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Resolution 2006-72 RESOLUTION NO. 2006-72 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY APPROVING TENTATIVE CANCELLATION OF WILLIAMSON ACT LAND CONSERVATION CONTRACT NO. 75-086, APN 835-05-006, WITH REGARD TO THE LAS ANIMAS INDUSTRIAL PARK PROJECT ON LAS ANIMAS AVENUE WHEREAS, the real property located within the County of Santa Clara, City of Gilroy, California, known as APN 835-05-006 ("the Property"), is currently subject to a land conservation contract ("the Contract"), also known as Williamson Act Contract No. 75-086. It was entered into by John R. Winn and Joseph J. Annotti, as landowners, and the County of Santa Clara, pursuant to the California Land Conservation Act of 1965 (the "Williamson Act") on February 19, 1975. It was recorded on February 25, 1975 in book 293, pages 1 through 12 of the Official Records of Santa Clara County WHEREAS, on September 22, 2004, the County of Santa Clara recorded a notice of nonrenewal of the Contract, pursuant to Section 51245 of the California Government Code; and WHEREAS, under the "nonrenewal" procedures set forth in section 4 of the Contract and in Sections 51244 and 51246(a) of the Government Code, the Contract will expire on December 31, 2013; and WHEREAS, on August 1, 2005, the Property was annexed into the City of Gilroy, upon which date the City succeeded the County of Santa Clara and became the public entity governing the - - Contract; and WHEREAS, on or about November 23,2005, Las Animas Development LLC filed with the City of Gilroy a petition to cancel the Contract, which was accompanied by a proposal to subdivide \MDO\701328.3 101006.04706084 -1- Resolution No. 2006-72 and construct an industrial park on the Property known as Las Animas Industrial Park ("the Project"); and WHEREAS, pursuant to the California Environmental Quality Act ("CEQA"), a final environmental impact report for this project entitled "Las Animas Annexation and Pre-Zoning," SCH#2002022084, dated April 2003, was certified as having been completed in compliance with CEQA by the City Council on July 18, 2005, and on that same date, CEQA Resolution No. 2005-51 was adopted making the required findings for each significant effect on the environment, adopting mitigation measures, and adopting a statement of overriding considerations for those effects which were deemed to be unavoidable; and WHEREAS, pursuant to Government Code section 51284, a duly noticed public hearing was held on September 18, 2006 which was continued to October 16, 2006. After those hearings, the Council considered the public testimony, the staff report dated September 11,2006 ("Staff Report"), the supplemental staff report dated October 1 0, 2006 ("Supplemental Staff Report"), which Staff Report and Supplemental Staff Report are attached hereto as Exhibits A and B respectively, and incorporated herein by this reference. The Council also considered a comment letter from the California Department of Conservation dated September 20, 2006; which is included in the Supplemental Staff Report, and all other documentation related to the application to cancel the Contract; and WHEREAS, the location and custodian of the documents or other materials which constitute the record of proceedings upon which this application approval is based is the office of the City Clerk. NOW, THEREFORE, BE IT RESOLVED THAT the City Council hereby makes and adopts the following findings as required by State law, based on evidence in the entire record, including the \MDO\701328.3 101006..Q4706084 -2- Resolution No. 2006-72 Staff Report and Supplemental Staff Report, and oral and written testimony. Section 1. Pursuant to Government Code section 51282(a), the cancellation of the Contract is consistent with the purposes of the Williamson Act for the following reasons: A. Pursuant to Government Code section 51282(b)(I), cancellation of the Contract is for land on which a notice of non-renewal has been served. The County of Santa Clara recorded a notice ofnonrenewal of the Contract on September 22,2004. B. Pursuant to Government Code section 51282(b)(2), cancellation of the Contract is not likely to result in the removal of adjacent lands from agricultural use. The adjacent lands to the north are located outside the City's Urban Service Area and are unlikely to be removed from agricultural use as a result of the cancellation. The lands to the east and west consist of rural residences and do not involve any commercial agricultural use. Any conversion of an adjacent property to an industrial use would be because it is designated for industrial development and the infrastructure is available. The adjacent lands to the south consist of industrial uses with a few rural residences that do not involve any commercial agricultural use. C. Pursuant to Government Code section 51282(b)(3), cancellation of the Contract is for an alternative use which is consistent with the applicable provisions of the City of Gilroy General Plan. The proposed project is for an industrial park subdivision, and