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HomeMy WebLinkAbout02/16/1993, C-5 - LEASE OF APN 073-281-004 IN STENNER CANYON MEONG DATE: ,411 11 city Of San 1S OBISPO FFew uary 16, 1993 TNUM COUNCIL AGENDA REPORT From: John Moss � Prepared by: Sue Baasch-gq Acting Utilifks Director Administrative Analyst 7)✓ SUBJECT: Lease of APN 073-281-004 in Stenner Canyon CAO RECOMMENDATION By motion, approve and authorize the Mayor to execute a five year lease of APN 073- 281-004 in Stenner Canyon with Kenneth L. Glick. DISCUSSION At the Novembet 17, 1992 Councilmeeting, staff presented an analysis of possible interim or long term uses of a city-owned parcel in Stenner Canyon, APN 073-281-004. In line with staff's recommendation not to sell or exchange the real property at this time, Council directed staff to develop a five year lease of the 13 acre parcel with Kenneth Glick, owner of the mobilehome on the parcel. Kenneth Glick, an adjacent property owner, purchased the mobilehome located on the property when it was declared surplus to city needs. Because of a number of factors, primarily the difficulty of moving the mobilehome, Mr. Glick requested Council consideration of possible disposition of the underlying real property. This request resulted in the analysis presented on November 17, 1992. Staff has met with Mr. Glick several times to develop the proposed lease. The lease contains the following key provisions, which both parties support: ■ Five year term; ■ First year monthly rental rate of 4275; ■ Annual increases of four percent to the rental rate; ■ Lessee to assume full responsibility for all costs associated with utilities, including supply of water to the site; ■ Requirement to move the mobilehome at the end of the five year term. FISCAL IMPACT Over the five year period, the estimated revenue to the Water Fund is $17,300. Attachment: Lease 11/17/92 Council Agenda Report - Consideration of Disposition of City Property: Stenner Canyon APN 073-281-004 LEASE OF PROPERTY: Stenner Canyon APN 073-281-004 This lease, made and entered into this day of , 1993, by and between the CITY OF SAN LUIS OBISPO (hereinafter, "City"), a Municipal Corporation, and KENNETH L. GLICK (hereinafter "Lessee"). WITNESSETH: WHEREAS, the parties hereto desire to enter into an agreement whereby the City will lease approximately 13.62 acres of the City's real property known as APN 073-281-004, Stenner Canyon, San Luis Obispo County, California. NOW, THEREFORE, in consideration of the promises and agreements, covenants and conditions stated herein, the parties agree as follows: 1 . PREMISES LEASED City leases to lessee the real property described in Exhibit A to this lease, together with a double-wide garage thereon, subject to any rights and or easements as described in Schedule B of Exhibit A. 2. TERM The term of this lease shall commence on 1993, and extend for a period of five (5) years. 3. RENTAL Lessee shall pay to the City the sum of Two Hundred Seventy-five dollars ($2751 per month for the first year, which shall include the real property and fixtures described above, payable monthly in advance on the first day of each month. The amount of rent owed by the Lessee shall be increased annually on the anniversary date of this lease by four (4) percent. No rent shall be due for the first two months after the lease is executed, as the Lessee requests this time to secure water to the site. �s 1 Lease of APN 073-281-004 Page 2 4. SECURITY DEPOSIT Lessee shall deposit with City upon execution hereof a security deposit in the amount of one month's rent as security for Lessee's faithful performance of obligations hereunder. If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, City may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default for the payment of any other sum to which City may become obligated by reason of Lessee's default, or to compensate City for any loss or damage which City may suffer thereby. If City so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with City in an amount sufficient to restore said deposit to the full amount then required of Lessee. If the monthly base rent shall, from time to time, increase during the term of this lease, Lessee shall, at the time of such increase, deposit with City additional money as a security deposit so that the total amount of the security deposit held by City shall at all times bear the same proportion to the then current base rent as the initial security deposit bears to the initial base rent. City shall not be required to keep said security deposit separate from its general accounts. If Lessee performs all of Lessee's obligations hereunder, said deposit, or so much thereof as has not heretofore been applied by City, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at City's option, to the last assignee, if any, of Lessee's interest hereunder) at the expiration of the term hereof, and after Lessee has vacated the premises. 