4/11/23 - Azusa Unified School District Board Meeting/Study Session

001the meeting is open and the live stream has started good evening everyone Welcome to our Tuesday April 11 2023 meeting of the Azusa Unified School District governing board tonight's meeting is a regular meeting and a study session the time is now 5 29. moving to item 1.2 we have our flag salute which will be led by Miss Zoe Stapleton a student at Longfellow dual immersion preschool hi Zoe hi hi we're ready for you all right [Music] ready begin I pledge allegiance to the flag of the United States of America and to the Republic for which it stands explanation under God is invisible with liberty and justice for all yeah thank you Zoe so much for being so brave and leading us in our flag salute today have a great night um [Music] tambien they think

002I'm buenas noches moving to item 1.3 approval of the agenda I may have a motion make a motion to approve okay moved and seconded well is there any discussion move to a vote and the motion passes unanimously 1.4 roll call Board member benavidez board vice president Rodriguez Pena president Ford clerk Ariana here I'm sorry Ariana I'm sorry and board member Greer here thank you moving on to item 2.0 items from the floor public comment on agenda or non-agenda items hope do we have uh blue cards for any member of members of the public presence tonight good evening I'm here on behalf of the Azusa Women's Club my name is Vanessa Jones I'm the first vice president and Dean of Paris for the organization um as our students round out the year I wanted to remind

003them and their parents of all the amazing scholarship opportunities that are available throughout the community and Beyond including one from the Azusa Women's Club the mission of the Azusa Women's Club is the remote education and support our community Through events and fundraising all year long culminating in our annual scholarship board graduating students are invited to apply for the Azusa Women's Club scholarship by submitting an application which includes a personal essay question created by the scholarship committee applications are currently available through your school's counseling office they have all the information already every year the club Awards One minimum 500 scholarship to a student from each of the Azusa Unified School District High School each of the three high schools are eligible and encouraged July by April 20th that's the deadline I am excited to announce that

004through community support and approval of the executive board we're able to award a thousand dollar scholarship each of the selected scholarship recipients this year all students applying to post-secondary education are eligible to apply recipients of the awards are based on financial need academic achievement and Community involvement again the deadline is April 20th and if you have any questions you can contact us at the azusawomensclub.info at email and thank you for your have a good evening thank you so much Lika do we have any members of the public online we have no one online for public comment thank you we'll now move to item 3.0 presentation of surplus property update Mr Ortega thank you Dr Bill uh tonight uh we're going to spend the next uh couple of hours hour and a half um diving into

005this uh when we're internally referred to as phase three of school reorganization which is uh dealing with our Surplus property um as everyone knows uh we have a surplus property committee actually the the chair is uh among us tonight um and um we want to make sure that as we are going through this process that the Board of Education um is is coming along uh to understand where we are in the process and the information that's being uh shared eventually the goal uh of the 7-Eleven Surplus property committee uh will be to submit a recommendation via a report uh to the board of education and so we find it important that um as we work towards that goal uh when that arrives you would have had context information and background to make this next step

006of decisions um as informative as possible and so I'm very pleased tonight we we have uh two uh guests with us tonight we have Sarah Polito from uh our legal firm uh F uh three uh and she will be introducing our second guest but at this moment we'd like to call Sarah to the podium thank you all right just want to make sure this is working great um hello everyone it's great to be with you this evening again I'm Sarah Polito from F3 I'm the attorney that's been working with the district for about a year now on our Surplus property um so so before we dive in to the great content that Lauren has from dcg I just wanted to give kind of a brief summary of what's happened so far in the timeline um

007just so you all are up to date on everything that's happened here um so far with the Surplus properties um so just to recap uh the 7-Eleven committee was created on August 9th of 22 there was a resolution that was brought to the board then uh the 11 members of the committee were appointed on February the 7th we had our first meeting of the 7-Eleven on March 8th in which uh the properties were introduced all six of them uh the purpose of the committee was reviewed with the committee members we discussed um some of the laws and rules that apply to the operation of the committee and then um and a chairwoman was elected she's here with us tonight um so our next meeting is tomorrow and this this same set of information is also

008going to be provided to the 7-Eleven and so um just as was introduced by superintendent Ortega we wanted to ensure that you all had this information in advance of it going to the 7-Eleven committee for review um so dcg is a commercial real estate expert firm um right they they are Brokers and realtors that have expertise in the field of of commercial real estate and they were tasked with reviewing the six sites and identifying some Alternatives um so what they did is cause is called the feasibility analysis right and they looked at at a variety of factors that Lauren will go into much more detail into but essentially their goal was just to review all of the options for these properties and identify based on um you know certain limitations like land use planning and

009zoning and feedback from City officials what the most likely options were for potential use of these properties if the district decides that they um are Surplus for district needs um I I want to say you were all provided with a written summary of the findings that Lauren will go over in your board packets as well as um like a glossary of terms just in case any of those are unfamiliar those things should be helpful um and then I also want to highlight that the board is not being asked to take any action tonight or to make any final decisions about you know what to do with these properties that's um that's a part of the goal of the 7-Eleven is they're going to review this information and provide a recommendation so don't feel like you

010have to make a decision or that you're being asked to do any of that tonight it's really just um lots and lots of preliminary information to assist you in making those decisions later on when the time is right so with that I will leave the floor to Lauren to guide our discussion tonight thank you awesome well good this evening yet good late afternoon everyone my name is Lauren Jennings I'm with dcg strategies and I'm sure we've already heard what today's study session will be focused on the potential underutilized and potential Surplus properties that the district has identified for our firm um and so as you are aware our team we were hired by the school district um via request for proposal and so you as the school district released a request for proposal last summer

011and the request for proposal was specifically for a development consultant and someone who could come in and assist the district with assessing and really analyzing alternative use options for six pre-identified properties and so we'll talk through those properties on the next few slides but that is what our team has endeavored to do over the past few months has been again in response to the request proposals that was released by the school district and so um the we have a lot of information to go through today um so I have built in a couple of different pauses throughout however if at any point you have a question that comes up or point of clarification that will be helpful for the entire group definitely obviously feel free to either raise your hand or just stop me and

012let me know um and I can answer questions on the spot as well too but again I've built in three particular portions of time um following the sides for some questions and answers um and I have about an hour to an hour and a half of information so I can go as slow or as quickly as you need me to again um we're going to spend a lot of time diving deep into the general process that our team went through we'll also discuss just some of the market realities of the Azusa area and then we'll go into the actual development feasibility and findings themselves on the next few slide and so with that we will Jump Right In and so obviously this session is not at all about us but just wanted to provide some

013context in terms of who we are so our firm dcg strategies we've been in business since 2005 so we've been around for nearly 20 years um and we work with and we specialize in working with public schools and districts throughout the state of California and so we are a full-service real estate team meaning that we provide Consulting development and brokerage services to local educational agencies throughout the state of California a fun fact about us is that we are the exclusive real estate services provider for California school boards Association so csbs selected us as their exclusive real estate services provider and so through that we regularly provide workshops and seminars to csba members throughout the state of California and so moving on as I mentioned in response to the RFP you as a school district pre-selected

014six sites that you wanted studied for potential alternative use options and so those sites are listed right here on the slide today as I mentioned the presentation will go over some high-level information on the process we'll go over marketing for the general area and then we'll discuss each of these sites one by one and so when we talk about alternative use often this slide really depicts what we deem to be best practice when analyzing and assessing feasibility for specifically School District property and so I'll go through um this slide here in general but this was the process that our team has been on over the past few weeks um and so the first step involves introductory conversations and that's our team had an opportunity to meet with staff um and we're really trying to understand

015what our current market realities and then also really diving deep into what our board goals and priorities and potentially objectives that you want us to cover and one thing that we heard loud and clear from staff is that the board does not have any predispositions to really any use at all um the staff let us know that you as the board were open to all options and you really wanted our team to bring back what potential options are so that you can make fully informed decisions we always say that our role is we do not provide recommendations our role is to give you reliable data so that you in turn can make a fully informed decision um one of the the big things about obviously being on a board is there's a lot of decisions

016that you have to make and so we want you to feel comfortable when you make those decisions to know that you have all of the information available to to you so again you make a fully informed decision and so that was the the first step and again this is really what we deem to be best practice um and then the second step is really understanding a site constraint review and when we say a site constraint review essentially what we're saying is that is there anything physically on a site that could potentially prohibit and or limit development one example that I'll give you which is why this is important is that we're working with another school district they gave us five sites to study similar to how your school district is at one of the sites

017was just over 16 Acres our team did review a site strength analysis on the property and determine that of the 16 Acres only two and a half of those Acres were actually developable that is a huge difference and that's something that you need to know as board members because alternative use options for a 16 Acre Site are likely maybe going to be different than alternative use options for a two and a half acre site so part of what we do is really understanding is there anything that could prohibit and or limit the developable acreage of a property um I also want to just emphasize here that we did not do any formal soil studies or formal physical due diligence that involves a lot of resources a lot of outside consultants and we typically say to

018protect your resources to wait and to wait to do those studies once a formal decision has been made but so we did preliminary site constraint analysis and I'll get go through in a future slide on what that means um getting into really the meat of it is step three the land use analysis and that's really the bulk of the work that we do and I can share a little bit more about what that means and also to level set I would say um and so in as a part of a land use analysis what we study is what are the current approved uses for a property um but then not only what are the current approved uses but also what are potential uses that are likely to be approved and so taking a little bit

019of a step back when you talk about real estate and development nothing is haphazard everything is planned and everything is detailed years in advance and in development each jurisdiction has what's called a general plan as well as a zoning ordinance at per municipal code and essentially those documents are really the rule book and the jurisdiction is essentially saying that these are the uses that we want in these particular areas um and so the I always say the general plan and the zoning ordinance are like sisters the general plan is the bigger older sister um the general plan is the long-term blueprint right and so when a city is planning for future development they typically will plan 20 to 30 years in advance and so the general plan will say you know in the next 20

020to 30 years this is what we want to see where then the zoning ordinance has to align with the general plan however the zoning ordinance provides a lot more detail so it'll give specific uses that are allowed within those land use designations as well as development standards such as you know this is the height limit this is the setback these are you know the the look and feel of properties in general and so a part of of what we do is we look at those contextual influences to better understand again what is already approved but then what's likely to be and I say what's likely to be approved because essentially in modern development um cities want to make sure that everything fits and everything aligns right it's highly unlikely that you're going to have a

021single family home next to let's say a 10 foot or 10 story excuse me apartment building that's by Design not by just happenstance that is that's by Design and so it's really important to understand the surrounding area um and so that's a land use portion um the fourth step really is okay well after we assess what are the approved uses and the potentially a potential approved uses um we only want to give you vetted options right we don't want to give you options that say well maybe you can do this but we're not sure so we actually will vet the options and a part of that as Sarah mentioned is we have informal conversations with the local jurisdiction I might always have to give the caveat to say that nothing is ever guaranteed these are

022completely informal conversations um nothing is guaranteed until you actually go through the formal application and perming process but generally speaking we can get a good feel of what is likely to be approved and so we did vet those uses and then the final step is we package them up into a presentation and then we present you with the findings for you to ask questions um with an end goal of making it a future decision not a future okay so then uh moving on this is we're still Level setting right now so we're not getting into the nitty-gritty yet we're still Level setting um but highest and best use is a term that you will see on some of the future slides and so I wanted just to take a second to pause and make sure

023that we all understand what I mean when I say highest and best use so highest and best use uh contrary to its name because when you think of best it kind of can sound like subjective but it's an objective term highest and best use is a actually an appraisal term that is identified by the appraisal Institute and essentially the definition of it means it is a use the most probable use that is going to provide a property owner with the maximum Revenue so that's essentially what it is it highest and best use um rates I would say revenue and it says what what option is going to give us the highest revenue and so there's four tests that are applied when you consider and determine what a highest and best use of a property is

