Report Prepared by: Scott McBride, Development Services Director
Title
SUBJECT: Adoption of Resolution of the Housing Successor Agency to the Merced Redevelopment Agency Declaring Certain Properties as Exempt Surplus Land and Providing Direction Pursuant to the Surplus Land Act for the Disposition of Housing Successor Agency Properties
REPORT IN BRIEF
This Resolution declares certain properties as exempt surplus land and provides direction pursuant to the Surplus Land Act for the disposition of Housing Successor Agency properties.
RECOMMENDATION
City Council - Adopt a motion adopting Resolution 2021-17, a Resolution of the City Council of the City of Merced, California, acting as the Housing Successor Agency to the Merced Redevelopment Agency, declaring certain properties as exempt surplus land and directing the City Manager to follow the procedures set forth in the Surplus Lands Act for the disposition of Housing Successor properties.
Body
ALTERNATIVES
1. Approve as recommended by staff; or,
2. Approve, subject to conditions as specified by the City Council; or,
3. Deny the request; or,
4. Refer back to staff for reconsideration of specific items as requested by the City Council; or,
5. Defer action until a specified date.
AUTHORITY
Charter of the City of Merced, Section 200. The City of Merced chose to be the Housing Successor Agency to the former Merced Redevelopment Agency following its dissolution in 2012.
CITY COUNCIL PRIORITIES
FY 2019/2020 Priority of Affordable Housing and Homelessness
DISCUSSION
Background
The City of Merced (“City”) is the Housing Successor Agency (“Housing Successor”) to the former Merced Redevelopment Agency (“Agency”). After the dissolution of redevelopment in 2012, ten parcels of vacant land were transferred to the Housing Successor (“Properties”). The Properties are scattered throughout the City, with nine sites near Downtown Merced and one near the airport. Exhibit 1 presents a map of the Properties and Table 1 lists their address, size, zoning, and land use.
Exhibit 1
Table 2
Property Details
|
# |
Address |
Lot Size (AC) |
Lot Size (SF) |
Zoning Code |
Land Use |
|
1 |
1823 I Street |
0.05 |
2,100 |
R-4 |
High Density Residential |
|
2 |
1815 I Street |
0.06 |
2,400 |
|
|
|
3 |
205 W. 18th Street |
0.07 |
3,000 |
|
|
|
4 |
211 W. 18th Street |
0.17 |
7,500 |
|
|
|
5 |
202 W. 19th Street |
0.17 |
7,500 |
|
|
|
6 |
1744 I Street |
0.11 |
5,000 |
|
|
|
7 |
49 W. 18th Street |
0.25 |
10,800 |
|
|
|
8 |
150 W. 19th Street |
0.17 |
7,500 |
|
|
|
9 |
26 W. 18th Street |
0.17 |
7,500 |
|
|
|
10 |
73 South R Street |
0.47 |
20,416 |
R-1-6 |
Low Density Residential |
State law requires the Housing Successor to either develop the Properties with affordable housing or sell the properties and deposit the sales proceeds into the Low and Moderate Income Housing Asset Fund (“Housing Asset Fund”) to fund other affordable housing activities. The deadline to initiate development or sell the properties is February 25, 2023.
In April 2019, City Council directed staff to approach developers about developing the sites with affordable housing, and to sell any sites that did not receive any interest. There is specific interest in some of the locations and these partners have interest in participating in the RFP process. Preparation of the RFP has unfortunately been delayed to address several time sensitive items, including execution of the financial instruments related to the Childs and B Project, preparation of the Consolidated Plan for Housing and Urban Development, and more recently Substantial Amendments and agreements to implement the CDBG-CV activities to assist support to the community related to COVID-19 as directed by the City Council.
Request for Proposals
City staff and consultants have prepared a Request for Proposals (“RFP”) inviting proposals from qualified developers to develop affordable housing on the Properties. The Housing Successor will consider proposals to develop any number of properties (i.e. all ten properties, a single property, or any combination thereof). The Housing Successor will contribute the land through a long-term, low cost land lease or other terms negotiated with each selected developer.
The RFP (attached) provides background information on the Properties, City housing needs, and legal requirements for affordability. Proposals will be due on May 20, 2021, and must describe the initial design concept, development team and qualifications, financial capacity. City staff will review proposals and return to City Council tentatively in August 2021 to present the recommended developers and obtain authorization to proceed with negotiations. Proposals will be selected based on the quality of the proposed project(s), legal compliance with affordability requirements, and developer experience and financial capacity.
Surplus Lands Act Exemption
Assembly Bill 1486 amended the Surplus Lands Act (the “Act”) effective January 1, 2020. The Act requires cities to offer to sell surplus property to affordable housing developers and other entities before offering them for sale on the open market. The Act allows for certain exemptions, including when property is disposed of to provide affordable housing meeting certain conditions per Government Code Section 54221(f)(1)(A):
• Not less than 80% of the area of any parcel should be used for housing development.
• Not less than 40% of the total number of units shall be made available to households earning 75% of the Area Median Income (“AMI”) or less and at least half of which shall be affordable to very low-income households.
• Units must be restricted by a regulatory agreement for no less than 30 years.
The RFP requires proposed developments to comply with these requirements. The RFP identifies additional Housing Successor requirements, which include a minimum number of extremely low-income units and an affordability period of at least 15 years for mutual self-help units, 45 years for ownership units, and 55 years for rental units.
The Act requires the City to declare land as either “surplus land” or “exempt surplus land,” as supported by written findings, before taking any action to dispose of the Properties. It is recommended the City Council approve the attached resolution declaring the Properties are exempt surplus land pursuant to Government Code Section 54221(f)(1)(A).
Summary of Recommended Action
The City Council is being requested to approve the Resolution of the Housing Successor Agency to the Merced Redevelopment Agency Declaring Certain Properties as Exempt Surplus Land and providing direction pursuant to the Surplus Land Act for the Disposition of Housing Successor Agency Properties.
It should be noted the RFP and approving Resolution do not provide any authority to execute leases, property sales, or similar documents. The City Council must provide that authority separately when appropriate. After all proposals have been submitted and reviewed, a separate item will return to the City Council for action.
The request to release the RFP in April will allow staff to further efforts aimed at increasing the number of affordable units available to City of Merced residents.
IMPACT ON CITY RESOURCES
None.
ATTACHMENTS
1. Resolution 2021-17
2. RFP Affordable Housing Development Opportunities