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<br />Honorable Mayor and Members of the City Council: <br /> <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 such <br />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 property <br />is subject to the contract. Williamson Act contracts are binding on all successors in interest <br />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 is <br />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 to <br />cancel the contract, the landowner is to pay a cancellation fee equal to 12.5% of the value of the <br />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 waive <br />any payment, or any portion of any payment, of the cancellation fee, if certain findings are <br />made, namely: (1) the cancellation is caused by an involuntary transfer or change in the use of <br />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 />A venue; 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 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 portion of the property for residential development. Also in 1999 <br />Lonestar gave notice to cancel the contract on the entire property. <br /> <br />Centex Homes, which held an option on the property, subsequently processed a PUD <br />development plan, development agreement, and tentative map for a portion of the Lonestar <br />property. Under the development agreement, the City was conveyed a portion of the Lonestar <br />property (about 1.85 acres) for the realigned Vineyard Avenue, thereby splitting the 30 acres, <br />with about 21.5 acres south of the realigned Vineyard Avenue and 6.65 acres north. In that no <br />SR 05:170 <br />Page 2 <br />