Novato advances toward municipal property sales, leases

Novato officials are poised to narrow down which city real estate holdings might be considered for lease or sale.

The City Council discussed the issue at its meeting on April 23. City staff recommended hiring a real estate services firm to guide the sale or lease of hundreds of city-owned buildings and sites.

The council supported seeking a request for information, or RFI, which would kick off a bid process. The council also asked staff to return with a property list that would prioritize the first phase of the effort.

The real estate adviser would evaluate properties selected by staff and the council for potential lease or sale. The sites would include smaller open space and right-of-way locations.

“It’s about seeing each property’s potential in relation to the other properties,” said Jessica Deakyne, assistant city manager. “What is the highest and best use for each of these properties?”

The city occupies 11 buildings, including the city administrative offices at 922 Machin Ave. and City Hall at 901 Sherman Ave. Also listed is the vacant Community House building at 908 Machin Ave., considered a high priority for sale.

The Novato Parks, Recreation and Community Services Department is in charge of 66 buildings and sites, including Miwok Park at 2200 Novato Blvd. and the San Andreas Open Space tract.

The city also oversees 17 sites, some of which include multiple facilities, like Morning Star Farms at 855 Sutro Ave., which leases land from the city. Other sites include vacant buildings at 1663 Novato Blvd. and the former Novato Human Needs Center at 1523 S. Novato Blvd.

The sale of properties is typically guided by an official process known as a surplus property sale. The city must follow a prescribed method involving who can make offers on properties first, Deakyne said.

The city plans to surplus properties on Novato Boulevard following road work in the area, Deakyne said.

Councilmember Pat Eklund said she was alarmed that some of the city’s most widely used assets, such as parks, were included in the staff report.

“Rather than a laundry list of the properties, it would be easier if it was narrowed down,” she said. “I think before we hire anybody, we need to figure out what are the properties we want to do something with.”

“The RFI doesn’t have to list the properties,” she said. “It would give staff some direction which ones for this person to look at first and provide some feedback to us.”

Mayor Mark Milberg said a general request for information would not impede the process. A narrowed property list would be available when a more involved request for proposals was sent out, he said.

“If we issue an RFI with the properties named, it is going to stir a lot of community angst,” Milberg said. “Even if we try to do confidentiality, it will probably leak out somehow.”

Councilmember Susan Wernick said she hopes to accelerate the process because of the city’s financial problems. She said vacant properties owned by the town are a drain on resources.

The city projects a deficit of approximately $2.6 million for the current fiscal year, an increase from the adopted budget in July, which projected a $1.7 million shortfall. The city expects $47.9 million in revenue and $50.6 million in expenses.

“Every year we leave it vacant, the cost to renovate it becomes higher and higher,” Wernick said of the Community House. “I am eager to get moving on this process.”