WALNUT CREEK -- Six acres of land along Interstate 680 that could bring millions to city coffers if leased or sold had been on the market since last fall. But the listing was recently pulled after it was discovered the city may not own all of the land.

The city's corporation yard, transportation center and a recycling center together make up the six acres. The properties, 470-490 and 511 Lawrence Way, are apparently prime real estate for a car dealership and could net the city $16 million if sold or $1 million a year if leased, real estate experts said last summer.

But any potential sale is on hold after city staff discovered that not all of the property is in the city's name. The smaller western portion was purchased using the city's redevelopment agency with city funding in the 1990s, but never transferred to city ownership, said Community Development Director Sandra Meyer.

"There was never really any RDA money (used) but at the time, it was an oversight that it was not transferred back to the city," she said.

That oversight is now a potential problem because Gov. Jerry Brown eliminated the state redevelopment program in 2012 and has worked to seize agency assets.


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But Meyer said the worst that will happen -- which she does not anticipate -- is that the state won't sign off on the city being the title owner. If that happens, if the city still decided to sell the property, the revenue wouldn't go to Walnut Creek.

"It's unlikely in this case because there was no loss to any taxing entities because there was never any RDA money used," she said. "It doesn't mean we cant sell it; we just want to understand the repercussions."

This only affects the smaller portion of the Lawrence Way properties, where the Contra Costa Solid Waste Authority recycling center operates. The city could sell or lease the four acres -- the bigger section of the property -- across the street, she said.

The City Council approved the asset management plan for the city's two

redevelopment agency sites in December. The other agency site is on Locust Street, where the veterans hall once stood. If the state controller's office signs off, the title on the Lawrence Way parcel can then be transferred, Meyer said. That is expected to happen within the next two months.

But until then, the parcels will remain off the market.

Ed Del Beccaro with Transwestern, the agent working for the city, confirmed that marketing these properties had ceased, but that there has been interest in them nonetheless.

Meyer agreed there is interest, and that the city is still interested in putting the corporation yard area into more of "an economic development use."

This idea to sell the plots had been ruminating for a while, and real estate experts hired by the city said that, with 250,000 cars passing by the Lawrence Way land each day, it is a prime location for a car dealership. Council members said in August prospective uses for the land need not be limited to dealerships, and that options from retail to a hotel there are viable.

The city currently gets no sales or property tax from the current uses on most of these sites, but by selling or leasing the property to a business the city would gain both rent and tax revenue. But if the state doesn't allow the title to be put in Walnut Creek's name, any revenue made on the smaller parcel would go to the state or another taxing entity.

Mayor Kristina Lawson said she is "disappointed that we are this far down the path and had not figured out" that part of the land is owned by the redevelopment agency.

Going forward, the move to turn the corporation yard into an economic driver -- and move the corp yard -- is a "valid and lofty goal," but the city

needs to make sure laws are followed, she said.

"These laws are complex and we have to be focused on understanding

what we are doing when we are operating under them," Lawson said.

Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.

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