PREPARED BY: KIERON SLAUGHTER DATE OF MEETING: 04/21/2025
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO DECLARING CITY-OWNED PROPERTY LOCATED AT 1820 RUMRILL BOULEVARD WITH APN 411-041-009 TO BE EXEMPT SURPLUS PROPERTY UNDER THE SURPLUS LAND ACT
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2025-2027 Council Priority Workplan Compliance Statements:
Adopting the resolution supports a major policy goal contained in the FY 2025-27 City Council Priority Workplan effective April 7, 2025 to Focus on Economic Development and Fiscal Diversification.
CEQA Compliance Statement The resolution is exempt from environmental review under the California Environmental Quality Act in accordance with CEQA Guidelines Section 15378(B)(5) because it can be seen with certainty that there is no potential for causing a significant effect on the environment because the project solely involves an administrative activity and does not authorize any construction or development activities. Any future construction or development activities will require a separate CEQA analysis at that time.
BACKGROUND
The parcel identified as APN 411-041-009 located at 1820 Rumrill Blvd (the “Property”) is currently owned by the City of San Pablo (the “City”) as the Housing Successor Agency. In 2021, the City issued a Request for Proposals (“RFP”) for the development and management of housing at the property. The proposal submitted by Novin Development Corporation best demonstrated the experience, expertise and qualifications necessary to meet the goals outlined in the RFP. On February 7, 2022, in closed session with its real property negotiators, the City Council reviewed and selected Novin Development Corporation as the preferred developer, authorizing the City Manager to begin negotiations with Novin Development Corporation toward an agreement for the sale and development of the property.
City staff and Novin Development Corporation (the “Developer”) have negotiated a proposed Disposition and Development Agreement (the “DDA”) providing for the purchase and development of the Property. The Developer proposes a 45-unit multifamily 100% affordable housing development (the “Project”) with rents that do not to exceed 60% of the Area Median Income. The proposed Project will be financed with equity generated through the syndication of 4% low-income housing tax credits (LIHTC), a permanent amortizing tax-exempt bond loan through the California Debt Allocation Committee (CDLAC), as well as a $1,000,000 gap loan provided by the City from the Low-to-Moderate Income Housing Asset Fund (“LMIHAF”) and a $935,200 purchase money note for the fair market value of the Property.
The LMIHAF are housing successor funds, subject to the affordable housing provisions of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.), as modified by housing successor provisions in Health and Safety Code Sections 34176and 34176.1. It is proposed that the Project Loans have rate of three percent (3%) annual simple interest and would be repaid to the LMIHAF over 30 years from 75 percent of the residual receipts from the Project (residual receipts are generally net revenues from operation of the Project and are expressly defined in the promissory note attached to the DDA). The monies available in the LMIHAF are restricted to use for affordable housing purposes.
The City Manager is authorized to extend the payment period of the Project Loan from 30 years to 55 years (the term of the affordability covenants that run with the property) if the City Manager is satisfied that the extended repayment period is required by the financing for the development of the Site.
Exempt Surplus Land
The Surplus Land Act (SLA), originally enacted in 1968, was modified in 2020 (AB 1486), to ensure availability of property for affordable housing development. Under the new SLA structure, with certain exceptions, public agencies that want to sell or lease a property must go through a structured sale disposition process that first requires exposing the property to a state published list of affordable housing developers and other interested parties. The Updated Surplus Land Act Guidelines originally issued in April 2021, and updated in August 2024, Section 103 Exemptions, subsection (C)(3)(A) Small Surplus Land Parcels provide that land that is less than one-half acre in area (21,780 square feet) and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes is exempt from the SLA (Government Code Section 54221(f)(1)(B)).
1820 Rumrill Boulevard APN 411-041-009 is 21,619 square feet and it therefore exempt from the SLA.
FISCAL IMPACT
Approval of the proposed resolution would satisfies the California Department of Housing and Community Development requirement to declare the property exempt from the Surplus Land Act at least thirty (30) days prior to disposition of the property. Once the developer has acquired all of the necessary funding for development, the City is expected to execute a loan agreement for the fair market value of the Property and to commit $1,000,000 of the City’s Low and Moderate Income Housing Asset Fund 250 to the Project for disbursement at the commencement of Project construction. Both loans have a repayment period of 30 (or possibly 55) years based on 75% of the project’s residual receipts.
ATTACHMENTS:
Att A. Resolution
Att B. Parcel Map for 1820 Rumrill Boulevard APN 411-041-009