of APNs 430-371-27, 430- 371-29, 430-371-30, 430-371-31, 430-371-33, 430-381-65, 430-381-67, 430- 381-74 and 430-381-95 is hereby declared "surplus land;" and 4. The City Manager or designee is authorized to circulate an NOA and submit any required documentation to HCD in connection with this Resolution, and to take such other actions as are required or appropriate to implement such direction. PASSED and ADOPTED by the City Council of the City of Tustin at a regular meeting on 1 st day of October, 2024. AUSTIN LUMBARD, Mayor Docusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7 ATTEST: ERICA N. YASUDA, City Clerk APPROVED AS TO FORM: Signed by: DAVI�K NDIG, City Attorney 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. 24-68 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 1st day of October, 2024 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: ERICA N. YASUDA, City Clerk