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HomeMy WebLinkAboutCORRESPONDANCE - 20EFrom: Gabriel M.B. Ross <ross@smwlaw.com> Sent: Tuesday, November 19, 2019 1:18 PM To: eComment <eComment@santa-ana.org> Cc: Cesar C <cesarc@kennedycommission.org>; Deanna Kitamura<deanna@forworkingfamilies.org>; Ben Beach <ben@forworkingfamilies.org>; Patrick Woolsey<pwoolsey@smwlaw.com> Subject: Comment on Council Item 20E Honorable Councilmembers, On behalf of Orange County Communities for Responsible Development, I am writing to object to the City Council's consideration of Item 20E on the November 19, 2019 Agenda. I reiterate the comments made in the attached letters, which are by this reference incorporated here in full. The lands subject to the 15 Purchase and Sale Agreements on the Council's agenda today are surplus lands under the definition of the Surplus Land Act, Government Code section 54222(b). The City may not dispose of these lands until it has followed the Act's procedures. Because the it has not followed those procedures, the sales contemplated in the 15 agreements are illegal. We therefore urge you to reject these proposals, rescind your previous actions concerning these lands, and commit to complying with the Act. If you do approve the Purchase and Sale Agreements, we will immediately seek an order enjoining the sales. Please feel free to get in touch if you have any questions. Yours, Gabriel Ross. Gabriel M.B. Ross Shute, Mihaly & Weinberger LLP 396 Hayes Street San Francisco, CA 94102-4421 v: 415/552-7272 x249 f: 415/552-5816 www.smwiaw.com Please consider the environment before printing this e-mail or attachments. 00 PARTNERSHIP Working Families VIA ELECTRONIC MAIL February 26,2019 Mayor Miguel Pulido Mayor Pro Tern Juan Villegas Councilmember Vicente Sarmiento Councilmember David Penaloza Councilmember Jose Solorio Councilmember Roman Reyna Councilmember Cecilia Iglesias 20 Civic Center Plaza P.O. Box 1988, M31 Santa Ana, CA 92701 Re: Surplus Land Act Requirements for the Sale of Eighty -Eight Bristol Corridor Parcels Dear Mayor Pulido, Mayor Pro Tern Villegas and Councilmembers: We write on behalf of Orange County Communities Organized for Responsible Development (OCCORD) to express our serious concern that the City's contemplated sale of eighty-eight parcels of City -owned land (the "Parcels") under the procedures proposed by City staff would violate the Surplus Land Act (the "Act"). Accordingly, we urge the City to dispose of the Parcels in a manner that complies with the Act by, at a minimum, offering to sell or lease the land for affordable housing or open space uses. 1. The Surplus Land Act Requires that Surplus Land Be Offered for Affordable Housing or Open Space The Act, Cal. Gov. Code, § 54220, etseq., requires that when a local agency wishes to dispose of land it no longer requires, the agency must send a written offer to sell or lease the property to certain entities for affordable housing or park purposes. The Flanders Found. v. City of Carmel -by -the -Sea, 202 Cal. App. 4th 603, 613,135 Cal. Rptr. 3d 221, 229 (2012). In adopting the Act, the California Legislature declared, "housing is of vital statewide importance to the health, safety, and welfare of the residents of this state and ... provision of a decent home and a suitable living environment for every Californian is a priority of the highest order," and thus "surplus government land, prior to disposition, should be made available for that purpose." Cal. Gov. Code, § 54220(a). 1305 Franklin Street Suite 501 ❑ Oakland, CA 94612 ❑ 510-281-7555 w Jorworkingfannilies.org C w Jnthepublicinterestorg Specifically, the Act requires that a local agency disposing of surplus land must send a "written offer to sell or lease for the purpose of developing low- and moderate -income housing" to local public agencies and, upon request, to individuals or organizations certified by the state to "own, construct, acquire, or rehabilitate a housing development' Cal. Gov't Code § 54222(a) (internal citations omitted). The Act further requires that a written offer to "sell or lease for park and recreational purposes or open -space purposes" be sent to local and regional parks agencies. Cal. Gov't Code § 54222(b). II. The City s Proposed Sale of the Parcels, As Currently Structured, Would Violate the Act Here, the City proposes to sell over 400,000 square feet of City -owned land in the Bristol corridor through a combination of Requests for Proposals (RFPs) and direct negotiation. The City's proposal is set forth in a Request for Council Action dated February 19, 2019 and entitled "APPROVE THE REQUEST FOR PROPOSALS FOR THE SALE OF CITY -OWNED PROPERTIES WITH RESTRICTED USE OF PROCEEDS AND ALLOW FOR DIRECT NEGOTIATION FOR SALE OF EXEMPT REAL PROPERTY PER SANTA ANA MUNICIPAL CODE" (the "Staff Report"). In the Staff Report, the City proposes to sell 28 combined parcels through