Sentinel staff report–
The Citrus Heights City Council voted 5-0 last week to approve the purchase of an 11.44-acre vacant portion of the former Sylvan Middle School lot at Sylvan Corners.
The purchase was approved for $3.43 million using the city’s new line of credit. The seller, San Juan Unified School District, also voted to approve the purchase agreement during a subsequent May 28 board meeting this week.
What comes next?
According to the terms of the purchase agreement, the city has now entered a 60-day “due diligence” period where additional investigation and inspection of the property can be performed. The city can still back out of the agreement and receive back a $100,000 deposit.
Colleen McDuffee, the city’s planning division manager, told the council just prior to the May 23 vote that if no red flags are raised during the 60-day period, the city will make an additional $50,000 deposit, go through escrow, make a final deposit and finalize the purchase.
McDuffee said by September or October of this year, city staff plans to return to the council to “present our process going forward.”
The city’s stated goal in purchasing the property has been to have more control over its future development.
A preferred future use for the property has not yet been determined by the city. However, city leaders and staff have expressed a general intent to identify a developer to work with in approving a suitable project for the location, before selling the property.
“We’re assuming we would probably hold the property for about two years in order to go through this entitlement process with the developer,” McDuffee told the council. She said the debt being held over that two-year period is expected to add about $400,000 in interest costs, with the debt being paid back once the property is sold.
Another $47,000 in expenses is also anticipated to cover legal fees, closing costs, and pre-purchase studies and fencing, according to the city.
McDuffee said the sales price was based on a joint appraisal conducted about a year ago. She said the appraisal had determined “that the highest and best use of the site would be a median density residential use,” which put the value of the property at $3.43 million, or just under $300,000 per acre.
The city has long-expressed an interest in the former Sylvan Middle School site, following the demolition of the school two years ago. However, with dwindling reserves, it wasn’t until the council approved its first-ever $12 million line of credit last year that a potential purchase of the prime piece of land was made possible.
The property is viewed as a central location with high visibility and is one of the few available large lots left in Citrus Heights, which is 98 percent built-out.
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