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CC 2013-10-08_08.j. SA Long Range Property Mgmnt PlanTO: FROM: MEMORANDUM SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY STEVEN ADAMS, CITY MANAGER~ SUBJECT: CONSIDERATION OF LONG RANGE PROPERTY MANAGEMENT PLAN DATE: OCTOBER 8, 2013 RECOMMENDATION: It is recommended the Successor Agency to the Dissolved Redevelopment Agency approve the proposed Long Range Property Management Plan. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: Depending upon the sale price, a portion of the proceeds will be paid to the City as one of the taxing agencies. BACKGROUND: On June 27, 2012, Governor Brown signed into law Assembly Bill (AB1484), a budget trailer bill that makes substantial changes to the redevelopment agency dissolution process implemented by Assembly Bill 1 X 26. One of the key components of AB 1484 is the requirement that all successor agencies develop a long-range property management plan that governs the disposition and use of the former redevelopment agency property. Staff has developed the Long Range Property Management Plan for the Successor Agency (Successor Agency) to the former Arroyo Grande Redevelopment Agency (RDA), which first requires approval by the City Council as the Successor Agency and then the Oversight Board. ANALYSIS OF ISSUES: The Department of Finance (DOF) has approved staff's appeal that the Pearwood Hills property is a housing asset since it was purchased with Redevelopment Agency affordable housing set aside funds. Therefore, the only property currently owned by the Successor Agency is the property at Faeh Street and El Camino Real. Item 8.j. - Page 1 SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY CONSIDERATION OF LONG RANGE PROPERTY MANAGEMENT PLAN OCTOBER 8, 2013 PAGE2 The property was acquired by the RDA on July 18, 2006 for $830,000, primarily for the purpose of a hotel development. The value is estimated at this time to be in the range of $700,000. Two exclusive negotiation agreements were approved, but unsuccessful in resulting in an approved hotel project. The State legislation indicates that properties intended to be used for a project identified in an approved redevelopment plan may be transferred to the host city or county. However, based on information staff has received, most jurisdictions have not been successful in obtaining approval for such transfers from DOF. In addition, since the RDA had been unsuccessful in achieving a hotel development on the site, the identified project. does not appear to be feasible and it is proposed the property be sold. It is proposed an updated appraisal be obtained. It is then proposed a real estate agent be engaged by the Successor Agency and approved by the Oversight Board, along with a recommended listing price. Any proposed sale would then be presented to the Oversight Board for approval. The Successor Agency is also under a restricted timeframe for submittal of the Long Range Property Management Plan. It is required within six months of the DOF Finding of Completion, which was received on April 26, 2013. There was a delay in preparation of the Long Range Property Management Plan due to the DOF review of the Pearwood Hills property. ALTERNATIVES: The following alternatives are presented for consideration: 1. Approve the proposed Long Range Property Management Plan; 2. Recommend the Successor Agency pursue transfer of the property to the City for a proposed project, which staff does not believe will be successful; 3. Recommend a different process for disposition of the property; or 4. Provide staff other direction. ADVANTAGES: Approval of the recommendations will ultimately result in increased revenue to the General Fund and likely result in approval of the proposed plan by DOF. DISADVANTAGES: By disposing of the property, the City will no longer control the proposed use. ENVIRONMENTAL REVIEW: No environmental review is required for this item. Item 8.j. - Page 2 SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY CONSIDERATION OF LONG RANGE PROPERTY MANAGEMENT PLAN OCTOBER 8, 2013 PAGE3 PUBLIC NOTIFICATION AND COMMENTS: The revised agenda was posted in front of the City Hall and on the City's website on Friday, October 8, 2013. Attachments: 1. Long Range Property Management Plan Item 8.j. - Page 3 LONG RANGE PROPERTY MANAGEMENT PLAN SUCCESSOR AGENCY TO THE FORMER ARROYO GRANDE REDEVELOPMENT AGENCY 300 East Branch Street Arroyo Grande, CA 93420 Item 8.j. - Page 4 INTRODUCTION Arroyo Grande Successor Agency Long Range Property Management Plan Page -1- On June 27, 2012, Governor Brown signed into law Assembly Bill (AB1484), a budget trailer bill that makes substantial changes to the redevelopment agency dissolution process implemented by Assembly Bill 1 X 26. One of the key components of AB 1484 is the requirement that all successor agencies develop a long-range property management plan that governs the disposition and use of the former redevelopment agency property. This document is the Long Range Property Management Plan for the Successor Agency (Successor Agency) to the former Arroyo Grande Redevelopment Agency (RDA). SUMMARY OF PROPERTIES OWNED BY THE SUCCESSOR AGENCY There is only one (1) former RDA property owned and controlled by the Successor Agency, which is a vacant property at El Camino Real and Faeh Street. HISTORY OF PREVIOUS DEVELOPMENT PROPOSALS AND ACTIVITIES On June 26, 2007, an Exclusive Negotiation Agreement (ENA) was approved by the Arroyo Grande Redevelopment Agency with