TO: Board of Supervisors
FROM: Ryan J. Alsop, County Executive Officer
REPORT BY: Steven Lederer, Director of Public Works
SUBJECT: Sale of Calistoga Fairgrounds Property
RECOMMENDATION
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Adopt a Resolution and approve and authorize Agreement No. 240259B taking necessary steps to sell approximately 70.6-acres of County-owned land commonly known as the Calistoga Fairgrounds property to the City of Calistoga for $2,000,000 with a retained right for County to repurchase the Property under the following circumstances: change in zoning and/or proposed sale or lease. (Fiscal Impact: $2,000,000 Revenue; General Fund; Not Budgeted; Discretionary)
[4/5 vote required]
CONTINUED FROM JANUARY 9, 2024
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BACKGROUND
In Spring 2023, the Board appointed an Ad hoc Committee to meet with City of Calistoga representatives to negotiate terms for the sale of the County’s Calistoga Fairgrounds property. The proposed Resolution and Purchase and Sale Agreement (“PSA”) are attached. Certain actions contained within the proposed Resolution are required to affect the sale.
Requested Action:
Adopt a Resolution taking the following actions related to the sale of approximately 70.6-acres of County-owned land commonly known as the Calistoga Fairgrounds property (“Property”) located in the City of Calistoga (“City”):
1. Declare approximately 70.6-acres of County-owned property as “exempt surplus land” pursuant to Government Code section 54221(f)(1)(D) as the County is transferring Property to another local, state, or federal agency for the agency’s use;
2. Authorize the Board Chair to execute Agreement 240245B, a purchase and sale agreement and grant deed for conveyance of the Property to the City for a significantly discounted purchase price of $2,000,000;
3. Authorize the County Executive Officer (CEO) or designee to take any other steps and execute any other documents necessary to consummate the sale and conveyance of the Property to the City of Calistoga; and
4. Find that the sale of Property is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to: (a) Class 12 “Surplus Government Property Sales” and (b) the General Rule Exemption.
Procedural Requirements:
1. Receive Staff Presentation
2. Take Public Comment
3. Discuss, Move and Approve Resolution (4/5 vote required).
Napa County is the owner of approximately 70.6-acres of improved land located in the City of Calistoga, County of Napa, commonly known as APN: 011-140-055, 011-140-006, 011-140-007 and 011-481-022 (“County’s 70.6-acres” or “the Property”). The County contracted with the Napa County Fair Association for over 80 years to operate and maintain a portion of the County’s 70.6-acres as the “Napa County Fairgrounds.”
The Napa County Fairgrounds struggled since 2012 when the State cut funding for fair operations, compounded by aging infrastructure and declining attendance at fair events. The Napa County Fair Association terminated its agreement effective December 31, 2018.
In 2019, the County and City of Calistoga (“City”) discussed governance of the Property and in particular the approximate 34.3-acre improved portion of the Property which included the major operational facilities including the speedway, fair buildings/offices, a single-family residence, and recreational vehicle parking area. Such discussions concluded with the City’s desire to acquire this 34.3-acre portion of the Property (“34.3-acre Portion”) to preserve and utilize the grounds for the greatest benefit to Calistoga and County residents. On or about August 20, 2019, the County Board of Supervisors adopted Resolution No. 2019-105 declaring the 34.3-acre Portion as no longer required for County use and designating it as surplus so that it could be conveyed to the City. After adoption of Resolution No. 2019-105, the County and the City executed Agreement 200089B, a purchase and sale agreement and escrow instructions. In May 2020, in recognition of financing limitations the City was experiencing as a result of the COVID-19 pandemic, the County and City terminated the purchase and sale agreement.