5. DEFAULT Lessee agrees to pay said rents to City at the time and in the manner herein provided, without any deduction whatever and keep the leased premises free from any and all claims and demands against City of any kind or character. Should Lessee fail to pay any part of the rent herein specified, at the times or in the manner herein provided, or fail faithfully to comply with or perform any other of the terms, conditions, covenants and agreements of this ease on the part of Lessee to be performed or complied with, then and in that event, City may terminate this lease or may pursue any remedy whatsoever provided for by law, and in any of said events, City shall be entitled to take possession of said leased property and may enter into and upon said leased premises, without notice to said Lessee, and exclude said Lessee therefrom and from in.any manner having access thereto, and remove all persons and property therefrom, and by process of law, or otherwise, take and resume possession of said leased premises, and in the removal of such property, City shall in nowise be responsible or liable either to Lessee or to any other person whomsoever for such property or the safe keeping thereof or for any damage. City Lease of APN 073-281-004 Page 3 is hereby further authorized to store such removed property in any warehouse or other place at the expense and for the account of Lessee. 6. RIGHT-OF-WAY Nothing in this lease will prohibit City's continued access to its water lines and facilities adjacent to this property. Fencing or other obstruction of the privately-maintained road is prohibited. 7. USE Lessee shall be entitled to use the property as the site for Lessee's mobilehome, grazing and other lawful uses, but this use is limited to activities that will have no detrimental impact on the area environment or the creek habitat or water quality. Lessee agrees to keep said premises in a clean, wholesome condition, free from rubbish, garbage and like accumulations of waste. 8. UTILITIES Lessee shall make all arrangements for any payment due for all utilities and services furnished to or used by it on the leased premises, including, without limitation, gas, electricity, water, telephone service, trash collection, and sanitation. This includes any and all costs for connection charges. The City assumes no responsibility and makes no warranties regarding any utilities, and Lessee hereby holds the City harmless in this regard. 9. ALTERATIONS AND REPAIRS Lessee agrees that the garage is now in tenantable and good order and condition and Lessee shall keep and maintain premises in good and sanitary order and condition, and that no alteration, repair or change shall made in or about leased premises without the written consent of the City, said Lessee hereby waiving all rights under the provisions of section 1942 of the Civil Code of the state of California to make repairs at the City's expense. Lessee shall not mar or deface in any manner any part of said leased premises. Lessee shall,at the termination of this lease, surrender leased premises to the City in as good order and condition as reasonable and proper use will permit. 10. PROPERTY TAX If this lease should result in the assessment of taxes for this real property, including, but not limited to, possessory interest taxes, Lessee agrees that Lease of APN 073-281-004 Page 4 any tax liability will result in an increase in the amount of rent due the City, equal to the amount of any such tax liability. 11 . HOLDING OVER If Lessee holds possession of premises after the expiration of the term of this lease, Lessee shall become a tenant from month to month only upon the terms herein specified, but at a monthly rent of Three Hundred and Seventy-Five Dollars ($375:) per month, payable monthly in advance on the first day of each month and shall continue to be such tenant until such tenancy shall be terminated by the City or until Lessee shall have given to City a written notice at least one month prior.to the date of the termination of such monthly tenancy of Lessee's intention to terminate such tenancy and shall at the expiration of such month have vacated and surrendered possession of said leased premises. 