21-1102_R&H LAND PARTNERS_Agenda Report_D1City of San Juan Capistrano
Agenda Report
TO: Honorable Mayor and Members of the City Council
FROM: Benjamin Siegel, City Manager
SUBMITTED BY: Charlie View, Assistant City Manager
PREPARED BY: Matisse Reischl, Senior Management Analyst
DATE: November 2, 2021
SUBJECT: Purchase and Sale Agreement with R&H Land Partners, LLC for
City-owned Property Located at Calle Arroyo and Rancho Viejo
Road; and Hearing of Any Protests to the Disposition of the City-
owned Property (Assessor Parcel Number: 666-232-08)
RECOMMENDATION:
Approve and authorize the City Manager to execute a Purchase and Sale Agreement for
the sale of a 1.09-acre City-owned parcel located at Calle Arroyo and Rancho Viejo Road
to R&H Land Partners, LLC.
EXECUTIVE SUMMARY:
On October 19, 2021, the City Council adopted a Resolution of Intention (Attachment 1)
finding that public convenience and necessity require the sale of the City-owned Calle
Arroyo property, an approximately 1-acre parcel located at Calle Arroyo and Rancho Viejo
Road, to R&H Land Partners, LLC, represented by Mr. Robert Socci. In addition to the
required public hearing notice, State law requires that the Resolution be published in the
local newspaper and posted in three locations on the Calle Arroyo property. All publication
and posting requirements have been complied with in support of the proposed sale of
public land. Due to its location and unique parcel characteristics, including lack of legal
access, a stand-alone public use on the City-owned Calle Arroyo property is generally
infeasible. The proposed sale of the property to the adjacent landowner above fair market
value is envisioned to facilitate improved options for long-term use of the site, while
mitigating future risk and maintenance obligations associated with City ownership.
11/2/2021
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City Council Agenda Report
November 2, 2021
Page 2 of 4
DISCUSSION/ANALYSIS:
The City owns an approximately 1-acre parcel generally located at Calle Arroyo and
Rancho Viejo Road (Calle Arroyo parcel). An aerial photo of the site is provided as
Attachment 2. The parcel is situated between property owned by St. Margaret’s Episcopal
School and the Ortega Cottages Business Park. The Calle Arroyo parcel is currently
operated under a License Agreement by Ortega Equestrian Center and used for office
space, support facilities and a riding ring, all in conjunction with a larger commercial
equestrian and stable operation located on an adjacent property owned by St. Margaret’s.
Importantly, the City-owned Calle Arroyo parcel is landlocked with no legal access.
Currently, Ortega Equestrian Center accesses the Calle Arroyo parcel through an
informal agreement with the Ortega Cottages business park property owner.
Upon receipt of an informal purchase offer for the Calle Arroyo property from the Ortega
Cottages owner, in October 2019 staff contacted St. Margaret’s and the operator of the
Ortega Equestrian Center to gauge interest, if any, in potentially acquiring the property
from the City. While discussions with St. Margaret’s and the Ortega Equestrian Center
did not mature into a formal purchase offer from either, the owner of the Ortega Cottages
business park, Mr. Socci, submitted an offer of $150,000. The parcel was appraised at
$120,000.
The property is zoned PC (CDP 78-1) Ortega Planned Community, Planning Sector C,
which permits a range of open space recreation uses, including parks, playgrounds, riding
and hiking trails, bicycle trails, golf courses, and agricultural uses. However, due to the
restricted access and relatively small size, the site is not well-suited for a stand-alone
public use.
Additionally, the Calle Arroyo parcel is located within the floodway adjacent to San Juan
Creek. Federal Emergency Management Administration (FEMA) regulations provide
restrictions on types of development that can be undertaken in a floodway, including
limitations on permanent structures. While R&H Land Partners has not identified a
specific project or intended use of the Calle Arroyo parcel, Mr. Socci has expressed
interest in working with staff on potential uses that could be allowed under the current
zoning. Any future proposal would be subject to a separate entitlement and environmental
review process.
