By Neil Farrell ~
A vacant property on Coral Avenue has finally been sold and now the City of Morro Bay will have to decide what to do with the money.
The approximately 1-acre vacant parcel at San Jacinto Street and Coral Avenue was given to the City by the original developers of the Cloisters, Keyoto-Natalie Corp., back in the 1990s, with the intentions that a new fire station be built there.
Over time that plan was abandoned and the property put up for sale. It’s been for sale for about 10 years and on July 12, the City finally got it sold, depending of course on a successful 120-day escrow period.
An out-of-the-area developer, Jeff Mayer, is the buyer for $799,000, according to a City staff report. Local realtor, Frankie Ciano of Ciano Real Estate, Inc., in Morro Bay was the agent on the deal. Ciano said they’ve been listing it off and on for the City for about three years and when they first got the listing they thought they had a buyer but that fell through. Morro Bay Realty had also previously listed the property for the City.
Ciano said they had taken it off the market for a while and when they put it back on, received 2-3 offers at the same time. “The market has picked up a bit,” he said, “and developers are looking around again for properties to develop.”
Mayer has been coming to the Central Coast for family vacations for many years and loves it here, he explained, particularly Morro Bay. What to do now with an essentially blank canvas, though one that’s zoned “Coastal Resources Residential,” with a golf course and planned development overlays, will be the task ahead. And it’s one that will require some effort.
That’s because, as Ciano explained, the property was given to the City in the original Cloisters subdivision (early 1990s) with the intent for a new fire station.
But with the building of the new Harbor Street Station, and improvements made to the Bonita Street Station’s apparatus bay, the fire department no longer needs it.
In the mid-2000s, the City processed a 6-lot subdivision on the property, passing it locally but hitting a dead end at the Coastal Commission, which decided the subdivision was invalid. That’s because it was subdivided as part of the Cloisters’ and the Coastal Commission decreed that all the residential density for the subdivision was used up.
Ciano said their task will be to amend the local coastal program and the coastal development permit to allow more residential development, should Mayer decide to go that route.
“It makes sense,” he said, “for it to be residential. It’s surrounded on three sides by residences.” They’ve had several conversations with the City and the Coastal Commission, he explained, about what they’d like to see built there and they’ll have to go through the entitlement process for any development. “There are challenges ahead.”
One obstacle and something that has concerned previous people interested in buying the land, are lines of huge eucalyptus trees that bisect the site and runs along the sidewalk, which leads to a Hwy 1 stoplight and is a major thoroughfare for pedestrians and bicyclists heading to the beach.
Ciano said the City has an approved tree policy for removals and noted that the eucs are not native trees and present a potential fire hazard. They’re also shallow rooted and growing in sand. “The last storm,” Ciano said, “a tree fell across San Jacinto Street blocking it.” Other eucs growing in a line on properties across the street make for an esthetically nice canopy cover on San Jacinto.
By selling the property, the City made no commitments to any future development plans, nor the removal of any trees, which comes under a specific City policy (Res. 39-07, dealing with major vegetation removals).
As for the $799,000, a previous Council had promised to use the proceeds from what was essentially a gifted property, to pay down the debt on the Harbor Street Fire Station. A USDA Rural Assistance loan was taken out to build that station in 2012 with monies from the Measure Q sales tax going to pay the debt burden.
Some questions were raised at the Council meeting about whether or not the proceeds were locked in on the fire station loan?
City Manager David Buckingham said they were researching whether the money has strings attached but the City Council decides how to spend what comes in. He wants to spend the money on the fire station debt, with some to fix up the City’s skate park at the Teen Center, which apparently needs a lot of work, if not replacing.
According to The Bay News’ archives, when the new station was dedicated in December 2012, retiring Fire Chief Mike Pond noted to the assembly of about 300 residents and dignitaries at the grand opening, that funding for the nearly $3 million office and living quarters came from a $1.6 million FEMA grant, M-Q monies and a $1.5 million USDA loan taken out in 2011. A new apparatus bay was built in a previous phase and paid for through FEMA monies, M-Q and City funds, with no loans taken out.
And there was this from the article, “Pond noted that the city council has pledged to use money from the sale of a .99-acre property in Cloisters to pay down the USDA debt.”
While not exactly a binding document, it indicates what the city council of the day (made up of Mayor Bill Yates, Council members Carla Wixom, Nancy Johnson, George Leage and Noah Smukler) intended be done with the property proceeds. But the debt payments aren’t a large part of the $1.02 million expected M-Q revenues in the 2016-17 budget.
Finance Director, Susan Slayton said, “The debt payment is around $83,000 per year. We have to contribute to a reserve account, so for the first 10 years, we put 10% of the payment into a reserve ($8,300). So the long and short answer is Measure Q contributes roughly $91,000 per year for 10 years of the loan, then $83,000 for the remaining 20 years.”
As of the end of June the balance on that loan stood at $1,386,000, Slayton said. So paying the full $799,000 towards the debt would bring the balance down to $587,000, for a payoff at the current rate in about 7 years.
M-Q monies are slated by Council policy to be spent on police and fire department needs, street and storm drain repairs.