South Valley Developers for purchase the El Camino/Faeh Street site and development of a hotel at the site. The developers were not able to produce a final development proposal and the ENA terminated. On September 14, 2010, a second ENA was approved with Legacy Hospitality for purchase and development of a hotel at the site. Again, the developer was not successful in generating a final development proposal and this second ENA was also terminated. INVENTORY Section 3419(c)(1) of the Health and Safety Code, which was added as part of AB 1484, requires that the Long Range Property Management Plan include an inventory of all properties held in the Community Redevelopment Property Trust Fund. For the Arroyo Grande Successor Agency, this inventory has only the one site referenced in the two prior sections. An aerial photograph of the property is attached. Date of Acquisition and Value The property was acquired by the RDA on July 18, 2006 for $830,000. The property was appraised in 2006 for $933,000. The most recent appraisal was on December 28, 2009 for $1,025,000. Purpose Property was Acquired Given the limited existence of vacant property along the freeway, the RDA wanted to ensure the optimal development potential of freeway frontage of this parcel was taken advantage of. The primary intent was to pursue a hotel development, which was pursued, but was not successful prior to dissolution of the RDA. Parcel Data The undeveloped parcel APN number is 006-151-027. The property is zoned Highway Mixed-Use (HMU). The total area of the parcel is 0.83 acres or 36,250 sq. ft. The area minus public improvements is 0. 79 acres or 34,630 sq. ft. Parking requirements are 1 Item 8.j. - Page 5 Arroyo Grande Successor Agency Long Range Property Management Plan Page -2- space/250 sq. ft. of floor area for commercial businesses/office space. This parking requirement changes depending on the exact proposed use. According to the Assessor's Map, which is attached, the property consists of 12 total underlying lots as well as a 50' wide area for the extension of North Alpine. Estimate of the Current Value The most recent appraisal of the property was $1,025,000 on December 28, 2009. Estimate of Lease. Rental or Other Revenues Generated by the Property The property is undeveloped so there has been no revenue generated from the property. History of Environmental Contamination or Remediation Efforts There is no known history of environmental contamination on this site. A phase one environmental review was performed in connection with the last prior development proposal described above which did not reveal any issues of concern. Property's Potential for Transit-Oriented Development and the Advancement of Planning Objectives of the Successor Agency The property is located directly adjacent to the City's park-and-ride facility, which serves Highway 101 and regional bus service. Therefore, the property is ideally situated to accommodate some form of transit oriented development. History of Previous Development Proposals and Activities On June 26, 2007, an Exclusive Negotiation Agreement (ENA) was approved by the RDA with South Valley Developers for purchase of the site and development of a hotel at the site. The developers were not able to produce a final development proposal and the ENA terminated. On September 14, 2010, a second ENA was approved with Legacy Hospitality for purchase and development of a hotel at the site. Again, the developer was not successful in generating a final development proposal and this second ENA was also terminated. The property was also located within the City's "Green Corridor", which was a former program that provided incentives for new businesses selling environmentally oriented products and services. As a result, the property was also marketed for that purpose, but no proposals were received. USE OF DISPOSITION OF PROPERTIES Because the RDA had been unsuccessful in achieving a hotel development on the site, it is proposed the property be sold. It is proposed an updated appraisal be obtained. It is then proposed a real estate agent be engaged by the Successor Agency and approved by the Oversight Board, along with a recommended listing price. Any proposed sale would then be presented to the Oversight Board for approval. Health and Safety Code Section 34191.5(c)(2)(B) states in pertinent part: Item 8.j. - Page 6 Arroyo Grande Successor Agency Long Range Property Management Plan Page -3- If the plan directs the liquidation of the property ... the proceeds from the sale shall be distributed as property tax to the taxing entities. In accordance with Section 34191.5(c)(2)(8), proceeds of the sale of the El Camino Real/Faeh Street site, minus the cost of sale (including but not limited to real estate commissions, environmental costs if any, escrow costs, and title costs) shall be turned over to the county auditor-controller for distribution to the affected taxing agencies. EXHIBITS • Aerial photograph of the El Camino Real/Faeh property • Assessor's Map of the El Camino Real/Faeh property Item 8.j. - Page 7 APN: 006-151-027 Approximate Area: 0.83 acres (36,250 sq. ft.) Approximate Area Minus Public Improvements: 0.79 acres (34,630 sq. ft.) Item 8.j. - Page 8 REVISIONS 1.$. !Mir (U-J7' 02-27-rH 06-242 01-12-08 50 100 LZ THIS MAP IS PREPARED fOR IU-24 ASSESSMENT PURPOSES ONLY. 50 i-: Cl) _., 0 ':.. .. .,, 006-15 ® 50 CITY OF ARROYO GRANDE filnfi?t5a'tdd ~NTY OF BOOK 006 PAG£'15 Item 8.j. - Page 9 THIS PAGE INTENTIONALLY LEFT BLANK Item 8.j. - Page 10