To: Sonoma County Board of Supervisors
Department or Agency Name(s): Public Infrastructure
Staff Name and Phone Number: Johannes J. Hoevertsz, 707-565-2550
Vote Requirement: Majority
Supervisorial District(s): Fifth
Title:
Title
Final Approval of Sale of Certain Surplus Land in Forestville
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Recommended Action:
Recommended action
A) Adopt a Resolution to accept and approve the sale for $10,000 to Buyer Allen Wark of certain surplus real property located at Terrace Drive in Forestville, California (APNs: 081-150-049, 081-150-052, and 081-150-088), and to authorize and direct the Chair of the Board of Supervisors to execute the deeds for said sale; and
B) Delegate authority to the Director of Sonoma County Public Infrastructure to complete all steps and negotiate and execute all documents reasonably required, in form approved by County Counsel, to effect said sale.
(Fifth District)
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Executive Summary:
Sonoma County Public Infrastructure requests Board approval for the sale for $10,000 to Buyer Allen Wark of certain surplus real property in Forestville, California. The land was declared as “surplus land” per previous Resolution of your Board, in accordance with applicable law. Disposing of the property will enable the County to generate revenue both from the sale of surplus land and from future property tax proceeds, and eliminate responsibilities as to the property, including recurring vegetation management costs.
Discussion:
The Sonoma County Public Infrastructure Department has entered into a contingent Purchase and Sale Agreement to sell certain real property located on Terrace Drive in Forestville, Sonoma County, California (APN: 081-150-049, 081-150-052, and 081-150-088). The properties were declared as “surplus land” per Board Resolution 22-0155 on April 19, 2022, in accordance with the State of California Surplus Land Act and State policies. The property is not currently used nor do any plans exist to use the parcels for governmental or other public purposes.
Chronology of previous sale of two Terrace Drive parcels:
In late 2019, property owner Allen Wark expressed interest in acquiring five small County-owned parcels adjacent to his property on Terrace Drive, Forestville.
Sonoma County Public Infrastructure hired the appraisal firm Ward Levy to conduct a formal appraisal of the subject parcels in 2020. The Appraisal, dated January 8, 2021, described each parcel as being of limited value due to, among other factors, moderate to steep sloping topography (appraiser verbally estimated 15-90 degrees, with an average slope of about 45 degrees). Given these slopes, the small individual lot sizes, and the need to develop on-site septic systems that would require cost-intensive engineering, the appraisal report concluded that “in all likelihood the lots would not be developable individually, with the highest and best use of each of the individual subject parcels as vacant land to augment the privacy and lot size of an adjacent owner's property.”
On April 20, 2021, the Board approved a Sonoma County Public Infrastructure request to sell two of the parcels that qualified as “exempt surplus land” under the Surplus Land Act because they were each under 5,000 square feet and were being sold to an adjacent landowner, with the sale subject to final Board approval of sale. The Board also adopted Resolution 21-0162, declaring these two parcels as “Surplus Property” and the “Intent to Sell”. The California Department of Housing & Community Development (HCD) later confirmed that the two parcels were exempt surplus land and could be sold without further Surplus Land Act process.
On September 28, 2021, the Board adopted Board Resolution 21-0397, approving the Purchase and Sale Agreement and sale of the properties to adjacent property owner Allen Wark for $5,500. The sale closed and ownership was transferred to Allen Wark on October 8, 2021.
Chronology of proposed sale of remaining three Terrace Drive parcels:
On January 14, 2022, Allen Wark contacted the County seeking to purchase the three remaining County owned parcels on Terrace Drive, Forestville (APN: 081-150-049, 081-150-052, and 081-150-088) that are adjacent to his property.
On April 19, 2022, the Board adopted Resolution 22-0155 declaring the three remaining parcels on Terrace Drive, Forestville (APN: 081-150-049, 081-150-052, and 081-150-088) as surplus land pursuant to Government Code Section 54220 et seq. (“Surplus Land Act”) and authorized the Director of Sonoma County Public Infrastructure to provide notification that the County intends to sell the surplus property as required by Government Code Section 54220, and to negotiate and execute a real property purchase agreement and complete other steps or documents reasonably required to effect said sale, subject to final approval of the Board of Supervisors. Resolution 22-0155 also determined that the proposed sales of the three parcels was categorically exempt under the California Environmental Quality Act (CEQA), and a Notice of Exemption was posted on August 31, 2022.
