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Report regarding a resolution determining that no further review under the California Environmental Quality Act is required and authorizing the City Manager to execute a Purchase and Sale Agreement for 71 Camaritas Avenue and approving Budget Amendment Number 22.014 appropriating $5.5 million for the acquisition. (Julie Barnard, Economic Development Coordinator)
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RECOMMENDATION
Recommendation
Staff recommends adopting a resolution determining that no further review under the California Environmental Quality Act (CEQA) is required, authorizing the City Manager to execute a Purchase and Sale Agreement for $5,500,000 for the property located at 71 Camaritas Avenue for the relocation and construction of a new Fire Station 63, and approving Budget Amendment Number 22.014 appropriating funds for the acquisition.
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BACKGROUND/DISCUSSION
Fire Station 63 is located in the rear portion of the Municipal Services Building (MSB) at 33 Arroyo Drive. The station was installed when the City purchased the MSB in 1982 and has been in near continuous operation since that time. It is the smallest of the City’s five fire stations, occupying 5,248 square feet. The limited living space, storage, apparatus bay size, and lot configuration make it challenging to meet current operational needs. It is also the busiest station in the department and houses an ambulance and fire engine with five personnel. Attachment 1 shows the primary and neighboring response zones for Station 63.
In 2010, the City renovated Station 63 to address serious structural, life safety and operational issues. However, the MSB as a whole was not seismically upgraded, the living quarters and apparatus bay were not expanded and remain undersized. The station continues to be dependent on the MSB for all of its utilities and mechanical systems and there is limited space for training and no space to house reserve apparatus or emergency supplies.
Initial Civic Campus plans included building a new Station 63 at the same time as the Civic Campus. Later, it was decided to build a new station when the MSB was redeveloped, with the potential for either having a developer help pay for the station or use the proceeds from sale of the MSB to pay for the station. Designs for a new station have been brought to the “design development” level (i.e., advanced - but not complete - construction drawings); with plans calling for an 8,800 sq. ft. facility requiring 45,000 sq. ft. of land for the station. Construction was projected to cost approximately $20,000,000, not including land cost. Until recently, the City’s plan was to build a new Station 63 at the corner of Arroyo Drive and Camaritas Avenue, at the northwest corner of the current MSB site.
In May 2021, Jeff Aguilar of CBRE Brokerage Services approached the City on behalf of his client Camino Royale Investment Corporation (“the Seller”) to determine the City’s interest in acquiring 71 Camaritas Avenue (the “Property”), see Attachment 1 for the site location. Previously, the Seller had pursued entitlements for a hotel on this Property, but they encountered significant community opposition and ultimately withdrew their application. The Seller then opted not to pursue the project any further and began to explore options to dispose of the Property, which included outreach to the City.
The Property measures approximately 1.07 acres in land area. A significant portion of the site is encumbered by an 80-foot-wide easement held by the San Francisco Public Utilities Commission (SFPUC). Despite the easement, an architectural analysis concluded that the Property has sufficient size and configuration to accommodate the City’s plans for a new Fire Station 63.
On June 23, 2021, the City Council met in closed session to discuss the possible acquisition of the Property for the relocation of Fire Station 63 to the Property. Council directed staff to negotiate with the Seller. Staff and the Seller have reached an agreement on a purchase price of $5,500,000, and staff is recommending that the City Council take actions necessary to proceed with purchasing the Property. A significant reason for the City to proceed with the purchase of the Property for Fire Station 63 is that doing so will unencumber any future plans for the MSB.
Within five days of the execution of the PSA, the City and Seller will open escrow and pay a $165,000 deposit. At this time, the City will have 60 days to complete all due diligence items. During the due diligence period staff will make all efforts to understand the constraints of the site and to ensure that a fire station can be built on the site. These efforts include, but are not limited to; fully understanding what may and may not be built over the SFPUC easement, investigating all environmental conditions and concerns, discovering any utilities that have not yet been disclosed and developing a conceptual fire station layout on the site to ensure that there is a configuration that would make the fire station feasible. The City has the right, in its sole and absolute discretion, to not move forward with the purchase for any reason (or no reason) prior to the expiration of the Due Diligence Contingency Period and receive a full refund on the deposit.
In accordance with provisions of State Planning Law (Govt. Code Section 65402), on July 15, 2021, the Planning Commission adopted Resolution No. 2873-2021, finding that the location, purpose and extent of the proposed acquisition of the Property is in conformity with the City’s adopted General Plan.
At the time that this staff report was completed, some details of the Purchase and Sale Agreement (“PSA”) for acquisition of the Property were still being negotiated. Because of the need to complete the acquisition in a timely manner, staff is seeking Council approval for the PSA in substantially the form attached and authorization for the City Manager to execute the PSA once the final details have been negotiated, as long as the final terms do not unreasonably increase the City’s obligations above those reflected in the attached draft PSA, and subject to review by the City Attorney.
The Property is within the El Camino Real / Chestnut Area Plan (ECR/C), which envisions redevelopment of the area as a vibrant, mixed-use district. The General Plan Land Use Designation for the Property is El Camino Mixed Use North, High Intensity which is intended to accommodate high-intensity active uses and mixed-use development. Public uses (including government offices, police and fire stations, parks, and public schools) are also permitted in this land use designation. Development of a fire station at this site would help to carry out the City’s vision for redevelopment of the Plan Area, by providing public safety facilities to support existing and future land uses.
In 2017, the City prepared and the City Council certified a Subsequent Environmental Impact Report (SEIR) for the Community Civic Campus Phase I-III project. The project reviewed in the SEIR contemplated the construction of a new Police Station, shared Parks and Recreation/Library/Council Chambers facility, and replacement of Fire Station 63. The SEIR specifically referenced that the project would be constructed in three phases and Phase III would consist of construction of Fire Station 63. The purpose of the SEIR was to identify any new significant or more severe environmental impacts than those disclosed in the 2011 ECR/C Area Plan EIR, and concluded that the project, inclusive of Phase I-III, would not result in new or more significant environmental impacts. Thus, the proposed acquisition of the Property and the action before the City Council are already included as a part of the project that was previously analyzed in the SEIR. Therefore, no additional CEQA analysis is required at this time.
FISCAL IMPACT
Approving Budget Amendment Number 22.014 appropriates $5,500,000 from the City’s Infrastructure Reserve Fund to pay for the acquisition of the Property. Funding for the construction of the Fire Station is yet to be determined but staff will explore using a combination of Infrastructure Reserve Funds, developer impact fees, community benefits from large-scale developments, and/or other sources.
RELATIONSHIP TO STRATEGIC PLAN
The purchase of 71 Camaritas Avenue meets the City’s Strategic Plan Priority #3: Public Safety. Specifically the goal of designing a new Fire Station #63.
CONCLUSION
Staff recommends adopting a resolution determining that no additional review under CEQA is required and authorizing the City Manager to execute a PSA substantially in the form attached to the resolution for $5,500,000 for the property located at 71 Camaritas Avenue for the relocation and construction of a new Fire Station 63, and approving Budget Amendment Number 22.014 appropriating funds for the acquisition.
Attachment 1:
1. 71 Camaritas Avenue Site location