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8.A. - Page 21 4. Environmental Review. The disposal of real property by a public agency is a project within the meaning of the California Environmental Quality Act. Sometimes, however, a disposition by the City will be exempt from the requirements of CEQA (for example, where an existing use is anticipated to continue after acquisition by the purchaser). In any event, the Community Development Department should be consulted to ensure that the appropriate environmental review is conducted and that any necessary environmental documentation is completed prior to a decision to sell or lease City-owned property. 5. Surplus Land Act. If the property intended for sale has been determined to be surplus property pursuant to California Government Code Section 54220, such surplus City-owned property must first be offered to certain agencies. The City Attorney should be consulted to ensure such offers are made in compliance with the Surplus Land Act. 6. Negotiations and Agreement with Potential Purchaser or Lessee. After the City has followed the appropriate process for disposing of real property and identified the preferred purchaser or lessee, the City Manager shall enter into negotiations with such purchaser or lessee, as applicable. There should be an informal letter of intent between the parties that summarizes the key business terms and conditions of sale or lease before formal purchase and sale or lease documents are drafted. The negotiations should address the conditions of title and allocation of risks of existing conditions, including hazardous materials. Discovery of hazardous materials may trigger a disclosure the County Board of Supervisors within 72 hours pursuant to Cal. Health & Safety Code s. 25180.7. During negotiations it also may be necessary to agendize a closed session pursuant to Government Code section 54956.8, for the City Council to discuss terms and price of the proposed sale or lease. The City Attorney should be consulted to properly agendize the closed session. The notice for the closed session and the agenda shall identify the subject real property and the person(s) with whom the City Manager may negotiate. Formal City Council approval at a public meeting will still be necessary at a subsequent stage of the process to finalize the disposal of property. ATTY/POLICIES/PROPERTY ACQUISITION AND DISPOSITION PROCEDURES REV:10-04-12 PT Page 16 of 21