Pittsburg has agreed to sell more than half of the now defunct Delta View golf course to a Delaware company to build a technology park and data center.
City Council approved the purchase deal this week with little discussion on a 4-0 vote with Mayor Holland Barrett White absent. Under the agreement, the city will provide financing to Pittsburg Land Holdings LLC, a subsidiary of AVAIO Digital Partners, for the 101.7 acres sold for $16.7 million.
Part of the range of the former US Army’s Camp Stoneman, the golf club grounds were donated to the city by the federal government in 1947 and opened as a nine-hole golf course. Plagued by legal and financial issues, the Delta View Golf Course, located south of West Leland Road and Golf Club Road, closed in February 2018 and the city began looking for other options for the course.
In 2018, the city entered into exclusive negotiation rights with Energy Delivery Solutions, which agreed that Pittsburg was ideally located in the Bay Area to attract data centers due to its availability of power and fiber infrastructure. . But after negotiating a sale price and schedule, the company and all of its assets – including the deal – were later acquired by AVAIO.
Another curveball came in 2019 with Governor Gavin Newsom signing amendments to the state’s surplus land law, according to Jordan Davis, director of community and economic development. By law, cities with excess land must first make it available to low-income housing developers and negotiate in good faith with those developers, he said.
“(But) we see this as land that would be in high demand,” Davis said of the former golf course the city had earmarked for a technology park that would house equipment for information technology operations. such as computers, servers, storage hardware and more.
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To move forward with its plans, the city asked the state for — and received — an exemption from the rules since it had previously entered into an agreement for exclusive bargaining rights. The only caveat was that the land had to be sold by December 31 this year.
“It’s moving a little faster” because of the new surplus land rules, he said.
To obtain the exemption, the city had to mirror the previous agreement with Energy Solutions.
“The city proposes to provide seller deferral financing evidenced by a secured promissory note and secured by a first position trust deed,” Davis said.
Under the agreement, the buyer would pay 2% interest calculated annually, accumulating immediately after the sale, but the company would not have to make the first payment until 42 months after the closing date.
To ensure the developer moves forward with the construction plans, they are required to file a connection agreement with PG&E and submit architectural designs within 12 months. If the project is not approved, however, a replacement project would have to comply with zoning and could not be a residential development, Jordan said.
No company representative was present due to the need to travel and increasing COVID cases, Jordan said. However, a company spokesperson reiterated AVAIO’s commitment and said they expect to prepare environmental documents within the next 12 to 18 months.
Resident Mark Linde, however, questioned the appraised value of the property, which he said was around $200,000 per acre. But since the electricity is already located directly on the property, he said he thought it was worth more.
“I think it actually increases property value, especially for parcels next to utility lines,” he said. “And, then, what guarantees do we have, other than in writing – I don’t see them putting in the money right away – that it’s not going to end up like the Vidrio project, where the city lost about $11 million.”
Linde was referring to a defaulting developer on the central three-block city project, Vidrio, leaving it just 90% built.
Councilman Juan Banales asked if the company could sell or pursue a different project.
Jordan said that could only happen if its technology park plans were turned down. In that case, the company could return the properties to the city, pursue a different project, or sell the property, in which case the city would split the proceeds from the sale, he said.