25A - AGMT FOR CITY OWNED PROPERTY

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Purchase and Sale Agreement of 203-205 W Civic Center Drive August 18, 2020 Page 2 On September 3, 2019, City Council authorized the negotiation of a Disposition and Development Agreement (DDA) for the renovation and reuse of the YMCA land with Caribou Industries. However, due to the new legislation on Surplus Lands Act procedures that were being enacted at the end of 2019, the City could not continue these negotiations. SURPLUS LANDS ACT The Surplus Land Act requires all local agencies to prioritize affordable housing, as well as parks and open space, when disposing of surplus land. New legislation, which took effect on January 1, 2020, required that before a local agency take any action to dispose of land, the land must be declared either "surplus land" or "exempt surplus land". Upon the City's determination that the YMCA property was surplus land, the procedures required the City to offer the sale or lease of surplus land to certain public entities for a period of 60 days. On March 3, 2020, the City Council adopted a resolution declaring the YMCA property as surplus land. During the 60-day period following, the City received one proposal for affordable housing. During negotiations, it was determined that the proposal would not be feasible due to a need for City funding and onsite parking. The withdrawal of this proposal ceased negotiations and the City may now sell the surplus land without further restrictions. CURRENT STATUS Staff is recommending that the City enter into a Purchase and Sale Agreement (Exhibit 1) with Caribou to develop the former YMCA facility into a 20-40 room boutique hotel and new grand salon lobby. This lobby will serve as the check -in area for the boutique hotel and will maintain the historical features of the old YMCA. The main floor will also include a Grand Ball Room and Banquet Hall for community events and conferences. This Grand Ball Room will be able to accommodate up to 300 people and will be equipped with state of the art audio and visual equipment. Also included in the former YMCA facility will be a gym, basketball court, indoor pool and spa, bistro for hotel guests, and an art gallery for local artists. Staff is also including the driveway area south of the YMCA as the project would utilize this area as the pickup and drop off for the hotel. (Exhibit 2). Caribou's proposal to redevelop the YMCA to include boutique style hotel rooms is anticipated to generate revenue in terms of hotel visitors tax, utility taxes, and property taxes for the City. The total investment in this project will exceed several millions of dollars and will revitalize a historic piece of Santa Ana's history into a fully functioning community asset that has been boarded up for over two decades. Entitlements for this project will still be subject to Planning Commission, Historic Resources Commission, and City Council approval in the near future. Caribou estimates that it will take 36 months to obtain entitlements, go through the necessary City processes, and open for business. Staff reviewed the project for compliance with California Government Code Section 53083 regarding Economic Subsidy Reports. Because the City is receiving funds for the property and an 25A-2