CITRUS HEIGHTS, CA (MPG) - The City purchased the 11.34-acre New Sylvan property—located just south of Sylvan Cemetery on Auburn Blvd.—from the San Juan School District in September 2019. “This was a strategic acquisition to be able to direct the use and steward the land development,” said Meghan Huber, economic development and communications manager.

The City declared the property as surplus in December 2019, and set concept, design, land use, and financial goals for the site in April 2020. The City put the property on the market in July 2020 with the Offering Memorandum, which closed in October 2020 with one response—from Woodside Homes. The draft Purchase and Sale Agreement was completed in December 2020 and presented to Council during the January 14 meeting (conducted via teleconference). Huber said, “Because the project, and this site, is so highly visible and important to our community, we wanted to ensure maximum public engagement.” Ahead of the meeting, letters were delivered to adjacent residents and property owners notifying them of the upcoming public hearing, and notifications were sent via news releases and social media.

The purchaser, Woodside Homes, is one of the largest homebuilders in the western United States, with many active developments in the Sacramento Region. The proposed project would develop approximately 93 single-family for-sale units on the site—a combination of 69 Bungalow lots measuring 40’ x 75’ and 24 Cottage lots measuring 35’ x 75’.  The actual design of the project will still need to go through the standard development review process.

Part of that process involves meeting the requirements of the Surplus Land Act, which is initiated when a surplus property is sold for residential use. The Act requires 15% of the residential units be designated as affordable housing, which is defined as affordable to persons earning 80% of the median income in the city. To meet this requirement, 14 of the Cottage lot deeds will be bound by a regulatory agreement that potential buyers must meet income requirements to qualify for those homes.

The purchase price agreement between the City and Woodside Homes is based on the lot count—$50,000 per Bungalow lot and $30,000 per Cottage lot. The approximated total purchase price for the property is $4.17 million. The City’s total investment into the property (including $3.4 million for the site, plus additional costs to prepare the property for sale, plus interest on the financing) totals $3.8 million. After the sale, the City’s estimated profit would be $297,915.

Huber explained that the project will have long-term economic benefits for Citrus Heights: “By building on a long-dormant corner of the city, we are activating the land to begin generating property tax dollars,” which the City is scheduled to begin receiving in fiscal year 2022-2023 after the Revenue Neutrality agreement with the county expires. Huber estimates that the City will receive almost $30,000 annually from these new units.

Welcoming 93 new families will increase the population along that corridor, which Huber said will help support existing businesses and improve the City’s statistics in order to attract new businesses. Those new residents will also spend money on taxable items, potentially generating new sales tax revenue for the City.

Jim Bayless, land acquisition manager for Woodside Homes, said they are “excited about the opportunity to build on all the improvements that Citrus Heights has invested in the Auburn Blvd. corridor.” Bayless explained that they initially considered a higher number of units, but they want to ensure quality housing with good circulation on the site—while preserving as many of the beautiful, mature oak trees as possible.

Four public comments were submitted for this item. One resident wrote in to oppose any development of the land, while two pushed for retail and restaurants on the site, or even a mixed use of both retail and housing. Another resident opposed any new housing, asking instead for some kind of attraction or a sports complex for traveling sports teams.

Councilmember Tim Schaefer also asked about the possibility of a park or sports complex. He said he didn’t think building homes on the property complemented the cultural significance of the site. He asked whether any analysis was done regarding subdividing the property, because he noted there is limited market interest in such a large property.

Community development director Colleen McDuffee explained that the City was open to offers on smaller portions of the property, and the Offering Memorandum didn’t specify that the purchase had to include the entire site. The City also discussed possible sales to Sylvan Cemetery or to Sunrise Recreation and Park District, but both declined.  

Councilmember Jeannie Bruins said there are already a lot of commercial vacancies in Citrus Heights, “many of them at Sylvan Corners.” Building new retail “only adds to that problem.” Bruins said that developing good, quality affordable housing will “encourage further development of our business community, knowing that we have built-in consumers to participate.” Bruins also cited the excellent reputation of Woodside Homes, stating, “I am pleased to support this project.”

Councilmember Bret Daniels said, “I appreciate staffs’ efforts to put as much lipstick on this as possible,” but he expressed disappointment in the project. He had “visions of stores and homes together with this energy and this destination.” But he acknowledged that with the current economic climate, new commercial spaces were likely to wind up vacant. While he said, “I greatly appreciate that a developer with the status and reputation of Woodside is coming forward,” he still described it as “unfortunate,” “very sad,” and “a big thud.”  

Mayor Steve Miller said that the goal of purchasing the property was to ensure the site didn’t end up filled with gas stations, drive-thrus, or “another strip mall that we don’t need.” He explained that the proposed project meets one of the major goals of the City’s General Plan, which is to increase home ownership. As part of the economic recovery after the pandemic, “this is going to help the surrounding small businesses, and I think encourage redevelopment,” said Miller. He pointed out the many commercial vacancies nearby and said what the city needs right now is not new retail, but new customers.  

“I don’t see this as a thud. I see this as closing one chapter and moving on to the next,” said Mayor Miller. The motion passed 4-1, with Councilmember Schaefer dissenting.