024and so those four are listed here and it's essentially um it's saying what's physically possible on a site and so that's a part of what we talked about in our process slide of you have to understand what's physically possible first um the second question or outline that it that it asks is what's legally permissible and that's what we talked about the approved uses and likely to be approved uses with the zoning and general plan um the third test so to speak that is answered is what it what of those uses what is financially feasible because essentially we want to use that is at least going to um not put the property owner to deficit um and then the final test is of the uses that are physically possible legally permissible and financially feasible which use

025gives us the maximum productivity I.E Returns the highest revenue um and so when you go through that test you essentially are ended with one option and that's what's called the highest and best use and so when we talk about highest and best use I just want to make sure we're all on the same page that it's purely Revenue um it has we also understand in working with school districts and School District property that there are other things that come into play when you're assessing ice and best use right um sometimes it's not all revenue it sometimes it has to do with what are the board goals and objectives right A lot of times we work with school districts where they say revenue is important but it's not the highest and so we really want to

026take into account other factors and so again I wanted to make sure that that you know I hear you and I understand highest and best use is purely just revenue and then other things that it could be Community goals right highest and best use does not take into account Community goals and so we're purely talking about Revenue here all right so I'll pause here um that was sort of just the intro to levels that make sure we understand key terms um any questions about any of the information that was just shared and thank you I have a couple of questions one you said that you would be providing options and not recommendations but this is information that's going to the 711 committee so maybe this is a question for you represented this is going to

027the 7-Eleven committee who is providing recommendation not not up so so they are getting up they're sending a recommendation and I imagine along with that recommendation we would also get the menu of options yeah I can ask Sarah to provide more but yes essentially that is correct uh the 711 committee will gather information just like the way we're gathering information on now and they are tasked uh to create a report uh that will make a recommendation to the Board of Education in terms of the uh possible uses for the um for the sites uh we have we've set the stage with the 7-Eleven to let them know that they are not a decision-making body um they will be recommending and the the decision-making body is the Board of Education I don't know if you want

028to add anything to that Sarah yeah just uh just very briefly so the 7-Eleven doesn't normally within the content of the report provide the board with all of the options they normally kind of explain the process that's happened as a part of their uh their meetings and their review and then they provide a recommendation which can be as broad or as specific as they come to um so they they will have a um usually it's relatively specific and that they won't say like you know here are 12 options of things you can do they'll say you know we've looked at all of the data that's been presented by staff and by consultants and we think for each property this is the use that the board should do and again it's just a recommendation the board

029can decide to you know to take that to modify it to do something completely different it's just um essentially the board has tasked this committee with doing the hard work of looking into all of the data so that you know you have something that you can rely on when you're making your final decision so I would say it's going to be more recommendation and less all of the options they will have looked at all the options but ultimately they're going to send you um a relatively specific like set of recommendations for the sites okay and with your question so will we be able to also look at the options from where they finalize their recommendation that was one of the questions yeah well so I think you'll be presented with some options today certainly the

030same ones at the 7-Eleven will see and then we can we can walk through uh whether it be in written form or in a future board meeting or a different you know form of a study session a kind of a more extensive review of the options but really that's what you'll see tonight is that dcg has looked at you know based on all the factors that you just heard what what are all the options for these properties given given some of the limitations um now there there are some things we'll talk about at the very end of today about things that um you know some internal uses maybe that you may consider for these sites right and so that that may be kind of a bigger conversation with staff to identify what things outside of

031like disposition of the properties may be potential uses for these sites as well does that make sense great um my question is um I know you talked about the zoning so we would know um where the site is located if that site is zoning right for for apartments or a store or you know it's residential so it makes that makes a difference where the property is located at oh you're exactly right so to answer your question yes okay so every single parcel that is anywhere is has a zoning assigned to it it has a land use designation which is defined for your general plan and then it has the little sister which is the zoning that's defined per municipal code and zoning ordinance and so the zoning ordinance essentially says there's a name to it

032so for example let's just call it institutional slash school which some of your properties are Zone institutional slash School it'll say what the purpose of that zone is and then it'll already tell you these are permitted uses that whoever the local jurisdiction is has approved to have on this particular parcel then it'll say what conditionally permitted uses are and both of those terms are in the glossary of terms that I provided for it for you guys and so essentially everything is already thought through far in advance from the governing jurisdiction and that's perfect but also um because we do have our schools our properties I should say and through different cities step does each City have different zonings right do they yeah so we'll go through that so you're already you you're on to my

033next Point perfect okay sorry no no don't be sorry so there are three different jurisdictions so there's six properties and we'll talk about this a little more on further slides But to answer your question yes there's three different jurisdictions that govern your six properties which sort of makes it a little complicated because that's essentially three different sets of rules that you have to abide by um per property and so because of that each jurisdiction has its own rulebook which is its own General plan and Zoning code so we also have them in the unincorporated which is LA County yes exactly so that's so so one of them is city of Glendora um three of the sites are located in city of Azusa and then two of the sites are in unincorporated areas and essentially an

034unincorporated area means that it's not within official City Limits and so anytime you have unincorporated land the governing Authority is the county so you have two of the sites correct that are located within or under the jurisdiction of the County of Los Angeles yeah I was actually surprised to see I didn't realize that one of the properties were unincorporated well yeah so we'll talk about that because technically four of the sites have um an address of Azusa so you would just assume oh they're all four within Azusa now only three of them are within Azusa City Limits the fourth one has the Azusa address but it's outside of official City Limits which is fairly common I know it sounds odd it's like why would they have an Azusa address but they can't give it a

035LA County address I guess so they give it Azusa address but it's outside of official City Limits and so that's just a part of you know when you look up property knowing how to navigate and who the local jurisdiction is so you're absolutely correct thank you yes thank you just a couple other quick questions so as we're looking at at ice and best use and I appreciate how you defined that to clarify that it's a technical and objective firm um would if if part of what we're looking at and and it doesn't take into account board goals Community goals I I know you said we spoke to staff at what point in the process does the board speak into uh what those goals are on the front end where I where a concern that I

036have is as the 7 11 committee is is working and doing some work if they are not informed with uh with with per some of that perspective and what some of those goals are from the board then do we run into a situation where the 7-Eleven committee has gone ahead and done some work that is that is detached from what some of those goals are and so now we're needing to either walk some of that work back so I see I see some potential room for for greater levels of partnership and collaboration on on the front end that that is potentially concerning uh and then the the second piece is you talked about you would bring forward vetted options but you said that there would not be soil or other Environmental Studies that that would

037happen until a bit later so does that mean that um they'd be vetted up to that point or or are you saying that the options that you bring forward at that point you would do some of those Environmental Studies so give you a short answer um essentially they are vetted meaning that they have a likelihood of being approved your first hurdle is really is the the boss the local jurisdiction going to allow it because if they don't allow it then you it's like a hard stop um in development there are um you essentially most the time would need to do some sort of soil study to say you know is the soil conducive to the type of development we want um the reason why we don't recommend doing those type of studies now is one

038they cost a lot of money but then two you really the the type of studies that are needed are based off of the use the anticipated use so because there's no decision on what use that you want there right now um we would essentially be sort of going into it blind um and I will also say that um and this is obviously with the caveat of if the school district is keeping the properties and if you're not you know using another entity on the site then you obviously would do the studies but in some instances if you decide to either lease the property or potentially sell it those are costs that would likely nine times out of ten be borne by the tenant and or the buyer so those because of those reasons I mean

039you can spend the money now but we recommend not to and then I I can answer you're probably best yeah I was just going to speak to your first question sorry um so to your first question I certainly think if they're if there are goals or particular things that come to mind even tonight when you're reviewing this presentation are there things you've already thought of you know feel free to share those here or with staff you know privately in another Forum depending on um you know how you how you feel is appropriate but I think that's kind of our goal tonight is to start to give you as much data as we can about the review that's been done so that you can start to kind of formulate those ideas about things you may use

040these sites for internally or on the other side if ultimately like disposition is really what the board wants um so you know for example things to think about if there are some goals about some use of sites which sites would make most sense to do that as opposed to which sites maybe would we want to maximize value so we could put some money into those uses that you plan to do on some of those sites for example so so to your point um our our goal is for the 7-Eleven to operate along with recommendation from the board and staff so that there isn't that kind of like mismatch in the timeline um we didn't though kind of want to force that on the board a bit too early right like we want you to have

041information to be able to think about what really makes sense on which site does that make sense so that you're you know you're not making decisions at a point too early before you you know you've seen things that will go into that decision I think just one more thing to add to that is that right now the system that we are building is that again we would be doing a parallel kind of process right and so we would be coming to the board on a frequent basis as we're going to the 7-Eleven to to have those kind of opportunities maybe not extensive like study sessions but definitely in in regular board meetings to have agenda items where we can preview what's coming and then have moments to speak into as well my question I'm not

042sure again if I'm speaking to early but go ahead um I would like to know how can the funds be used for the when we sell lease or whatever with these properties or where are we going to use these funds or how can they be used yeah so that's a great question and actually it was asked by our 7-Eleven so it is something that's on the mind of our of our committee members as well um so they're they're uh there are restrictions on the use of funds that come from Sailor lease of surplus property they essentially have to be put back into Capital Improvements right so so facilities improvements that are going to happen on District sites um so a lot of the time like I mentioned before for example there there are times when

043you know the board may be thinking about well if we want to Surplus a couple of these sites and the revenue from those things can go back into other facilities right to build a new um a new and better facility or to upgrade one that you decide to keep um so yes so it is important to highlight that there are restrictions but essentially they go back into facilities improvements thank you all right any other question before we move on we'll have more time for questions as well okay so uh this slide right here jumping back in uh you know now that we sort of like I said we I feel like we've level set it a little bit we've defined some key terms um now we'll jump a bit more into the process and then

044some of our preliminary findings um and so this slide right here really um is meant to be parallel with the process slide that we talked about I think it was two slides prior um and this is uh just some of the the overall obviously we've done a lot more than this but this is some of the overall steps that our team has taken so in terms of of Step One Like I said we did have introductory conversations with staff as well as District legal counsel we completed some general uh property history research as well as just general property exploration um our team did obviously complete um exterior site visits of the properties I'm driving the neighborhoods just to make sure that we have a general understanding of location and then the problem properties themselves for

045the site constraint review as I mentioned we did not do any environmental analysis or any physical studies so we did not study the soil I always have to make sure I emphasize that um however we did receive preliminary title reports and so a title report I believe that's also on the glossary of turns but it's essentially a document that is prepared by a title company that goes back as far as they can with the life of the property and shows the chain of title a title report will also show if there's any easements or any liens on a property and easement is essentially if there is if someone else has permission to use the property in some way so for example a lot of properties have utility easements from like the utility company or even

046really the city so a couple of the properties had a city easements where the city owns them and the U.S School District at some point in time or maybe even a prior owner gave the city permission to put uh utility underneath it or add a sidewalk or whatever have you so um those are a part of understanding if there's any physical constraints on the property that would limit the developable area so we did review the preliminary title report and then we did review what's called a plotted easement map and so when you get the preliminary title report it has all of your easements but they're all in like legal terms not even legal terms but they're um like a it's not it's not plotted on a map it's all words and it says you know

047this north of this and it's like how do you read that so A plotted easement map is essentially where a title company will plot it and it'll show your parcel and it'll say this is where the utility easement is and so we did review um both of those reports for the properties and um some of the most of the properties did have easements but none of them would really severely limit development or even prohibit development and they're just essentially things to be aware of but they could be uh worked around if anything were on the sites um as I mentioned we did complete a land use analysis and so we did preliminary development feasibility um and then preliminary capacity review essentially like what is the capacity of the property itself and then as I mentioned

