MEETING DATE:
JULY 28, 2026
SUBJECT:
Title
RESOLUTION NO. 2026-9647 - DECLARING CERTAIN LEASEHOLD INTERESTS IN REAL PROPERTY IDENTIFIED AS ASSESSOR’S PARCEL NUMBER 222-170-38-00 TO BE SURPLUS PURSUANT TO AND AS DEFINED BY THE SURPLUS LAND ACT, AUTHORIZING THE ISSUANCE OF A NOTICE OF AVAILABILITY OF SUCH PROPERTY INTERESTS, AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE A LONG-TERM LEASE OR SIMILAR ARRANGEMENT AND ASSOCIATED DOCUMENTS FOR DISPOSITION OF SUCH PROPERTY INTERESTS IN ACCORDANCE WITH APPLICABLE LAW
Body
Recommendation
Recommendation
ADOPT a resolution declaring that certain leasehold interests in real property identified as Assessor’s Parcel number 222-170-38-00 to be surplus pursuant to and as defined by the Surplus Land Act, authorizing the issuance of a notice of availability (NOA) of such property interests, and authorizing the City Manager to negotiate a long-term lease or similar arrangement and related documents for disposition of such property interests in accordance with applicable law.
Body
Board or Commission Action
Not Applicable
Relevant Council Strategic Theme
Good Governance
Relevant Department Goal
Not Applicable
Executive Summary
The City owns a vacant parcel located on Santa Barbara Drive identified as Assessor's Parcel Number 222-170-38-00 ("Property"). The parcel measures approximately 41.85 acres, and the City’s ownership of the Property was a result of dedication of land from a private developer of property near the site around 2021. Per Resolution 2015-8140 and 2021-8919, the dedication of the Property stipulated that the parcel be used for City park, recreation, and other similar public enjoyment purposes.
The Property is designated and zoned for park and recreational purposes within the City's adopted General Plan, the Heart of the City Specific Plan, and the City’s Zoning Ordinance. While the parcel has been identified as, and is intended for, long-term recreational and public use, the City does not currently have the financial resources to develop the parcel for such use. The site has, therefore, remained undeveloped open space since it was dedicated to the City for recreation purposes.
Furthermore, due to the size of the Property, the City’s long-term financial planning does not include development of the Property in the City’s multi-year planning horizon. Therefore, staff has concluded that the Property is not anticipated to be developable for municipal purposes within the City's present or foreseeable future operational horizon, absent a public-private partnership and/or other long-term lease arrangement for the Property.
It should be noted that under California’s Surplus Land Act, set forth in Government Code §§ 54220 et seq (“the Act”), and specifically in §54221(d)(1)(B), the term “disposition” is defined to include leases of surplus land for terms in excess of fifteen (15) years, inclusive of any extensions or renewal options, as well as the sale of real property. The use of the term “disposition” as utilized in this report and proposed Resolution is with respect to the anticipated long-term lease of the Property to facilitate development and maintenance of park, recreation, and similar public enjoyment opportunities, and does not include sale of the Property in fee. The City will retain ownership of the Property.
Consistent with the Act, staff seek the City Council’s consideration and approval of the proposed Resolution which would declare certain leasehold interests in the Property to be “surplus” as defined by and as required by the Act, authorize the City Manager or designee to take appropriate implementing action, including issuance of a Notice of Availability (“NOA”) to parties identified by the Act and engaging in negotiations with responding parties for disposition of the Property interests in question as permitted and restricted, as applicable by the underlying General Plan, Specific Plan, and Zoning designations. Any final document relating to such disposition would return to the City Council for separate consideration and action.
Discussion
The Property consists of an open-space parcel totaling approximately 41.85 acres. The City is the fee owner of the parcel as a result of land dedication from a developer of a nearby planned community. Per Resolution 2015-8140 and 2021-8919, the dedication contemplated use of the Property for City park, open-space, recreation, and other similar public enjoyment purposes. The Property is designated and zoned for park and recreational purposes within the City's adopted General Plan, the Heart of the City Specific Plan, and the City’s Zoning Ordinance.
The Property represents one of the City's few remaining large undeveloped parcels capable of accommodating a community-scale recreational facility, though financing of such has been a challenge for the City. While the long-term intended use of the space has been recreational use since the City’s ownership of the land, and is indeed required by reason of the dedication of the same for park and recreation purposes, due to its size, location, and characteristics staff believes that the cost of development of the site for such intended use to be prohibitive for development if entirely borne by the City. Costs are estimated to exceed $40M, due to anticipated costs associated with site preparation, utility work, construction, and environmental mitigation.
The Act defines entry into a long-term lease or similar constraint on real property to be a “disposition” of such property; given the need to amortize cost of construction of facilities, and the cost of long-term maintenance, etc., it is anticipated that a lease or joint use agreement would need to exceed a 15-year period by a number of years. Staff did not identify an exemption under the Act for anticipated private participation by way of a long-term lease or joint use arrangement, and accordingly recommend that the City Council declare certain leasehold interests in the Property to be “surplus,” yet retain the existing General Plan, Specific Plan, and Zoning designations, so that staff may work to retain the Property in fee and negotiate a public-private partnership, joint use, and/or other similar long-term lease arrangement for the Property consistent with the purposes for which the site was dedicated to the City.
