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
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Item 8.j. - Page 9
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