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Encinitas council grants 0.96‑acre easement to Lennar for $1.8M; directs funds toward nearby improvements
Summary
The council approved an easement to Lennar over portions of Piraeus Street and Plato Place for $1.8 million and directed staff to return with cost estimates for neighborhood mitigation, including safe‑routes and utility undergrounding.
The Encinitas City Council on Dec. 4 approved granting a 0.96‑acre easement across city‑owned land on Piraeus Street and Plato Place to Lennar Homes of California for $1,800,000 and directed staff to return with estimates for improvements in the surrounding area.
City negotiators presented two appraisals obtained in 2023. The city's appraiser, Lance Dore, used an "across-the-fence" methodology and appraised the easement at $2,156,000; Lennar's appraiser, Kenneth Keggy, valued the property using constrained-parcel comparables and appraised the easement value at $224,000. Staff reported Lennar's offer at $1,800,000, which city negotiators said exceeded Lennar's appraisal and was below the city's appraisal.
Jay Schwarm, administrative services and human resources director and one of the city's designated negotiators, said the easement document preserves the city's fee interest while granting rights for grading, construction access, maintenance, installation of utilities and related project uses; the document also contains indemnity, insurance and termination provisions in the event the project does not proceed or the easement obligations are not met.
Why it matters: Residents voiced strong opposition to granting the easement. Speakers said the city should not transfer rights in public streets to a developer, raised concerns that the detention/biofiltration basin should sit on private property rather than city property, and asked that any proceeds be used for neighborhood mitigation. Several speakers urged the council to require the developer to place required infrastructure on its parcel rather than on the easement.
Council action and directions: Council approved the staff recommendation to grant the easement for $1.8 million and—by motion—directed that the funds be dedicated to neighborhood mitigation or improvements in the vicinity of the project rather than deposited without designation in the general fund. Council also directed staff to return with cost estimates for identified improvements, including safe routes to school, a right‑turn pocket on Plato Place, a walkway to La Costa Avenue, undergrounding utilities and an assessment of SCOOP hauling costs for beach placement of project sand. The motion carried unanimously with Council Member Ehlers absent.
Appraisal, terms and safeguards: Staff explained the easement conveys limited rights and retains the city's fee ownership; the easement document includes termination clauses if the project does not proceed for a year or if Lennar fails to perform. Staff also said Lennar offered to pay $1.8 million, a negotiated figure above Lennar's appraiser but below the city's appraiser. The easement contains standard indemnity and insurance requirements and requires reconveyance in specified circumstances.
Next steps: Staff will prepare cost estimates for the neighborhood improvements council identified and return to council. If the project proceeds, easement conveyance terms require Lennar to perform insurance and maintenance obligations and permit termination and reconveyance in specified circumstances.
