BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Adopt a Resolution Declaring Seven Parcels Located Along Coyote Creek in San Jose, California (San Jose, District 2) Located at 120 Arroyo Way (APNs 467-29-027 and 037), 150 Arroyo Way (APN 467-29-026), 166 Arroyo Way (APN 467-29-036), 180 Arroyo Way (APN 467-29-035), 382 South 17th Street (APN 467-39-103) and 70 South 17th Street (APN 467-29-039) are No Longer Required for Valley Water Use and Purposes and Declaring That the Parcels are Surplus Land Under California Government Code Section 54221(b)(1), and, Authorize the Chief Executive Officer to Negotiate, Approve, Execute, and Implement Agreements and Other Documents Necessary for the Sale and Disposition of the Seven Surplus Properties.
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RECOMMENDATION: Recommendation
A. Adopt the RESOLUTION DECLARING SEVEN PARCELS LOCATED ALONG COYOTE CREEK IN SAN JOSE, CALIFORNIA (DISTRICT 2) LOCATED AT 120 ARROYO WAY (APN’S 467-29-027 and 037), 150 ARROYO WAY (APN 467-29-026), 166 ARROYO WAY (APN 467-29-036), 180 ARROYO WAY (APN 467-29-035), 382 SOUTH 17TH STREET (APN 467-39-103), AND 70 SOUTH 17TH STREET (APN 467-29-039) ARE NO LONGER REQUIRED FOR VALLEY WATER USE AND PURPOSES AND DECLARING THAT THE PARCELS ARE SURPLUS LAND UNDER CALIFORNIA GOVERNMENT CODE SECTION 54221(b)(1); and
B. Authorize the Chief Executive Officer to negotiate, approve, execute, and implement agreements and other documents necessary for the sale and disposition of seven surplus properties, including authority to make any required determinations and take any required actions under the California Environmental Quality Act (CEQA), in accordance with applicable law.
Body
SUMMARY:
Santa Clara Valley Water District (Valley Water) is undertaking the Anderson Dam Federal Energy Regulatory Commission Order Compliance Project (FOCP) as a result of the February 20, 2020 directive from the Federal Energy Regulatory Commission (FERC) to implement interim risk reduction measures at Anderson Dam. One of those measures is the Coyote Creek Flood Management Measures Project - Project No. 91864007 (Project), which is funded by the Water Utility Enterprise Fund (Fund 61).
Valley Water acquired property rights along approximately nine miles of Coyote Creek in San José to implement the Project. The acquisitions provided the land needed to construct floodwalls and maintain them after construction. This included seven parcels in the Olinder-Brookwood Terrace neighborhood, six of which contain single-family residences (Attachment 1, Property Map). While Valley Water needs only portions of these parcels for the floodwalls and associated operations and maintenance, negotiations for the property rights resulted in the owners choosing to sell the entire parcels instead for both parties’ convenience.
Valley Water currently rents out four of the six residences on a month-to-month basis through Cal-Western Property Management. The remaining two residences are boarded and fenced for security. The properties require ongoing management and maintenance and have experienced trespass and security issues. Selling the properties would reduce these costs and liabilities and allow Valley Water to recoup Project funds.
Valley Water no longer needs fee title to the seven parcels for its purposes. As part of the disposition, Valley Water will reserve the water management and access easements necessary to operate and maintain the floodwalls. Section 31(a) of the District Act authorizes the Board, by resolution, to determine that real property or an interest in real property is no longer necessary for Valley Water purposes and thereafter sell, lease, or otherwise dispose of the property. Staff therefore recommend that the Board declare the seven parcels as surplus and initiate the disposition process in accordance with the Surplus Land Act.
Staff also recommends that the Board delegate authority to the Chief Executive Officer (CEO) to approve and execute the sale and disposition of the properties following completion of the Surplus Land Act process, including making any required CEQA determinations. The CEO will inform the Board of each completed sale.