048we um vetted those the potential use options and so that was vetted via informal conversations with planning with the three different jurisdictions um and then really looking at local land use Trends and so um in summary um and also to your point when we call it a preliminary development analysis it's preliminary because we didn't study any soil but it was based off of what's listed on the site there just the local Landing starts like regulations at General development patterns and then those informal conversations with the city and county staff one thing I'll say which will go into on some of the the future slides is that um the informal conversations with City and County Planning staff are really key uh because once again they are they have the end-all be-all in terms of what uses

049are allowed on the property and so we really take those conversations um seriously uh because we want to make sure that any use that is that we presents or any option that we present aligns with both either the city or the County's goal for the property so again just wanting to note that okay so now we start to sort of get into like the fun stuff so uh this is just a general summary of findings and so in general as I mentioned we studied six sites um in total for land acreage it was just over 58 Acres so 58.51 acres to be exact and as we discussed the properties are located within three jurisdictions and so we sort of talked about it already but just again to make sure we're all clear the jurisdiction is

050essentially who has the governing authority over over your property and so as I mentioned four of the properties have city of Azusa address however only three of them are within city of Azusa City Limits and so I'll talk through on the future slides what three properties are governed by the city of Azusa one of the properties had the city of Glendora address and so it's governed by the city of Glendora and then the final two properties one is in Azusa and one is um excuse it has an Azusa address and the last one has a Covina address but they're both located in unincorporated areas of Azusa and Covina so thus they fall under the County of Los Angeles Dona excuse me um jurisdiction um and so um as we'll also see and you'll learn the

051properties hold a variety of different zoning designations and we talked a little bit about the importance of what that is and why that's important but we'll go through what that means but there was a variety of different zoning designations raining for ranging from classifications reserved for public agencies which makes sense because you are a public agency um two various forms of residential uh what was interesting is that some of the properties are already zoned for residential use even though you as a school district are using them as a school so it's something obviously to take into consideration as we learn or excuse me as we discuss the alternative use options and then one thing which I'll talk about on the next few slides but just wanted to make sure I think it's no uh surprise

052that California is in a housing crisis we have been in a housing crisis and um I'm hoping it won't be too much longer than winter housing crisis but California we need housing and so one thing that we heard loud and clear across the board even though we talked to three different jurisdictions each jurisdiction in terms of the cities and the counties are are all aligned and their goal to increase housing stock and I'll talk through some of the legislation that is really at the Forefront of their minds in terms of what is making this such a priority for them but one thing again that we've heard loud and clear is that the entire county is in real need of housing um and um the jurisdictions are making that a priority with any new development that's

053taking place um and so all right so here's where we'll now talk into some of the findings and so uh when we think of just the General market landscape uh this is focused obviously just on Azusa just because that's where we're located but most of the majority of the properties are located actually in Asus itself um what was interesting that that we found in reading the general plan the current General plan that currently um oversees the uh the properties is was adopted in 2004. so what is that almost 20 years it's about 20 years but again that's standard because General plans look at a 20 to 30 year Horizon so in 2004 when the general plan was approved for the area um the general plan noted that open space for development was sparth um in

0542004 the general plan noted that the entire city of Azusa was pretty much already developed and so that's important to understand because obviously that was 20 years ago and generally speaking it's probably only gotten worse um again the general plan noted that there really wasn't open space and so when you don't have vacant land for development when you don't have vacant land to build the necessary housing that's needed um you're essentially left with what's called infill development this is another term that's included in the glossary sheet that was provided for you but infill development is essentially development that is already on developed land and so that could be essentially a parking lot that is used as a parking lot and they say no we want to develop it for infield development um it could be

055industrial land that once housed an industrial warehouse but they change it to residential development because there's nowhere else to develop and so one thing that was noted again back in 2004 was that the city was really focused on infill development to meet their goals and their development needs essentially because there was no other land that they could focus on if everything's developed you have to focus on what's already developed yeah and so um that was one key term and then we'll talk about a little bit in terms of uh The Orchards and the agriculture that applies to actually two of your sites so I'll save that for when we go to those slides um but again in general development was was very sparse and I say it again the local city as well as the

056jurisdictions are aligned in terms of policy makers and staff and their goal to increase housing stocks okay so now this is getting in drilling down even further to some State legislation um and so the reason why housing is on the Forefront of everyone's mind is for what we call the Regional Housing needs allocation um this is short for arena so rhna is this uh shorthand term for it so if you ever hear anybody say Arena and they're talking about housing chances are they're talking about the Regional Housing needs allocation and so essentially um there's a lot of different layers involved with Arena um but this it is a mandate from the state of California so the California Department of Housing and Community Development which is also known as hcd essentially determines how many housing units

057are needed throughout the state of California and they also determine how affordable those housing units need to be and it's the cycle that they go through every eight years and so every eight years hcd says to every region you need to allow for X number of housing units and this is how affordable those housing units need to be um so then every region then forms an association so in your case it's the Southern California Association of governments also called skag and so if you hear that term that's what they're referring to so the Southern California Association of governments then takes the number that hcd gives them which in your case is just over 1.3 million units um and skag will then attribute a a reasonable share or proportion to each City town and jurisdiction within

058their region and so um we have listed on the slide here um but again so the the current cycle again it's an eight year cycle it happens every eight years the current cycle is from March excuse me October 2021 to October 2029. so we're essentially right at the beginning of the eight year cycle and so back in 2020 hcd determined that one million three hundred forty one thousand eight hundred twenty seven housing units were needed in the Southern California region again between 2021 and 2029 and so proportionately the city of Azusa was allocated 2651 housing units the city of Glendora was allocated 2276 unit and then unincorporated Los Angeles County was allocated 90 052 units and essentially at Rena is an allocation meaning that each jurisdiction is required to abide by and allow for this

059many housing units and obviously a city excuse me a jurisdiction cannot force a private property owner to develop their property the jurisdiction meets state requirements as long as they allow for housing to be built so they can't force you or me or whoever owns property to build housing on it or whatever they say on it but they have to allow for it and that's essentially where they can check off to say to the state yes we have allowed for the amount of units that you're requiring of us so be nice to us because there are certain consequences so the and just to just to provide contacts the reason why we're in this housing crisis is because a lot of jurisdictions were not abiding by the allocations that hcd has been giving and so before there

060were no consequences now htd is saying we can no longer not allow you guys to meet these needs and so if you do not there are some serious consequences that you will have to live with and so because of that um every jurisdiction is focused on housing every jurisdiction in the state of California so not just your area but every jurisdiction in the state of California is updating their housing element the housing element um is updated every eight years to align with the hcd's determination and so I say all that to say just to provide context in terms of this is why housing is at the Forefront of every jurisdiction's mine specifically now it's everywhere in California because of hcd's numbers that have come out and because they are required to abide by them um

061and allocate them so I'll pause here uh for questions in regards to uh Rena and or um just the Azusa Market in general do you have information around how many housing units have been built in Azusa since 2021 so the um so yes and no um in terms of the that's a great question like I can provide more context so in terms of the allocation that's allowed so we specifically talk about Azusa it's 2651 units um that could be a combo a city can meet their allocation numbers from a variety of different ways they um can meet it by projects that are already in the pipeline so they don't have to be built but if they're in the process of being built then um they can count that towards their allocation number they can also

062count just underutilized property um that is not developed at all but they want to develop so and we'll talk about this one of your properties they've actually identified as an opportunity site which an opportunity site is essentially they have to they they say this site can hold 50 units this site can hold 25 units and then this is how we're going to meet our goal and so they can identify the shows and so in terms of the city of Azusa they have they're still at the very beginning process when we met with the city the city said that they are really pushing to get to their numbers so they didn't tell us exactly how many that they have but they said that um pretty much and this was not specific to you to the school

063district but any infield development opportunities that come up they're pushing for housing mm-hmm okay so um these next this slide and the following slide are just a general overview and then this is where following these two slides is where we'll get into the specifics for each of the properties themselves so um generally speaking again we had like I said six properties and this slide as well as the following slide just gives an overview of the Aerials of the property as well as the approximate size and then the current zoning but once again um we can I'm going to go through them specifically in detail uh for site and so we'll start off with Center Middle School these are in alphabetical order based off of the names that we have for them so they're in no

064particular order but just Medical uh so Center Middle School is the first property that we have listed here um and so the property this one is is located again it has an Azusa address but it's one of the properties that are it is in Covina Islands which is an unincorporated area of azus So This falls under the jurisdiction of the County of Los Angeles the property um contains various buildings and are currently used obviously at the middle school and through the site and looking at the surrounding area the property is adjacent to single-family homes within light agricultural zoning we'll talk about that on the next slide like why is it agricultural zoning it's bordered by low density residential so low density is essentially single family homes on all four sides and then as you can

065see there are streets that separate the existing use on the North and the west of the property and then there are existing homes contiguous to the property on the south ending and so um as we talk about zoning um once again it's really important when you're looking at property to First understand what the current zoning is but then to also understand what is in the surrounding general area and so that's sort of why I gave the you know surrounding a single family area because chances are um you know when you're looking at alternative use options more than likely the city you're in this space the county is going to approve a use that aligns with the surrounding area again I gave the examples of um it's barely not common um to see a single story

066you know two-bedroom home next to a 10-story apartment complex it's just not going to be approved I mean chances are I would not want to live next to a twin story apartment building if I was in a one-story a single-family home and so it's really important to look at the surrounding contextual influences and so as I mentioned it's located in unincorporated area of Azusa and so it's under the County of Los Angeles interestingly enough the current zoning is um zoned A1 6000 the A1 stands for Life Agriculture and the 6000 stands for the minimum square foot so it's essentially saying that light agriculture is allowed here with six thousand square feet parcels um and so uh the uh light aquaculture the permitted uses because once again the jurisdiction will give you uses that are permitted

067already and already allowable and then they'll give you conditionally permitted uses so light agricultural allows for uses including Community Gardens utility scale solar energy facilities and various residential uses obviously um you're like this doesn't make sense and why does its own line agriculture um it's essentially old and outdated zoning and so interestingly enough the county is in the process of updating they're going through it what's called an area Plan update and staff has been tasked with updating outdated zoning and this property is included in that so they're currently updating approximately 000 Parcels that are in the area and they're changing the zoning to really align with what the current use is um on one of the prior slides we talked about how or it mentioned just in terms of the character and the overview of

068Azusa how there was a lot of orchards and the Orchards were then turned into single-family development the zoning was never changed away from The Orchards and so the Sid the county is in the process of it's actually a very positive that what they're doing but they're in the process of saying we're just gonna Nix the light agriculture because obviously these aren't agricultural areas and we're going to align it with the current use and so this property as well as the next property which we'll talk about are planned staff has already planned to rezone the property and the update to be our one single family residential um and so that's important because essentially um it's there's no set timeline in terms of when uh the Board of Supervisors will actually approve it we're assuming towards the

069end of the year but they're planning to go to I believe Planning Commission in June and essentially they're going to say we have 25 000 Parcels that just rezoned incorrectly they're outdated zoning and so we want to change it to R1 and they're chaining it to R1 because it's the property is located in a primarily single-family residential area R1 is stands for low density the lowest density for residential use and so with that um the property essentially assuming it's approved by the county which you know I can only speculate that it would be approved but assuming it is approved by the county the property will essentially buy right allow for low density housing and the R1 zoning allows for zero to nine units per acre with 6 000 square foot Lots which is essentially already

070what's in the surrounding area because of the A1 6000. um and so R1 also provides for appropriate location of public and semi-public uses such as schools parks and religious facilities that can serve and complement residential uses so essentially what the county is saying for this property and the surrounding area we want this to be a residential area and um because of that we are zoning it as R1 residential and we are also supportive of uses that will complement residential uses so it doesn't have to be housing however we want uses that complement housing and those could be schools Parks religious facilities things of that nature but they've already essentially deemed the area as a residential area and then finally the land use designation which is what's under the general plan is designated for public and

