Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute an Option and Purchase and Sale Agreement and a Memorandum of Option and Purchase and Sale Agreement with PDC Sacramento LPIV, LLC, authorizing the City Clerk to record the Memorandum of Option Agreement, and finding that disposition of the property located at 6382 Phillip Road is in the City’s best interest.

The property at 6382 Phillip Road is referred to as the Roseville Industrial Park and is an approximately 236.26-acre (with 191.08 developable acres) greenfield vacant parcel, located north of a planned six-lane arterial (extension of Blue Oaks Boulevard, west of Westbrook Boulevard). The northern section of the site is bisected by the planned six-lane regional Placer Parkway.  See Attachment 1 for a map of the property.

Site Data and Attributes:

1. APN: 017-101-008-000
2. Zoning: Public/Quasi-Public.  The current P/QP designation is used to establish areas for municipal, governmental or public facilities.  The purchase and sale agreement is contingent on the purchaser requesting that the property be rezoned to an industrial designation.
3. Neighboring land uses: To the northwest is the Al Johnson Wildlife Area, part of a 1,700 acre site planned to accommodate the City’s stormwater Regional Retention facility and potential recreation uses.  To the west along the southern portion of the site are agricultural uses; to the east, immediately adjacent is the Creekview Specific Plan area, planned to accommodate about 2,000 residential units; to the south along the southern edge of the Reason Farms Industrial Site is the future extension of Blue Oaks Boulevard, and to the south the West Roseville Specific Plan approved in 2004, which is 65 percent built out, and includes 10,479 residential uses, parks, open space and commercial uses.   A portion of the site would accommodate the future Placer Parkway, a planned regional facility, which would will connect Highway 65 in Placer County to Highway 99 in Sutter County, providing an alternate highway to Interstate 80.
4. Size in acres:  The entire parcel is 236.26 acres, which includes 191.08 developable acres.  The remaining 45.18 acres comprise the Pleasant Grove Creek Floodplain, a retention basin bypass channel, and the Placer Parkway alignment.
5. Shape of site:  The parcel is rectangular.
6. Potential for development: The site is currently vacant.  An analysis of the site was done in 2006 by the City of Roseville for a potential job center which assumed multiple buildings totaling 1,080,000 square feet in a total of 18 buildings.  However, the site could potentially accommodate more development if higher density buildings (taller, larger floorplates) are considered.  PDC Sacramento LPIV, LLC completed a conceptual site plan for the area south of Pleasant Grove Creek (see Attachment 2) that includes 1,995,000 square feet of industrial use in 9 buildings.  Attachment 3 shows the conceptual site plan in relation to the northern area that will be developed in a future phase(s).

The key points of the Purchase and Sale Agreement are summarized below:

• City agrees to sell to Buyer the 236.26-acre Property at the appraised market rate value of $34,519/acre.
• City agrees that Buyer may acquire the Property in phases over a ten-year period. The increments of acreage for the phases will be at least 35 acres each and the appraised market rate value used for the purchase of the initial phase will be adjusted upward for each subsequent phase based on a specified Consumer Price Index set forth in the Purchase and Sale Agreement.
• Within the first 90 days after the effective date, Buyer may give the City a written notice that Buyer has elected to acquire the first phase of the Property before obtaining all entitlements.  If Buyer exercises the option to acquire a phase prior to obtaining the entitlements and then subsequently is unable to obtain the entitlements on economic terms acceptable to Buyer in its sole and absolute discretion, the Buyer will have the option to provide written notice to the City that Buyer is electing to reconvey the phase property back to the City on the same terms and condition upon which the Buyer purchased the phase from the City and the City will be obligated to re-purchase the phase.
• Within five (5) business days of providing the City with the option notice as to the applicable phase, Buyer shall deposit $50,000 with the title company.  The earnest money shall be credited toward the purchase price at closing.
• The phases will occur every two years.  The Buyer has the option to extend the two-year period for each phase by sending a written notice and depositing an additional deposit of $50,000 with the Title Company which additional deposit will be applicable to the purchase price for that particular phase.
• Buyer shall have one year to conduct its due diligence with respect to the property and entitling the property for industrial development.  Buyer may extend the due diligence period for two additional periods of 60 calendar days each by providing City with written notice prior to the expiration of the period then in effect and depositing into escrow $50,000, which shall be non-refundable but applicable to the purchase price for each extension period.
• Buyer will fully entitle the property including conducting the CEQA analysis and rezoning efforts, at their expense. City reserves final discretion and approval as to entitlements and as to all related matters, including CEQA review, in connection therewith.
• Buyer will develop the Master Infrastructure Plan and bring all needed utilities and roadways to the property.

Future development will require approval of Planning Department entitlements including a Rezone and General Plan amendment for industrial use, a major project permit, and environmental review.   These entitlements will require review and approval by the Planning Commission and City Council.  During the entitlements phase, the Buyer will communicate with adjacent landowners and make reasonable efforts to coordinate development.

According to Roseville Municipal Code §4.12.110(B), the City may dispose of real property without sealed bids..."pursuant to a finding by the city council that such disposition is in the city’s best interest. Provided, however, that notice of the terms and conditions of such proposed sale or disposition pursuant to this subsection and the date of confirmation thereof shall be published in a newspaper of general circulation in the city at least 10 days prior to final approval and confirmation of the proposed sale or disposition. Such sales and dispositions shall be confirmed and approved upon a four-fifths’ affirmative vote of the city council."

There are no identified future City needs for this land and the property is underutilized. Accordingly, the City Council declared the property as surplus on November 20, 2019. As required by the Surplus Land Act, letters offering to sell or lease the property were sent to local public and affordable housing developers; park, recreation and open space agencies; and school districts. None of these agencies expressed an interest in leasing or purchasing the property. The City has complied with the Surplus Land Act, and may dispose of the property pursuant to its own real property disposition procedures.

Sale of underutilized properties can generate quality developments that result in new businesses, jobs and amenities and help fulfill the City’s goal of economic sustainability. Therefore, disposition of the property pursuant to the terms of the Option and Purchase and Sale Agreement is in the City’s best interest.

The City of Roseville Economic Development Department would provide assistance through the required entitlement and permitting processes if a future purchase and sale agreement is approved by the City Council.

Approval of a Purchase and Sale Agreement will result in future property sales that will increase the Strategic Improvement Fund (SIF) fund balance during each phase of property purchase.  The first phase of 35 acres is expected to result in $1,243,165 ($34,519/acre). Upon approval of entitlements, staff will seek approval from the City Council with a request for a budget adjustment for first and future phase acquisitions.

The proposed project involves the sale of surplus property not located in an area of statewide, regional or area-wide concern. This activity is categorically exempt from CEQA as a Class 12 Exemption (State CEQA Guidelines Section 15312). The Exemption has been prepared and no further CEQA action is required.

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Dominick Casey, City Manager