The town of San Diego’s efforts to lease the 48 acres of land it owns round Pechanga Enviornment to developer Brookfield Properties could run afoul of newly finalized state tips, leaving the way forward for the positioning in limbo.
The guidelines, launched Tuesday by the California Division of Housing and Group Improvement, or HCD, clarify that the Surplus Land Act, as amended by the state legislature in late 2019, applies to native company property that’s for lease. The interpretation quantities to a heftier blow to the already on-hold sports arena redevelopment deal, because it implies that San Diego ought to have supplied the Halfway District web site to reasonably priced housing builders earlier than soliciting curiosity from different builders.
“The town is totally reviewing the ultimate tips and can interact with HCD to get clearer evaluation on what our choices could also be concerning the Sports activities Enviornment Improvement. These choices might embrace rebidding the property to an reasonably priced housing developer or receiving an exemption if a sure variety of reasonably priced items are constructed on the positioning,” San Diego’s Chief Working Officer Jay Goldstone mentioned in a press release to the Union-Tribune. “Nonetheless, there isn’t any intention to problem a brand new request for proposals presently.”
The what-happens-now conundrum comes greater than a 12 months after San Diego issued a request for redevelopment proposals for its sports activities area property within the Halfway District. In August, town, underneath then-Mayor Kevin Faulconer, selected Brookfield Properties to redo the positioning with an all-new sports activities area, 5 acres of public parks, 2,100 housing items and 590,000 sq. toes of retail area.
As of February, when town hit the pause button on formal talks with the developer, negotiations had been nonetheless preliminary and phrases remained undecided.
In the meantime, because the transaction was inching ahead, the Housing and Group Improvement company was drafting its guidelines of enforcement for the Surplus Land Act, which had been expanded by Assembly Bill 1486 to unlock extra land for reasonably priced housing. The rulebook in query, referred to as the Surplus Land Act Tips, defines how cities, counties and different companies can switch their actual property belongings.
HCD launched a draft model in November, signaling for the primary time a extra stringent software of the legislation and creating uncertainty across the definition of surplus land.
Within the ultimate model, the state company notes that native government-owned land, whether or not it’s on the market or lease, should undergo a selected disposition course of that begins with a proper declaration as as to if the property is surplus land or exempt surplus land. HCD’s guidelines embrace particular exemptions for small parcels, land marketed for mixed-use initiatives with a minimum of 25 % reasonably priced housing, belief lands, short-term leases and offers already underneath contract, amongst different issues. In any other case, an area company should problem what’s referred to as a “discover of availability,” providing surplus land to an inventory of reasonably priced housing builders who’ve 60 days to reply. Municipalities are then required to conduct a 90-day, “good religion” negotiation interval with events.
The steps should happen, so as, earlier than a metropolis can solicit bids by a typical procurement course of, the rules state. Nonetheless, it’s unclear whether or not HCD will make exceptions for cities, reminiscent of San Diego, that had been exploring long-term floor leases earlier than the rules had been finalized.
“It’s too early to attract any conclusions,” mentioned Ted Lohman from Brookfield Properties. “Brookfield Properties continues to be reviewing the just-released ultimate HCD tips to find out subsequent steps. That mentioned, we stay dedicated to persevering with our dialogue with group members, stakeholders and town, as applicable.”
Past the sports activities area property, the state company’s tips have unknown implications for government-owned land throughout the state that’s leased to motels, theme parks, cultural establishments and different companies.