If such Property leasehold interests in question are declared “surplus,” the Act requires that the City prepare and deliver an NOA to entities designated by the statute, particularly (1) housing sponsors listed on the Department of Housing and Community Development’s (HCD’s) website, (2) parks and recreational departments and regional park authorities with jurisdiction in the location where the land is located, and the State Resources Agency, (3) school districts with jurisdiction where the land is located, and (4) any entity with jurisdiction over the land if the land is in an infill opportunity zone or covered by a transit village plan adopted pursuant to the Transit Village Development Planning Act of 1994 (collectively, the “Designated Entities.”) In the event multiple parties respond to the NOA, first priority in negotiation shall be given to an entity that agrees to use the site for park or recreational purposes pursuant to Government Code section 54227(b).
The Act also requires the City to negotiate with responding Designated Entities in good faith prior to making the Property available to any other party. The Surplus Land Act does not require the City to ultimately agree to lease/dispose of the Property to any negotiating party, subject to limitations set forth in the law.
Approval of the recommended action would result in certain interests in the Property to be “surplus” and would authorize City staff to prepare and deliver the necessary notices and documentation to notify Designated Entities of the availability of the Property interest, and thereafter conduct good-faith negotiations with responding parties consistent with the Act. In the event the negotiations conclude without a proposed disposition of the Property, the declaration would further authorize City Staff to apprise the California Department of Housing and Community Development (“HCD”) that such negotiations were conducted in good faith, and in the event such negotiations do not conclude with a recommendation to enter into an agreement with any of the Designated Entities, to apprise HCD of the same and of the City’s intent to negotiate with other third parties for the planned disposition.
The NOA would set forth all applicable constraints, including the intent to retain the General Plan, Specific Plan, and Zoning designations of the Property and associated constraints, as well as the requirements of the original dedication consistent with the adopted Resolution.
The Act governs the disposition of local agency property determined to be surplus. Pursuant to Government Code Section 54227(b), priority for local agency surplus land is granted to ”…an entity that agrees to use the site for park or recreational purposes if the land being offered is already being used and will continue to be used for park or recreational purposes, or if the land is designated for park and recreational use in the local general plan and will be developed for that purpose.” Due to the City’s General Plan designation of the parcel as Recreation and the Heart of the City Specific Plan which zones the site for Park use, as well as the restrictions associated with the manner of the dedication of the Property, and the characteristics of the surrounding area, the NOA shall give priority to proposers that would use the Property consistent with the original dedication, General Plan, Specific Plan, and zoning designations through appropriate lease provisions, deed restrictions, and/or other recorded instruments. These uses would include, but may not be limited to:
• Public recreation use
• Athletic facilities
• Public leisure facilities
Pursuant to Government Code section 38440, et seq., the sale of land dedicated by the City to public park use or abandonment of park use could require additional consideration and actions. As neither the abandonment of park use nor the sale of the Property is contemplated, compliance with the Act is all that is necessary.
Development of the Property through a private-public partnership and/or other similar long-term lease arrangement would leverage private or other investment to accelerate construction of recreational amenities that would otherwise not be financially feasible for the City within the foreseeable future. This approach allows the Property to be efficiently developed while reducing the financial risk to the City.
The recommended action would permit the City Manager or designee to negotiate terms for disposition of the Property consistent with applicable law and the Resolution. The final disposition document(s) if any, would be subject to further review by the City Council, including for environmental impacts as applicable.
Environmental Review
The activity performed under this action is not a “project” as defined under Section 15378 of the California Environmental Quality Act Guidelines (California Code of Regulations, Title 14, Division 6, Chapter 3, Sections 15000 - 15387), and is therefore not subject to environmental review pursuant to Guidelines Section 15060(c)(3).
The nature and scope of any potential future development is not known at this time. If, upon compliance with the Act, a project application for development entitlements is brought forward, the appropriate level of environmental review would be identified and conducted for the same.
Fiscal Impact
There is no fiscal impact associated with the declaration of certain interests in the Property to be surplus.
Potential revenue associated with a possible long-term lease or other joint use arrangement relating to the Property is unknown at this time. In future, such revenue may be utilized for the development or maintenance of public use components of the parcel or be realized as City revenue, and would be part of the City’s Operational and Capital Improvement Program Budget process and subject to annual City Council approval.
Attachment(s)
Resolution
Exhibit A: Aerial Vicinity Map
Prepared by: Janet Brotherton, Budget and Analysis Manager
Submitted by: Donna Apar, Finance Director
Reviewed by: Donna Apar, Finance Director
Reviewed by: Helen Holmes Peak, City Attorney
Approved by: Michelle Bender, City Manager