Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Raymond Hodges, Director, Department of Housing
Subject: Resolution Finding and Declaring that the Real Property Located at 721 Airport Boulevard, South San Francisco, California, is Exempt Surplus Land Under the Surplus Land Act
RECOMMENDATION:
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Adopt a resolution:
A) Finding and declaring that the real property owned by the County located at 721 Airport Boulevard, South San Francisco, California, a 0.345-acre parcel identified as Assessor Parcel Number 012-146-140, which is to be disposed of by the County through a long-term lease for operation as permanent supportive housing, is exempt surplus land under the Surplus Land Act; and
B) Authorizing and directing the Director of the Department of Housing, or designee, acting in consultation with the County Attorney, to execute any and all notices, certificates, and documents as may be necessary and advisable to effectuate the purposes of this resolution, and to provide notice of the Surplus Land Act exemption determination to the California Department of Housing and Community Development.
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BACKGROUND:
The County currently owns in fee simple real property located at 721 Airport Boulevard, South San Francisco, California, a 0.345-acre parcel identified as Assessor Parcel Number 012-146-140, which was previously the site of a Ramada Inn, and is currently developed with one four-story building with approximately 25,000 square feet of space and a subterranean parking garage (the “Property”).
Pursuant to this Board’s authorizations, the County acquired the Property in 2023, in part using State Homekey funding, for the purpose of rehabilitating the Property for operation as Permanent Supportive Housing for individuals experiencing or at risk of homelessness. The Project will consist of a 45-unit, 100-percent affordable housing project consisting of twelve (12) units of housing for people experiencing Chronic Homelessness and thirty-three (33) units of housing for people experiencing homelessness or at risk of homelessness (the “Project”). One hundred percent of the units will be affordable to households at or below 30% of the Area Median Income. In accordance with Homekey requirements, a restrictive covenant for a term of 55-years has been recorded on the Property and is enforceable by State HCD, which ensures the ongoing affordability requirements of the Homekey program.
Also under this Board’s authorizations, the County has entered into a property disposition and development agreement setting forth the terms and conditions by which a Special Purpose Entity owned by Episcopal Community Services (“ECS”), as the County’s co-applicant for the Homekey award, would acquire, rehabilitate, manage, operate, and provide supportive services at the Project. Pursuant to Board authorizations, the County intends to enter into a long-term lease of the Property with ECS’s Special Purpose Entity, known as 721 Airport, LLC, to operate the Project.
This Board has further authorized the County and 721 Airport LLC to enter into a loan agreement by which the County will disburse funds for the construction and rehabilitation of the Property, for which the repayment obligation under a promissory note will be secured by a deed of trust, together with a Regulatory Agreement recorded on 721 Airport LLC’s leasehold interest in the Property. The County Regulatory Agreement will require that the Property be continuously operated as affordable housing (twelve (12) units for persons experiencing Chronic Homelessness and thirty-three (33) units for persons experiencing homelessness or at risk of homelessness), and in which one hundred percent of the units will be affordable to households at or below 30% of the Area Median Income, for a period of at least fifty-five (55) years from the date a Certificate of Occupancy is issued for the Project.
The Surplus Land Act is a state statute that local agencies must follow when disposing of surplus land, including entering into long-term leases. The Surplus Land Act requires local agencies across California to follow certain public notification and wait periods prior to disposing of publicly-owned land determined to be surplus or not necessary for local agency operations. One purpose of the Surplus Land Act is to give potential housing developers priority access to surplus land for development of new housing. The Surplus Land Act also allows local agencies to declare land exempt from the Surplus Land Act’s disposition requirements when certain criteria are met.
DISCUSSION:
Under the Surplus Land Act, the County may take formal action in a regular public meeting to declare land as "surplus land" or "exempt surplus land." Under Government Code Section 54221(f)(1)(A), “exempt surplus land” includes land that is transferred for the development of affordable housing pursuant to Government Code Section 25539.4.
Government Code Section 25539.4 provides in pertinent part that: “whenever the board of supervisors determines that any real property or interest therein owned, or to be purchased, by the county can be used to provide housing affordable to persons and families of low or moderate income . . . and that this use is in the county's best interests, the county may sell, lease, exchange, quitclaim, convey, or otherwise dispose of the real property or interest therein at less than fair market value, or purchase an interest in the real property, to provide that affordable housing without complying with other provisions of this article.”
This Board determined in Resolution No. 080574, that the operation of the Project on
the Property is in furtherance of the Board’s goals to provide permanent affordable
housing in the County of San Mateo, is in the vital and best interests of the County of
San Mateo and the welfare of its residents, and serves a public purpose.
The County’s Lease of the Property for the Project satisfies the criteria set forth in Government Code Section 25539.4 because (1) at least 80 percent of the Property will be used for the development of housing, (2) at least 40 percent of the housing units will be affordable to households whose incomes are equal to or less than 75 percent of the maximum income of lower income households and at least half of these will be affordable to very low income households, and (3) the parties will execute a Regulatory Agreement, to be recorded in the Official Records of the Office of the Clerk-Recorder of the County of San Mateo pursuant to Government Code 25539.4(e), guaranteeing that 721 Airport LLC, as lessee and operator of the Project, and its successors in interest will maintain the affordability restrictions described herein for at least 30 years.
Because the Property meets these requirements, it therefore qualifies as “exempt surplus land” under Government Code Section 54221(f)(1)(A).
The County is required to provide notice of its exemption determination to State HCD 30 days prior to disposing of the Property.
The County Attorney has reviewed and approved the proposed resolution as to form.
COMMUNITY IMPACT:
The County is dedicated to ensuring safe affordable housing options for all San Mateo County residents, especially the most vulnerable extremely low-income, very low-income and special-needs households. The Project will consist of 100% affordable housing for people experiencing or at-risk of homelessness who, without deeply affordable housing and coordinated supportive services, experience significant barriers to housing stability.
FISCAL IMPACT:
There is no fiscal impact associated with adopting this resolution.