WALNUT CREEK -- A necessary but unsightly piece of city business, the city corporation yard, sits on a very valuable stretch of land in Walnut Creek. And city leaders are thinking that to boost budgets, it may be time to sell.
Walnut Creek City Council members last week directed city staff to move forward on selling or leasing six acres that front Interstate 680 and moving the city's corporation yard -- where maintenance trucks and equipment are stored -- to another location altogether. Also on the property is the city's actor's studio, and nearby is the traffic maintenance yard, police department impound yard and a recycling center leased to the Contra Costa County Solid Waste Authority. The city may sale or lease all of the property at 470-490 and 511 Lawrence Way and build a public works campus somewhere else in the city.
If the city sold all the parcels, it could bring as much as $18 million. A yearly lease for all parcels would bring in more than $1 million a year in rent.
This idea has been ruminating for a while, and real estate experts consulting with the city say the property would be especially attractive for a new-car dealership.
"Walnut Creek has achieved that position where it is one of the preeminent location addresses," said Ed Del Beccaro with Transwestern, a consultant on the project. Businesses want "a flagship in Walnut Creek. This site has the potential to be a jewel box for a new dealership or other major retailer."
The properties are so valuable because of the large size and the visibility from the freeway, over which more than 250,000 cars pass the parcels daily.
The city currently gets no sales or property tax from the current uses on most of the sites, but by selling or leasing the property to a business the city would gain both rent and tax revenue, according to city staff.
The City Council agreed to move forward, but said that while the zoning may be for an auto dealership, any buyer should propose what they want from retail to a hotel.
"We should be more flexible at the outset," said Mayor Cindy Silva. "Recognizing that when this comes back to us for a final decision if it something not auto sales and service it will extend the time frame and perhaps change a whole bunch of traffic and circulation issues that even if it was a higher price, it might make it a no-go."
Of course, the city still needs a public services campus. In what is called a "public-private partnership," city leaders will request proposals from developers and landowners for property and facilities that could be used for a new corporation yard. Interested sellers would provide a "turnkey replacement facility" in another part of town, perhaps the Shadelands Business Park. Acquiring an existing site and facility will cost an estimated $4 million.
"Rather than acquiring vacant land and building a new 46,000-square-foot facility at $300-$400 per square foot, the city could acquire an existing 20-30-year-old building at $80-$100 per square foot plus renovation costs," according to an agenda report.
There are already interested buyers for the Lawrence Way sites, as well as those who would be willing to sell land for a turnkey operation to the city, Del Beccaro said. It is possible that the buyer of Lawrence Way may be the same person who sells the city a new corporation yard site.
Getting a new facility in this manner was a popular idea with council members.
This way "we have other people trying to figure out what is the best property or offer that we can get rather than us trying to expend a lot of staff resources figuring that out," said Councilman Bob Simmons.
But there are still some unanswered questions concerning issues such as sewer and water easements. And Mayor Pro Tem Kristina Lawson said that because Caltrans owns nearby roads and onramps, she was unsure whether that agency would allow the use change. She also noted that the city's legal staff had not been involved in the process, and directed City Manager Ken Nordhoff to include all departments in a project like this.
"The entire city has not been working on this project, and that is of great frustration to me," she said.
Lawson also voiced concerns the city will have to deal with the public's perception of the city getting a new building while at the same time going out to the public and saying the city is strapped for cash.
"We may have a real perception problem going forward," Lawson said.
The next step is the city will issue requests for proposals for both those who want to buy the land and acquisition of a new public services campus. Within 60 to 90 days the city will know if there are interested parties.
Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.