HomeMy WebLinkAbout22 - Balboa Theater - Notice of Change of Intended Use and Sale, Located at 707 East Balboa BoulevardCITY OF
NEWPORT BEACH
- City Council Staff Report
June 9, 2015
Agenda Item No. 22
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Kimberly Brandt, Community Development Director — (949) 644 -3226,
kbrandt @newportbeachca.gov
PREPARED BY: James Campbell, Principal Planner
PHONE: (949) 644 -3210 or Jcampbell @newportbeachca.gov
TITLE: Balboa Theater - Notice of Change of Intended Use and Sale, Located at 707 East
Balboa Boulevard
ABSTRACT:
The Balboa Theater was acquired in 1998 by the City using Federal Community Development Block Grant
(CDBG) funds. The property is located at 707 East Balboa Boulevard in Balboa Village. The City Council
has expressed a desire to dispose of this underperforming asset. Federal Regulation 24 CFR §570.505
requires the City to provide notice of, and opportunity to comment on, any proposed change of use or
intended use of the property. This hearing will partly satisfy the Federal public participation requirement.
RECOMMENDATION:
a) Conduct a public hearing;
b) Find the change of the intended use and sale of the Balboa Theater building and property exempt from
environmental review pursuant to Section 15312 (Surplus Government Property Sales) of the California
Environmental Quality Act Guidelines, California Code of Regulations, Title 14, Chapter 3;
c) Direct staff to take necessary steps to sell the property and return to the City Council with the purchase
and sale agreement;
d) Direct staff to complete all necessary administrative activities consistent with U.S. Department of
Housing and Urban Development requirements to document the disposition of the Balboa Theater; and
e) Direct staff to begin planning for future use of the proceeds from the sale of the property consistent
with CDBG requirements.
FUNDING REQUIREMENTS:
The City funded one hundred percent of the acquisition of the Balboa Theater property with CDBG
funds. Total acquisition costs in 1998 were $489,461.18. Since acquisition, the City has not invested other
funds into the property that impacted its value; therefore, Federal regulations ( §570.505) specify that all
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proceeds from the sale of the property be defined as program income to the CDBG program for future use
by the City for CDBG - eligible activities.
In 1998, the Balboa Theater was acquired by the City of Newport Beach with CDBG funds. The City
partnered with the Balboa Theater Foundation (Foundation) who worked for many years to raise the
necessary capital to renovate the building to open and operate the facility. The theater was intended to
assist two target census block groups that contain over 1,500 housing units. Unfortunately, the Foundation
was unsuccessful in their extensive efforts and the theater was not renovated and never opened. As a
result, the grant funded acquisition did not achieve a national objective required for use of CDBG funds.
The City still owns the facility, and given the unsuccessful effort to open the facility and the passage of
time, the City Council has expressed a desire to sell the property leading to a change of the intended use.
Federal regulations ( §570.505) allows a CDBG recipient to change the use or planned use of a grant
acquired property only after the recipient provides affected citizens with reasonable notice of, and
opportunity to comment on, any proposed change. Notice has been provided of this hearing as described
below. Consideration of written and oral comments received during the hearing will satisfy Federal public
participation requirements.
Proceeds from the sale of the property will be designated for future CDBG - eligible activities. CDBG funds
can be used to address a variety of community needs when benefiting low- and moderate - income
individuals or households, including but not limited to:
• Community and senior services and facilities
• Fair housing enforcement and landlord /tenant mediation
• Homeless prevention and domestic violence programs
• Commercial fagade improvements
• Street and sewer improvements
• Disabled (ADA) accessibility improvements
• Housing programs
• Section 108 loan payments
Staff will initiate planning for future projects based on community needs identified in the recently adopted
2015 -2019 Consolidated Plan.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find the sale of the Balboa Theater exempt from the California
Environmental Quality Act ( "CEQA ") pursuant to Section 15312 (Surplus Government Property Sales) of
the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to
have a significant effect on the environment. The property is presently developed and has no habitat value.
The sale of the property would also qualify under Section 13501 (Existing Facilities) and the use of the
property and adjacent properties has not changed since 1998 when the City acquired the property.
NOTICING:
Notice of this item was published in the Daily Pilot, posted on the property (707 East Balboa Boulevard),
sent to Balboa Peninsula homeowners associations and Balboa Village Business Owners Association, and
it was posted to the City's website and email news /alert subscription service.
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