12. ASSIGNMENT Lessee shall not assign this lease in whole or in part nor sublet the premises in whole or in part without the written consent of City. Said consent shall not be unreasonably withheld. If the City consents to a sublease, Lessee shall remain responsible for the performance of all the terms, covenants and conditions of this Lease including financial obligations to the City. If Lessee assigns or subleases said Lease or any portion thereof without the prior written consent of the City, then said sublease or assignment shall, at the option of the City, immediately cease and terminate. No interest of Lessee in this lease shall be assignable by operation of law. Each of the following acts shall be considered an involuntary assignment: a. If Lessee is or becomes bankrupt or insolvent, makes an assignment for benefit of creditors; b. If a writ of attachment or execution is levied on this lease; C. If, in any proceeding or action to which Lessee is a party, a receiver is appointed with authority to take possession of the premises. Any involuntary assignment shall constitute a default by Lessee and City shall have the right to elect to terminate this lease. C-S-S� Lease of APN 073-281-004 Page 5 13. INSPECTION The City shall have the right at all reasonable times to enter upon the premises for the purpose of inspecting the same, determining that all the terms, covenants and conditions of this lease are being kept and performed by Lessee. 14. HAZARDOUS WASTE Lessee agrees it will not, in violation of any applicable law, place, hold, or dispose of any hazardous material (defined hereinafter) on, under or at the premises, the building or the complex and that it will not, in violation of any applicable law, use the premises or any other portion of the building or the complex as a treatment, storage, or disposal (whether permanent or temporary) site for any hazardous material. Lessee further agrees that it will not cause or allow any asbestos to be incorporated into any improvements or alternations which it makes or causes to be made to the premises. Lessee hereby indemnifies the Lessor against any all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever (including without limitation, court costs and attorneys' fees) which at any time or from time to time may be paid, incurred or suffered by, or asserted against the City for, with respect to, or as a direct or indirect result of (a) breach by Lessee of the foregoing covenants, or, (b) to the extent caused or allowed by Lessee or any agent, employee, invitee, or licensee of leakage, spillage, discharge, emission or release-from, onto, or into the premises, the complex, the atmosphere, or any watercourse, body of water, or groundwater, or any hazardous material (including, without limitation, or any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under the Comprehensive Environment Response, Compensation and Liability Act, any so-called "Superfund" or "Superlien" law, or any other federal, state, local or other statute, law, ordinance, code, rule, regulation, order or decree regulating to or imposing liability or standards of conduct concerning any hazardous material); and the provisions of and undertakings and indemnification set out in this paragraph shall survive the termination of this Lease, and shall continue to be the personal liability, obligation and indemnification of the Lessee, binding upon the Lessee, forever. 15. INDEMNIFICATION - Lessee shall defend, indemnify and save harmless the City and its agents, officers and employees against any and all claims and demands made because of: (a) any damage, injury or death suffered by any person or corporation and caused by any negligent act or omission of Lessee, its agents, employees, tenants, or assigns under this agreement; d E�6 Lease of APN 073-281-004 Page 6 (b) any damage caused by any negligent act or omission of Lessee, its agents, employees, tenants or assigns under this agreement to any property of the City and its agents, officers and employees; (c) any damage, injury or death suffered by any agent, tenant, or assign of Lessee under this agreement, except for claims and demands resulting from the negligence or willful misconduct of the City and its agents, officers and employees; (d) Lessee's negligent violation of any law, any regulation or any term or condition of any permit. Lessee shall also defend, indemnify and save harmless the City and its agents, officers and employees against any and all expense of investigating and defending against such claims and demands, including, but not limited to, attorney's fees and costs. 16. INSURANCE Lessee shall provide insurance as described in Exhibit B to this lease. 17. MODIFICATION OF THIS AGREEMENT Each of the terms, covenants, conditions of this lease are mutual and dependant, and any breach of any of the said terms, covenants or conditions shall constitute grounds for the termination, cancellation, or forfeiture of this lease. 18. ENFORCEMENT COSTS AND ATTORNEY'S FEES The prevailing party in any action between the parties to this agreement brought to enforce the terms of this agreement may recover from the other party its reasonable cost and attorneys fees in connection with such an action. 