Meeting Date: 1/25/2016 Report Type: Staff/Discussion Report ID: 2016-00091 04 Oversight Board for Redevelopment Agency Successor Agency Report 915 I Street, 1 st Floor www.cityofsacramento.org Title: Delegate Authority to the Redevelopment Agency Successor Agency to Implement the Long Range Property Management Plan Location: Citywide Recommendation: Pass a Resolution authorizing the Redevelopment Agency Successor Agency to implement the Long Range Property Management Plan as approved by the Department of Finance. Contact: Leslie Fritzsche, Senior Project Manager and RASA Staff, (916) 808-7223, Economic Development Department Presenter: Leslie Fritzsche, Senior Project Manager and RASA Staff, (916) 808-7223, Economic Development Department Department: Economic Development Dept Division: Citywide Development Dept ID: 18001031 Attachments: 1-Description/Analysis 2-Resolution City Attorney Review Approved as to Form Sheryl Patterson 1/20/2016 12:59:54 PM Approvals/Acknowledgements Department Director or Designee: Leslie Fritzsche - 1/20/2016 11:59:13 AM James Sanchez, City Attorney Shirley Concolino, City Clerk Russell Fehr, City Treasurer John F. Shirey, City Manager 1 of 6
Description/Analysis: The Long Range Property Management Plan (LRPMP) dated June 15, 2015, as revised on December 15, 2015, addresses the planned disposition of the 81 remaining parcels that were transferred to the Redevelopment Agency Successor Agency. The LRPMP, as approved by the State Department of Finance (DOF) on December 31, 2015, sets forth the method for disposition of the parcels including transferring to the City as government use, purchase by the City for future development, or sold to the general public. Pursuant to the recent change in the Dissolution Law, actions to implement the approved LRPMP are not subject to additional review by DOF. (Health and Safety Code 34191.5(f)). In order to expedite the implementation of the LRPMP, staff is requesting the delegation of limited authority for the Redevelopment Agency Successor Agency to sell properties without the need for further Oversight Board approval. This will aid in streamlining the disposition process. Staff is recommending that RASA be delegated the authority to: 1) Sell RASA property at market value. This will be accomplished utilizing one of two disposition methods: a) Sell at appraised value; or b) Sell at highest bid Properties that cannot be sold at their appraised value or through a bidding process would require Oversight Board approval of the pricing alternatives. The disposition options in such cases may involve a lower sale price to transfer the property so it returns to the tax rolls and possibly development obligations to provide long-term benefits for the taxing entities and the community. 2) Sell small RASA remnant parcels based on a Broker s Estimate of Value of $10,000 or less at a negotiated price. A focus of this effort will be working with the adjacent property owners for potential acquisition of these remnants and possibly property consolidation to create a usable site. 3) Sell to the City the properties listed under City Retain for Future Development (see list included herein as Attachment 1) based on the June 2011 appraised value and subject to approval of Compensation Agreements by the taxing entities. 4) Transfer the properties north of the Robertson Community Center along Norwood Avenue (Assessor Parcel Numbers 250-0130-016, -017,-021,-022,-023) to the City at no cost as government use. (The Oversight Board previously authorized the transfer of the other government use properties listed in the LRPMP.) All of the sales transactions of $100,000 or more would require the RASA Board (City Council) approval. The City has delegated to its City Manager authority to sell properties under $100,000, and RASA would request the same delegation of authority to implement the LRPMP. 2 of 6
Policy Considerations: The actions outlined in this report are in furtherance of the approved LRPMP as approved by the Oversight Board on June 15, 2015 and revised as approved on December 15, 2015. Economic Impacts: There are no direct economic impacts to the actions proposed in this report, but it is envisioned that streamlining the disposition process will expedite property sales and development and the return of properties to the tax rolls will benefit the taxing entities. Environmental Considerations: Not applicable. Sustainability: The RASA-owned properties are located in City-designated infill areas and their disposition coupled with their reuse is in keeping with the City s Sustainability Plan. Rationale for Recommendation: On February 1, 2012, the City of Sacramento assumed the role as Successor Agency to the Redevelopment Agency of the City of Sacramento (RASA). In that capacity, RASA is responsible for unwinding the Agency s activities including the disposition of the Agency s non-housing real estate assets. On May 20, 2013, the Oversight Board for RASA approved the following guidelines for the disposition of RASA properties: 1. Follow rules and restrictions dictated by the funding source utilized for acquiring the property 2. Continue to use properties that have traditionally functioned as public assets as public properties by transferring them to the City 3. Provide opportunities to fulfill the development objectives set out when the property was purchased. 