In early 2021, the City and County resumed discussions and the City expressed interest in acquiring County’s 70.6-acre Property. On or about October 18, 2022, the County Board of Supervisors adopted Resolution No. 2022-152 declaring the remaining 36.3-acre portion of the Property as no longer required for County use and designating it as surplus so the County’s 70.6-acre Property could be conveyed to the City. On or about this same date, the County and the City executed Napa County Agreement 230198B, a purchase and sale agreement and escrow instructions. In March 2022, the City terminated the purchase and sale agreement following a failed vote of a measure that would have financed the purchase of and improvements to the Property.
On May 16, 2023, the Board of Supervisors received a presentation from staff regarding the Property and the Board provided direction to staff to resume discussions with the City regarding the City’s interest in acquiring the County’s 70.6-acre Property. In Spring 2023, the Board appointed an Ad hoc Committee to meet with City of Calistoga representatives to negotiate terms for the sale of Calistoga Fairgrounds. As a result of discussions and negotiations, the terms and conditions set forth in the Purchase and Sale Agreement (“PSA”) include:
1. Significantly discounted purchase-sale price of $2,000,000 to allow the City to acquire the Property ‘as is’ and operate the Property consistent with its historical uses, which are important to the community and the residents of Napa County;
2. Exclude a small portion of County “retained land” which is an approximate 1.0-acre of land and improvements currently being leased by the County to the Napa County Office of Education and certain adjacent square footage;
3. The City shall have a 120-day due diligence period to further investigate the site and must waive all contingencies or cancel the escrow (the PSA provides the CEO with the authority to extend the due diligence period or the closing date if needed); and
4. After waiving contingencies, the City will have 15 days to close escrow on the Property.
The PSA also includes terms related to future uses, including:
1. The City shall operate the Property for public purposes consistent with historical uses, including County fair, events center, RV park, golf course, racetrack, recycled water distribution, food bank for the benefit of the community, etc. (as defined in the PSA);
2. The County may use all or portions of the Property for emergency response purposes at no cost to the County upon the declaration of any federal, state, or local disaster; and
3. The County retains the right to repurchase the Property at the Purchase Price (adjustment defined in the PSA) from the City under the following circumstances: change in zoning and/or proposed sale or long-term lease.
Adoption of the resolution proposed today will declare the Property “exempt surplus property” pursuant to Government Code section 54221(f)(1)(D) which includes “surplus land that a local agency is transferring to another local, state, or federal agency for the Agency’s use,” and therefore determine that certain procedural requirements within the Surplus Lands Act do not apply to sale of the Property. The proposed resolution further determines that sale of the Property is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Class 12 “Surplus Government Property Sales” and the General Rule Exemption. The County has given public notice of its intended action to convey the Property to the City at least one week in advance pursuant to California Government Code Sections 25365(c) and 6061.
Once the proposed resolution is adopted, it will be submitted to California Department of Housing and Community Development (HCD) for their review and concurrence with the County’s determination that the property is “exempt surplus property.” HCD has thirty days to respond, and sale of the property is conditioned upon concurrence from HCD. With procedural requirements and timelines within the PSA, the Property is expected to close escrow in May 2024.
FISCAL IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
No |
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Where is it budgeted? |
General Fund will receive the revenue proceeds (Fund 1000, Division 10500) |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
The Property is no longer required for County use. Sale of the Property to the City of Calistoga will enable the Property to continue to provide community services under City ownership and operation. |
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Is the general fund affected? |
Yes |
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Future fiscal impact: |
Annual maintenance savings of approximately $300,000. |
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Consequences if not approved: |
The County will continue to maintain and insure the Property. |
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ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: Consideration and possible adoption of a Categorical Exemption from the California Environmental Quality Act (“CEQA”) pursuant to: (a) Class 12 “Surplus Government Property Sales,” which may be found in the guidelines for the implementation of CEQA at 14 CCR §15312; and (b) the General Rule Exemption. It can be seen with certainty that there is no possibility the proposed action may have a significant effect on the environment and therefore CEQA is not applicable. [See Guidelines for the Implementation of the California Environmental Quality Act, 14 CCR 15061(b)(3)].