071semi-public you'll see that on a lot of just general public properties as well as school district property because you guys are a public institution and this zoning designer excuse me land use designation is reserved for Community serving uses um and so we'll on the next slide we'll just highlight some of the key findings that we have for the property okay there we go and so as I mentioned uh the property has a light agricultural zoning and I don't I don't remember if I mentioned this already but the light aquaculture I did um already allows for residential but so they're changing it to officially residential single family R1 um and the when we talked to the county um again they have 90 000 units that they need to allow for within the next eight years or

072between now and 2029 and so they're really pushing for housing as well too and so this the county did note that any residential development should be um obviously consistent with the surrounding adjacent neighborhoods they really want uniformity throughout the area which makes sense um and so one thing to note is that um while they are proposing to change the zoning they are not proposing to change the land use designation which is the public semi-public uh under the general plan and so um essentially that will stay because you all still own the property as a public agency but they did make a footnote saying that if the use were to change away from public or semi-public then they essentially would update the general The Landing siliconation to align with the surrounding use essentially for housing um

073and so with that likely a general plan Amendment would not be required for the property okay so this is the first I'm just going to pause here because I'm not going to pause after every property but this is the first property that we talked about and each of the five following properties will have the similar layout in terms that we'll talk about the surrounding area we'll talk about the zoning and we'll talk about key findings so before I go further any questions in regards to this or just in general um I'm trying to get granular enough where you can wear it it's helpful but not get to granular repair for you can you provide some information about how a ground lease would work if the district were to retain the land but permit development what

074that means in terms of its use and also possible revenue streams yeah so um uh on the initial slide we had some of the alternative alternative use options that will be allowable on the property and so one of them was the as as is um and then another one was obviously residential development because the county is rezoning it for residential development and so as is use um can mean a couple of different things and so as is can mean either the district uses it for some other purposes so if you you know had maybe it wasn't an active school which if you wanted to use it for other District um um uh what's the word I'm trying to say other different uses so to speak then you can um or you could essentially use the

075prop or you can essentially lease or sell the property specifically since you asked for lease you could lease the property to a user who would use the facilities and their as is right so someone who could comment and essentially have to do minimum to no changes to the development structure and use it so that could potentially be a religious facility that could be you know another school whether a private school comes in and uses it or that could be you know another maybe another public agency wants to use the building as is and so um as is for essentially all the properties um as is would be a supportive use on on the site itself and so if you wanted to do a lease you could do either a lease of the actual buildings or

076you can do a ground place the difference is is that a use of the buildings there are um and all of this is up for negotiation right so there's no like right or wrong way to do it but um you you know essentially if you were to lease the buildings themselves you could um more than likely get a higher price per square foot um but then you as the landlord would technically be required sometimes to provide more so for instance you know you can do an as is ground excuse me as is least where you would maintain the facilities and then your tenant provide pays you a price per square foot you can also do a ground lease where you essentially just leasing the dirt and then your tenant could then do whatever they want

077with the building and that could be inclusive of demolishing the building and building something else um or um you know um they are maybe just using the exterior of the facility typically with the ground leaves um that's meant for more longer term development not as is and you're paying a you're receiving a lower price per square foot because you're essentially renting and leasing out dirt versus leasing out the buildings um and then the difference between the two I would say would be a ground leases typically because there's some sort of potential development included um that's more on a longer term basis so we're working with the school district where they had two Surplus School properties that have been vacant for 10 years and uh we released a request for proposals for the property and they

078had a variety of different proposals that came in but they ended up selecting a developer to come in and they did a long-term 65-year ground lease on this site the developer is going to demolish the school buildings and build housing there but the school district they're paying the school district the monthly fee for the actual ground and then the property would revert back to them at the end of the 65-year lease so there's a variety of different ways um to answer the question on Revenue um that's really difficult to answer because it really depends on who your user is and the use that they're um that they're going to be requesting my question is so on any of these properties is it possible to because it has so much acres um salad portion or not

079I would you know like not necessarily someone doesn't want to write like the whole thing in maybe a certain area a certain section of it is that possible oh for sure that's definitely possible so for example with Center Middle School um I believe this is the one of the this is the larger site it's almost 14 acres and so um you could do exactly that if you wanted to and you know there's no decisions made obviously but if say you wanted to maybe lease a portion of it and then sell the other half of it or whatever you know you'd like to do you can do that we working with another school district where they have a 10 Acre Site um the actual school facilities are on four and a half acres and so they

080have at least to another entity for the four and a half acres and then the remaining five and a half acres are vacant land and so they're considering potentially selling that for development so yes to answer your question you you don't have to do not all or nothing thank you you have a question so with respect to the revenue if it's you going to a ground lease or you know uh or you dependently so what are those funds restricted that's the legal question so the answer is generally yes right so if you uh the disposition of surplus property lease or sale when that money comes back it um does have to be put back into facilities so there there isn't um a structure that I'm aware of that you can you can do to get

081around that restriction in the Education Code yeah or um multiple uses on a single parcel so for example if the school district were to keep part of the property and decide to sell a second section would that be a subdivision of the parcel wow in terms of yeah there's a lot of nuances in there so for example I'm just looking at the the slides where it gives a single parcel number to the property so if you are doing two different things with properties would that require subdivision of that single parcel or is there more detail in that partial number so um I can answer the first part of them maybe you can go into the legal part of it so um yes all of the well not really yes or no all of the parcels

082um excuse me all the properties consist of one parcel um and so there are instances however where a property can have multiple different Parcels combined but in terms of your six properties all of them currently are one single parcel um do you want to maybe talk about subdivision map pack yeah so so it depends um if you have the same owner of the parcel but you're using it for two different things you wouldn't necessarily have to subdivide the parcel there there is a long call in California called the subdivision map act that requires that if a parcel is being split there's a procedure now public entities um like a school district they they actually have an easy way out they have an exception to some of those procedures there's in uh it's a simpler way

083that they that we use to split Parcels um so for example I had a site that we assisted a district with they were going to sell to a developer but the city Express some interest in wanting to build a lift station on a portion of that property so we we worked with the city to split off a portion of that property it got sold to the city and then now the remainder of that same site the same personal as being sold to a developer for use for a different purpose so yes if it's the same parcel and you're going to be selling it for example to two different people um or you're going to be even doing at least to two different entities it would make sense to to split the parcel but as a

084school district we actually have a easier way to do that than the normal procedure under the subdivision map app so essentially at close of escrow if you were to sell it then it would be automatically created two different parts so is that does that procedure work around the public hearing with if you don't do the sub the subdivision map act does that work around the public hearing process um well so so yes it's not the same type of a discretionary process that you have in some other situation so usually what happens is we get something called a certificate of compliance or acceptance from the city that gets recorded against the parcels and then eventually a new parcel number is assigned so that for for tax purposes and other reasons those those new Parcels can be

085identified um but it's not the same the same type of discretionary process that we would see normally under the subdivision map Act foreign can you just describe briefly when you talked about the the potential for 65-year ground lease and at the end of that 65 years you know hypothetically District would still be in possession of that part of that of the ground how does that work if there is a develop development on that ground what does that look like in 65 yeah so um great question so if you were to do a 65-year ground lease and you have a tenant that builds the constructs the property on it once their ground lease is over you still own the land and so you now own the buildings that are on it um the thing is though

086so the re so two things they're they essentially are long term because if a developer or anybody is putting a lot of money into construction they want to make sure that they get their the use of the buildings but then also two you know at typically at the end of 65 years if they they probably did some rehab but the buildings aren't in pristine shape um but the they are yours if the lease it I have a question around the site so if a site is no longer used as a public school facility is it then no longer eligible for the property tax exemption um so yes yes the answer is generally unless it's being sold to another entity that has some other type of an exemption um usually what happens is we deal for

087example like in the PSA when we're transitioning the property to a buyer there's discussion about like when when the property taxes are paid and how they're apportioned and then once that new owner takes possession they will start to pay property taxes on the parcel now again if it's you know say another Public School District where they buy the property they would have rights to their exemption right separate from from this District's exemption but they're yes there's a process by which that property then flips over and starts paying property taxes I have another question with respect to the brown lease so uh one it creates a revenue stream for the district right used to be used on Capital Improvement projects is that correct which um means like it's the air conditioners or things like that I

088mean can you just provide an example of some Capital Improvement project yeah so uh usually it's like doing doing like upgrades to buildings so I've seen districts for example that will use the revenue from selling a surplus property to build a new like state of the art science lab or they'll build you know a new football stadium or um you know additional classrooms at a site where they're seeing expansion or they need additional use um if there's some other internal use identified like a conference center or um you know for example maybe you have a site that was built in 1950 and really needs upgrades right there are things you know with regard to technology or additional space that you would want that's money that you could put back into those projects okay and then

089I have another question with respect to um the ground lease so we're not tied into 65 years I mean that was an example you've given right or is it all negotiable 65 years was what they ended on the developer actually won it longer right but they gave they agreed to 65 years okay Val's per negotiation and the only restriction I'm aware of is there's a section of the Education Code that says we can't go any further than 99. okay so so something the board should really take into consideration is the term of the lease and then also because we're we've negotiated with the developers say the scenario presented itself and then we're tied in at market rate whatever the market rate is at that time right so it's not like we're generating or we're getting

090we're reassessing the property how does that work so this is all it's this is all negotiations um I can tell you what's like standard I mean so in terms of just general for leases two things a ground lease or Housing Development is pretty rare um that a lot of developers will not touch it because they essentially can't make their profit off of it and also too one thing to think about and this is probably going into like way too much detail but when you a developer essentially is going to get a loan for their cash and for their construction loan um a lot of lenders are not going to loan them prop money on a property that they don't own it's just too risky for a lender so I say all that to say that

091um it's and maybe I should not have used that example but it's quite rare to do a ground lease for housing specifically you can do ground leases for other things but for housing with a developer the reason why it worked with this other school district was just the developer it had its own um Capital funding source and so they didn't have to go to an outside Source but that's pretty rare um and so um with in terms of your your question itself it's all up for negotiations and so one example is the the lease that I'm that I was referring to for 65 years um it essentially starts out really low um and then there you would negotiate annual escalations or maybe it's five-year escalations or ten year escalation this is there's no like one

092standard rule you can it's all negotiation um and so you would in this case for the other District at 65 years they start really low and then um every year they they escalate up and the reason behind that is like when you're first starting to rent they're literally renting dirt they have no income they have no revenue from the the um housing units so it's like they can only afford to pay so much but the end goal is that essentially over 65 years as we all know housing costs continue to rise and so they will have more Revenue to be able to pay um for for the the land um another thing and was another school district they did it wasn't a ground lease but they did a lease of the actual building so it

093was a surplus School site that they leased to another school um and um this one was interesting because this is all negotiation and we had to fight hard for this negotiation but the district succeeded um in the sense that they built in um it was a 30-year lease of the building and they built in a 10-year Market adjustment um and so that's a way to do it where you know you could mostly just say it's an annual escalation and it just keeps going until but every 10 years or however much you want you could build in and say okay at the 10-year Mark we want to reassess the market it's risky though because if the market goes down which right now in a down economy then if you reassess then you could potentially be lowering

094your income however though there could be payoff because if the market is high and your annual escalations are say two percent but you know in the past five years like we had like serious inflation so then it could go higher so there's a risk on both sides um but all of this is not one size fits all you just have to have a good negotiation team on here and that was one of my questions yeah in the development agreement can you phase in different you know escalations it's all yeah I'll say this um your traditional if you're thinking of traditional developers um they are a lot cleaner they don't want the risk they won't like they're pretty like cut and drive like this is where we're stopping um if you get into some non-traditional users

