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Agenda Item
ASR
Control 25-000511 |
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MEETING
DATE: |
10/14/25 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
3 |
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SUBMITTING Agency/Department: |
County
Executive Office (Approved) |
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Department contact person(s): |
Thomas
A. Miller (714) 834-6019 |
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Brian
Bauer (714) 834-5663 |
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Subject: Approve Agreements for Sale of
Parcels to the City of Irvine
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
Approved
Agreement to Form |
Discussion |
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4/5
Vote |
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Budgeted: N/A |
Current Year
Cost: N/A |
Annual Cost: FY 2026-27 $200,000 |
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Staffing Impact: |
No |
# of Positions: |
Sole Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 8/17/2010 #19; 8/8/1984 #1, 7/17/1984
#28 |
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RECOMMENDED
ACTION(S):
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1. |
Find that the project is categorically
exempt from the California Environmental Quality Act (CEQA), Class 12
(Surplus Government Property Sales) pursuant to CEQA Guidelines section
15312. |
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2. |
Approve the Option to Purchase Agreement
with the City of Irvine, to complete its due diligence to purchase two County
owned parcels, which are not required for County use, located at the north
side of Bee Canyon Access Road, east of Portola Parkway, totaling approximately
1.97 Acres in unincorporated Orange County, and authorize the Chief Real
Estate Officer or designee to execute the Option to Purchase Agreement in
substantially the form attached with minor modifications that do not increase
the cost or liability to the County, for a term of up to thirty-six months,
with an option to extend the Option term for up to one additional year in
order to fulfill the Option requirements.
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3. |
Approve the Purchase and Sale Agreement
and Joint Escrow Instructions authorizing the sale of the two County-owned
parcels in unincorporated Orange County, located at the north side of Bee
Canyon Access Road, east of Portola Parkway, totaling approximately 1.97
Acres to the City of Irvine, for the purchase price of $9,259,000 to be
satisfied through a deduction to the County’s Fair Share Obligation under
Implementation Agreement No. 2 between City of Irvine, Irvine Redevelopment
Agency and County of Orange, and authorize the Chief Real Estate Officer or
designee to execute the Purchase and Sale Agreement and Joint Escrow
Instructions, including minor modifications that do not materially alter the
terms of the transaction or increase the cost or liability to the County,
with approval of County Counsel, and upon fulfillment of conditions precedent
in the Option to Purchase Agreement. |
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4. |
Approve the Addendum to Implementation
Agreement No. 2, which will reduce the County’s fair share obligation to the
City of Irvine by $9,259,000, in consideration for the sale of the land, and
authorize the Chief Real Estate Officer or designee to execute the Addendum
to Implementation Agreement No. 2 in substantially the form attached,
including minor modifications that do not materially alter the terms of the
transaction or increase the cost or liability to the County, with approval of
County Counsel. |
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5. |
Authorize the Chief Real Estate Officer
or designee to execute any and all necessary documents related to the sale of
the two parcels to the City of Irvine, and take any required actions to
complete the property sale with the City of Irvine in accordance with the
Option to Purchase Agreement and Purchase and Sale Agreement, including
making minor modifications and amendments that do not materially alter the
terms of the transaction or increase the cost or liability to the County, and
to sign related documents and perform related actions as required to finalize
due diligence, complete the purchase and close escrow, including executing
the final Grant Deed for transfer of the property. |
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6. |
Authorize the reimbursement to the OC
Waste & Recycling Enterprise Fund 299 for the value of the acreage in the
amount of $200,000 out of Fund 15T (El Toro Improvement Fund). |
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7. |
Direct County staff to work with the
City of Irvine and Orange County Local Agency Formation Commission (OC LAFCO)
on the annexation of the two parcels to the City of Irvine. |
SUMMARY:
Approval of the Option to Purchase
Agreement, Purchase and Sale Agreement and Joint Escrow Instructions, and
Addendum to Implementation Agreement No. 2 will allow the County to sell its
two surplus parcels to the City of Irvine, which it requires for its proposed
Gateway Village residential development, providing $9,259,000 to the County to
be utilized to directly reduce the County’s fair share obligation to the City
of Irvine under Implementation Agreement No. 2, significantly lowering the
County’s financial obligation for required infrastructure costs and ensure the
ongoing beneficial use of the County’s property at the former MCAS El Toro.
BACKGROUND
INFORMATION:
On July 17, 1984, the Board of
Supervisors (Board) approved Resolution No. 84-1113, declaring its intention to
purchase approximately 846 acres of land from The Irvine Company (TIC) for the
development of the Bee Canyon Refuse Disposal Site and Access Road (Disposal
Site), for a total consideration of $8,400,000.
On August 8, 1984, the Board approved the County’s purchase of the
Disposal Site, which is now known as the Frank R. Bowerman Landfill.
The
City of Irvine
The City of Irvine (City), entered
into an agreement with Brookfield Properties for 70 acres for its proposed
development of approximately 1,236 homes (Gateway Village), located at the
northeast corner of Jeffrey Road and Portola Parkway. Included within the development are two
County-owned parcels of land, totaling approximately 1.97 acres (Notch
Parcels), located in an unincorporated area of Orange County adjacent to the
Bee Canyon Access Road, which is the primary entrance to the Frank R. Bowerman
Landfill. See Attachment A for Location
Map.
In Fall 2024, the City initiated
discussions with the County regarding the possible acquisition of the Notch
Parcels which are necessary for the Gateway Village project. These Notch
Parcels are excess roadway, surplus to County needs, with a value of approximately
$100,000 per acre if valued based on current open space zoning with no deed
restrictions, which is the current land use designation.
