Cornell Road Properties

City Council approved the sale of two parcels (yellow and blue in photo) to Arcadia Homes to be included in the Fairway Oaks housing project. The project sits just west of Highway 99, south of Glendale Avenue, northwest of Dry Creek and east of the Creekside 2 development.

After recent performance reviews by the City Council, City Manager Eugene Palazzo waited until the end of the March 19 meeting to announce his resignation. Palazzo gave no reason for the resignation and said he was very proud of the work he did for the city over the past three years. This past year was marked by the resignation of Finance Director Emily Boyd who was handpicked by Palazzo to head the department, a data breech at the police department due to months of back-up failures that occurred without being detected, a 300,000 gallon sewage spill that the public was not notified of, and a less than stellar audit review that included months of un-reconciled bank statements.

Council members, including the mayor, had very little to comment except to thank Palazzo for his service and wish him well.

Economic Development Director Amie Mendes asked council to approve the sale of two parcels of land near Cornell Road to Arcadia Homes, which has had plans to build a housing development of approximately 100 homes, Fairway Oaks, for the past few years.

The parcels are just west of Highway 99 and adjacent to the Fairway Oaks project.

Mendes said Arcadia Homes attempted to purchase parcel 52 from the private owner, only to find out it had over $350,000 worth of unpaid water and sewer assessments, interest, penalties and attorney fees owed to the city. With the market value only weighing in at $120,000, the land is of very little interest to any other buyers.

Mendes’ presentation also included a 5.7-acre parcel that the city originally thought could be used as an overflow parking lot for the Galt Market. Both parcels are problematic with previously accrued city assessed liens, lack of suitable access and the county island that is located within the area. There are no utilities at either property, and both would require easements from owners of the county island properties.

Mendes asked council to approve selling the 2-acre property to Arcadia for $120,000. The city would first foreclose on the property and then sell it to Arcadia. The city will pay for foreclosure, consulting and legal fees to the tune of approximately $36,000 and $20,000 in taxes and fees. If the deal goes through, $64,000 will go to the city’s sewer and water funds.

The 5.7-acre parcel is already owned by the city. Mendes said both parcels were appraised at $60,000 per acre. The city paid $132,000 for the 5.7-acre property in 2002 and paid Assessment District 1999-1 the amount of the back liens for a total investment of $398,501. Mendes said the city has been out the cost of maintaining the property without a purpose for keeping it.

The original agreement with Arcadia Homes for the 5.7 acres was a selling price of $340,000, but after council members heard from a number of concerned citizens, Vice Mayor Farmer voiced his concerns to Mendes. Mendes went back to Arcadia Homes and they agreed to settle for a $356,000 selling price. Proceeds from the sale will go to the Parks and Recreation Department.

Council member Rich Lozano thanked Mendes for her hard work since the city would “never recover” money owed on the properties.

Vice Mayor Farmer said, “What we’re getting is fair. I look at this as infill. It will help property values in the area and money to our Parks and Rec. For these reasons, I support it.”

Arcadia Homes spokesman Mike Oliver thanked the council for their 4-0 approval. Council member Curt Campion was absent due to a death in his family.

“It’s been a long process,” Oliver said. “It’s been a joy working with you. It’s a complicated property, as you know, and still a need for annexation. I want to thank the staff and Mr. Palazzo. We appreciate everyone’s efforts.”

Community Development Director Chris Erias gave a presentation on the 2030 Galt General Plan and Housing, which must be filed with the state. Erias said there are requirements in 10 categories that all California cities must meet, including housing, safety, conservation and open spaces, land use and noise. The city has liberties to add their own categories and identify needs of public facilities and services, community character, economic development and historical uses.

Galt must identify its sphere of influence, which extends north of Twin Cities Road, east of Cherokee Road and west of Sargent Road. It must also show efforts to meet the regional housing needs, including low and moderate income housing efforts, and show all entitled projects.

“We don’t have to build the homes,” Erias said. “We do have to have land suitable to build those (moderate- to low-income) homes. We just haven’t had a proposal for affordable homes come to us.”

Erias said he expects to see more stringent protocols for housing coming down from the Governor, including more low-income housing as infill projects.

“I see in the future we are going to have to provide some incentives for affordable projects,” Erais said. “We have encouraged infill. That’s where we’ve done a great job.”

Erias said some cities require developers to include a percentage of their homes earmarked for low- to moderate-income families. Low-income families are identified as at 50 percent of the area’s median income. Erias said our area’s median income is around $80,000 per year for a four-member family, which would put a low-income family at $40,000 per year.