095that's in the in the case the examples that I'm giving you these were all non-traditional users and so they were a little more flexible um but it's still something to take into account I was just going to note when you're thinking about a lease there's some there's some things on the other side to think about too so I think folks normally think well you know this is the way that we can keep the ownership of the underlying land which is going to increase in value in all likelihood over time right so that's a that's that's a great benefit potentially but on the flip side of that right if you're doing a lease of the facilities for example um like to another school or to a church or another non-profit you know there's there's the cost

096of Maintenance and it all depends on what you negotiate right who's doing upkeep of the security system and the HVAC and you know who has the secretary out front and um you know if a pipe breaks or the or there's a leak in the roof those are all you know potential liabilities for the district um there also has to be someone that can administrate the lease over time right ensure that you're receiving lease payments and that you know there's not a default or someone's not late on making those payments and then there's the additional just like General like liability right you still own the underlying land someone else's you using it right so we have Indemnity Provisions that we work in on the legal side but if something happens there in all likelihood they're going

097to sue the district too right because you own the underlying land and so that's just kind of kind of one of those additional risks that you think about on the flip side when you're still the owner of the property that's really true and then the last thing I'll say and this is like truly far in advance because we're not there yet you have a lot of steps you have to go through to even get there but a part of what our team does is if there are proposals that you're considering we can analyze those and essentially complete like a financial analysis to say what is the present value of the cash now if you were to sell right and if you were to sell the property this is how much you would get for it

098and what's the present value of those dollars compared to receiving small you know obviously it's going to be smaller amounts right so you receive if you sell it's one upfront lump some cash payment versus if you lease um you know it probably over this the span of the the lease will be a lot of money but you're getting it in smaller increments and so that's a part of the like how do you weigh your options and sometimes school districts say well we have an immediate need for the for the funds and so we really want to do this or sometimes other school districts say you know what we really just want we don't want to you know we would rather keep it and we're fine with getting it so it's just a part of um

099you know analyzing what options are on the table and then I'm probably getting ahead of myself but I know when you increase the density within a zoning area you usually have an environmental impact report and in this case we're going to see that with all the site at what point and I mean I know they they're pretty costly so at what point do we um is that something we still can negotiate with the developers that's something the school district's gonna take on yeah so that's going to depend sorry I'll start feel free to fill in um so that's going to depend on what you ultimately decide to use the property for but in California we have sequa which is what we look for normally when identifying that's kind of one of the laws under which

100review has to happen from an environmental perspective anything considered a project under sequa has to be reviewed right so there's some some level of environmental review under the law that has to happen now a project can be something as simple as disposing of the property so for example if you decide that there's a property that you want to sell we're going to address SQL within the display position documents there there are all kinds of exceptions for example if just the name of the entity that owns the property is changing but no physical change happens then you then the district doesn't have the obligation to do the expensive environmental review at that time but say for example it gets sold to a developer and they're going to build you know 60 units on the site or

101whatever it is they they will have a SQL obligation um in all likelihood that they will have to do the most extensive type of secret review depending you know because of the magnitude of the project um but you're right that every change in use or thing that's considered a a project that's the like technical term under sequel has an obligation for for that changed user to do that review um so we'll see that and and the the level and the expense of the review just just kind of depends on um what the project and the new use is yeah and then the only thing I'll add to that is 9.9 times out of 10 that um the time and the expense is borne by the buyer so um unless you as a school district were

102processing your own entitlements and unless you were um changing the use for your own potential internal use um then there's I've never seen a school district like we would you would have the developer whoever the buyer is pay for that manage it and take on that risk that's not a risk that we would recommend you to bear um that's something for example when you asked earlier about like why didn't we do like soil studies or environmental review it's it's because you know the like a developer for example that's what they're going to do during their diligence period they're going to do the review of the site to identify are all these conditions environmentally what we need to be able to do our project and you're talking you know 30 50 60 70 000 sometimes worth

103overview that it just doesn't make sense for us to recommend the district to up front when when the buyer is the one that's really going to take on the risk of ensuring that that site is feasible for what they need thank you let's um let's see if we can move on to hear the presentation for the remainder of the site and um maybe think about some of our saving our questions until the end of the formal presentation okay so the next site is Ellington Elementary uh this site is going to be uh really similar to Center Middle School so we'll go through this one fairly quickly um Ellington Elementary similar to Center this is located in unincorporated um Los Angeles County so it's under the jurisdiction of the county um it's in an unincorporated area

104of Covina known as East Irwindale um so this parcel is 8.55 acres in size um and it is located south of the highly concentrated retail on Azusa Avenue the property is adjacent to a mix of single-family homes as well as University District zoning featuring some moderate density to mixed use and essentially a mixed use uh property is a as a mix it has residential as well as commercial together combined so that's what's called um it's bordered by low density on all four sites they're single family homes on all four sides and this their streets that are separating the site from all existing uses and so again very similar to sense to Center I won't spend too much time on this um it has the exact same zoning of a16000 similar to Center this site is

105proposed to be rezoned by the county to R1 single family residential and it has the exact same Landing designation as a Center Middle School of Public and semi-public and then here um the key findings are exactly the same because again the properties are both within the county jerks jurisdiction they have the same exact zoning and they're both uh planned to be rezoned um likely by the end of the year so that's Ellington Elementary School so moving on to our third site this is the former Sierra High School this is sort of the outlier here because this site is located in Glendora so this is the only site that is under the jurisdiction of city of Glendora so the first two again were LA County now we're moving on to our second jurisdiction of Glendora and

106so this is once again it's one parcel and it's 9.07 acres in size the property is located in a primarily low to medium density area which is a little different than the prior two sites those were primarily in low density so this has some medium density which medium density would be some multi-family use versus just a single family use um and so there's multi-family residential to the south at low density residentialists to the East and then north of the property and it's bordered to the West actually by unincorporated County Land which was uh important to note so Dalton Park is right across the street and that's owned by L.A County I'm immediately to the west and so uh the Zoning for the property um this property is already zoned for single-family residential so it's really

107the third site that the jurisdiction has already said we want housing here um and so the property is currently zoned for our one single family and it has a land use designation of Civic institutional it's very similar to the public semi-public that was designated in LA county but essentially the name is just different because it's a different rule book that we're abiding by this time from Glendora and so um I did mention at the beginning that um this site is listed as an opportunity site um and essentially they have it listed as site 49 to be specific within their housing element and as I mentioned when the cities and uh jurisdictions get their Arena allocations they are required to identify and count up the properties of this is how we're going to meet our numbers

108and so they have identified your school property as an opportunity site in their housing element and in the housing element it identifies that the property could support 43 to 54 dwelling units and so they are considering obviously single family because it's already zoned for a single family and so we did have again informal conversations with the city and once again the city had said oh yes we knew the school district was looking at alternative use options and we really want to see housing here um obviously that's indicated by the fact that they have it in their housing element already um and so the site is zoned for a single family but the city mentioned that they could be open to a potential denser option but obviously nothing is guaranteed because it's already approved for single

109family um and so one thing to note um this is a little different than the other I'm the center in Ellington is that um even though the zoning allows for a residential um the land use designation which is a general plan is Civic institutional so any change in use away from a Civic institutional use will require a general plan Amendment which is a longer detailed process but that would be borne by whoever the end user is more than likely um I mentioned it's in the housing element and then the city did or yes the city did note that any residential development should be consistent with the surrounding area which is no surprise there okay so now these next three sites are the final three slides sites are located officially within the city of Azusa City

110Limits and so the next three will be again under Azusa City jurisdiction and so the first site is Mountain View Elementary this property is once again it's one parcel it's 8.45 acres in size the site has immediate access it's right as you can see in the photo right off of Interstate 210 it's surrounded by single family residential to the Northeast and South uh what was interesting here is you can kind of see it in the photo but to the left um on the property um it is bordered with light industrial usage and so there's different uses such as Iron Works welding um and um you know uses such as like a highway improvements contractor is located there so the city has designated the area to the left as light Industrial um one thing again as

111we already talked about is that when you're looking at potential uses it's important to see what's in the surrounding area so when we saw this site the first thing that came to mind is oh potentially could industrial be a use that the city would approve there um we heard loud and clear that the residential is the highest need for this area and the site and so the city would like to see some form of residential on the site here and so um in terms of the Zoning for the property uh the zoning is this is the same zoning that's going to be for the next two sites as well everything in Azusa is going to align with this zoning but it's zoned ins which is for institutional slash school which again makes sense because it's

112a current institutional slash School use um and so the ins zone is applied to sites within the city obviously that are reserved for public facilities such as private schools meeting facilities libraries government offices things of that nature and we have some of the permitted uses that are listed here what's interesting to note is that um in most zoning districts you have a permitted use that's already approved to be allowed for and you don't have to go through the formal you always have to apply for permits but you don't have to go through like the long in-depth process but because of the very specific ins and institutional School use um any permitted use does require a zoning clearance to make sure that you are in fact using it for under the ins allowable Zone and so

113the permitted uses include parks and playgrounds office and utility facilities very similar still even though it has a different name it's very similar to the uses that were allowed in the other sites again they have a different name because it's a different jurisdiction but it's essentially with the same end goal and then the landing designation is institution school as well too for this property again because you as the school district are the owners and then the key findings here um are that um as we mentioned it's the institutional School use so if the use were to change away from an Institutional use then it would require a zone change as well as a general plan Amendment um and as I mentioned the properties adjacent to both residential and light industrial however what we heard is

114that residential is the greatest need for the area and once again any form of development should be consistent with the surrounding area next up is Powell Elementary School as I mentioned these two sites we can Breeze through fairly quickly because they're essentially the exact same zoning and the exact same designation so for uh Powell Elementary School um the property is comprised of once again one parcel 9.14 acres in size the property resides on the very far eastern border of the city of Azusa but it still is within a city as zoning the site is bounded to the east and south by unincorporated Land once again because it's on the very far border of Azusa City Limits and it's located in a primarily low density residential area and has single-family homes to the east west and

115south the property on the North however as you can see it has larger buildings up there but to the north there are multi-family two-story Garden Apartments and so again that provides a general idea in terms of what likely uses would be approved there and so um once again it has the same ins institutional zoning we went through uh what is allowed there um and what um uh the the use designations allow for and then finally the findings are going to be uh very similar because it's again we're dealing with the same city we're dealing with the same zoning and we're dealing with the same land use designation um and so similar to Mountain View any change would require a zone change as well as a general plan Amendment as well as um any change in

116use should be um you know consistent with the surrounding area which we discussed with single family as well as multi-family and then the last sites last but not least the Slauson Middle School so once again this property as I mentioned is located within the city of Azusa so it falls under Azusa um uh jurisdiction um and so this property is 9.43 acres in size and it is um a mix of low density and medium density homes and so you can see it's a mix of different density uses but it's still located in a primarily residential area one interesting thing to note is that the site is one block from the commercial Corridor of San Gabriel Valley Gabriel Valley um excuse me Avenue commercial Corridor however it's still primarily in terms of the Amelia adjacent uses

117in a residential area um and then for the zoning as I mentioned it's the same as before we're dealing with institutional School zoning institutional School land use designation and then finally the key findings for this site um once again are the same as before um and also what's interesting to to note here is that the property is located right across the street from Memorial Park uh which is owned by the city and so the last and final slide here um is just some of the the key findings and just a summary of sort of everything that we've discussed and so um on each of the slides it did identify what the potential alternative use options were and then it also identified what the highest and best uses and once again the highest and best use

118is solely a matter of what is the probable use that's going to provide the maximum Revenue to a property owner and So based off of everything that we discussed in terms of the land use designations meaning the zoning and general plan in terms of what would be allowed there based off of the market conditions which is inclusive of the Arena allocations as well as every jurisdictions uh dire need for increased housing stock as well as um the informal conversations with the city and county planning we have determined that the highest and best use for each site from a pure Revenue standpoint is the development of resident mental housing and that is because and you can see here so the proposed Zoning for Center and Ellington is aligned with the highest and best use this the

