LAKE COUNTY, Calif. – The city of Clearlake is moving forward with negotiations for the potential sales of two city-owned properties.
The discussions on the proposed sale of a 29-acre property at 2890 Old Highway 53 and the extension of an exclusive negotiations agreement for a portion of the city’s Pearce Field airport property at 6356 Armijo Ave. and 6393 James St. are the latest in a series of sales negotiations for city-owned properties that have taken place over the past year.
Both properties were topics at a special city council meeting on Dec. 17.
City Manager Alan Flora said that the land at 2890 Old Highway 53, held by the successor agency to the city’s former redevelopment agency, previously had a tentative map for a housing development filed for it but that project didn’t move forward due to the Great Recession.
Recently, however, the previous developer – Robert Adelman – as well as TJG/Summitt Development Corp. expressed interest in developing the land for homes, Flora said.
Flora said both proposed projects are for 20 homes on lots of 1.25 acres each.
Adelman and Mark Flamer offered $100,000 and a five-year option to purchase the property, while Summitt Development Corp. offered a purchase price of $150,000 and an agreement to close escrow within 30 days of the approval of the tentative subdivision map.
Speaking on behalf of Summitt Development, Realtor Dave Hughes said their plan includes building two to three spec homes initially.
He said there appears to be a need for upper-end homes in Clearlake, noting that a 1,600-square-foot home near the subject property sold for $428,000 about a year ago. Hughes added that there is not enough home inventory in the community.
In his presentation to the council, Adelman said, “Our analysis is that it’s going to be really, really tough to build a subdivision now” given the cost of building and site improvements.
Adelman suggested that with building costs now at about $300 per square foot in Lake County, it would be necessary to sell the homes for $400,000 to $500,000 just to break even.
He also raised concerns of market disruptions due to the possible end of the state’s COVID-19-related eviction moratorium and other impacts of the pandemic.
Vice Mayor Dirk Slooten asked if Adelman can get financing to build the project.
Adelman said he could, and that they would want to build the first row of homes along the highway with the least amount of infrastructure possible. If the market can handle it, he said they can finance and build it, but added that the only way to build this project is to build it as cheaply as possible.
Councilwoman Joyce Overton said she was worried about the project and making sure it didn’t stall again.
Flora said the city needs to do creative things to bring housing to Clearlake.
During the discussion, Adelman had referenced the availability of homes with sales prices of up to $500,000 in Lake County. “But we don’t have those homes available in the city of Clearlake, and that’s what we want,” said Flora.
Flora said that it was important, based on some of the new housing statutes coming down on Jan. 1, that the city have an exclusive negotiating agreement on the property before the new year.
He said the agreement the city would put together for the land would have a provision giving the city the right of repurchase if the project isn’t built, which Overton said was what she wanted to hear.
Slooten said he thinks there’s tremendous demand and wants to see the project done as quickly as possible. “Economics do change.”
The council ultimately decided to go with Summitt Development Corp.’s proposal. Overton moved to enter into the 180-day exclusive negotiation agreement with Summitt, which Slooten seconded and the council approved 5-0.
At Flora’s request, the council also considered extending the proposed letter of intent with King Management LLC, which is interested in purchasing a portion of the city’s Pearce Field airport property at 6356 Armijo Ave. and 6393 James St. to develop a hotel.
The council had initially signed the letter with King Management in July and later in 2020 approved another letter of intent with the company in regard to a portion of Redbud Park, where it wants to build another hotel.
Flora said company representatives recently visited Clearlake and looked at the two sites.
He said the company wants to focus on the Redbud Park site first but is still very interested in working on the airport project.
Flora said King Management is interested in extending the letter of intent for another six months.
He added, the hope is that within that time there will be more clarity on the company’s plans for the Redbud Park property and the city will have design work completed for improvements on the airport land.
Slooten moved to approve extending the letter of intent, which Councilman David Claffey seconded. The motion received a unanimous council vote.
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