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Home My WebLink AboutItem 12b - Acquiring Properties at 15 & 19 Lucile Street from LA County for Affordable Housing DATE: August 20, 2024 TO: Honorable Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director SUBJECT: RESOLUTION NO. 7587 DECLARING THE CITY'S INTEREST IN RE- ACQUIRING THE PROPERTIES LOCATED AT 15 & 19 LUCILE STREET FROM LOS ANGELES COUNTY FOR THE PURPOSE OF BUILDING AFFORDABLE HOUSING CEQA: Not a Project Recommendation: Adopt SUMMARY The former Redevelopment Agency of the City of Arcadia acquired two properties on Lucile Street in 2009-10, for the purpose of building an affordable housing project. Existing buildings on the sites were demolished and entitlements were approved for development. However, as part of the statewide dissolution of Redevelopment, the City elected to transfer its existing affordable housing assets to Los Angeles County. This transfer was accepted in 2014, and Los Angeles County has owned the property since. In the past decade, the County has been unable to move forward with a project on the site and it has remained vacant. Recently, the County has expressed an interest in transferring the Lucile Street properties back to the City. Therefore, it is recommended that the City Council adopt Resolution No. 7587 declaring the City’s interest in re- acquiring the properties located at 15 & 19 Lucile Street from Los Angeles County, for the purpose of building affordable housing. BACKGROUND The City of Arcadia had an active Redevelopment Agency (Agency) for many years. The Agency boundaries were roughly from Santa Clara Street and Huntington Drive on the west, to 5th Avenue on the east, and included all of Downtown Arcadia. Tax Increment Financing (“TIF”) was utilized by the Agency to fund many important commercial projects, including hotels and commercial centers throughout the Downtown. As part of the Agency’s work, 20% of all revenue received was required to be utilized for low- and moderate-income housing projects. Through this funding, the Agency supported the Resolution No. 7587 – Lucile Street August 20, 2024 Page 2 of 4 development of the Heritage Park Senior Housing Project (54 rental units on Las Tunas Drive), the Campus Commons Senior Housing Project (43 units on Campus Drive), and the Alta Street Classics (6 units for first time homebuyers on Alta Street). In 2009-10, the agency also acquired 15 & 19 Lucile Street, two adjacent parcels that together make up approximately 14,000 square feet in area, for the purpose of building affordable housing. Following acquisition, the existing buildings on site were demolished and the site was prepared for development. The Agency went through a Request for Proposal (“RFP”) process and ultimately selected Gangi Builders to develop a 9-unit, moderate-level affordable housing project. The project was approved for entitlements but no development contract or building permit was issued before the State dissolved Redevelopment agencies. As a result of this action, the Agency was unable to move forward with the approved project. Subsequent to this, in 2012, the City adopted Resolution No. 6815, electing to transfer all affordable housing assets to the County. In 2014, the County then adopted a Resolution accepting the properties. Since that time, the County has had a number of concepts for development/use of the site, and the City has repeatedly encouraged the County to move forward with affordable housing on that site. Recently, the County went through an RFP process to determine if there were interested parties to partner in the development of an affordable housing project there. At the conclusion of this process, there was one interested party who submitted a proposal: Habitat for Humanity. However, the County has not moved forward with the proposal, stating that the required subsidy in the proposal was too great for the size of the project. In subsequent discussions with the City, the County has now suggested that it may be possible to transfer the property back to the City of Arcadia, for the purpose of developing affordable housing. DISCUSSION Since the County tends to focus on larger development sites yielding more units in higher density areas, and has many other properties in its portfolio, the development of the Lucile Street properties is a higher priority for Arcadia than for the County. By re-acquiring the properties, the City is more likely to get a project completed in a shorter period of time. In addition, there is a chance that if the City does not re-acquire the parcels, they will be sold to a third party for development of market-rate housing, which would defeat the original intent of the Agency. For these reasons, it would be recommended that the City consider re-acquiring the parcels from the County. In order for the City to re-acquire these parcels, the first step is for the City Council to approve a Resolution declaring its interest to the County Board of Supervisors. Resolution No. 7587 has been prepared for that purpose. If approved, the Resolution will be sent to the County and included as part of an agenda item to the Board of Supervisors considering the transfer of the property to the City. Based on discussions with representatives of the Los Angeles County Development Authority (“LACDA”) and Resolution No. 7587 – Lucile Street August 20, 2024 Page 3 of 4 Supervisor Barger’s office, the County is prepared to offer the parcel to the City for no cost and/or for nominal costs (e.g. costs of property transfer, recordation, etc.). The intent for re-acquiring the Lucile Street properties would be to build affordable housing. No specific project is identified at this time, but the City would review the one proposal that was submitted to LACDA by Habitat for Humanity. Once the property is transferred, the City would go through the required processes to prepare the parcel for development, including the requirements of the Surplus Land Act and any other legal steps required. On that front, the County has already been working with the State on the Surplus Land Act process for this site. It is possible, but not guaranteed, that any Surplus Land Act clearances the County receives could be transferred to the City as a governmental successor of the site. This could streamline the eventual development process once the City acquired the parcels. Any project proposed for the site will go through the City’s required design review and land use approval processes. The attached Resolution declares the City’s intent to receive the Lucile Street properties back from the County. The Resolution also authorizes the City Manager to execute all official transfer documents necessary and approve the expenditure of any nominal fees associated with the transfer. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the environment. The transfer of the property itself is not a project. Any subsequent project proposed on the site will be subject to review under CEQA as needed. FISCAL IMPACT In discussions with the County, it has been represented that the transfer of the Lucile Street properties will be provided at no cost to the City, or only the cost of the transfer documents and any other necessary fees. If this changes through the process, and the fees and/or costs are greater than anticipated, an item will be returned to the City Council to consider the potential expenditure. RECOMMENDATION It is recommended that the City Council determine this action does not constitute a project under the California Environmental Quality Act (“CEQA”); and adopt Resolution No. 7587 declaring the City’s interest in re-acquiring the properties located at 15 & 19 Lucile Street from Los Angeles County for the purpose of building affordable housing. Resolution No. 7587 – Lucile Street August 20, 2024 Page 4 of 4 Attachment No. 1: Resolution No. 7587 Attachment No. 2: Map of Lucile Street Properties Overlays Selected parcel highlighted Parcel location within City of Arcadia N/A Property Owner(s): Lot Area (sq ft): Year Built: Main Structure / Unit (sq. ft.): Number of Units: R-3 HDR Property Characteristics 0 Los Angeles County Development Authority Site Address:15 & 19 LUCILE ST Parcel Numbers: 5779-014-901 5779-014-900 N/A Zoning: General Plan: N/A Downtown Overlay: Downtown Parking Overlay: Architectural Design Overlay:N/A N/A N/A N/A Residential Flex Overlay: N/A N/A N/A N/A Special Height Overlay: N/A Parking Overlay: Racetrack Event Overlay: This map is a user generated static output from an Internet mapping site and is for reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable. Report generated 21-Sep-2021 Page 1 of 1 13,839 (0.31 acre)