RFPs and 5 substandard parcels through direct negotiation. The Parcels qualify as "surplus land" for purposes of the Act. The Act defines "surplus land" as "land owned by any local agency, that is determined to be no longer necessary for the agency's use, except property being held by the agency for the purpose of exchange." Cal. Gov. Code § 54221 (b). The Staff Report expresses the City's determination to sell the Parcels, in accordance with its desire to use the Parcels for purposes other than the "municipal operations and various improvement projects" for which the Parcels were originally acquired. That is, the Staff Report memorializes the City's determination that the Parcels are no longer necessary for the City's use. Yet, the Staff Report makes no mention of the Act or its procedural requirements or of generating housing or open space through the disposition process. Indeed, the report makes plain that the goal of the sale of the Parcels is to "promote revenue generating development and increase [sic] local workforce base." The disposition process described in the Staff Report, which the City aims to complete as soon as May 2019, does not include offering to sell or lease the Parcels to entities for affordable housing or open space. 2 III. The City Cannot Support Its Position that the Parcels Are Exempt from the Act's Requirements During a February 19, 2019 phone call with OCCORD's attorney, Ben Beach, City Attorney John Funk took the position that the Act does not apply to the Parcels because the Parcels have been held by the City "for the purpose of exchange," thereby qualifying them for the exception set forth in Cal. Gov. Code § 54221 (b). But the City's own words and deeds severely undercut this position. First, the Staff Report contravenes the idea that the Parcels were being held for the purposes of exchange. The Report makes no mention of this concept. Rather, the Report suggests the City's purposes for the Parcels can shift and have shifted: "[o]ver time, the need for these assets and interests can change, thereby creating an opportunity for their use for... purposes" [other than those for which they were originally acquired]. In this case, the Staff Report explains, the City's original purposes for holding the parcels were for "municipal operations and various improvement projects." Now, the Report states, the City proposes to sell these parcels for the purposes of revenue generation and workforce development. Nowhere in the City's recounting of its purposes for the Parcels or, indeed, in any other part of the public record is any indication that the Parcels have been held for the purpose of exchange. This is no small matter. The Surplus Land Act is the primary state law governing the sale of city -owned parcels of land. If the City intends to sell over 400,000 square feet of land and rely on a single exemption in the Act to avoid, wholesale, the application of the Act, it must establish a record that supports its position. The City has plainly not met that burden and, instead, has built a record that strongly suggests the City held the Parcels for purposes other than exchange and believed that it could freely shift its use of the Parcels. Second, there is no exception in the Act for land held for the purpose of sale, and holding the Parcels for sale does not qualify as holding land for the purpose of exchange under the Act. Several provisions of the Government Code indicate that the use of term "exchange" in the Act refers to an exchange of surplus lands for other lands, not the sale of surplus lands. See, e.g., Cal. Gov't Code § 11011(d) ("In recommending or determining the disposition of surplus lands, the Director of General Services may give priority to proposals by the state that involve the exchange of surplus lands for lands listed in those reports"); Cal. Gov't Code § 11011(f) (requiring report on disposition of surplus lands identifying "the date of sale and price received, or the value of the land received in exchange"). Indeed, the City itself has distinguished "sale" from "exchange" with regard to the disposition of other Bristol corridor parcels. In a January 15, 2019 Request for Council Action entitled "APPROVE APPROPRIATION ADJUSTMENT AND PURCHASE AND SALE AGREEMENT FOR PORTIONS OF CITY -OWNED REAL PROPERTY AT 1301 AND 1305 WEST 12TH STREET FOR BRISTOL STREET IMPROVEMENTS PROJECT PHASE 3A," the City states, "[t]he portions of these properties that will remain after the Bristol Street Improvements are completed, and which will not be used by the project, are being held for purposes of exchange or sale" (emphasis added.). The City cannot now assert that "exchange" and "sale" of other remnant Bristol corridor properties are the same thing. IV. Any Contractual Obligation the City May Have to Sell the Parcels Cannot Override the City's Obligations Under the Act In the course of discussion of the Staff