119city or city the county in those instances is already changing the use to housing there um as we discussed the former Sierra High School the current zoning already aligns with the highest and best use the current zoning is for housing and then the current Zoning for Mountain View pollen Slawson as we mentioned is for institutional school so obviously it does not allow align with the highest and best use in a general plan Amendment would be needed um and so one thing to keep in mind um is as we said um in terms of the alternative use options each of the properties can still be used in their as is condition and when we say that it's even though jurisdictions and the state are pushing for housing as I mentioned they cannot force any sort of

120development on a on a property owner and so when we say that you as a property owner then essentially are limited to what's called buy right development and buy right development is uh development that fits within the current zoning and the current land use designation um and so with that the buy right development essentially for three of the properties is housing and the buy right development for the other three how the other three properties is some form of institutional School use and so you're limited by that if you um wanted to stick within the buy right development and so because of that each of the properties could be used as I mentioned in there and as is condition for example to be repurposed for district priorities or District uses in that and that bullet uh

121when we had our first Surplus uh property committee meeting um at the end of the of the meeting uh question was asked to the committee um is there any thing that you would like us to bring uh to the next uh meeting and so they did ask uh they did ask us does the district have any interest in the properties um and so they wanted to hear what is our stance like dude are we looking to use um those properties so right now something to consider um that would be a benefit possible benefit to the district um and again not to say this one or this one or this one but here's a couple things that we do know Sierra High School um is not big enough for Sierra High School um and so one

122possible use for a property would be to provide Sierra High School with its proper School um Sierra High School as you all know is smaller in scale and so it could be Sierra High School and possibly something else another thing that we know is that we were granted one of the largest uh community school grants in the state of California and so another possibility as we think about the sites and what the what the district might be interested in um is some kind of community Center professional development center that we can couple with another thing that we do also know is that we are constantly um challenged to find um spaces for meetings and trainings um because we have very very few and so as we think about the needs of the district in terms

123of conferencing professional development model classrooms you know those kinds of work things and the fact that we're about to embark on this journey of Community Schools maybe a site for Community this is very loose like a community and Conference Center uh where we might have um some district-wide uh benefits to the community as we're thinking about Community Schools and and services for for our community so those are just initial things um again eventually we're going to get here but just to plant the seed uh for the board to consider that we might have some immediate uses uh for uh for some of these properties and those are two possible real real possibilities that would benefit the district and the students and the parents in the community learning that have you thought about the um adult

124transitional they have a very small portion right behind um Magnolia Magnolia yeah and you know they have a little space there where they play or you know hang out it would be nice if they had a bigger area to play in and more space so that can be divided with something else yeah and these are again yeah just super preliminary conversations but I know one of the things that we have heard along the way speaking specifically about the mhcp the Magnolia adult transition program um just a a question should they be with other adults and so again not this is super preliminary but if Sierra High School were to get its own proper school well guess what we have there we have the adult school and so is that a is that a a match

125right would that be a match that adults should be with adults um so again super preliminary but yes to your point I think that that is definitely something to to consider and they also they also do not have any parking they don't have any um handicap parking at all it's they're on the residential yes I mean I said they had a parking lot just a couple questions in response to your your comments when you say just so that there's Clarity when you say Sierra High School there are potentially two properties that we're referring to when we say Sierra High School but you're you're speaking of the property on Gladstone Street no so I'm what I'm what I'm saying is that Sierra High School that's on the old Gladstone Street property Elementary I know I'm Gladstone

126Street so the current the current the current uh Sierra High School where it's located that property and where they are located and the way that it's divided up does not house Sierra High School properly and so we have six properties that were looking at would it be a benefit for one of those properties to give Sierra High School its own proper school maybe going back to Barranca and I'm you know again but but that's kind of what we're we're talking about so because in response to that I this is this is probably and I may be saying this to myself more than I'm saying this to you um because of the the seat that you did not hold um at the time when when we made that move but that I want to challenge us

127as a district to to be more thoughtful into the future because if we just a couple years ago moved Sierra High School to this campus and added parking lots and did all kind of other construction pieces in order to make that feasible for for Sierra High School to now have a conversation where we're saying that the property that Sierra High School is on is not feasible for where where Sarah High School is is that that makes that does not that makes no sense to me um and so again that's less to you and more to me because I was sitting at this seat when those decisions were made and so even more of a reason why as we're looking at these things um why I I just want us to ensure that we're really thinking

128these things through because that just causes us to incur unnecessary expenses when we're we're moving things multiple times and just want a clarification just so that we we're all on the same page as a as a reminder where Sierra High School is at is also the adult education center right so it's it's it's basically two entities on the same property so the adult education center not Sierra High School got a new parking lot um the what would be that the East Side the east side of the property where Sierra High School is housed that portion of Sierra High School um definitely is not the most ideal to house the way that you know they should run and so I just want to just want a clarification on that there are things that the staff there

129and the teachers there um have to do in terms of their rooms and their sharing in the locations where they're at that if they were on a campus that afforded those things it would be definitely more ideal I I kind of understand where you're coming from um Adrian but I but I also understand that um because the the traffic even with Gladstone Elementary that was there was horrid teachers didn't you know didn't know where to park parents and so forth so the added parking lot was actually a benefit I I feel and especially because of the adult school and kind of in conversation here we're talking about you know moving Magnolia the adult transition like for them to be with other adults which makes sense for the parking lot to be there as you were

130speaking about Sierra High School with this proper school I was thinking of um the options right of the sites that we have just in consideration to be able to um to give the students a PE building and so forth right something that they normally right now don't have they have to change in the bathroom you know they don't have lockers so it's it's so I see that potential another advantage that um you said that we have as well with um the properties that we have spoken about today is a you know through the committee School Grant and so right away I you know when you said I thought Community Resources right Community Center conferencing and I mean I can't share what location I'm thinking about but I'm thinking um ahead again because asouza uh city

131is actually on a really good resource rampager and they're developing all these resources and so forth and maybe possibly partnering with the city in that aspect on how we we both can provide right the resources to our um or Community this is our community their you know our parents is is their Community as well and so being able to partner up in in that way with um the community school grants is uh again I'm we're not looking at sites we're not naming any sites but being in partnership with the city on on that yeah I think I think that to a board member Greer's a point um one can easily jump to conclusions and say well Sierra High School is only 200 and so it makes the most sense to go to the smallest site

132if that's what the board decided right but there's so much more that goes into that decision uh you heard a lot today in terms of zoning and plans and all that but then on top of that is the condition of the six properties right and so we've been asking a lot tonight about how can These funds be used and so that's another I think as we think about this in a more comprehensive Global manner these are things that need to come into play as well because although it seems at this site and again I don't know we're going to discover this as we as we go through but these are things I think that we need to consider as if we do land and then and the board probably has more ideas but let's just

133use these as as examples I think those are other things that we need to look at as well because not these six properties are not equal in terms of their current condition um what we have invested in in those properties recently versus not you know for a very long time right those are all things I think that we need to consider as we're making these decisions um to look at it in a more comprehensive manner to say okay because of x y z although it seems as if this but because of all of this it makes more sense you know this you know um the other day I had to go to to Pomona to go to this office and it takes me to this place which is the mall and then what is it

134Pomona Unified School District I'm like they purchased a mall have you seen that yeah and in there they have Community Services they always sewn all walking around trying to find where I was going room 106 what have you what is my walking I'm going through the um like a wellness center and then there was like the wet program right mental health office and it was like really really neat I guess they even the show was still there but they had like doors there I guess that they must spend a lot of money on that but it was very very nice and uh the lady said it was so easy for people to find where to go they all went to this mall and all their resources and hope I mean they'd be great if we

135could partner with with the the city and and make it happen because it was and there was all kinds of people in there you know children adults and just I don't know I I found it really interesting I was like wow how did that happen but I guess you're familiar with that but that was that different hospital that was very nice I just want to say that um just having a social services background I think that you know a partnership with the city would be ideal I think that we should explore all those Avenues um because this is going to be a one-time opportunity for us to really deliver to the community and the students and I think that we really need to look at this you know with with the microscope and really um

136you know come together be have an open mind and um I just think it's a really great opportunity for kids our future students and um a partnership would be great because we could look at state-of-the-art community centers you know that are already moving in that direction but we definitely um what board member Greer said we should think about the future uh Mr Ortega I have a couple of questions our uh is the district in process to conduct an equity audit with specific focus on programming and Facilities I'm not currently no is that something that we can discuss at a future meeting of course and then um my comment around um vision and priorities is I'm wondering what um we've heard the jurisdictions priorities around housing we heard that loud and clear and have had a

137lot of information around housing I'm also interested um to know what the jurisdictions and primarily Azusa city of Azusa what its priorities are around Green Space and Recreation and youth programming and I know a couple of us have talked about youth programming and maybe non-profit partnership as a way to provide a comprehensive Assets in the community so I'm interested to hear more um visioning and plans from the city and the other jurisdictions around those items and um going back to slide 10 one of the beginning slides talked about um the Housing and Community Development Department or Housing and Community Development Department the affordability levels of the housing units um how is that determined and how is that how are would any of those affordability requirements be imposed on any of the jurisdiction yeah so uh

138hcd and the uh will go through a um I think it's probably one slide for that so hcd yeah it's a long process that they go through but they basically study just demographics they do population surveys um and they at a state level determine how affordable the units need to be and so essentially I don't have the specifics for each jurisdiction in front of me but I do have for example um Los Angeles County um and so for LA County the total uh was is 812 000 units that are that are required and again the 1.3 is for the region 812 000 and then they break it out in terms of 217 000 are very low income 123 000 need to be low income 131 000 need to be moderate income and then 340 000

139need to be above moderate and so they break it out based off of What's called the area median income and then essentially there is within the area median income every county has their area median income which is essentially it's called Ami and and it and a nutshell in summary it essentially says how much really do you need to make for a family of four to be comfortable to live here um and so of course every county has a different number and then the above moderate moderate low income are all a certain percentage of whatever the Ami is and so they based off of all their demographic studies they will determine how many units and then how affordable they have to be and so Within These numbers again I don't have it specifically um but I

140can definitely give that to the superintendent and then he can share that with the board um in terms of what the affordability levels are thank you can can you clarify on on the three properties that that were listed under azusa's jurisdiction there was another terminal that said alternative housing in addition to as is and residential development can you can you speak to what that means yeah so alternative housing is essentially anything that's not your standard market rate housing so alternative housing could be some form of senior housing it could um even be Workforce or employee housing if the school district wanted to build housing for your teachers on it it's essentially anything that is not um uh market rate housing and the reason why those in particular did have the option for alternative housing is

141based off of the density allowances and so um for the the other properties single family as remember they were zoned R1 or will be changed to R1 which is low density single family um for um you know senior housing for example you're typically going going to want either a medium but more than likely a high density and in terms of like condos or apartments and so it's feasible with a higher density and so the the site those sites were identified with alternative housing options because of the allowable density okay and then another question I have is that what as we're discussing some of these different potential options because I I have a question here and I wonder at at what point are we entering into closed session conversation when we're you know discussing prices and

142potential values of land and what when when are we venturing into things yeah so the uh the exception for being able to discuss like real estate negotiations in closed session is relatively small right it says specifically it has to be uh discussion with your negotiator about the price in terms of payment so certainly if we start to get into like for example you know we haven't presented values tonight right like estimated you know ranges of the value or potential value of the site for that reason right we want to be sure to protect any of that you know private or confidential information so that in some future negotiation we're not disadvantaging the district um but yeah I mean essentially if we're talking about price in terms of payment those are discussions we can have in

