FROM:
Administrative Services
SUBJECT:
Title
Adopt Resolution No. 2026-003, Declaring that City owned real property identified with Assessor’s Parcel Numbers 0228-051-14-0000 and 0228-051-15-0000 (collectively the “Property”) as exempt surplus land pursuant to the Surplus Land Act, Government Code section 54220, et seq.; authorizing the City Manager and his designee(s) to take all actions necessary to comply with the Surplus Land Act pursuant to State California Environmental Quality Act (“CEQA”) Guidelines section 15312; and Authorize the City Manager to enter into a Purchase and Sale Agreement regarding the Property, conditioned on compliance with CEQA pursuant to CEQA Guidelines section 15004(b)(2); and directing staff to issue a notice of exemption.
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RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2026-003, Declaring that City owned real property identified with Assessor’s Parcel Numbers 0228-051-14-0000 and 0228-051-15-0000 (collectively the “Property”) as exempt surplus land as exempt surplus land pursuant to the Surplus Land Act, Government Code section 54220, et seq.; and authorize the City Manager and his designee(s) to take all actions necessary to comply with the Surplus Land Act pursuant to State California Environmental Quality Act (“CEQA”) Guidelines section 15312.
2. Authorize the City Manager to enter into a Purchase and Sale Agreement regarding the Property, conditioned on compliance with CEQA pursuant to CEQA Guidelines section 15004(b)(2); and directing staff to issue a notice of exemption.
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COUNCIL GOALS:
• Provide a diverse range of housing types and levels of affordability while addressing homelessness in the community by construction of affordable high-quality multi-family housing.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.
DISCUSSION:
The City of Fontana acquired these parcels in 1997. Staff has been unable to determine the purpose of buying these parcels. There was an attempt to sell these parcels in 2019 but that transaction was not completed. In 2003, Resolution No. 2003-55, the City declared portions of these city owned parcels as right of way for street and public utility purposes.
The two parcels (collectively referred to as the “Property”), which together total 16,812 square feet, less than one-half of an acre, are no longer needed for the City’s uses or purposes and provide no direct benefit to the City in their current condition. The Property is adjacent to land owned by a school district and that land is vacant and not currently being used by the school district. Staff believes it will provide a great opportunity for development by a private company and therefore, is recommending that the City declare the property as exempt surplus.
By adopting the attached Resolution, the City would declare these properties as “exempt surplus land,” under the Surplus Land Act and Government Code section 54221, and these parcels are no longer necessary for the City’s use.
The City also has reporting and compliance obligations to the Department of Housing and Community Development (“HCD”), who can impose penalties based on the ultimate sales price of the parcel, if the Surplus Land Act is not followed prior to disposition. A copy of this Resolution will be submitted to HCD.
Adoption of the attached Resolution will comply with the Surplus Land Act process and substantiate that this Property is exempt surplus land that may be disposed without any additional disposition procedures under the Act. The disposition of these properties will contribute to the City’s goals to encourage new development.
In connection with the declaration of the Property as exempt surplus land, staff has negotiated a proposed Purchase Sale Agreement. The proposed buyer is Fontana Investment 2023 LLC, a Delaware limited liability company. The terms of the Purchase Sale Agreement include the following:
• Purchase Price: $225,000
• Deposit: $5,000
• Due Diligence Period: 45 days
• Closing Date: 15 days from Satisfaction of Buyer's conditions, or 2 years from Buyer's delivery that it has completed inspections.
• Conditions Regarding FUSD Properties: Buyer is seeking to acquire adjacent properties from the Fontana Unified School District, which would occur concurrently with acquisition of the City Property. Acquisition of the FUSD properties is a condition for benefit of the Buyer.
• Conditions Regarding Entitlements and CEQA Review: The disposition of the City Property is conditioned upon the Buyer submitting a project application and obtaining entitlements for a project that involves the development of residential housing. The City's review and approval of the entitlements, and any required environmental review under the California Environmental Quality Act ("CEQA"), is a condition precedent for the City's obligation to close escrow.
CEQA:
Pursuant to the California Environmental Quality Act (Public Resources Code section 21000, et seq.) (“CEQA”), staff has determined that the potential actions contemplated involve the sale of exempt surplus government property, which is exempt from environmental review under CEQA pursuant to State CEQA Guidelines section 15312, as the Property is not located in an area of statewide, regional or area-wide concern per CEQA Guidelines Section 15206(b)(4). Further, the terms of the proposed Purchase Sale Agreement impose, as a condition precedent for the City's obligation to close escrow, the requirement that the Buyer submit a project application and obtain entitlements from the City for a development that involves a residential housing pursuant the City’s completion of any required environmental review pursuant to CEQA such that, per CEQA Guidelines section 15004(b)(2), the approval of the Purchase and Sale Agreement is not the approval of a “project” under CEQA.
FISCAL IMPACT:
This completion of this transaction will result in revenue for the City in the amount of $225,000 for the General Fund.
MOTION:
Approve staff recommendation.