LAKE COUNTY, Calif. — The Lakeport City Council has taken action to make city-owned properties available for sale in response to interest from hotel developers.
At the council’s Aug. 17 meeting, Community Development Director Jenni Byers reported that the city has been approached by two hoteliers about a potential lakeside hotel project at the Dutch Harbor property, located on North Main Street next to the Lakefront Park that’s under construction.
In order to move forward on a possible sale, Byers said the city needed to declare the property surplus.
The 2.9-acre Dutch Harbor — which has long been envisioned as being used for a hotel development — was one of several properties staff identified as surplus.
The others include a 0.51-acre property next to Dutch Harbor that includes a building that was the old Natural High School; the former police station on N. Forbes Street, 0.23 acres; and an 0.80-acre portion of land not included in the Lakefront Park project.
Councilman Michael Green asked about how developable the Dutch Harbor property is.
Byers said the Lakeport Lakefront Revitalization Plan presented information on that prospect, which is why the small strip from the park is to be included.
The plan includes alternatives such as a private hotel development on the site, or commercial or waterfront development.
It also suggested the city consider adding a specific general plan policy to the land use element allowing for a possible lot line adjustment between the Dutch Harbor property and Natural High property to make the Dutch Harbor site a more developable parcel for a hotel or similar resort commercial use.
Byers said the early proposals are for a three-story hotel building.
City Manager Kevin Ingram said a 2017 hotel feasibility study identified a hotel as the highest use for Dutch Harbor, although it was undersized, at less than three acres. He said adding the other nearby property gets it closer to the needed size.
Green asked why the city didn’t analyze adding that property to Lakefront Park. Ingram said the city didn’t include the old school building or the additional shoreline frontage due to the tight time frame the city had as well as the California Environmental Quality Act requirements for the building’s demolition.
While Ingram said that property won’t necessarily be used for a hotel, it’s a matter of making it available for other potential uses. Any potential commercial use requires the city to go through the surplus process.
He said the city has done some marketing to try to attract hoteliers and they received some leads.
Councilman Michael Froio moved to adopt the resolution declaring the surplus property and directing staff to file a notice of availability with the California Department of Housing and Community Development in accordance with the Surplus Lands Act.
That law requires local governments to follow certain steps before disposition of property, including declaring it either “surplus land” or “exempt surplus land.”
Unless the land is exempt, Byers’ report said the law requires the city to give written notice of the property’s availability to any local public entity, including schools and park districts, within whose jurisdiction the property is located, as well as to housing sponsors that have notified the Department of Housing and Community Development of their interest in surplus property.
“An entity receiving notice from the agency has 60 days to notify the agency of its interest in purchasing the property, and the agency is required to negotiate in good faith for not less than 90 days with any entity that has responded. Notwithstanding the obligation to negotiate in good faith, the local agency is not required to sell or lease the property to the agency, or to do so for less than fair market value,” Byers wrote in her report.
As of early Tuesday, the Department of Housing and Community Development’s website had not been updated to show the Lakeport properties in its database.
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Lakeport City Council approves declaring surplus property as part of potential hotel project
- Elizabeth Larson
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