TO: Board of Supervisors
FROM: Ryan J. Alsop, Chief Executive Officer
REPORT BY: Jennifer M. Palmer, Assistant Chief Executive Officer
SUBJECT: 1127 First Street
RECOMMENDATION
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Adopt a Resolution declaring County property located in downtown Napa at 1127 First Street as surplus land in accordance with the California Surplus Lands Act, Government Code Section 54220 et. seq.; and approve and authorize a Budget Amendment to reallocate previously approved appropriation for the “1127 First Tenant Improvement Project” and “1127 First HVAC Replacement” in the total amount of $1,998,946 to the “1st & 2nd Floor Improvement at HOJ Project”. (Fiscal Impact:$1,998,946 Expense; Capital Improvement Fund; Budget Reallocation; Discretionary)
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BACKGROUND
Last year, following the Board’s consideration and move away from a proposed $200 million-plus, five-to-six-year facility reconstruction plan that involved the complete, top-to-bottom renovation of the County Administrative Building and South Campus Building 4, located at 2751 Napa Valley Corporate Drive, vacating both the Hall of Justice and 1127 First Street, the Board directed staff to pursue a more minimalist and less expensive plan to address acute building maintenance and office space needs. The Board’s decision was largely informed by the considerable cost of new building construction and an uncertain economic climate; factors that remain increasingly relevant today.
Subsequent to that decision, staff has been focused on: 1) The development of a new Behavioral Health Treatment Center at the former Re-Entry Facility; 2) Co-locating Child Support Services and the Probation Department in shared leased office space at 555 Gateway Drive; 3) Relocating the Public Defender’s Office, and Assessor, Recorder/County Clerk, and Elections from 1127 First Street to the first and second floors of the Hall of Justice; and 4) Moving the District Attorney’s Office from 1127 First Street into leased office space at 1250 Main Street in downtown Napa. Given these pursuits, including the relocation of business functions that have historically occupied 1127 First Street, the need for continued investment in 1127 First Street no longer outweighs even its near-term benefit to County operations. Therefore, the property is no longer needed for the County’s use.
At the same time, downtown Napa is in a period of active transformation. Significant private investment, new development, and the ongoing evolution of the City’s retail and hospitality core have renewed the potential of key downtown properties - including the block anchored by 1127 First Street. Originally built as a department store to serve the heart of downtown Napa, the 1127 First Street building occupies a prominent site that has long been identified by elected officials, City leaders, and community members alike as an underutilized asset. Taking advantage of the buildings diminished utility for County operations going forward and declaring it a surplus property positions the property to potentially be redeveloped for more active, pedestrian-oriented downtown uses - consistent with its original purpose and the community’s vision for this block of the City’s urban core.
Staff are therefore recommending the Board: Declare 1127 First Street surplus land pursuant to the California Surplus Lands Act; close out the existing “1127 First Tenant Improvement Project” and “1127 First HVAC Replacement Project”; and reallocate the remaining appropriation from that project to tenant improvements for the Hall of Justice building “1st & 2nd Floor Improvements at HOJ Project.”
SLA Declaration
Prior to sale of 1127 First Street, the County must comply with the process set forth in the California Surplus Lands Act, Government Code Section 54220 et seq. ("SLA"), including Board adoption of a resolution finding that 1127 First Street is no longer needed for the County's use and declaring the property surplus land. Following the Board's adoption of the resolution, the County must issue a Notice of Availability ("NOA") to certain local agencies and housing sponsors. The notified parties have 60 days from the date the NOA is sent to submit a notice of interest to purchase the property on terms established by the County in the resolution. If no notice of interest is received within the 60-day period, the County may proceed with sale of the property without further SLA compliance, except that the County must record an affordability covenant stating that if 10 or more residential units are developed on the property, not less than 15 percent of the total units shall be sold or rented at affordable housing cost.