143closed session the the question that I have is if we look at the property the old Sierra High School property as as one example so as I understand that you had it laid out it said something along the lines of uh it would it would be already potentially designated for low low density residential but there's the potential for it to be medium density residential if if something is low density or medium density does that affect the the value of the land theoretically yes so how does that can you help me understand how that works if the entity that we are potentially negotiating with has the ability to change the the zoning which changes the value right but then we sell it at a lower value and then it's changed to a higher value land and

144help me understand yeah yeah so so I'll start by saying um one of the benefits that uh that Lauren mentioned on some of these sites is that some of them don't don't have to have all of the entitlements changed the way that some of the other sites would right so rezone or the general plan Amendment um that's the that's a process that you know for example just use a developer right they um that's that's a discretionary process they have to go through with the city that takes time and costs them lots of money um if the site doesn't have to go through one or both of those processes it's worth more to them now potentially and the district could also potentially sell it faster now the the flip side of that is even sites that

145have to go through that entitlement process sometimes developers can anticipate that value and they're willing to to take on that risk and so we just build in a very long escrow period where one of the conditions of them closing on the property is that they receive those entitlements that they need to be able to build what they plan for the site so um having it already with the the proper zoning and like land use designation does add value assuming that the anticipated project from that developer is consistent with those designations now um say for example they it's it's zoned for single family but they have some plan for some more uh for for some development or some some product that is higher density now um because that's not consistent with the current designation they would

146they would still have to have that entitlement and it's unclear you know it's going to depend on the site and the city it's unclear if they could get approval of the higher density but um in general the higher density the more units they can build potentially the more valuable the site but Sarah that that's that that falls mostly on the shoulders of the potential buyer right that they're knocking on the door of the entity to say we would like to rezone this would you consider higher density but that's that's something that they engage with with with the city yeah and I what I heard your question is we want to make sure there's no bait and switch right we don't want you to to sell us or we don't want to sell it to you

147thinking you're going to build single-family homes and then you close and then you build multi-family and now you make more money so um two things I'll say this is why I guess commend you guys for going through this process is because um it's really important for you as a district as a seller to know everything that a developer knows and a part of the process that we just went through we know everything a developer is going to know and so because of that we know that the city potentially is open to a higher density and so we build that into the negotiations right and so the way that we we're working with the school district right now where um the property is zoned for low density but we talked we did the research we talked

148to the city and the city said we want medium density because we're in a housing crisis this is up north so like everybody's doing it and so they want more density than they've currently already planned for and so because of that then when we negotiate with potential developers we will let them know we already know there's a potentially higher density and so therefore we want you to give us a price but then we want you to break it down off of per unit and so the final price is going to change based off of the final number of units that are approved for you so that then protects you that you know if it protects you from basically them doing a bait and switched up we're only going to do 60 and then they get

14980 and you're like whoa where where's the money so you would know upon closing what that final is because they would have to get approval and permits from the city and that's public so you we could call the city and what would go to city council and the city council would say we're approving X number of units and so you would then that's your balance and check I think the other thing too is this concept of the highest and best value right so like when we get an appraisal and the appraiser is is you know trying to identify the value of the site they're not looking at you know what what one buyer or seller or what one buyer is going to do they're looking at based on all these factors what the value of

150the property is so on the flip side right if they buy it and they build a community center and they don't end up generating all of that all of that value it doesn't mean that they're entitled to buy the site for Less right it's there's that Baseline of like what is the what is the uh like maximally productive use and that's where we negotiate right if the person that was buying it was going to do the do the most profitable thing with it that's that's the value so that if I hear if I hear everything correctly um we as as the seller we as a district we would be directly dealing with the the buyer with a potential developer that we would not be again using Sarah high school as as the example we would

151not be handing off property to the city and then this the the city or the ones that then deals with the the bike so it's directly from us to the to the bar so that buyer as you're saying if they were saying they were going for medium density housing in there they would be looking to get those City permits and and if and if they get to know then then we we have that information and we know before we go through the process of the of the final sale well so so it depends on how you structure the transaction but usually a developer is only going to take on so much of that risk right they are only going to be able to get the profit from their their development and the purchase of the

152property if they know or have some level of certainty that they're going to get the entitlements that they need so what I have seen before and Lauren can add additional to this based on other transactions but what I've seen is there is a relatively common structure with developers where if there's a substantial amount of entitlement that needs to happen on the site we'll sign a PSA with a developer we agree to a certain price that price you know can be variable based on the on the number of units entitled but you have a super long escrow period right where they they're going through the entitlements process and only once they get their entitlements are they obligated to buy the property and close escrow so they they build the value of those entitlements into their proposed

153price that they agree to at the beginning but they they're only they only have to buy the site once they once that risk is gone right like once they have the approval for the project that they anticipate right that's an option you don't have to sell it subject to entitlement I if I were recommending anything I would probably never recommend you should not sell subject entitlements because you're potentially leaving a lot of money on the table you could sell as is and say the as is value is I'm using random numbers here 2 million but subject to entitlements is 5 million and if you don't want to wait the it's approximately 18 to 24 months of the entitlement process and so if you don't want to wait that 18 to 24 months you could essentially

154sell it now and say we're going to sell it to you as is give us 2 million and do whatever you want with it but that we would rarely advise for that and that's because that process builds in so much value also there are normally deposits of a substantial size that are being paid in by the developer throughout that time right so there's money coming in throughout the period of the entitlement or of escrow right before close of escrow that is kind of like keeping them honest right they know they're going to be out some amount some substantial in the game yeah like hundreds of thousands of dollars to tie up your property there are some that do but we would never recommend you type your property for nothing you got to pay for pay

155for it I have a question um with respect to uh disposition of the property so we sell a developers interested in two sites right we could maybe negotiate with the developer that on one of the sites they build the community center as part of the development agreement is that I mean I've seen that structure at another city but they built a senior community center so but they and they had housing so it helped fulfill some of the Arena recommendations and then it helped fulfill some of the you know priorities of the of the city at that point in our case it would be that this I mean I guess I'll start and I think this is probably more of a Lauren question but I I think it's all going to depend on on the appetite

156of a developer for something like that so for example I've seen developers you know that will buy a property even the like local jurisdictions that you were asking about the affordable housing requirements so even you know cities for example will have a certain uh like quota or like requirement for a certain number a certain number of affordable housing units but they often give an an out option right where the developer can pay a certain amount of money into an alternative account instead of doing the affordable housing and then the few deals I've seen recently the those developers have exercised that out right so it's just finding the right developer that's willing to do a community benefit or or seize the profit in doing that because that's that's really ultimately what they're what they're usually looking

157for yeah um I've seen that's an option of what you said and the way that it would essentially work is that um the developer would instead of giving you cash they would return to you unit or a building right and so you they they wouldn't necessarily do it for free they would do it so if if they were to say um uh you know they would they would you would sell them let's just say two sites or even one site and you split it in half right uh they would say okay well one of the sites is worth I'm gonna use the same numbers two million dollars so then we will deliver two million dollars worth of construction on another property so it's essentially just it's another form of tender versus cash it's construction um

158when you talk about housing I would say that obviously like this is super caveat of like you have to go through all like the illegal things like you got to make sure you do it the right way but um typically if you're talking about development a developer has like certain economies of scales that you know we or the school district might not have and so that could be a potential option um but to Sarah's want you've got to find a developer who's willing to do it you got to find a developer who's comfortable doing it but again they would essentially turn over a building versus turning over cash that's all the same to them when you guys uh speak about the developers what's the process of finding these developers would it be the district that

159finds the developers or would it be yeah I can you want to go through it um yeah so I'll start from what I've seen before so it um there are a number of different processes um from the legal side of things we so there's this underlying obligation in the Education Code that once the property is is uh is declared Surplus there's a there's a procedure in The Code by which like how properties have to be sold and that usually says that we uh we submit a public notice and then anyone that wants to buy us to come to a public meeting like this and they essentially make bids um however that doesn't normally result in the most like profitability or the best options for the district so we submit a waiver right to the State

160Board of Education and they allow us to have more flexibility in doing a different process um normally when we draft that waiver and we ask for it for for that flexibility in the process it'll be some form of like a request for proposals for example where we'll you know put out information to the community um I would reach out to developers I work with I'm sure Lauren's team has a number of developers that they're familiar with that would have interest test they would be looking at all that information and then submitting like letters of intent or initial proposals where they say you know here's what we're willing to pay for the site and here are the terms of that so really it's it's there's no steadfast one way that we have to do it but

161if we have the waiver from CDE then it's just a matter of kind of soliciting that interest and seeing what developers have interest in the site and then we also um you know use the benefit of the market to have them give us the best price right if they know there's six other developers interested in the site they're going to put their best foot forward with their offer and in that same um note would we be using the same developer for all six bytes or will we be using because they're at different cities different locations and different zoning I I wouldn't I would say we don't normally want to have the same developer at all Sites we would see you know what what interest there is for what product at what site you also don't

162want um there are cases where it makes sense just from a strategic perspective to have a developer really focused on this project not have other out or other options right um and so there for that reason I would say it probably would be best to look at you know like multiple Developers for different sites yeah I would say best practice when you have multiple sites is you would release them each separately individually for to Market so to speak so you would have a separate request for proposal for each property um I would never I would not suggest having one or you know so so essentially if a developer was interested if you were to release say three sites they would need to submit three separate proposals and then you as a board would make a

163decision uh based off of The Proposal that best aligns with that particular site and so it could be where there's one developer but it more than likely could not be where there's different developers or not even developers different users because when we put it out to Market it's not just for development people can come and like you know we're working with another school district where it's not public yet but um they released the site and there was a variety of different uses there was some development there were some as is uses there were some other schools that said we want to lease the property there was some um you know other entities that were going to still use the building but then do some form of alternative housing on the site so you're really um

164leaving the door open for any use to come in and then you're assessing it based off of the in on the individual merits of the proposer as well as the site itself and then the only other thing I should mention from a legal perspective is that there's again there's a procedure in the education code for what this process looks like so before the waiver and before the process of soliciting offers from four four profit developers there is this um there's there's this obligation to make offers to uh to public entities and to non-profits and they actually have a priority offer so if they come forward within the timeline that we designate for those offers they have a priority and the district has an obligation to negotiate in good faith with them now there's no obligation

165to necessarily sell them any of those Parcels we just have to negotiate in good faith if they come forward and they do again have a priority so just know that if any one property is designated as Surplus and the board decides to move it forward with the sale that process has to happen before we solicit offers from developers one thing to also keep in mind too to add spare market value you're not required to sell it below market rate basically so um this question is probably for what president will in Montana Ortega I would like to see the um update on the process on that Surplus properties as as progress you know I'm not sure it seems like this is going to take a long time but even if it's on our um a weekly

166board packet I mean if it needs to be right and um also the 7-Eleven committee's discussions how often are they going to meet all right so right now the way we have envisioned this process um is that they would meet roughly uh a monthly and what we had talked about and discussed again to to bring the board along to the same process is that we would meet as a board to update where we are what we've done what they what we discussed obviously um have some opportunity for any input if that's and then we would have the Surplus committee meeting and then the next month the same thing board meeting Surplus board meeting Surplus again maybe not to this extent depending on the content um but that at every board meeting we would be running

167parallel with the Surplus property committee so you would be in tuned every step of the way great yes because I didn't I was disenvisioning one of the pastors other committees we have waited till they gave us the report at the end and by then you know I don't want them to waste their time and also our time because we're the decision makers right and they're the recommendation people and um you know I wanted to go through all this stuff and then oh no we want to change this this but I like I like that idea I didn't know that you were going to do that and then so you would also have it on our board agenda uh periodically so we we will discuss it because it needs to be discussed in puppet right correct

