To: Honorable Mayor and Members of City Council
From: Steve Potter, City Manager
Prepared By: Liz Habkirk, Assistant City Manager
TITLE:
Title
Purchase and Sale Agreement and Budget Transfer for the acquisition of Harvest Middle School property
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a Resolution (1) approving and authorizing the City Manager to execute a Purchase and Sale Agreement with the Napa Valley Unified School District for the property located at 2447 Old Sonoma Road, Napa, CA 94559 (APN 004-460-030-000); (2) approve the appropriation of funds as documented in budget amendment No. 92P3; and (3) and finding the actions authorized by this resolution are exempt from or not yet subject CEQA.
Body
DISCUSSION:
The former Harvest Middle School property is a 26.62-acre developed property located at 2449 Old Sonoma Road and within City limits that is owned by the Napa Unified School District (NVUSD). The Harvest Middle School site is also adjacent to the City’s Playground Fantastico park.
In April of 2021, the NVUSD Board approved closing Harvest Middle School after the 2021-22 school year due to falling enrollment and budget constraints. Following the closure, NVUSD held a series of community forums for residents to discuss future redevelopment of the site with a focus on preserving a portion of the existing recreational facilities for community use and looking for housing opportunities. The property’s school facilities remain in place and the recreational areas, including a swimming pool, gymnasium, turf and grass fields, and hard courts, are currently still utilized for recreational purposes by the City of Napa and other user groups, as well as informally by the public.
In January of this year, the City Council held their annual workshop and named both Parks and Community Spaces and Housing as focus areas for the upcoming budget cycle and on March 4, 2025 the City Council directed the City Manager to enter into negotiations with NVUSD to acquire the property.
Since receiving that direction, City staff and the City’s contracted real estate broker have met with NVUSD staff to discuss potential terms of a purchase and sale agreement. Staff has also conducted preliminary site due diligence to assist in making a recommendation to the City Council.
At their September 11, 2025 meeting, the NVUSD Board will be considering approval of the Purchase and Sale Agreement, included in this report as Exhibit A to Attachment A. The main points of the proposed agreement include:
1. Purchase price of $25,000,000 ($25 million) for the entire 26.62 acre site and requires the City to provide an initial deposit of $100,000, which is fully refundable prior to the end of the Due Diligence Period (as defined in the Agreement as 85-days from the effective date of the Agreement);
2. Grants the City immediate access for any inspections deemed necessary through the end of the Due Diligence Period, including inspections and environmental assessments of the buildings and other improvements on the Property;
3. Assigns NVUSD’s remaining obligations under a Power Purchase Agreement with Solar Star NVUSD II, LLC for the solar installation located on the site;
4. Requires the City and NVUSD to indemnify each other against any and all claims, damages, or losses arising out of each respective party’s negligence or willful misconduct in connection with the Agreement.
5. Requires NVUSD to indemnify the City against any and all claims, damages, or losses stemming from environmental hazards on the Property; and
6. Includes standard provisions for escrow, closing, costs, and transfer of ownership.
The Harvest Middle School property represents a unique opportunity to engage in addressing Council Focus Areas, as well as meeting identified needs in the City’s Parks Master Plan and 2040 General Plan. With Council’s approval today, staff will conduct thorough site due diligence within the period allotted by the Agreement and return to Council with any additional information, if necessary, regarding any findings.
Prior to the close of the property purchase, expected mid-December 2025, staff will also return to Council with a separate item proposing an interim operations plan for site management post-acquisition which may include additional resource and budgetary requests. Future development of the site will follow a robust community outreach and site development planning process, including identification of necessary funding for any improvements to the property.
Staff recommends the City Council adopt the resolution approving the Purchase and Sale Agreement and adopt Budget Adjustment No. 92P3 to allocate the necessary funds to (1) provide an initial deposit of $100,000 and (2) fund the balance necessary to complete the purchase, including related acquisition costs such as broker fees and site inspections, pending a successful due diligence period.
FINANCIAL IMPACTS:
The proposed property acquisition will be funded through a combination of existing appropriations and available balances across multiple funding sources which totals $25,600,000. This will allow for total purchase price and related acquisition costs such as broker fees, due diligence related testing and inspections, and initial site management, and it is proposed to be facilitated as follows:
Existing Appropriations
• General Fund Recreational Opportunities Project Funds - $470,000
• Measure G Recreational Opportunities Project Funds - $4,000,000
• City Facility Planning Project (33FC23CM01) - $1,050,000
These funds have been appropriated through prior Council actions and are available.
Unassigned Fund Balances
• General Fund Facility Reserves Unassigned Fund Balance - $5,570,000
• Park Acquisition/Development Funds Unassigned Fund Balance - $12,510,000
• General Fund Unassigned Fund Balance - $2,000,000
Appropriation of unassigned fund balances total $20,080,000.
The General Fund Facility Reserve has an unassigned fund balance of $5.6 million. The Facility Reserve is an appropriate funding source wherein the General Fund makes annual contributions for the improvement, expansion, and construction of City-owned facilities.
The Park Acquisition & Development Fund has an unassigned fund of $12.6 million. These funds are an eligible funding source as they collected through development impact fees for the creation, expansion and improvement of parks and recreational facilities.
While the Fiscal Year 2024/25 audit has not yet been finalized, City staff has nearly completed the year-end closing process and has a high level of confidence in the strength of the General Fund’s ending unassigned fund balance. The usage of $2.0 million of General Fund unassigned fund balance for this purchase not only aligns with Council Focus Areas but is a prudent use of one-time funds for this one-time cost.
Unassigned fund balances for the General Fund Facility Reserve and the Park Acquisition & Development fund are stated at their FY 2025/26 starting balance. The proposed appropriation would utilize most of the available balance. Per fiscal policy, the Facility Reserve will continue to receive annual contributions from the General Fund for future projects. The Park Acquisition & Development Fund will continue to collect development impact fees which will also accumulate for future projects and needs.
Through careful analysis of the General Fund, staff believes that the General Fund is in a strong fiscal position and can accommodate this request in addition to our committed and future needs.
CEQA:
The authorization of this purchase and sale agreement is not a project subject to the California Environmental Quality Act (CEQA) (Public Resources Code section 21000, et. seq.) pursuant to CEQA Guidelines (California Code of Regulations, Title 14, section 15000, et seq.) sections 15061(b)(3) (Common Sense Exemption). Further, and on a separate and independent basis, pursuant to CEQA Guidelines section 15004(b)(2)(A), any future use or development of the Property is too speculative at this stage to allow for meaningful environmental assessment. Any future use or development will be contingent on CEQA review and compliance.
CEQA Guideline 15061(b)(3) (Common Sense Exemption): This subsection excludes from CEQA activities that do not have the potential to cause a significant effect on the environment. This approval does not commit the City to any proposed course of action regarding the use or development of the Property. Any future changes to or development of the Property will be analyzed and approved in accordance with CEQA and the Napa Municipal Code.
CEQA Guideline 15004(b)(2)(A), addressing the timing of environmental review under CEQA, requires environmental analyses be completed “as early as feasible” but “late enough to provide meaningful information for environmental assessment.” This section authorizes the City to “enter into land acquisition agreements” before completion of CEQA “when the [City] has conditioned the [City’s] future use of the site on CEQA compliance.” Any future use or development of the Property is too premature at this stage for meaningful environmental assessment. The resolution states the City conditions any future use or development of the Property upon completion of all necessary CEQA review and approval processes.
DOCUMENTS ATTACHED:
ATCH 1 – Resolution
EX A – Purchase and Sale Agreement
EX B – Budget Adjustment No. 92P3
NOTIFICATION:
None.