the project site has a General Plan land use designation oflndustrial Park and is zoned Ml (Limited Industrial), which zoning is consistent with the designation of Industrial Park. D. Pursuant to Government Code section 51282(b)(4), cancellation of the Contract will not result in discontiguous patterns of urban development. The project site is located within an industrial zoning district. Adjacent lands to the south, east and west are within the Gilroy city limits and designated for industrial development. Existing industrial development is located directly south of the project site. Development ofthe project site would be an orderly and contiguous progression of urban development. E. Pursuant to Government Code section 51282(b)(5), there is no proximate non-contracted land which is both available and suitable for the use to which it is proposed the contracted land be put. An alternative site analysis was prepared by Colliers International, a commercial real estate bro~erage, on June 9, 2006, a copy of which is included in tbe Staff Report, to identify any alternative sites in the City of Gilroy that would be available and suitable for the use proposed for the Project. The analysis found no comparable sites in industrially designated areas as required by the General Plan that were suitable in size. Therefore, there is no available land sufficiently close to the Property that can serve the salient features of the Project and, thus, serve as a practical alternative site for the Project. Section 2. Pursuant to Government Code section 51283(b), the Santa Clara County Assessor, by letter dated May 25,2006, certified under penalty of perjury that the amount of the Contract cancellation fee that the owner of the Property shall pay is Six Hundred and Fifty-Five Thousand \MDO\701328.3 101006..Q4706084 -3- Resolution No. 2006-72 Three Hundred and Seventy-Five Dollars ($ 655,375.00), a copy of which is included in the Staff Report. Based on that determination, the City Council hereby certifies said amount as the "Cancellation Fee." Section 3. Pursuant to Government Code section 51282(a), the City Council hereby grants tentative approval for cancellation of the Contract. Section 4. The City Clerk is hereby directed to record in the office of the Santa Clara County Recorder a certificate of tentative cancellation pursuant to Government Code section 51283.4, substantially in the form set forth in Exhibit C attached hereto. The certificate shall include the following conditions and contingencies that must be satisfied prior to the issuance and recording of a certificate of cancellation of the Contract: A. The Cancellation Fee, or a recomputed cancellation fee if required pursuant to Government Code section 51283.4, has been paid in full; and B. The owner of the Property has obtained all permits necessary to commence the Project. Pursuant to Government Code section 51284.4(b), the owner of the Property shall notify the City Council when he or she has satisfied the conditions and contingencies enumerated in the certificate of tentative cancellation. Within 30 days thereafter, upon determination by the City that all conditions have in fact been satisfied, the City shall cause the certificate to be recorded, and send a copy to the Director of Conservation, State of California. If the owner of the Property instead, pursuant to subsection 4( c), notifies the City that he or she is unable to satisfy all or certain conditions, then the City shall execute and record a certificate of withdrawal of tentative approval of cancellation. In this instance, there shall be no refund of any cancellation fee paid. Section 5. Prior to the recording ofthe certificate of tentative cancellation, the owner of the Property shall grant to the City of Gilroy an indemnity, to the satisfaction of the City Attorney, agreeing to defend with counsel of the City's choice, indemnify, and hold harmless the City, its City Council, Planning Commission, agents, officers, and employees from any claim, action, or proceeding against the City, its City Council, Planning Commission, agents, officers, and employees to attack, set aside, void, or annul any tentative or final approval of the cancellation ofthe Contract made by the City, its City Council, Planning Commission, agents, officers, or employees. PASSED AND ADOPTED this 6th day of November, 2006 by the following vote: AYES: COUNCILMEMBERS: ARELLANO, BRACCO, CORREA, GARTMAN, VALIQUETTE, VELASCO, and PINHEIRO NOES: COUNCILMEMBERS: NONE \MDO\701328.3 101006.04706084 -4- Resolution No. 2006-72 ABSENT: COUNCILMEMBERS: NONE AT'~ 12 . ~ ", " ];Lt-LA i -L~L{~^- Rhonda Pellin, CityV Clerk \MDO\701328.3 101006..Q4706084 -5- Resolution No. 2006-72 EXHIBIT A City of Gilroy Community Development Department Planning Division 7351 Rosanna St. Gilroy, CA (408) 846-0440 Williamson Act Contract Cancellation September II, 2006 FILE NUMBER: M 05-14 APPLICANT: Las Animas Land Development LLC [c/o Augustine Melia (408) 848-3222] LOCATION: 315 Las Animas Avenue (APN: 835-05-006) STAFF: Cydney Casper (ccasper@ci.gilroy.ca.us) REOUESTED ACTION: Request to cancel an existing Williamson Act Contract, currently in non-renewal status, on 27.5 acres of land designated as Industrial Park. DESCRIPTION OF PROPERTY: Parcel Numbers: Land Area: Flood Zone: 835-05-006 27.5 acres "X" Panel # 060340 oo02D Date: 8-17-98 STATUS OF PROPERTY: Existing Land Use Rural ResidencelFallow Agriculture General Plan Designation Industrial Park Zoning MI STATUS OF SURROUNDING PROPERTIES: Existing Land Use General Plan Designation Zoning North: Rural Residential South: Industrial & Rural Residential East: Rural Residential/Hwy 101 West: Single Family Residential Industrial Park Industrial Park Industrial Park Low Density Residential County Ml Ml Rl M 05-14 2 9111/06 CONFORMANCE OF REOUEST WITH GENERAL PLAN: The proposed project conforms to the land use designation for the property on the General Plan map, and is consistent with the intent of the General Plan Document text and policies. ENVIRONMENTAL IMPACTS: ENVIRONMENTAL IMPACT REPORT A prior Environmental Impact Report was prepared in compliance with the California Environmental Quality Act (CEQA) by EMC Planning Group, a planning consulting firm, for the annexation of this property and four other adjacent properties. The EIR identifies several significant impacts that can be mitigated to a less-than-significant level, and recommends 17 mitigation measures that have been found to reduce the impacts to an acceptable level (Mitigation Monitoring Program in Appendix of Final EIR document). The EIR also identified two unavoidable significant adverse impacts: 1) Immitigable air quality impacts at the cumulative level and 2) Significant impacts caused by cancellation of Williamson Act Contract. Implementation of the City's Agricultural Mitigation Policy would be required. On July 18, 2005, the City Council certified the EIR and adopted a Statement of Overriding Considerations with regard to each unavoidable significant adverse impact. Feasible mitigation measures have been included with the certified EIR. ANALYSIS OF REOUEST: The California Land Conservation Act of 1965, commonly known as the Williamson Act, is a State law that creates a preservation incentive for agricultural properties. This act provides for property tax relief to owners of agricultural land who agree to limit the use of the property to agricultural operations, or other approved uses that are compatible with agricultural operations. The purpose of this Act is to allow an incentive for the voluntary conservation of agriculturally viable land. Once a contract has been entered into, the property owner may use the land only for agriculturally related uses, regardless of the underlying zoning designation of the property, or changes in jurisdiction (e.g. annexation of property into a city). In exchange for agreeing to the land use restrictions, the property owner is given a reduction in property taxes for the property involved in the contract. The minimum length of each Williamson Act contract is 10 years, and each year the contract is renewed for one year. In the event the property is sold, the Williamson Act contract remains in place, so that the new property owner is subject to the same conditions and restrictions placed on the original property owner. There are two methods that can be used to terminate a Williamson Act contract: 1. The property owner can issue a notice of non-renewal. The effect of non-renewal is to terminate the contract at the end of the current ten year term. M 05-14 3 9111/06 2. The property owner can request a cancellation of the contract. If the jurisdiction in which the property is located agrees to allow the cancellation, the property owner is required to pay a cancellation fee of 12.5 percent of the property's current assessed value to the County Assessor. Once the cancellation fee has been paid, the property is removed from the contract. Current Request The property owner of 27.5 acres located on the north side of Las Animas A venue between Monterey Road and Highway 101 is requesting early cancellation of an existing Williamson Act Contract that is in non- renewal status. The County Assessor has determined the value of the 27.5 acre parcel to be $5,243,000 therefore the contract cancellation fee is $655,375 (12.5% of $5,243,000). The applicant would be required to pay this fee prior to the cancellation being completed. Once the cancellation of the contract is complete, the property owner will be required to pay the full taxes assessed by the County Assessor's Office, rather than the reduced taxes that are now being paid. The City will have a net increase in revenue from this property once the contract is cancelled, since the amount of taxes levied against this property will increase. The amount of the increase is not known at this time. County Inclusion Criteria In 2003, Santa Clara County began updating its administration of the California Land Conservation Act in response to an audit conducted by the State in 2002. As part of this process, the County modified its Agricultural Preserve and the criteria for inclusion within the Preserve, which is required in order to enter into a Williamson Act contract. These criteria include the following: 1. Properties in the Agricultural Preserve if lands are zoned Agricultural Ranchlands (AR), Agriculture (A), Hillsides (HS) and are outside an Urban Service Area. 2. Properties in the AR, A, or HS zoning districts and inside an Urban Service Area, if properties are currently in commercial agricultural use and have not non-renewed their contract. 