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The Danville Town Council is set Tuesday to review options for the former site of the town offices following their relocation late last year.
Councilmembers will consider next steps for the 2.77-acre property at 510 La Gonda Way that is now vacant following the move to 500 La Gonda Way in November 2022 as part of a study session Tuesday morning.
The property was first acquired by the town in 1985 for an initial price-tag of $3.5 million. It served as the site of the town offices from 1985 — three years after the town’s incorporation — until last year’s move.
Although the property is no longer a part of town business following the move, it continues to be used for solar electricity for the new site and for employee parking, the latter of which is required under the town’s parking standards. In order to maintain these functions, the town will keep approximately 27,000 square feet, with the future of the remaining 1.65 acres remaining up for discussion.
Under the most recent Housing Element adopted by the town earlier this year, the property falls under a residential multi-family General Plan designation, allowing for a density of 30 to 35 units per acre.
“The assumption has been that the Town will dispose of 510 La Gonda for a housing development once it is no longer needed for Town use,” Town Manager Joe Calabrigo and City Attorney Robert Ewing said in a staff report prepared for the upcoming meeting.
They added that disposing of the property would need to be done in compliance with the Surplus Land Act, which they said “now essentially acts as a right of first refusal for development of affordable housing units before the land can be sold for any other purpose.”
In addition, the SLA currently increases the authority of the state’s Department of Housing and Community Development (HCD), which is responsible for reviewing and approving dispositions under the SLA.
“Property owned by a local government becomes ‘surplus’ when the local agency declares it is no longer necessary for the agency’s use,” Calabrigo and Ewing wrote. “Once the property is declared surplus, the agency must notify affordable housing developers registered with HCD of the property’s availability by sending them a Notice of Availability.”
They added that local officials also have the option of sending the notice to affordable housing developers not registered with the HCD.
Following the notice, developers have 60 days to express their interest, according to the SLA. If at least one developer responds with interest in acquiring the property, a 90-day negotiation period would kick off at that point, with the local agency being required to engage in good-faith negotiations.
“If more than one developer responds, the SLA prioritizes which parties get to negotiate first based on the percentage of affordable units they are proposing,” Calabrigo and Ewing wrote. “If no one responds, the agency is then free to dispose of the property as it sees fit.”
Following the negotiation process, any agreement would be required to ensure that at least 25% of the proposed housing would be affordable for low-income earners, rather than moderate or high earners. If state officials find that the town negotiated in good faith yet failed to reach an agreement with a developer, the town would then be allowed to sell the property.
If the property were to be sold for housing, it would require the buyer to ensure at least 15% of units are affordable for low incomes.
One exception for the process under the SLA, according to Calabrigo and Ewing, would allow the property to be deemed “exempt surplus” if the town declares that it should be used for 100% affordable housing consisting of at least 75% affordable to low income earners and at least 50% being available to very low income earners.
“In that situation, the agency can bypass the Notice of Availability process and immediately negotiate with one or more affordable housing providers,” Calabrigo and Ewing wrote.
HCD approval would still be required for the reasoning behind the exemption of the property, they added.
Calabrigo and Ewing point to two different directions for the council to consider.
“The first option would be to attempt to ensure the deepest level of affordability in the units to be built,” Calabrigo and Ewing wrote. “Under this approach, the Town could offer the property at no cost and include in the deal the full amount of the Town’s Low and Moderate Income Housing Fund (currently approximately $1,900,000).”
The other direction would be to seek to sell the property to a developer at a fair market value, which would result in 25% or 15% of units being designated affordable housing for low income earners depending on the outcome of the notification and negotiation process with developers.
The Danville Town Council is set to meet at 8:30 a.m. on Tuesday (July 11). The agenda is available here.