On May 9, 2022, the County, following the State Surplus Land Act requirements, sent the required written “Notice of Availability” and property description of the three parcels to 454 registered affordable housing developers. The Notice was also sent to Sonoma County Regional Parks, Sonoma County Office of Education, and Sonoma County Community Development Commission. A total of 457 entities received communication on the parcels’ availability. The County waited over 120 days for a response to these notices yet received no expression of interest.
On October 4, 2023, the County notified HCD that the County had completed the required surplus sale process under the Surplus Land Act, and intended to list the three parcels for sale to the general public. At HCD’s request and in accordance with the Surplus Lands Act, the County also agreed to attach an affordable housing restrictive covenant to the properties being sold.
On November 30, 2022, the County received a letter from the HCD approving the sale of the parcels to the general public.
On December 13, 2022, the County sent letters via certified mail to all three adjacent property owners, including Mr. Wark, announcing the three County-owned parcels on Terrace Drive were for sale. Mailing addresses were obtained from property ownership records. County staff also attempted to contact the adjacent property owners by telephone (excluding Mr. Wark who was already in contact with the County), but all telephone numbers found were disconnected. Unfortunately, the letters to the property owners were returned with no forwarding address.
On January 9, 2023, County staff decided that, given the lack of buyer interest in the three parcels (with the exception of Mr. Wark) despite County marketing efforts to date, that the most fiscally responsible move would be to persuade Mr. Wark to raise his unsolicited $8,000 offer for all the parcels rather than the County increasing marketing costs by placing ads and signs that may or may not generate another buyer at a higher price but would definitely require a high amount of staff time fielding calls from speculators and agents from around the County, along with higher escrow costs and greater staff time should the County open multiple escrows with different buyers. County staff provided sales comps from the appraisal to Mr. Wark, along with a $10,000 counteroffer. Mr. Wark agreed to raise his offer from $8,000 to $10,000, a price that was close to the combined appraised value of the three parcels. The County accepted Mr. Wark’s $10,000 offer.
On February 2, 2023, a Purchase and Sale Agreement was executed between the County and the Buyer, Allen Wark, that includes the following terms:
Property Being Transferred: 11289 Terrace Drive Ext (APN 081-150-049), 11253 Terrace Drive Ext (081-150-052), and 0 Terrace Drive Ext (081-150-088)
Purchase Price: $10,000 total for the three parcels
Deposit: $1,000
No Buyer Contingencies: Buyer’s purchase is not subject to any contingency for inspections, finance or appraisal of the property
County Disclosures: County is exempt from certain disclosure requirements. County has made written disclosures, including providing a Natural Hazards Disclosure Report, and Buyer has acknowledged receipt of those disclosures.
Board Approval Required: Final approval by the County Board of Supervisors required
Closing Period: Within ten (10) days from final approval by the County Board of Supervisors
Deed: Quit Claim Deed for each parcel
Restrictive Covenant: If ten (10) or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the property shall be sold or rented at affordable housing cost,
Escrow Holder: First American Title, 627 College Avenue, Santa Rosa, CA 95404
On February 3, 2023, the County’s escrow holder received the $1,000 Deposit from Buyer Wark, triggering the opening of escrow.
Project Costs and Construction Schedule. None. County intends to sell the subject properties “as is”.
Procedural Authority.
Government Code Section 25526.5, Section 54220 et seq. (“Surplus Land Act”) et seq., and County Code 2-150 et seq.
Strategic Plan:
N/A
Prior Board Actions:
4/19/22 Resolution Declaring Property as Surplus and Authorizing the Director of Sonoma County Public Infrastructure to Complete All Documents and Steps Required for Sale, Subject to Final Board Approval
Fiscal Summary
|
Expenditures |
FY 22-23 Adopted |
FY 23-24 Projected |
FY 24-25 Projected |
|
Budgeted Expenses |
$10,000 |
|
|
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
$10,000 |
|
|
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
$10,000 |
|
|
|
State/Federal |
|
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance |
|
|
|
|
Contingencies |
|
|
|
|
Total Sources |
$10,000 |
|
|
Narrative Explanation of Fiscal Impacts:
It is anticipated that any County costs such as escrow fees incurred in sale of the parcels will be covered by sale proceeds.
Narrative Explanation of Staffing Impacts (If Required):
None
Attachments:
1 - Purchase and Sale Agreement
2 - Board Resolution
3 - Board Resolution 22-0155, dated 4/19/22
4 - Notice of Property Availability sent to 454 Affordable Housing Developers, CDC, SCOE, and Regional Parks, mailed 5/9/22
5 - Notice of Property Availability sent to adjacent property owners, mailed 12/13/22
6 - HCD Approval Letter to Sell to General Public, dated 12/1/22
Related Items “On File” with the Clerk of the Board:
None