In 2019, the State took several actions to make public lands available for affordable
housing development including modifications to the Surplus Land Act. The Surplus Land
Act requires that prior to the sale of surplus land, unless an exemption applies, cities must
provide notice to affordable housing developers that a property is potentially available for
development. On June 15, 2021, the City Council adopted a resolution declaring the Calle
Arroyo parcel non-exempt surplus land and approved issuance of a Notice of Availability
to all required parties. After the required 60-day noticing period, no affordable housing
entity expressed interest in purchasing the property, and the City subsequently received
City Council Agenda Report
November 2, 2021
Page 3 of 4
notice from the Department of Housing and Community Development that the City had
complied with all noticing aspects of the Surplus Land Act and is free to move forward
with the potential sale to R&H Land Partners. The Surplus Land Act also requires that
concurrently with a potential future sale, a restrictive covenant must be recorded against
the property stipulating that if ten or more residential units are constructed on the site at
least 15% are to be rented or sold at affordable housing rates; however, due to the limited
size of the parcel, land use restrictions, and FEMA regulations housing would likely be
infeasible. As the City has received notification that all provisions of the Surplus Land Act
have been met, staff recommends that the City Council approve the proposed Purchase
and Sale Agreement for sale of the City-owned parcel to R&H Land Partners for the above
fair market value sale price of $150,000 and authorize the City Manager to execute the
agreement (Attachment 3).
R&H Land Partners has agreed to engage in discussions with the current Licensee,
Ortega Equestrian Center, to allow continued use of the Calle Arroyo parcel for a limited
duration; however, any longer-term agreement between R&H Land Partners and the
equestrian operator would likely be contingent on St. Margaret’s future plans for its
adjacent property, given that the majority of the Ortega Equestrian Center operation is
conducted on property owned by St. Margaret’s.
Pending City Council approval of the Purchase and Sale Agreement and prior to
disposition of the property, State law requires the Planning Commission determine the
sale of the Calle Arroyo property is consistent with the City’s General Plan. Therefore,
staff would bring a resolution before the Planning Commission later this month
recommending the sale of the Calle Arroyo parcel is consistent with the City’s General
Plan as Mr. Socci has expressed interest in working with staff to identify potential uses
that could be allowed under the current zoning.
FISCAL IMPACT:
Approval of the recommended action would result in $150,000 in one-time sales proceeds
and would be deposited to the City’s General Fund for future appropriation by the City
Council.
ENVIRONMENTAL REVIEW:
In accordance with the California Environmental Quality Act (CEQA) the recommended
action is exempt from CEQA per Section 15061(b)(3), the general rule that CEQA applies
only to projects which have the potential for causing a significant effect on the
environment. Where it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment, the activity is not
subject to CEQA. The approval of a Purchase and Sale Agreement will not have a
significant effect on the environment and any future project proposed for the site would
be subject to separate CEQA review.
City Council Agenda Report
November 2, 2021
Page 4 of 4
PRIOR CITY COUNCIL REVIEW:
• On October 19, 2021, the City Council approved a resolution declaring the City’s
intent to sell the Calle Arroyo parcel to R&H Land Partners.
• On June 15, 2021, the City Council approved a resolution declaring the Calle
Arroyo parcel non-exempt surplus land and approved the issuance of a Notice of
Availability to all required parties.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not Applicable.
NOTIFICATION:
Robert Socci, R&H Land Partners
OTRA, Inc.
St. Margaret’s Episcopal School
Interested Parties Notification List
ATTACHMENTS:
Attachment 1 – Resolution of Intention
Attachment 2 – Aerial Photo
Attachment 3 – Proposed Purchase and Sale Agreement
ATTACHMENT 1
ATTACHMENT 2
Calle Arroyo Parcel – Aerial Photo
ATTACHMENT 3
Attachment 3 will be distributed separately.