RDA Reso 2005-013 - Laserfiche WebLink

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33433 Report-/ /03 Davis Street July 2005 The City of San Leandro has already been repaid for its interest in 1103 Davis, which was a Community Development Block Grant (CDBG) award to a non-profit buyer who had previously purchased the site from the Agency. The non-profit buyer was unable to fulfill the terms of its DDA. As a result, it reconveyed the property to the Agency in 2003, which advanced repayment to the City of the CDBG obligation, which under HUD regulations was considered to be the appraised value (see below). While this transaction was entirely separate from the currently contemplated agreement, it is described in order to explain the previously-expended acquisition cost to the Agency. ESTIMA TED VALUE OF THE INTEREST DETERMINED AT HIGHEST AND BEST USE The Property was appraised in February 2003 at a value of $520,000 for multifamily housing as the highest and best use for development permitted by the Zoning Code, in the opinion of the appraiser. The property was marketed since 2003 at this price without any success, until a developer of small infill attached residential projects approached the Agency with an offer to buy the Property in mid-2004. The Property is zoned P (professional), and the General Plan land use designation is Office. Multifamily residential development is not allowed in the P district, so the property would have to be rezoned simultaneously with the processing of an amendment to the General Plan (both are discretionary approval processes of the City), the cost of which was not considered in the appraised value. Multifamily is allowed in ROR (Residential-Office-Retail), the Plaza Redevelopment Plan's land use designation for the site. In many parts of Davis Street, including this Property, the Zoning Code, General Plan, and Redevelopment Plan land use designations are not in alignment, affecting the development potential of many properties by increasing the cost of development. The Community Development Department's policy is to handle each of the properties with misaligned land use designations on a case by case basis as part of project approvals, funded by the developer and/or property owner. ESTIMATED VALUE OF THE INTEREST DETERMINED BY USE REQUIRED BY SALE Because of the awkward configuration of the Property, its small size, and its adjacency to a small residential street with one to two story single-family homes, residential development is the most feasible development option. This was the interdepartmental staff consensus and was verified by the market - no office developments were proposed as a result of the RFP conducted for the property in 2003. The office development market remains in a slump for existing inventory; a nearby office construction project at 1040 Davis Street will bring approximately 11,000 square feet of new inventory to market in 2006. Therefore, additional new office development in this area is both unlikely and relatively risky. The small retail strip center near the site on Davis Street adequately serves the immediate neighborhood; providing a retail opportunity not already existing, for example a full-service grocery store, would require a larger site than 1103 Davis. Page 3