4. Balance community objectives with the receipt of proceeds 5. Aggregate parcels where possible to provide biggest impact and financial benefit 6. Evaluate whether placing on market at this time and/or in an as-is condition is most beneficial approach. 7. Promote the utilization of sales proceeds to accomplish vertical development. 8. Acknowledge that each property offered for disposition will likely require a different amount of time on the market. These guidelines and the recent approval of the LRPMP provide the policy framework for the disposition of the RASA properties. To fulfill the mandate of the Dissolution Law (AB 1x 26, AB 1484, SB 107), staff is interested in moving forward with the implementation of the LRPMP and beginning the disposition process. Delegating certain actions to RASA will expedite the sale of the properties and allow them to return to the tax rolls more quickly than having to return to the Oversight Board for approval of each transaction. Two key implementation pieces have already been approved. On September 16, 2013, the Oversight Board approved a list of on-call appraisers that will be used for preparing any needed appraisals. In June 2015, two real estate brokerage firms (DTZ and Turton 3 of 6
Commercial Real Estate) were selected to assist in RASA in marketing the properties for sale. Staff will work with these firms to obtain values for listing and to position the assets for disposition in a logical and systematic manner so as to yield the maximum proceeds from the subject properties. Staff will provide regular reports on the disposition of properties to the Oversight Board. Financial Considerations: The actions outlined in this report do not have any direct financial impact. As provided in the Dissolution Law, all sales proceeds will be sent to the County Auditor-Controller for distribution to the taxing entities. When the City is acquiring property for Future Development, a Compensation Agreement is required to be entered into between RASA and all of the taxing entities. Local Business Enterprise (LBE): Not applicable. 4 of 6
RESOLUTION NO. 2016- Adopted by Oversight Board for Redevelopment Agency Successor Agency APPROVING DELEGATION OF AUTHORITY TO RASA TO SELL PROPERTIES SUBJECT TO CERTAIN RESTRICTIONS BACKGROUND: A. Pursuant to AB 1484 enacted in June of 2012, the Redevelopment Agency Successor Agency (RASA) is required to prepare a Long Range Property Management Plan ( Plan ) to identify the proposed disposition of the non-housing real property assets of the former Redevelopment Agency of the City of Sacramento. The Plan is to include historical information about each property, current use, estimated value, and the proposed method of disposition. C On December 15, 2013, the Oversight Board approved a Plan that included the non-government use parcels owned by RASA and recommended the parcels to be retained by the City for future private development, transferred pursuant to an enforceable obligation, or sold. D. Following review of the Plan by the State Department of Finance (DOF), the Oversight Board approved a revised Plan on June 15, 2015. E. A Long Range Property Management Plan Tracking Worksheet, a format provided by DOF, was approved by the Oversight Board at its December 15, 2015 meeting to support the Plan, thus expediting DOF s review. The Oversight Board also approved modifying the Plan as directed by DOF. F. On December 31, 2015, DOF approved RASA s Plan, and under SB 107, no further DOF review is required to implement the Plan. G. RASA is now in the position to begin disposing of RASA property assets, the sales proceeds of which will be provided to the County Auditor-Controller for disposition to the taxing entities. H. On September 16, 2013, the Oversight Board approved a list of on-call appraisers that will be used for preparing any needed appraisals. In June 2015, two real estate brokerage firms (DTZ and Turton Commercial Real Estate) were selected to assist in RASA in marketing the properties for sale. 5 of 6
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE OVERSIGHT BOARD FOR REDEVELOPMENT AGENCY SUCCESSOR AGENCY RESOLVES AS FOLLOWS: Section 1. RASA is authorized to take all actions necessary to dispose of RASA properties at market value without further approval of the Oversight Board based on either: a) Sell at appraised value; or b) Sell at highest bid Section 2. RASA is authorized to take all actions necessary to dispose of RASA remnant properties with a Broker s Estimate of Value of $10,000 or less at a negotiated price without further approval of the Oversight Board. Section 3. RASA is authorized to take all actions necessary to sell to the City RASA properties designated as Retain for Future Development at the June 2011 appraised value and subject to approval of Compensation Agreements by the taxing entities. Section 4. RASA is authorized to take all actions necessary to transfer the RASA properties north of the Robertson Community Center along Norwood Avenue (Assessor Parcel Numbers 250-0130-016, -017,-021,-022,-023) to the City at no cost as government use. ADOPTED BY THE OVERSIGHT BOARD FOR REDEVELOPMENT AGENCY SUCCESSOR AGENCY ON JANUARY 25, 2016 BY THE FOLLOWING VOTE: Yes: Noes: Abstain: Absent: Attest: Shirley Concolino, Redevelopment Agency Successor Agency Clerk Chair, Jay Schenirer 6 of 6