3. Properties in other zoning districts if the preponderance of the contracted and non-contracted lands are in a commercial agricultural use and there are unique characteristics of the agricultural enterprise warranting special findings. The County determined that the subject property did not meet these criteria and that there was no commercial agricultural use conducted on the property. Therefore, the County was going to remove the property from the Preserve and non-renew the Williamson Act Contract. Because the County process was delayed and not completed until June, 2006, the property owner filed a non-renewal notice September 22, 2004. The non-renewal process formally began on January 1, 2005. EIR Mitieation Requirements The EIR completed for the annexation of the subject property and several other adjacent parcels, indicated that although the project site included both Prime and Statewide Important farmlands, the completion of the California Agricultural Land Evaluation and Site Assessment Model (LESA) determined a less than significant impact with a LESA score of 58.6 and a Site Assessment subscore of 18.75. However, cancellation of the Williamson Act contract prior to its natural expiration was deemed a significant impact and would have to comply with the mitigation requirements of the City's Agricultural Mitigation Policy. . . M 05-14 4 9/11106 If the Council approves the cancellation request, the property owner will be required to execute a Deferred Agricultural Mitigation Agreement (see attached draft). The agreement requires the applicant to pay for appraisals to be completed upon the first tentative map to develop the property (or first permitting action if no tentative map is required). The City shall determine the fee amount based upon the appraisals completed. Payment of the fees will be paid to the City prior to the City's approval of a final map (or issuance of a building permit if no map is required). This Deferred Agricultural Mitigation Agreement is consistent with the requirements of Mitigation Measure #1 of the certified EIR. FINDINGS: In order to approve a request to cancel a Williamson Act Contract, the City Council must determine that the cancellation is consistent with the purposes of the Williamson Act by making the following findings: 1. That the cancellation is for land on which a notice of non-renewal has been served. A notice of non-renewal was filed with Santa Clara County on September 22, 2004 and the formal non-renewal process began January 1,2005. 2. That cancellation is not likely to result in the removal of adjacent lands from agricultural use. The adjacent lands to the north are located outside the City's Urban Service Area and are unlikely to be removed from agricultural use as a result of the cancellation. The lands to the east and west consist of rural residences and do not involve any commercial agricultural use. Any conversion to an industrial use would not be due to cancellation of the contract on the subject property, but because it is designated for industrial development and the infrastructure is available. The adjacent lands to the south consist of industrial uses with a few rural residences that do not involve any commercial agricultural use. 3. That cancellation is for an alternative use which is consistent with the applicable provisions of the General Plan. The project site has a General Plan land use designation of Industrial Park and is zoned Ml (Limited Industrial), which is consistent with the designation of Industrial Park. Development of the project site would be required to comply with the standards of development in the M 1 zoning district. 4. That cancellation wiU not result in discontiguous patterns of urban development. The project site is located within an industrial zoning district. Adjacent ands to the south, east and west are within the city limits and designated for industrial development. Existing industrial development is located directly south of the project site. Development of the project site would be an orderly and contiguous progression of urban development. 