If the County receives one or more notices of interest, it must negotiate in good faith with the interested parties for 90 days. If no agreement is reached within that period, the County may proceed with sale of the property without further SLA compliance, subject to the same affordability covenant requirement.
By adoption of the proposed resolution, the Board will take the following actions to initiate the sale of 1127 First Street in compliance with the SLA:
• Find that the property is no longer needed for the County's use;
• Declare the property as surplus land;
• Declare the County's intent to sell the property;
• Direct the Director of Public Works to comply with the SLA and send a written Notice of Availability to entities identified in the Act;
• Declare the minimum acceptable sales price as $10,000,000 (Ten Million Dollars) in net proceeds to the County;
• Delegate authority to the County Executive Officer to enter into a minimum 90-day good faith negotiation period with any entity submitting a Notice of Interest within 60 days of the County issuing a Notice of Availability;
• Require interested purchasers proposing residential development to provide no less than 25% of total units at affordable housing cost pursuant to Government Code section 54222.5; and
• Set other conditions and procedures applicable to the sale in accordance with Government Code section 54222.
Requested Actions:
Budget Amendment
1.Approve a Budget Amendment to reallocate previously approved budget to a different capital project: (4/5 vote required)
a. Reverse Transfers-out (57900) from Accumulated Capital Outlay (Fund 3000, Sub-Division 3000000) of $998,946 and the related Transfers-in (49900) to the “1127 First Tenant Improvement Project” (Fund 3000, Sub-Division 3000550, Project 26020); reduce the budgeted appropriations in Project 26020 accordingly;
b. Reallocate Transfers-out (57900) appropriations from the Accumulated Capital Outlay (Fund 3000, Sub-Division 3000000) and increase Transfers-in (49900) for the “1st & 2nd Floor Improvement at HOJ Project” (Fund 3000, Sub-Division 3000502, Project 26022); increase Project 26022 appropriations for Construction Services (52360) by $998,946;
c. Increase Intrafund Transfers out (57900) appropriations by $1,000,000 in Capital Projects Fund (Fund 3000, Subdivision 3000550) Project 21070 - 1127 First HVAC Replacement by decreasing Construction services (52360) by $1,000,000 to transfer to Accumulated Capital Outlay (Fund 3000, Sub-Division 3000000 Account 49900);
d. Increase Intrafund Transfers out (57900) by $1,000,000 in Accumulated Capital Outlay (Fund 3000, Sub-Division 3000000) offset by the Intrafund Transfer in from Project 21070; and
e. Increase Intrafund Transfers-in (49900) for the “1st & 2nd Floor Improvement at HOJ Project” (Fund 3000, Sub-Division 3000502, Project 26022); increase Project 26022 appropriations for Construction Services (52360) by $1,000,000.
2. Adopt a Resolution declaring the real property located at 1127 First Street, Napa, California, as surplus land, declaring the Board’s intention to sell such property, and establishing a minimum price and other terms, conditions and requirements for the sale of the property to qualified agencies and housing sponsors in accordance with the California Surplus Lands Act.
3. Approval of and authorization for the Director of Public Works to sign a deductive change order in the amount of ($1,186,134.78) to close the 250327B construction contract with Kirby Constructions Company for HVAC & and roof replacement work. Closing the contract includes supplying purchased materials to the County, balancing all line items previously partially or unpaid, all applicable warranties to be in effect for items as installed, and recording a Notice of Cessation following today’s Board action and 30 days following the last working day.
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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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
There is no mandate to declare 1127 First Street surplus land, nor to complete tenant improvements at the Hall of Justice. |
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Future fiscal impact: |
Revenues from the sale of 1127 First Street would be programmed in future fiscal years. |
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Consequences if not approved: |
1127 First Street will not be declared surplus land and the County cannot begin to sell the property. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is exempt from CEQA pursuant to Section15312 of Title 14 of the California Code of Regulations (State CEQA Guidelines), which exempts the sale of surplus government property