168so okay well I'm good with that thank you so I I I'd also like to to request then that at if it's the next maybe even it makes sense the next time that we have this conversation for there to be some opportunity for uh the the board to share and discuss I appreciate as as you shared out some of those some of the thinking on some of the potential for for some sites I think it would be helpful for there to be some discussion around around goals or hopes um both Community District uh um you know board goals that we have so as to be able to provide the 7-Eleven committee with some of that information so that they can they can move forward with the with that thinking like I said as like you're

169saying as opposed to coming back and we find that we're we're misaligned yeah I think we align perfectly right now because um our next Surplus property committee meeting is tomorrow and so just pretty much like here this is what so tomorrow we don't Envision them to start recommending and making decisions and so I think we're we're in alignment to to that request may I just ask another question regarding so on our weekly word packet would there be some input like we have the reorg organization okay what's going on with that I appreciate that yeah I have a question uh is the is the 711 committee is there have they maybe I don't know something you can I don't know if the school district is open to this or I know in many in many cities

170when they go through a plan Amendment or they're looking at a project there's Community input so I don't know if that's something we've considered um because it's nice to see what the community wants and getting some Community input as well and I think we should be welcoming to that yes yeah so I can speak to that so actually within the Education Code there's a requirement that the 7-Eleven have a public hearing so in addition to all their meetings being public meetings that are held a lot like a board meeting right where where we receive public comment they're open for anyone to come you know speak and provide input and feedback there is also a specific like public hearing that happens usually it's the third or fourth meeting depending on how many we have um and

171the code definitely contemplates as well that like this is you know it's um actually one of the specific roles of the committee is to is to like circulate information throughout the community in the and solicit feedback so so to your point I think that's very much built into the way that the that the meetings and the committee has been structured and just one question if I cannot would they I'm sorry so would they be notified like you know we get notifications when there's a public Hearing in my community or whoever they in the mail they get a card is that how it works to notify the community they're having a public meeting regarding a surplus properties yeah so I think our plan would be to do probably the process you have in place already with

172regard to notification of public hearings I mean there you know there are certain requirements you know from a legal perspective but if there's additional actions that this particular board takes with regard to notifying the community about those hearings you know we're certainly happy to to do those for that hearing for the 7-Eleven as well so um Mr tag I think this this theme of um going above and beyond the re the legal requirement for public hearing has come up most recently it came up during the many meetings of school reorganization um so I'd like to consider the ways in which we can push out um I think we have a lot of Communication online and social media and it's on our website um but I know board member reviews painted you had specifically brought up

173um you know paper you know sending home flyers and postcards to all residents um not just those um stakeholders who are already part of the district um again kind of going above and beyond to ensure that we can reach people perhaps multiple ways and and would you be able to provide in a a weekly update what it what is the cost for one send out uh because I because yes I I think that that makes sense but I think it'd be value it'd be helpful for us to know what those costs are because they I imagine they add up if we do if we do multiple of those just so that as as we give that direction um we give it with an understanding of what the costs associated with that direction a happy suggestion

174for that perhaps partnering up with the city of a Susan also having on their site um you know be being able to have it on channel three with the Spectrum and what not those are other possibilities to kind of um see how much it costs to see what would be um best for us to you know like uh president board member president Beau said that uh to be able to what we've learned from the past is that we've had community members come up to the podium saying we didn't know about this and it was right in front of my you know my home and Ellington's closing and so forth and um I still feel that uh the the the mailing is is very important as well because um the residents that mostly that came to

175the podium were the ones that perhaps were not on the email you know were not on on the website and so forth so I still feel that we still need to cover our our bases one two three four I mean one two three right to get a home run and what we've learned from the past because as uh Lauren is that your name you know she had mentioned that this is um phase two of our reconfigurating and reimagining our school district and the communication is key and if we can you know power through this and in collaboration with our community and be able to move this forward would uh would be a very successful project for forever especially for our students Mr take it zero I don't know the jargon on this term but is

176there a way to partner with the city to have a blurb or short notice hosted or printed within utility bills you could definitely explore that can I just ask something that just to let you know that all you told I'll live in unincorporated and I do get my water bill through the city of Azusa but I get my Edison to Edison so you know I don't know if everyone gets the city was used as um email I guess it depends where you live and my gas is the California Gas Company it's not the city of Azusa so just just wanted to add that stuff you know thank you so if we could do the research um across the multiple jurisdictions and utility providers for sure I know with my previous employment with the city of

177Azusa that was something they did in the utility bills yeah I have a question um with page 19 and it was a for former Sierra High School and I'm sorry I just wanted to test so just just thinking about just the the Ellington and Covina they probably don't get any Studio visit bills at all they're probably Covina and California gas and Edison like I do but they probably play something I'm not sure but they don't have any in one of those schools belong in Covina or in public Glendora too so as we're looking at the Zone the zoning um R1 single family residential but it also says that the land used can also be designated right for civic and institutional the next together next there you go um for civic and institutional which is you

178know which includes um schools colleges universities hospitals and government facilities so my question to you is um how will if we decide for example to use that land or designation and not family residential right or school colleges universities hospitals and government facilities how will we get the word out of them uh you know will be through the public hearing will it be through newspaper it would you know how would they get that information that we are uh you know this land is is is uh being sold and they are if that in the market right because we have these developers that have been in it that mainly are in education and but now we're looking at the other side of the Civic when you say them are you saying potential users or potential buyers or

179potential buyers right so as I'm the land use it because we can I mean if if uh you know with all the discussion stuff if we decide right that a hospital will be well remember Ariana's could I ask the question does this does this capture can the district say former zero High School AC we are going to put up this land for sale but we're only going to sell it to Developers who want to develop a hospital theoretically you can that's my question right um our you know our recommendation is just to cast The Net wide and you know typically if this district has the potential use that they would like we can note that in a request for proposal but we rack up I would recommend not to limit yourself and just get any

180and every proposal that comes in um because you know if there if you want it as a hospital there could only be one potential hospital that's interested in it but then you could potentially be leaving out other uses and so our recommendation is always too if you are looking for potential uses for a property to Market it far and wide and then my question is how would we Market it yeah so pretty much yes right so it's via what we well again assuming that you go through the process and you get a waiver that allows you to exempt yourself from the process that's dictated by Education Code and in recent years I have not seen a state board of education you could probably attest to this they have not denied a waiver application they more

181than likely will approve the waiver your line would agree with that yeah yeah that's true and and it's there's a reason because there there's actually a set um like list of reasons that they would have to give to deny that waiver and they're very very limited and so there are very few instances in which they would even be able to deny the waiver so it's it's not certain it is still discretionary technically they still has to go to a meeting and we submit um but yes in all likelihood it would be great so assuming you get the waiver then the that essentially exempts you from having to go through the public auction process and so it still does require a competitive bid process which you can achieve that through a request proposal so you've heard

182us say RFB probably a couple of times and essentially we would create a request for proposals that would detail the property itself it would detail the board goals and objectives for for the site and then it would say detail what you want to see in a response and so typically that would be a letter of intent that has all of the key terms in terms of purchase price or lease value um you know timeline to close um you know things of that nature the key terms but then we typically also recommend including in the RFP and in the requirement we want to know who the entity is right like we don't want to just get a number and not know what they're going to do with it so we want information on who the team

183is we want information on you know who the key team members are what's their experience in the area like have they done any projects in the area and then my thing that I always push for is we want to see do you have the financial capacity to perform the worst thing we want to do is select a buyer who doesn't have the money to perform and deliver what they say they're going to deliver so in terms of that we would then blast it out to any and all entities and we do it via a double approach right so we would put it on all of the traditional marketing um social commercial real estate platforms such as co-star and loop netflixy things like that and that's essentially where we put it up and then developers or

184potential buyers or Brokers are searching those platforms and they would see it and come up and say oh this property is available for sale or for lease and this is the deadline to submit a proposal so that's pretty much how they do it um on our end as well too we do targeted marketing because we don't just want to put it up and leave it we want to identify who are the users in the area that are active who are your potential Target end users so if for example we use the hospital example like if you really wanted hospitals we would research what are all the hospitals in the area and we would specifically send out the request proposal to them to make sure that they're aware of it so we do both where we

185put it up on the market which anyone who's in the market is gonna our role is to make sure that they know it's available and then we also send it to a targeted list of users and that is just from our internal network but then also specifically of um you know if there's users or developers in the area that are active who are likely going to to purchase the property and so it's that's the process um in terms of the time frame we typically suggest um no less than 30 days that's even stretch um I would probably recommend closer to 45 to 60 day of a marketing period to one allow time for people to find it but then also allow them time to prepare their actual proposal and I was just going to note

186from a practical side I I am working with several other districts in the area and you would be amazed about how how these developer they are really really uh keyed in available properties oh they are reaching out yeah they are yeah they are uh hot on these properties so I I would not expect that we would need to do even though all of that work would be done to solicit as much interest as possible and try to get the best price we we will already be hearing from developers throughout this whole process yeah and the reason why is because as we already discussed there's no infill development is all there is there's no vacant land and so it's very rare that a property that's more than an acre or two acres becomes available and so

187any property that's going to be of substantial size they're going to be all over it as assuming the market I mean we have to take into account the market that's assuming the market stays steady that's assume I mean decline in the market could potentially it might not affect um you still will get interest it might affect the amount of interest because you're smaller or Regional developers probably if the market was bad they probably hurts them more um but again they're think if they're they're buying it with the end goal for five years from now not I also just want to emphasize uh making sure for example there I guess for uh what has happened in the past here in the city of Azusa developers have come um they develop and then they file for bankruptcy

188right and so you know just with that I'm not predicting it I'm just saying from what we've learned um you know it I think it's also important to like you said the history right the the uh what they've delivered you know and so forth and not that I'm you know I'm not trusting but I'm trusting that you guys will do that research to bring us you know the best oh for sure it's a part of your due diligence as a seller and I would not recommend anything less than that um and the reason being again is because you want to know can you deliver I mean anybody could write a letter of intent I could write you a letter of intent for 25 million dollars but like that doesn't mean I have 25 million dollars

189in the bank and so part of of your due diligence as a trustee and as a board is making sure um that you do that and that's part of what our team would do for you the only other thing that I want to note though is sometimes um I think there's there's kind of a discretion that boards will take between you know trying to fill the role of a city planner for example and have all these very specific requirements for a development or try to put you know like long-term restrictions on a particular property and certainly that's something that can be done in certain circumstances but it can also limit value in some ways and from a legal perspective there's only so much we can do to limit a future owner's use of their new

190property right so there's I like to have a discussion with boards about the fact that once you sell the property it's not the district property anymore right and so they that new landowner has um quite a bit of flexibility to do with that property you know what they what they would do with their land and so there's just kind of a fine line and that's understanding that boards and you know communities feel strongly about the disposition of these sites but it's not always in the district's best interest to get really particular about the specifics of what a site's going to be used for in the future colleagues do you have any final thoughts or wonderings I'm going this way just just thank you for the information thank you great presentation yeah we we trust in

191you to lead us the right way because you're the professionals I'm just listening here and great information I learned a lot of just being here today thank you thank you for your time and the information Mr Ortega no thank you um as we said uh we we plan on running a parallel uh process um our intent again is that when we get to the point that the board receives a recommendation that you you would have been in the loop throughout this whole process so that you're not starting with the blank slate and then have to try to fill out fill in all the holes and all the gaps and so that that is our intent um as we created this system uh for us here in Azusa thank you very much we appreciate all the

192information moving to item 4.0 adjournment and four point I'm sorry 4.1 adjournment may I have a motion motion to approve 4.1 second any discussion being nine will call for a vote take a hand vote board member Benavides yes board vice president Rodriguez Pena yes board clerk Ariana's yes board member Greer yes and I'm yes and technology has caught up with us the motion passes unanimously the meeting is adjourned at 807 PM good night