19. WAIVER OF RELOCATION ASSISTANCE In accordance with. Civil Code Section 3513, Lessee hereby waives any rights to relocation assistance to which Lessee might otherwise be entitled, pursuant to Government Code Section 7260, et sea. Lessee shall indemnify and hold City harmless for any and all claims and demands which may be made against City in the event Lessee fails to include a waiver of relocation assistance clause in any lease, sublease, assignment or other agreement with respect to occupancy of the property by any subtenant or assign. �s7 Lease of APN 073-281-004 Page 7 20. REMOVAL OF MOBILE HOME At the end of the lease term, Lessee shall, at this sole cost and expense, remove the existing mobile home from the leased premises and restore the mobile home site to an undeveloped condition acceptable to the City. Should Lessee fail to remove the mobile home within 60 days of the expiration of the lease term or sooner termination, at City's option: (1) said mobile home shall become the property of City; or (2) City may remove and dispose of said mobile home. Lessee shall indemnify and hold City harmless for all costs incurred, or claims, actions, liens or judgments arising as a result of the removal or disposal or City ownership of said mobile home on Lessee's failure to remove. 21 . SUBJECT TO ALL LAWS AND BINDING This lease shall be subject to and subordinate to all laws, rules and regulations of the State of California and City of San Luis Obispo, including any and all conditions imposed by the City Council. This lease shall extend to and be binding upon the parties hereto, their representatives, assigns and successors, whomsoever. 22. NOTICE Any notice required or permitted to be given or served under the terms hereof shall be considered delivered when sent registered, return receipt requested, through the United States mail to: City Lessee Utilities Director Kenneth L. Glick City of San Luis Obispo 1315 Santa Rosa Street 955 Morro Street San Luis Obispo, CA 93401 San Luis Obispo, CA 93401 805-781-7215 805-544-3282 21 . ENTIRE AGREEMENT This lease contains the entire agreement of the parties on the matters covered and it may not be modified except by written agreement. Lease of APN 073-281-004 Page 8 IN WITNESS WHEREOF, the parties have executed this lease on the date first above written. CITY OF SAN LUIS OBISPO, KENNETH L. GLICK a municipal corporation Mayor Peg Pinard ATTEST: APPROVED AS TO FORM: <Q/�� City Clerk Diane Gladwell it Atto ey City Ad inistraUve Officer 742,z Finance Director hies Director E MIBIT A CONDITION OF TITLE REpur T SCHEDULE A DATE OF REPORT: June 15, 1992 ORDER NUMBER: 208527 - TB LIABILITY: $5,000.00 FEE: $ 500.00 1. Name of Party: CITY OF SAN LUIS OBISPO 2. The Interest referred to in the Application is: A FEE 3. The Land referred to in the Application is described as follows: PARCEL 1: That portion of Lot 9 according to "Map of the Partition of a part of the Rancho Potrero de San Luis Obispo, made by R.R. Harris in September 1887", in the County of San Luis Obispo, State of California, filed for record December 19, 1887 in Book A at page 171 of Maps, in the Office of the County Recorder of said County, described as follows: Beginning at stake S.45 of said Harris Survey; thence North 830 35' East, 895 feet to stake M.5; thence South 540 53' East, 225 feet to stake M.6; thence South 140 32' East, 133 feet to stake M.1; thence North 830 03' West, 269 feet to stake M.2; thence South 440 10' West, 558 feet to stake M.3; thence South 790 25' West, 1226 feet to stake M.4; thence North 270 East, 462 feet; thence North 570 45' East, 631 feet to stake S.45 the point of beginning. Except the Easterly 5 acres, more or less, as described in the deed to Maria Alberti, recorded January 5, 1951 in Book 592 at page 434 of Official Records. CONDTF2.11/15/97-Irc C S-io CONDITION OF TITLE REPORT SCHEDULE B ORDER NUMBER: 208527 - TB TICOR TITLE INSURANCE COMPANY reports that the Title Instruments, on the date hereof, disclose: OWNERSHIP OF THE INTEREST IS IN THE NAME OF: CITY OF SAN LUIS OBISPO, a municipal corporation REAL ESTATE TABES: none THE FOLLOWING DEFECTS, LIENS AND ENCUMBRANCES (WHICH ARE NOT NECESSARILY SHOWN IN THEIR ORDER OF PRIORITY) AGAINST THE INTEREST: 1. Such rights and easements for navigation and fishery which may exist over that portion of said land lying beneath the waters of Chorro Creek. 2. An easement for the purpose shown below and rights incidental thereto as set forth in a document Granted to: County of San Luis Obispo Recorded: June 11, 1942 in Book 316 at pages 339 and 341 of Official Records Purpose: public highway Affects: the Westerly and Northwesterly 20 feet of said land and as shown on Record of Survey recorded January 29, 1980 in Book 37, page 27 of Record of Surveys 3. Perpetual easements and rights of way affecting, as referred to in the Decree of Declaration of Taking issued out of the District Court of the United States in and for the Southern District of California, Case No. 2408-8 Civil, entitled United States of America, Plaintiff, vs. Certain Parcels of Land in San Luis Obispo County, State of California, Maria Alberti, Lorenzo Alberti, et al. , Defendents, a certified copy of which decree was recorded September 23, 1942 in Book 326 at page 75 of Official Records. By Quitclaim Deed recorded August 12, 1953 in Book 722 at page 91 of Official Records, United States of America, quitclaimed to the City of San Luis Obispo certain portions of said C0 orra.9/78/82-BK CONDITION OF TITLE REF 1.T Page 2 SCHEDULE B (Continued) ORDER NUMBER: 208527 - TB easements, reference being made to the record thereof for complete description. 