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Honorable Mayor and Members of the City Council: <br />BACKGROUND <br /> <br />Under state law (the Williamson Act), a city or county (more often, the latter) may establish <br />agricultural preserves and enumerate those land uses which are compatible or permitted on <br />such lands. The city or county may also by contract limit the use of agricultural lands within <br />agricultural preserves in exchange for a reduction in property tax assessments while the <br />property is subject to the contract. Williamson Act contracts are binding on all successors in <br />interest including annexing jurisdictions. Contracts have an initial term of 10 years and are <br />automatically renewed unless a notice of nonrenewal is given. Once the notice of nonrenewal <br />is given, the property will no longer be subject to contract after 10 years. <br /> <br />The contract, however, may also be cancelled upon the request of the landowner. A city or <br />county may grant cancellation if it makes a number of findings specified in the Act. In order <br />to cancel the contract, the landowner is to pay a cancellation fee equal to 12.5% of the value <br />of the land. Accordingly, when a city or county makes the findings relative to cancellation, it <br />tentatively cancels the contract, subject to the cancellation fees being paid and the landowner <br />satisfying any other condition of the resolution canceling the contract. A public hearing and <br />notice to adjacent property owners and to the State Department of Conservation are necessary <br />for cancellation. <br /> <br />In addition, if a city council finds that it is in the public interest to do so, the council may <br />waive any payment, or any portion of any payment, of the cancellation fee, if certain findings <br />are made, namely: (1) the cancellation is caused by an involuntary transfer or change in the <br />use of the land and the land is not immediately suitable for a purpose which produces a greater <br />economic return to the landowner; (2) it is in the best interest of the program to conserve <br />agricultural land use that the payment be waived; and (3) the waiver is approved by the <br />Secretary of the Resources Agency (a State agency). <br /> <br />In 1974, Lonestar Industries owned 30 acres generally north of the then existing Vineyard <br />Avenue; the acreage was all within the unincorporated area of Alameda County. At that time, <br />Lonestar entered into an Agricultural Preserve Contract with Alameda County for the 30 <br />acres. <br /> <br />In the early 1990's, the City annexed this property but the property remained subject to the <br />contract. In 1999, the City adopted the Vineyard Avenue Corridor Specific Plan. That Plan <br />designated the southern 21.5 acres of the property for residential development (about 27 <br />homes). Also in 1999 Lonestar gave notice to cancel the contract on the entire property. <br /> <br />SR:05:011 <br />Page 2 <br /> <br /> <br />