5. That there is no proximate non-contracted land which is both available and suitable for the use to which it is proposed the contracted land be put, or, that development of the contracted land would provide more contiguous patterns of urban development than development of proximate non-contracted land. An alternative site analysis was prepared by Colliers International, a commercial real estate brokerage, on June 9,2006 to identify any alternative sites similar in size and zoning that would be available and suitable for the use proposed for the project site. The analysis found no comparable site between 20-30 acres in size zoned Ml in the city. M 05-14 5 9/11106 STAFF RECOMMENDATION: Staff recommends that the City Council approve the request for cancellation of the Williamson Act Contract, subject to the findings noted above and the following 2 conditions: 1. The applicant shall pay the required cancellation fee to the County of Santa Clara Assessor's Office within one year of recording of the Tentative Certificate of Cancellation. 2. The Agricultural Mitigation Agreement, for feasible mitigation consistent with the requirements of the EIR completed for annexation of the property, shall be fully executed prior to issuance of the Tentative Certificate of Cancellation. illiam Faus Planning Division Manager bfaus@ci.gilroy.ca.us Attachments: Aerial Map of Project Site Land Conservation Contract recorded February 25, 1975 Letter from Santa Clara County dated April 30, 2003 Letter from Santa Clara County dated July 25, 2003 Santa Clara County map showing property to be excluded from Ag Preserve Certificate issued by the Santa Clara County Assessor's Office Alternative Site Analysis completed by Colliers International Proposed Agricultural Mitigation Agreement EXUIBIT B October 10, 2006 TO: Jay Baksa, City Administrator The City COUDCU Members FR: Cydney Casper, Planner II, ccasper@ci.gilroy.ca.us RE: M 05-14, Las Animas Land Development LLC, Williamson Act Contract Cancellation Request The Council reviewed and took public comment regarding the proposed Williamson Act Contract Cancellation at their regularly scheduled meeting of September 18, 2006. The Council continued the item for further consideration in order to provide adequate time for comments from the State Department of Conservation and to provide adequate response. On September 26, 2006 a letter was received from the State Department of Conservation regarding the proposal. A copy of the letter is attached along with two letters in response from Lee Wieder of Access Land Development Services, representative for the applicant. As stated in the previous staff report, there are five findings that need to be made in order to determine that a cancellation is consistent with the, purposes of the Williamson Act. In essence, the Department of Conservation concurs with the following fmdings: 1) A notice of non-renewal has been served; and 2) Removal of adjacent land from agricultural use is unlikely; and 3) The altemative use is consistent with the City's General Plan. The Department of Conservation has been unable to conclusively determine the following two fUldings: 4) Discontiguous pattems of urban development will not result; and 5) That there is no proximate non-contracted land which is available and suitable for the use proposed on the contracted land or that development of the contracted land would provide more contiguous pattems of urban development than development of proximate non-contracted land. In response to these last two findings, staff submits the following comments for Council consideration: ~A.\ M 05-14 2 9111/06 Discontiauous patterns of urban development will not result The Department of Conservation states: "While the site is adjacent to lands with industrial use designations, the site does not appear to be adjacent to existing urban development and contiguity appears to be based upon speculative future development."; and "Actual contiguity to exiting urban development, either at the time of cancellation or soon thereafter, must be the standard, because any appreciable delay between construction of the altemative use and achievement of contiguity results in the very evil the contiguity requirement was intended to abolish, i.e., premature and disorderly pattems of suburban development. (Honey Springs v. Board of Supervisors (1984), 157, Cal. App.3d 1122)" Those properties located to the east and west of the project site have just recently been annexed and have not yet proposed any industrial development. However, the applicant has completed one industrial development directly adjacent to the project site on the southwest comer of Las Animas and Murray Avenues. The applicant has also completed the subdivision process and is currently developing a second industrial development directly adjacent to the project site on the southeast comer of Las Animas Avenue and Monterey Road. The Department of Conservation recommended that additional information regarding the intent and ability of the landowner to develop the land in a timely manner be provided. The applicant had submitted conceptual plans with their cancellation application that were prepared for the development of the project site upon the release of the Williamson Act Contract. A copy of these plans is included with this report. Proximate noncontracted land that is available and suitable for the alternative use proposed The Department of Conservation recommended that additional information be provided regarding the