REPORT TO THE CITY COUNCIL
FROM: SCOTT L. MOZIER, PE, Director
Public Works Department
AARON A. AGUIRRE, Director
Parks, After School, Recreation, and Community Services Department
BY: RANDALL W. MORRISON, PE, Assistant Director
Public Works Department, Engineering Division
SUBJECT
...Title
Actions pertaining to the sale of a 7,405 square foot City owned parcel of undeveloped land located on the northwest corner of First Street and Nevada Avenue, APN: 459-282-13T (Council District 7):
1. Adopt a finding of no possibility of significant effect pursuant to CEQA Guidelines Section 15061 and Categorical Exemption pursuant to CEQA Guidelines Section 15312/Class 12 (Surplus Government Property Sales) for the proposed project pursuant to the California Environmental Quality Act (CEQA)
2. ***RESOLUTION - Finding there are substantial community benefits resulting from the sales agreement that justify a price less than market value as outlined in Fresno Municipal Code Section 4-204 relating to the disposition of real surplus property APN 459-282-13T (First Street & Nevada Avenue) (Subject to Mayor’s Veto)
3. Authorize the Public Works Director or designee to execute the Purchase and Sale Agreement with Mark Guevara for $5,000 upon confirmation from the California Department of Housing and Community Development in compliance with the Surplus Land Act
...Body
RECOMMENDATIONS
Staff recommends the City Council adopt a finding of no possibility of significant effect pursuant to Section 15061 of the California Environmental Quality Act (CEQA) and Categorical Exemption pursuant to CEQA Guidelines Section 15312 for the sale of a 7,405 square foot City-owned parcel located at the northwest corner of First Street and Nevada Avenue, pass the resolution authorizing the sale price of $5,000 which is below the appraised value of the property based on findings of good cause and clear and convincing benefit to the public under FMC Section 4-204, and approve the Agreement for Purchase and Sale of said parcel to Mark Guevara, who lives adjacent to the parcel, for $5,000, and authorize the Public Works Director or his designee to sign all documents necessary to complete the subject transaction.
EXECUTIVE SUMMARY
The City owns a small parcel at the corner of First Street and Nevada Avenue. The site contains approximately 7,405 square feet of mostly undeveloped land, but is encumbered with existing public street improvements of First Street. The parcel was declared surplus by the City Council on January 7, 2021, by Resolution No. 21-095. An appraisal was conducted by Scott E. Rurik, MAI of Scott Appraisal Co., with a total value of $8,700. The owner rejected the City’s sales price of $8,700 and offered to pay $5,000 cash. A sales price of $5,000 was negotiated by Mr. Guevara due to the challenges over the years to the community and to the City in maintaining the parcel free of blight. Mr. Guevara plans to keep the pocket park and secure it with access to the adjacent property owners and neighbors. Based on the parcel location and the small size, the property will be sold “as is” and 0.10 of the 0.17 acres will be dedicated by way of an easement to the City of Fresno which shall include the sidewalk, curb and gutter, and area extending into First Street.
BACKGROUND
The City owns 7,405 square feet of real property located on the northwest corner of First Street and Nevada Avenue (APN 459-282-13T). This parcel is of no use to the City and was declared surplus by the City Council on January 7, 2021, Resolution No. 21-095. Following Government Code Section 54230.5, notices have been provided to the Department of Housing and Community Development (HCD) and all housing sponsors as required by the Surplus Property Land Act, of the potential sale, and no responses from any entities were received stating any interest in the property. As required by the Surplus Land Act, when surplus land is disposed, it is often required to maintain certain levels of affordability. An affordable housing covenant shall be recorded on the property at the time of sale pursuant to Government Code Sections 54233 and 54233.5, which requires that if 10 or more units of housing are developed on the property in the next 55 years, that 15% of the units will follow guidelines for affordable housing.
Staff is recommending approval of the Agreement for Purchase and Sale of the 7,405 square foot parcel (APN: 459-282-13T) to Mark Guevara for $5,000 and authorize the Public Works Director or designee to sign and execute the standardized contract on behalf of the City of Fresno. Compensation was based on an appraisal conducted by Scott E. Rurik, MAI of Scott Appraisal Co., with a total value of $8,700. The owner rejected the City’s offer of $8,700 and offered to pay $5,000 cash. Staff is recommending Council find there are substantial community benefits that justify a sales price less than the appraised value. The City Attorney’s Office has reviewed and approved this staff report and Agreement for Purchase and Sale of the parcel and Grant Deed as to form.
