COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager's Office

DATE:

October 11, 2007

BOARD MEETING DATE:

October 30, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Services Division

SUBJECT:

Sale of County owned improved real property in the City of East Palo Alto for affordable housing purposes (COP 731)

RECOMMENDATION:

Adopt a resolution:

A. Declaring certain County-owned improved real property in the City of East Palo Alto as surplus to the needs of the County in order to facilitate the use of that property as part of a mixed-use development that includes a significant housing component, both market rate and affordable, and

B. Authorizing the commencement of actions necessary to sell said real property.

VISION ALIGNMENT:

Commitment: Offer a full range of housing choices.

Goal(s): Goal 9. Housing exists for people at all income levels and for all generations.

Commitment: Responsive, effective and collaborative government

Goal(s): Goal 22. County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County. The sale of surplus property contributes to these commitments by helping to further the City of East Palo Alto’s economic and community development objectives, and as part of a long-range strategy to promote the expansion of the housing stock in the County, including a mandated affordable component.

BACKGROUND:

The County acquired APN: 063-221-010 in 1966 for the realignment of University Avenue. The subject property is the remainder parcel after completion of road construction, and is irregular in shape. It comprises approximately 10,677 square feet (0.25 acres) at the southeast corner of Bay Road and University Avenue. The property is zoned C-1/S-3 (Neighborhood Business District.)

In May of 1977 the remainder parcel was sold by the Road Fund to the County’s Redevelopment Agency. In 1978 the property was improved with a 2,266 square foot building for the United States Postal Service (USPS), which still leases the facility. This lease will expire in July of 2008, and it is expected that the USPS will enter into a new five-year lease, which can be terminated by either party by giving one year’s written notice.

The subject property is located in the Ravenswood Industrial Area Redevelopment Project Area of the Redevelopment Agency of the City of East Palo Alto (“Agency”). In November 2006, the Agency solicited proposals from existing property owners to assemble and develop a 1.19 acre area, including the subject property and four adjacent parcels, designated as the “Four Corners Project”.

The Agency selected Clarum Corporation as the Master Developer for the Four Corners Project based on a proposal to construct a mixed use project that includes approximately 24,000 square feet of ground floor retail space and approximately 123 condominium and townhouse dwelling units on the upper floors, of which twenty percent (20%) will be affordable housing for low- and moderate-income households.

DISCUSSION:

At the request of the Department of Housing, Real Property Services has commissioned an independent appraisal of the property, and seeks a finding of this Board that the property is surplus to County needs. In order to ensure that the sale of the property facilitates additional housing, including affordable units, it is proposed that any transfer include deed restrictions that limit the use of the property and establish a time frame for project completion. The property will be sold subject to the lease with the USPS.

The sale process requires notification to certain public agencies of the County’s intent to sell the property, providing a sixty day period for any interested agency to negotiate an agreement with the County before the property is offered to the general public. If no public agency is interested in purchasing the property, it will be offered for sale through the auction process set forth in the Government Code. Any sale to a public agency or at auction will be presented to this Board for its consideration at a future date.

Concurrent with the necessary sixty day notice to public agencies, staff will formally request that the City of East Palo Alto find that the proposed sale conforms with its General Plan.

FISCAL IMPACT:

Declaring the property surplus has no fiscal impact. Proceeds of the transaction, if sold, will be deposited to the appropriate CDBG account of the Department of Housing. The County’s Housing and Community Development unit has used CDBG program funds to provide property management and maintenance services for the property since the County’s Redevelopment Agency was dissolved.

cc w/enc:

Lee Thompson, Deputy County Counsel

cc:

Duane Bay, Director, Department of Housing