TITLE:
title
SURPLUS LAND ACT DECLARATION AS EXEMPT SURPLUS LAND FOR A NEWLY-CREATED PARCEL CURRENTLY FUNCTIONING AS A PORTION OF THE SENIOR CENTER PARKING LOT AT 695 WEST 19TH STREET
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DEPARTMENT: CITY ATTORNEY’S OFFICE / COMMUNITY DEVELOPMENT DEPARTMENT
PRESENTED BY: KIMBERLY HALL BARLOW, CITY ATTORNEY
CONTACT INFORMATION: CARRIE TAI, COMMUNITY DEVELOPMENT DEPARTMENT, 714-754-5270
RECOMMENDATION:
recommendation
Staff recommends the City Council:
1. Find the Surplus Land Declaration is exempt from the California Environmental Quality Act (CEQA) pursuant to sections 15060(c)(3) and 15312 of the CEQA Guidelines
2. Adopt Resolution No. 26-XX Declaring Property to Be Exempt Surplus Land under the Surplus Land Act.
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BACKGROUND:
Effective January 1, 2020, AB 1486 amended the Surplus Land Act (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. Under these requirements “surplus land” is defined as land the agency determines is not necessary for its use and “disposal” includes long-term leases of more than 15 years. The City identified a portion of the Senior Center Parking lot at 695 W. 19th Street as being a possible site for affordable housing. The City must comply with the SLA before any action can be taken to lease or otherwise dispose of Property, and must declare the Property as either “surplus land” or “exempt surplus land,” through formal action at a public meeting supported by written findings. Adoption of the attached Resolution would declare the Property as exempt surplus land.
Approved Development Entitlements
Jamboree Housing Corporation (JHC) obtained approval from City Council on March 18, 2025 to develop a 70-unit affordable senior and permanent supportive housing project at the northeast corner of the Senior Center parking lot, which is located at 695 West 19th Street. The project site is directly across from an existing senior housing project known as “The Tower on 19th.” Jamboree Housing Corporation (JHC) is a local non-profit affordable housing developer which has built approximately 100 affordable housing projects throughout California consisting of over 2,000 units since 1990. The City Council’s approvals included the Tentative Parcel Map, Master Plan, Density Bonus, Disposition and Development Agreement/Affordable Housing Agreement (including Regulatory Agreement) and Ground Lease
The Tentative Parcel Map approved the creation of a new 1.5 acre parcel in the northeast portion of the Senior Center’s parking lot. The Final Parcel Map will finalize the creation of the new parcel, which the City intends to ground lease to Jamboree Housing for development of a 100% affordable senior development.
City Financial Support
The original financial support for the project from the City included the $1 annual lease for a 99-year ground lease, as well as a loan agreement for up to $700,000 deferred permit and development impact fees for the project. The March 18, 2026 City Council actions provided for a loan of HOME funds in the amount of $1.15 million and a loan of Housing Authority funding from the Housing Trust Fund of $2.1 million.
Current Status
JHC has secured all financing necessary to begin construction, including Low-Income Housing Tax Credits, and the project team is targeting a construction closing in December. This closing timeline is critical to meeting both the State’s TCAC readiness deadline and the expenditure deadline associated with the City’s ARPA funds. To meet this closing timeline, the Council must approve the following documents:
• Final Parcel Map
• Surplus Land Act Resolution
• Revised Ground Lease
• Revised City Regulatory Agreement
• Affordable Housing Loan Agreements
A final Parcel Map must be approved for the site, and is provided for in a separate agenda item, along with the required Easement Agreement for ingress, egress, parking and drainage to implement the parties’ intent to provide seamless circulation on the site and maintain access to parking for the public’s use, including vehicular and pedestrian access to the Senior Center.
ANALYSIS:
Surplus Land Use Act
Prior to the transaction closing escrow, at which point the Ground Lease will take effect and the various loan and other documents will be recorded, the City Council must adopt a resolution concerning disposition of the property under the Surplus Land Use Act.
The Surplus Land Act (SLA) aims to make local public land that is no longer needed for government purposes available for building affordable homes. When a local agency seeks to dispose of land it owns, through either sales or leases of land, it must comply with the SLA. Prior to finalizing a lease, the California Department of Housing and Community Development (HCD) must review the disposition for compliance.
The City has determined that this project qualifies as “exempt surplus land” under Government Code section 54221(f)(1)(F), which exempts land disposed of for a housing development that restricts 100 percent of units to low- or moderate- income households, with at least 75 percent restricted to lower-income households for 55 years.
Resolution No. 26-XX attached to this report declares this exemption. The required covenant or restriction described in Government Code section 54221(f)(1)(F)(ii) will be recorded against the Affordable Housing/Disposition and Development Agreement approved by City Council on March 18, 2025.
Following Council approval, the City will submit the Resolution and Agreement to HCD for its 30-day review.
Remaining Document Approvals
Slight revisions to the draft Ground Lease, new loan documents related to the HOME and ARPA funds, amendments to the draft Regulatory Agreement and other minor matters will be brought back for City Council consideration at a later date, and prior to scheduled closing.
FISCAL REVIEW:
There is no fiscal impact to the City’s General Fund. The funds from HOME and ARPA committed to the project, which will be addressed in a future agenda report, were previously approved by City Council and the funding sources approved are restricted sources that can only be used for low- and moderate- income affordable housing opportunities.
LEGAL REVIEW:
The City Attorney’s Office has reviewed this report and approves it as to form. The City Attorney’s Office also approved the Surplus Land Act Resolution for City Council action.
CITY COUNCIL GOALS AND PRIORITIES:
This item supports the following City Council Goal:
• Diversity, Stabilize and Increase Housing to Reflect Community Needs
CONCLUSION:
The proposed project directly supports the City Council’s goal to diversify, stabilize and increase housing to reflect community needs, by providing much-needed senior affordable housing. The project provides opportunities for a special needs group (senior population) to remain in the community, close to vital services, and surrounded by a supportive environment. Not only does the project address housing shortages for a vulnerable population, but it also reflects Costa Mesa’s commitment to inclusivity and community revitalization. Approval of the Surplus Land Act resolution is a prerequisite to the City formally entering into the Ground Lease and allowing the project to move forward.
Staff recommends that the Council find the Surplus Land Act declaration exempt from CEQA and that it approve Resolution No. 26-XX, declaring the newly formed Parcel to be Exempt Surplus Land under The Surplus Land Act.