Surplus Land Act and Policy
Effective January 1, 2020, AB 1486 amended the Surplus Land Act (SLA) (Government Code Section 54220 et seq.), which establishes the process local agencies must follow when disposing of surplus land. The SLA requires local agencies to prioritize affordable housing, as well as parks and open space, when disposing of surplus land. Before any action can be taken to dispose of the property, the Board must declare the property as either “surplus land” or “exempt surplus land,” through formal action in a regular public meeting supported by written findings. The seven parcels are either larger than the 0.5- acre maximum size allowed for exemption from the Surplus Lands Act or if smaller, are contiguous with other surplus parcels; they are not being transferred to another public agency or exchanged for land rights of equal value; nor do the parcels meet any other requirements for exemption. Therefore, staff recommends adoption of the attached Resolution (Attachment 2) declaring each parcel as non-exempt surplus land. A summary of the subsequent Surplus Land Act Process is provided below.
The SLA process requires Valley Water to follow these steps:
1. Designate real property as surplus land. (Current recommended action).
2. Issue Notices of Availability (NOA). Valley Water must send NOA’s to affordable housing developers, public agencies, and other entities specified in the SLA.
3. Allow a 60-day response window. Interested parties must notify Valley Water in writing within 60 days after the NOA is released.
4. Enter good-faith negotiations. If interest is received, Valley Water must enter into good faith negotiations for at least 90 days to determine mutually acceptable price and terms for a potential sale or lease.
5. Proceed if no agreement is reached. If negotiations do not result in an agreement after 90 days, Valley Water may dispose of the Property without further SLA requirements.
6. Report to HCD. Valley Water must submit a report to HCD summarizing the outcome of negotiations.
7. HCD Review. HCD has 30 days to determine whether it believes a violation of the SLA occurred.
8. Valley Water Review Period. If HCD alleges a violation, Valley Water has 60 days to correct it or provide findings demonstrating compliance.
9. Safe Harbor. If HCD does not issue a notice of violation within 30 days of receiving the report, Valley Water obtains “safe harbor” protections and is not subject to SLA penalty provisions.
10. Affordability Covenant Required. Valley Water must record an affordability covenant with the HCD if a future project on the Property includes 10 or more residential units.
The total anticipated time to complete the SLA process, following the Board’s declaration of the Properties as surplus lands, is 12 months if no qualified parties express interest within 60 days. In the case of receiving notification from affordable housing developers, public agencies, or other interested parties, the negotiation process may be significantly extended.
ENVIRONMENTAL JUSTICE IMPACT:
Declaring the seven properties as surplus land is consistent with Valley Water’s commitment to environmental justice, equitable access to public resources, and responsible stewardship of public assets. This action will make the properties available for disposition in accordance with the California Surplus Land Act, including notice to affordable housing developers and other public agencies that may be able to use the properties for affordable housing, open space, public infrastructure, or other public purposes.
FINANCIAL IMPACT:
Funding to complete the SLA and property disposition process is included in the District Real Property Administration Project, Project No. 00811054, which is included in the FY 2026-2027 Adopted Operating and Capital Budget . Proceeds from the future sale of the properties will be returned to the Water Utility Enterprise Fund (Fund 61).
CEQA:
The subject properties were acquired as part of the FERC-Ordered Compliance Project (FOCP). On June 23, 2020, the Board approved the FOCP as an emergency flood protection action exempt from CEQA.
The current Board action declares the properties surplus land, initiates the statutory notice and negotiation process under the Surplus Land Act, and delegates authority to the CEO to approve the eventual sale and disposition of the properties, including making any required CEQA determinations. The current action does not approve a specific sale, purchaser or transferee, development proposal, or physical change to the environment. Accordingly, the current action is not a project under CEQA pursuant to State CEQA Guidelines Sections 15060(c)(3) and 15378.
Before approving any subsequent disposition agreement, the CEO will make any CEQA determination required for that disposition pursuant to the authority delegated by the Board. Any proposed development of the properties will be subject to separate CEQA review, as applicable.
ATTACHMENTS:
Attachment 1: Property Map
Attachment 2: Resolution
UNCLASSIFIED MANAGER: Manager
Lisa Bankosh, 408-630-2618