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APPROVE SALE OF EXEMPT SURPLUS PROPERTY LOCATED AT DIAMOND STREET AND EAST WORTH STREET
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution:
1. Authorizing the filing of Notice of Exemption No. 37-23 under the California Environmental Quality Act (CEQA) for the disposition of exempt surplus real property located at Diamond Street and East Worth Street, APN 155-300-02.
2. Authorizing the disposition of the City-owned parcel located at Diamond Street and East Worth Street to Stockton Tri Industries LLC in the amount of $10,000.
3. Authorizing the City Manager, or designee, to execute the Purchase and Sale Agreement with Stockton Tri Industries LLC.
4. Authorizing the City Manager, or designee, to take all necessary and appropriate actions to carry out the purpose and intent of this resolution.
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Summary
The property located at Diamond Street and East Worth Street was acquired by the City at an undefined date, for use as a water well site that has since been removed and is no longer in use. An offer of $10,000 has been received from Stockton Tri Industries LLC (“Buyer”), owner of the adjoining property. All City Departments were surveyed to determine the property as surplus, and City Council authorized the surplus designation on August 22, 2023 (Attachment A - Resolution 2023-08-22-1208).
Disposition of this parcel will allow the property to serve a useful purpose and provide revenue to the City. This action will allow for City-owned real property, which is unnecessary for present or prospective public use, to be eliminated from the maintenance program, thereby reducing future City costs. Staff recommends that the City Council adopt the proposed resolution for the disposition of real property located at Diamond Street and East Worth Street, APN 155-300-02, in the amount of $10,000 (Attachment B - Vicinity Map and Attachment C - Aerial Map).
DISCUSSION
Background
Administrative Directive HRD-02 (Attachment D - HDR-02) establishes standard procedures for the sale of real property belonging to the City. Specifically, the procedures allow all real property that is surplus to the City’s present and anticipated future needs to be sold and serve a useful purpose, be returned to the active tax rolls, and provide revenue to the City’s General Fund. HRD-02 requires that any department that becomes aware that a City property is no longer necessary for use notify the Economic Development Department (EDD), which will explore the possibility of disposing of the property. EDD will initiate the process by circulating details about the property to all City Departments to determine if the property is excess. Once the property is deemed excess, EDD submits the property to the City Manager, together with a recommendation that the property be declared excess and sold. The Council must approve the disposition of City real property.
The State of California’s Surplus Land Act (AB 1486) requires that the City send notices offering the property first to public agencies and any developers who have notified the California Department of Housing and Community Development (HCD) of their interest in developing affordable housing on surplus land. Public agencies and developers will have sixty (60) days to notify the City in writing of interest in purchasing or leasing any properties. Should the City receive notification from a party interested in acquiring or leasing the subject property, a 90-day good faith negotiation period begins to determine if a mutually satisfactory sales price and terms can be agreed upon. If the price or terms cannot be agreed upon after the good faith negotiation period, the land may be disposed of. If the City receives no inquiries, it may then list the subject property for sale or solicit proposals for development. This process must be followed before the City can dispose of most City-owned real property assets. Because the subject property was deemed exempt surplus by Resolution 2023-08-22-1208, the City was not required to comply with all noticing requirements of the Surplus Land Act.
The Diamond and East Worth Street property consists of approximately 0.09-acres of vacant land, is zoned IG (Industrial), and is a former well site.
Present Situation
In February 2024, City staff and Buyer agreed to a purchase price of $10,000 for the parcel. Given that the subject parcel is small in size and predominantly surrounded by the Buyer’s existing parcel, staff believes $10,000 is a fair market valuation. The Buyer intends to incorporate the parcel into a planned facility improvement project that is currently under review by the City. The parcel will primarily be used for storage of materials to be used in their operations.
NOTIFICATION
As required for the lease or sale of real property, a notice in accordance with the provisions of Article V, Section 510, of the Charter of the City of Stockton was published in the official newspaper of the City at least ten (10) days before such action is taken. A public notice was published in the legal notice section of The Record on September 20, 2024.
ENVIRONMENTAL CLEARANCE
It has been determined by the Community Development Department that this activity/project regarding the sale of the property located at Diamond Street and East Worth Street, APN 155-300-02, is Categorically Exempt under CEQA Guidelines and is granted a “general rule exemption” under Section 15061(B)(3).
In accordance with Section 65402 of the Government Code, it has been determined that this project or action conforms to the City’s General Plan designation for the site and with the General Plan Policy Document, as amended.
FINANCIAL SUMMARY
If approved by Council, and upon close of escrow of the property, the gross amount of $10,000, less closing costs, advertising, filing, and miscellaneous fees, will be deposited into 0000-000-520001-100-000-00-00-000-000-, the Disposition/Fixed Assets/Sale of Fixed Assets Fund.
Attachment A - Resolution 2023-08-22-1208
Attachment B - Vicinity Map
Attachment C - Aerial Map
Attachment D - Administrative Directive HRD-02