SURPLUS LAND ACT
This parcel is of no use to the City and was declared surplus by the City Council on January 7, 2021, Resolution No. 21-095. Following Government Code Section 54230.5, notices were subsequently provided to the Department of Housing and Community Development (HCD) and all housing sponsors as required by the Surplus Property Land Act, of the potential sale, and no responses from any entities were received stating any interest in the property.
As required by the Surplus Land Act, when surplus land is disposed, it is often required to maintain certain levels of affordability. An affordable housing covenant shall be recorded on the property at the time of sale pursuant to Government Code Sections 54233 and 54233.5, which requires that if 10 or more units of housing are developed on the property in the next 55 years, that 15% of the units will follow guidelines for affordable housing.
Under SLA, the City is required to provide HCD notice of the disposition of any surplus property and given 30 days time to respond or object to the sale of the property prior to the City being allowed to finalize any agreement. The requisite notice has been provided to HCD and the City is currently pending a response. Assuming no objection is made, the City may finalize the agreement upon confirmation from HCD.
DISPOSITION OF REAL PROPERTY (FMC SECTION 4-204)
Pursuant to FMC Section 4-204(d)(4), the City shall not approve any purchase and sale agreement, disposition and development agreement, or any other agreement that would cause or allow City owned real property to be conveyed, except upon specified terms and conditions. One of those terms requires that purchase prices shall be at fair market appraised value, unless the Council makes findings there are substantial community benefits resulting from the sales agreement that justify a price less than market value. Here, an appraisal was conducted by Scott E. Rurik, MAI of Scott Appraisal Co., with a total value of $8,700. The owner rejected the City’s offer of $8,700 and offered to pay $5,000 cash. The negotiated price of $5,000 is justified under the circumstances and would provide substantial community benefits. Due to the undevelopable nature of the parcel, its small size, and that 0.10 of the 0.17 acres will be dedicated by way of an easement to the City of Fresno which shall include the sidewalk, curb and gutter, and area extending into First Street. Also, due to the challenges over the years to the community and to the City in maintaining the parcel free of blight. Mr. Guevara plans to keep and maintain the pocket park and secure it with access to the adjacent property owners and neighbors adding substantial community benefit.
ENVIRONMENTAL FINDINGS
Staff has performed a preliminary environmental assessment of this action and pursuant to California Environmental Quality Act (CEQA) Guidelines, Section 15061 has determined with certainty that there is no possibility that this action may have a significant effect on the environment, because it is merely a change of ownership. Therefore, this action does not constitute a project for CEQA purposes. Furthermore, this is exempt pursuant to CEQA Guidelines Section 15312/Class 12(Surplus Government Property Sales) for the proposed project pursuant to the California Environmental Quality Act (CEQA). The parcel is not located in an area of statewide, regional, or areawide concern identified in Section 15206(b)(4). Also, the property is of such size, shape, or inaccessibility that it is incapable of independent development or use. Only 0.7 of the 0.17 acre parcel may be developed, as the remainder of the parcel shall be to dedicate an easement to the City of Fresno which shall include the sidewalk, curb and gutter, and area extending into First Street. None of the exceptions to Categorical Exemptions set forth in CEQA Guidelines Section 15300.2 are applicable.
LOCAL PREFERENCE
Local preference does not apply because the acquisition of the subject real property does not include a bid or award of construction or services contract.
FISCAL IMPACT
The sale of APN 459-282-13T is in Council District 7. There will be no impact to the City’s General Fund resulting from this sale. The purchase amount of $5,000 will be deposited into the PARCS General Fund. A portion of these funds will be used to cover the recording and administrative fees to purchase the parcel.
Attachments:
Environmental Assessment No. PK00001
Resolution - FMC Section 4-204(d)(4)
Purchase and Sale Agreement
Grant Deed
Location Map
Vicinity Map