availability and suitability of proximate non-contracted lands. As stated in the previous staff report dated September 11, 2006, an altemative site analysis was completed by Colliers Intemational, a commercial real estate brokerage on June 9, 2006. The site analysis found that there were no proximate non- contracted industrial lands in the 20 - 30 acre size. The analysis also found that there were no industrial lands zoned the same as the project site (M 1- Limited Industrial) in the 20 - 30 acre size within Gilroy. A copy of the previous staff report dated September 11, 2006 including a copy of.the altemative site analysis is attached with this report. M 05-14 3 9/11/06 Non-Renewal The applicant's representative, Lee Wieder of Access Land Develop~ent, has included additional information in his letter dated October 6, 2006 regarding the reasons they are requesting cancellation instead of waiting for the contract to expire in nine years. In summary they are: ./ The County's determination that the property did not meet. the criteria for a Williamson Act Contract and its removal from the Agricultural Preserve. ./ Infrastructure and public facilities are currently in place to service any future development of the property. ./ The land has not been in agricultural production for more than six years. ./ Cancellation of the contract requires the payment of $655,375 in cancellation fees and agricultural mitigation at a 1: 1 ratio that would not be received to benefit preservation of additional agricultural lands if the contract expired in nine years. ./ The contract expires in nine years, any agricultural lands that were preserved as a part of the agricultural mitigation requirements would, be preserved in perpetuity . Staff Recommendation: The prior staff report dated September 11, 2006 included a staff recommendation of approval. Mter reviewing the comment letter from the Department of Conservation and with the additional information included in this report, staff believes that the five fmdings have been met and recommends that the City Council approve the proposed Williamson Act Contract Cancellation request. The followin, materials are attached: ~ Letter from the State of California, Resources Agency, Department of Conservation, dated September 20, 2006 ~ Letter from Access Land Development, dated October 2, 2006 ~ Letter from Access Land Development, dated October 6, 2006 ~ Conceptual Tentative Map plans for development of the project site ~ M 05-14 Staff Report, dated September 11, 2006 ~--;;,,;# When recorded return to: City of Gilroy 7351 Rosanna St. Gilroy, CA 95020 Attention: City Clerk EXHIBIT C SPACE ABOVE THIS LINE FOR RECORDERS USE ONLY (Public Entity Filing Fee Waived Pursuant to Gov't Code S 6103) APN: 835-05-006 CERTIFICATE OF TENTATIVE CANCELLATION This is the certify that: 1. Las Animas Development LLC has petitioned the City of Gilroy ("City") to cancel a land conservation contract, also known as Williamson Act Contract No. 75-086 ("the Contract"), that was entered into on February 19, 1975 between John R. Winn and Joseph J. Annotti, as the landowners, and the County of Santa Clara, pursuant to the California Land Conservation Act of 1965 (the "Williamson Act"). The contract was recorded against real property located within the County of Santa Clara, City of Gilroy, California, having APN 835-05-006 and further described in Exhibit "A" hereto ("the Property"), on February 25, 1975 in book 293, pages 1-12 ofthe Official Records of Santa Clara County 2. The City Council of the City of Gilroy granted tentative approval of cancellation of the Contract on November 6,2006, as set forth in Resolution No. 2006-_. 3. A certificate of cancellation of the Contract will be issued and recorded against the Property upon the full satisfaction of the following conditions and contingencies: 1. The cancellation fee ("Cancellation Fee") determined by the City in accordance with section 51283 of the Government Code and set forth in Resolution No. 2006- has been paid in full; and 11. The owner of the Property has obtained all permits necessary to commence the industrial park project on the Property. 4. Unless the Cancellation Fee is paid in full or a certification of cancellation of contract is issued within one year from the date of the recording of this Certificate of Tentative Cancellation, the Cancellation Fee shall be recomputed as of the date ofthe notice described in section 51283.4(b) or the date the owner of the Property requests a recomputation. \MDO\701348.2 103106..Q4706084 -1- 2006. ',#>P" CERTIFICA nON I certify that the foregoing is true and correct. Executed on this _ day of Rhonda Pellin, City Clerk City of Gilroy \MDO\701348.2 103106.04706084 -2- I, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2006-72 is an original resolution, or true and correct copy of a city resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council held on the 6th day of November, 2006, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this 14th day of November, 2006. ~/// ,. / "'~t(/ ~ -~,L(, (Seal)