The City is currently in the
process of entitling the Gateway Village project. By including the Notch
Parcels in the development, the potential value of the property for the City
significantly increases, as these parcels would then be zoned for residential
development. Utilizing the valuation methodology from its agreement with
Brookfield Properties, the City has offered to acquire the Notch Parcels from
the County for approximately $4,700,000 per gross acre, totaling $9,259,000.
CEO Real Estate is seeking Board
approval to finalize negotiations with the City for the sale of these Notch
Parcels, through an Option to Purchase Agreement (Attachment B), for a
thirty-six (36) month option term for an option price of one dollar ($1), with
an option to extend the term for one (1) additional year. If conditions are
satisfied, the County and City would execute the Purchase and Sale Agreement
(Attachment D), and Grant Deed (Attachment E).
Pursuant to Government Code Section
25365(a) (Attachment F), the County is permitted to transfer property to the
City "upon the terms and conditions as are agreed upon and without
complying with any other provisions of this code" upon 4/5 vote of the
Board of Supervisors when the property to be conveyed is not required for
County use. The Notch Parcels are adjacent to the Bee Canyon Access Road but
are not part of the roadway or the road right-of-way necessary for the
operation of the road and are therefore not required for the County’s use.
Fair
Share Obligation Under Implementation Agreement No. 2
On August 17, 2010, the Board
approved Implementation Agreement No. 2 which set forth certain agreements
between the City and County with respect to the long-term development and use
of the County’s properties at El Toro and the County’s fair share contribution
for infrastructure servicing the property (Fair Share). Implementation Agreement No. 2 requires the
County to pay the City up to $15,600,000, representative of its Fair Share,
towards “developing and installing the infrastructure improvements directly
related to servicing the premises” including Marine Way. This payment has not become due yet but is
anticipated to be due soon and paid from a combination of funds from El Toro
Improvement Fund 15T (Fund 15T) and General Fund revenue, as available.
In lieu of a $9,259,000 payment for
the sale of the Notch Parcels, the City has offered to enter into an Addendum
to Implementation Agreement No. 2 (Attachment C) with the County, which would
formally memorialize this reduction in the County’s Fair Share obligation,
serving to reduce the County’s Fair Share obligation to approximately
$6,341,000. This transaction will
directly benefit the County and its El Toro properties by contributing to the
payment of the Fair Share obligation, and therefore assisting in paying for the
El Toro infrastructure. It will also
result in there being sufficient funds in Fund 15T for the remainder of the
County’s Fair Share obligation, with no assistance required from the County
General Fund.
OC
Waste & Recycling Enterprise Fund
The Notch Parcels were acquired by
the County in 1984, as part of a purchase transaction with TIC, pursuant to
which the County acquired approximately 846 acres for the Disposal Site. The $8,400,000 purchase price was paid out of
the Capital Projects Budget but was “to be reimbursed by the Waste Management
Enterprise Fund.”
As the original purchase price for
the Disposal Site property was paid for out of OC Waste & Recycling
Enterprise Fund 299, CEO Real Estate proposes to reimburse the fund the
approximate value of the parcels with their present zoning designation. The parcels are zoned for open space, but are
not deed restricted for that purpose, which would permit a buyer to rezone the
properties for an alternate use. Based
on this, the current approximate value would be $100,000 per acre. Thus, for
the two acres to be acquired, $200,000 would be returned to the OC Waste &
Recycling Enterprise Fund as reimbursement for the original purchase price.
As set forth above, this
transaction with the City for the two acres directly benefits the County’s
properties at El Toro since the transaction will result in a significant
reduction in the County’s Fair Share obligation, pursuant to Implementation
Agreement No. 2 and will insure the ongoing beneficial use by the County of its
100-Acre parcel at El Toro. Due to this
direct benefit, CEO Real Estate is proposing the reimbursement to OC Waste
& Recycling Enterprise Fund 299 with funds from Fund 15T, which are
restricted for use that benefit the County’s properties at El Toro.
On September 9, 2025, the City's
council approved the Option to Purchase Agreement and Addendum to
Implementation Agreement No. 2. Should
the Board approve the Option to Purchase Agreement and it be exercised by the
City, County staff would work with the City and OC LAFCO on the annexation of
the parcels to the City of Irvine, including the development of a Property Tax
Exchange Resolution for approval by both the City and County.
Compliance
with CEQA:
The proposed project is categorically exempt (Class 12) from the provisions of
CEQA pursuant to CEQA Guidelines Section 15312, because it provides for the
sale of surplus government property that is not within an area of statewide,
regional or areawide concern.
General
Plan: The
Project is consistent with the General Plan of City of Irvine, pursuant to
Government Code Section 65402(b).
FINANCIAL
IMPACT:
In lieu of a $9,259,000 payment for
the sale of the Notch Parcels, the City and County have agreed to a reduction
in the County’s Fair Share obligation for the infrastructure improvements in El
Toro, from $15,600,000 to approximately $6,341,000. This reduction will be
covered primarily through Fund 15T, minimizing the need for assistance from the
County General Fund.
Appropriations to reimburse OC Waste &
Recycling Enterprise Fund 299 for the portion of the Disposal Site property
acquired in 1984, based on the approximate value at its present zoning as open
space, and it will be included in Fund 15T, El Toro Improvement Fund, FY
2026-27 Budget.
STAFFING
IMPACT:
N/A
ATTACHMENT(S):
Attachment
A – Location Map
Attachment B – Option Agreement
Attachment C – Addendum to Implementation Agreement No. 2
Attachment D – Purchase and Sale Agreement
Attachment E – Grant Deed
Attachment F – California Government Code Section 25365