STAFF REPORT - CITY COUNCIL/SUCCESSOR AGENCY/PUBLIC FINANCE AUTHORITY

It is recommended that the City Council: 

1. Adopt Resolution No. SA-351 authorizing the execution and recordation of a Corrective Deed to remedy a vesting error and thereafter the transfer of 180 N. Pierce Street (APN 071-123-18) to the City of Coalinga, including an Affordability Covenant; and 

2. Adopt Resolution No. 4309 authorizing the acquisition of 180 N. Pierce Street (APN 071-123-18) from the Coalinga Housing Successor Agency.

The City is the Housing Successor Agency (“Housing Successor”) to the former Coalinga Redevelopment Agency (“former Agency”). As part of the completion of the statewide redevelopment dissolution process in 2012, the former Agency transferred three real properties to the Housing Successor, including the subject Property. The 0.17-acre parcel is zoned for Residential Medium Density use.

Pursuant to Health and Safety Code Section 34176.1(e), the Housing Successor was required to develop the Property for affordable housing purposes by December 15, 2022 or dispose of the Property. Pursuant to Health and Safety Code Section 33433, the Housing Successor must dispose of the Property for fair market value and deposit the proceeds in the Housing Asset Fund.

As of January 1, 2020, Assembly Bill 1486, commonly referred to as the Surplus Land Act (“SLA”), requires that successor agencies follow surplus land disposition procedures for properties that were not previously subject to an existing contract. Such procedures include declaring the property as “surplus” or “exempt surplus” as defined in the SLA. The California Department of Housing and Community Development (“HCD”) oversees and enforces SLA requirements.

The City declared the Property as surplus land on April 21, 2022 and completed all procedural requirements outlined in the SLA, including issuance of a Notice of Availability. During the required notice period, the City received no interest from any developers. On July 26, 2022, HCD issued a determination letter confirming that SLA requirements had been met and approving the Property for sale or transfer, subject to compliance with applicable affordability requirements.

A local non-profit, Pierce Street Community Garden, currently leases the Property for $1 per year and operates a community garden. In late 2025, the City Council directed staff to take the necessary actions required to ultimately transfer the property to the nonprofit entity in order to preserve the community garden.

As part of the proposed transaction, staff identified the need for a corrective deed to address a prior vesting error. The original Grant Deed was inadvertently recorded in the name of the City of Coalinga rather than the former Redevelopment Agency of the City of Coalinga. This vesting error was not identified until after the passage of the Dissolution Act, and no corrective action was taken at that time.

Following execution and recordation of the corrective deed to properly vest title in the Housing Successor Agency, the Property will be transferred to the City in accordance with Surplus Land Act requirements, including recordation of an affordability covenant. 

The City intends to acquire the Property from the Housing Successor at fair market value, or $37,000, as determined by an appraisal dated May 25, 2023. Upon completion of the transfer, the City intends to subsequently convey the Property to the nonprofit entity managing the community garden at a future City Council meeting.

Pursuant to the Surplus Land Act, a covenant must be recorded on the Property requiring that if ten (10) or more residential units are developed, not less than fifteen percent (15%) of those units be designated as affordable housing.

Do not adopt one or both resolutions - Not Recommended

 
The Housing Successor Agency would retain ownership of the Property with the existing vesting error unresolved, and the proposed transfer to the City would not occur. This may limit the City’s ability to move forward with the planned future conveyance of the Property to the nonprofit entity and could delay or prevent continued use of the site as a community garden.

The conveyance price for the City is $37,000, plus up to an additional $500 for incidental costs related to the transfer. Such costs may include expenses associated with the execution and recordation of the corrective deed and related documents. 

Purchase of the Property by the City would be funded by Fund 101-404-98011, and proceeds would be deposited into the Housing Successor Low and Moderate Housing Asset Fund (Fund 815-400-48010) for future development of affordable housing.

The City currently provides maintenance to the Property, including water and street sweeping services, at an approximate annual cost of $437, excluding usage-based water consumption. These costs are expected to continue until the Property is transferred to the nonprofit entity, resulting in no new fiscal impact as a result of this action.