The City is the owner of real property located at the southwest corner of Stanford Avenue and Eighth Street (11390-11400 Stanford Avenue, Garden Grove, CA)(north portion of a larger assessor’s parcel APN No. 090-154-57)(the “Property”).  An appraisal obtained by the City determined the highest and best use of the property is for multi-family residential development in accordance with the existing zoning and the properties fair market value of $8,550,000.

On June 13, 2023, the City Council Adopted Resolution No. 9788-23 declaring the Property to be “exempt surplus land”. Section 103(b)(3)(D) of the Surplus Land Act Guidelines issued by HCD, states that local agency surplus land that is transferred to another local agency for the transferee agency’s use is exempt from the provisions of Articles II and III of the SLA/HCD Guidelines. Additionally, per Government Section Code 54221(b)(1) and 54221(f)(1)(D), exempt surplus land is defined to include surplus land that is transferred to another local agency for the agency’s use.

The Garden Grove Housing Authority (GGHA) serves as “Housing Successor” to the former Garden Grove Agency for Community Development (“Former Agency”). The GGHA has the authority and power under Housing Authority Law and Housing Successor Law to provide funding for the production, improvement, or preservation of affordable housing.

The City intends to sell and convey the Property to the GGHA for the development of affordable housing. The GGHA agrees to bear all costs associated with the conveyance of the Property and pay the fair market value of $8,550,000 to the City, of which $3,000,000 will be in cash and the remainder in the form of a Promissory Note.  

The property is subject to a ground lease with the Garden Grove Public Finance Authority as security associated with the City’s Lease Revenue Bonds, Series 2015A. The sale will be contingent upon substitution of collateral used to secure the bond in exchange for this parcel; and the California Department of Housing and Community Development approving the City’s determination of the Property as exempt surplus land.  

The GGHA will make a lump sum payment of $3,000,000 upon the execution of Purchase and Sale agreement and the successful removal of the contingencies.  The remaining amount of $5,550,000 will be paid over time with an interest rate of 5% per annum per the Promissory Note (Exhibit C of the Agreement).  The City will recognize a revenue in the amount of $8,550,000 when all conditions are met.

It is recommended that City Council and Housing Authority:

• Approve the Purchase and Sale Agreement and other related documents between the City of Garden Grove and the Garden Grove Housing Authority in regards to the sale of real property located at 11390-11400 Stanford Avenue by the City to the Housing Authority in the amount of $8,550,000; and
• Authorize the City Manager/Director to execute the Purchase and Sale Agreement, Grant Deed, Promissory Note, pertinent documents, and make minor modifications as needed, on behalf of the City.

By: Monica Covarrubias

Sr. Project Manager