City staff outline process for waterfront surplus‑land notice and Opportunity Zone planning
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Summary
Staff said a resolution to declare waterfront parcel exempt surplus land will go to council April 28; notice of availability (NOA) will go to the California Department of Housing and Community Development (HCD), starting a 60‑day response window followed, if there are respondents, by 90 days of good‑faith negotiations. Staff also described Opportunity Zone tracts and catalyst-project incentive ideas.
City staff reported they will bring a resolution to declare a waterfront parcel exempt surplus land to the City Council on April 28 and explained the follow‑on regulatory steps required under the California Surplus Land Act process.
Staff said the city received an exemption letter covering the parcel from the pier to the parking structure and that an open‑space Notice of Availability (NOA) will be submitted to the California Department of Housing and Community Development (HCD) for review. According to staff, once the NOA is released HCD’s process starts a 60‑day response period; if one or more qualified respondents reply, the city must enter a 90‑day period of good‑faith negotiations with responding public agencies or affordable‑housing developers.
Staff emphasized that community engagement occurs after the 90‑day negotiation period so as not to prejudice competing respondents; the council pressed staff on whether engagement could be held earlier, and staff said state SLA wording mandates the negotiation period before public outreach in this phase.
On Opportunity Zones, staff said they have overlaid the city’s development map with federal census tracts under consideration and identified two tracts of interest: Tract 24 (downtown to the ocean and portions of Midtown and the West Side) and Tract 32.02 (the West Side Avenue area). Staff said the city is tracking roughly two dozen downtown projects and is preparing to submit an application once state and federal guidance is finalized. Staff summarized the core federal incentives as capital‑gains deferral/exclusion structures tied to long‑term investment timelines.
Economic‑development staff also reviewed the catalyst‑project program criteria and feedback from a recent roundtable: suggested incentives included rooftop public‑access amenities, consideration of future cluster industries, a pre‑application proof‑of‑concept meeting, and possible sales‑tax deferral mechanisms within legal constraints. Staff said the top three incentives that would most change developers’ decisions were guaranteed timelines, deferred costs and a single project manager for applicants.
Next steps: staff will return to council on June 9 with additional catalyst‑project criteria and anticipate bringing NOA status updates and grant‑program revisions in June depending on HCD responses.