Report during the February 19, 2019 City Council meeting, the Executive Director of the City's Public Works Agency, Fuad Sweiss, appeared to represent that the City is obligated, as a condition of receipt of funds used for acquisition, to sell the Parcels. Mr. Sweiss further appeared to suggest that, in order to honor that funding obligation, the City was determined to avoid any obligations it might have under the Act. The Act contains no exception for land subject to the sort of funding obligations Mr. Sweiss describes. And, of course, the City cannot contract around its statutory obligations. Notably, it is not clear what obligations Mr. Sweiss was referencing in his remarks to the City Council. He specifically referred to "transportation funding," but the agreement between the Orange County Transportation Authority and the City under which the Authority provided funding for Phases I and II of the Bristol Street Widening Project expressly provides that the City has no obligation to sell parcels acquired for, but not used in, the Project. See Cooperative Agreement for the Bristol Street Widening Project between Orange County Transportation Authority and City of Santa Ana, Agreement No. C-6-0069, Article 4, Section D ("Nothing contained herein obligates the CITY to sell such surplus property or guarantees any particular amount of fund returned to AUTHORITY."). Conclusion Thank you for your consideration of these concerns. OCCORD hopes to resolve these concerns without resort to legal action. OCCORD's leadership would be pleased to meet with City officials to engage in productive dialogue regarding how the City will comply with the Act in connection with its disposition of the Parcels. We look forward to further conversation regarding this important matter. A.::-- ---� Ben Beach Legal Director Partnership for Working Families r k" Richard M arcantonio Managing Attorney Public Advocates Very truly yours, Antonio Hicks Senior Staff Attorney Public Counsel KA4L�d-'�' Mike Rawson Director Public Interest Law Project 5 0X> PARTNERSHIP m, Working Families VIA ELECTRONIC MAIL John M.Funk Assistant City Attorney 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 Dear Mr. Funk: March 29, 2019 I write on behalf of Orange County Communities Organized for Responsible Development (OCCORD), a nonprofit organization that has long advocated for affordable housing and open space in the City of Santa Ana. OCCORD once again urges the City to engage with it in constructive dialogue regarding the City's lack of compliance with the Surplus Land Act (the "Act") in connection with the planned disposition of 88 parcels of City -owned land. OCCORD and its allies appreciate the multiple indications that the City is evaluating application of the Act to the sale of the 88 parcels. A proper application of the Act would address the the critical issues of housing and open space that the City needs. OCCORD understands from limited conversations with City staff that the City is in the process of revising drafts of the Request for Proposals (RFP) related to the parcels. The legal arguments set forth in your letter dated March 5, 2019 in support of the City's position that the Act does not apply are without merit. OCCORD continues to assert its position that the Act governs the sale of the 88 parcels. OCCORD further asserts that the approach to the disposition of the parcels authorized by the City Council on March 5, 2019 violates the City's obligations under the Act. In addition, OCCORD believes that the letter from the Orange County Transportation Authority (OCTA) to the City dated May 1, 2018 offers a valuable opportunity for the City to meet its obligations under the Act with regard to parcels purchased using M2 program and OCTA Gas Tax funds. In that letter, OCTA states that the City is contractually obligated to sell those parcels in accordance with the provisions of the Government Code in which the Act is codified. Unfortunately, despite several instances of outreach by OCCORD staff to the City regarding the 88 parcels and the RFP, the City has offered no invitation for dialogue or negotiation regarding measures related to housing or open space. As stated in our February 29, 2019 letter to the Mayor and City Council, OCCORD hopes to resolve its concerns without resorting to legal action. OCCORD believes that dialogue with the City will have the greatest potential to achieve meaningful resolution if it occurs prior to the City's issuance of the REP. I thus urge the City to engage with OCCORD as soon as possible and to not issue the RFP until the City has at least made a good faith attempt at dialogue with OCCORD. 1305 Franklin Street, Suite 501, Oakland, CA 94612 1 (510) 201-0081 1 ForWorkingFamilies.org I hope to hear from you soon. I can be reached by email at ben@forworkingfamilies.org or by phone at 510-281-7555. Very truly yours, Ben Beach Legal Director 2