4. An easement for the purpose shown below and rights incidental thereto as set forth in a document Granted to: United States of America Recorded: April 26, 1944 in. Book 362 at page 31 of Official Records Purpose: appurtenances for the conveyance and distribution of water Affects: portions of said land S. Water rights, claims or title to water, whether or not the matters are shown by the public records. THE FOLLOWING MATTERS ARE DISCLOSED BY NAME ONLY AND THE COMPANY, WITHOUT ADDITIONAL INFORMATION, IS UNABLE TO DETERMINE WHETHER ANY OR ALL OF THESE MATTERS ARE DEFECTS, LIENS OR ENCUMBRANCES AGAINST THE INTEREST: none CONDT F4.11/20181•Irc ..� �goo:c- N 8 ° Y F Z Q Y Q Y Q tSol• N Q w a 6 0. • •Q •w� �N V �iyyN� •YYyy tO'fppVIVO,; O �` � m~ • AOCi ^:EC nN "uOp4 Y Y \N 0� Y 9� •� :SDDX3°foup°�i�-E� � � yV f 1Y =�se.ss Z Oz CL M Zy 0 wQl`q Q q a 0 Q e S•' w � I� O = Y " J 11 . r cc�Y W= v 0 ol►° Z w \ r Hy Z a a � 3 d •p� 0 Y.�• f,\ � � O 4. z t Y ^ W ul • { M O i O r �{ y = �. M t j a •a o .wt s .. Oft •'� a YC:! y,. s a • Q < < r oa X _s.4, 46 Ike +'o � a Zoe �; z• pIL � iO 2p 7J e V • ilio . ? � M 4 r�1 (✓ 9 J JLJ pYo 1� z x e =1 E w < U tr L a w z1: ? V 0 Q w ^ ItK, . Is pda r = te 00 { 'i 4. 01E a ejlT ^ , ^ l� YY ^yil V V , e ei• ii :S 1 ry P. \ �fp .. p p i e •ar C S'/_ EXHIBIT B INSURANCE REQUIREMENTS FOR LESSEES (NO AUTO RISKS) Lessee sball procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee's operation and use of the leased premises. The cost of such insurance shall be bome by the Lessee. Minimum Scope of insurance Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance . (for lessees with employees). 3. Property insurance against all risks of loss to any tenant.improvements or betterments. Minimum Limits of Insurance Lessee shall maintain limits no Iess than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 3. Property Insurance: Full replacement cost with no coinsurance penalty provision. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either. the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions The general liability policy is to contain, or be endorsed to contain, the following provisions: 1. The City, its officers,officials,employees, agents and volunteers are to be covered as insureds as respects: liability arising out of premises owned, occupied or used by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. The Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials,employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Lessee's insurance shall apply separately to each insured against whom claim is trade or suit is brought, except with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to stats_that coverage shall not be suspended, voided,cancelled by either party, reduced in coverage or in limits except after thirty(30)days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceotability of Insurers Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANII. Verification of Coverage Lessee shall famish the City with a certificate of insurance showing maintenance of the required insurance coverage. An original endorsement effecting general liability coverage required by this clause is also to be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before the lease commences. 17 MrsNov mbeerE17, 199 $ city o� San L.,.iS OBISPO �, BM COUNCIL AGENDA REPORT From: John Moss Prepared by: Sue Baasch Acting Utili s Director Administrative Analyst SUBJECT: Consideration of Disposition of City Property: Stenner Canyon APN 073-281-004 CAO RECOMMENDATION Receive a report from staff concerning the disposition of City-owned real property in Stenner Canyon and direct staff to proceed with the desired alternative. The staff's suggested alternatives are voiding the sale, followed by leasing (alternative 5 and alternative 1). DISCUSSION Background This parcel in Stenner Canyon was used historically to provide housing for the Water Treatment Plant Supervisor, but has not been used for that purpose since 1990. The housing, a double-wide mobile home, was auctioned in late 1990 to the highest bidder, who elected not to move it and sold it to the second bidder, Ken Glick. Due to existing site conditions, the relocation of the mobile home was discovered to be extremely difficult and costly. The mobile home remains on the property. The owner, Mr. Glick, originally asked if the City was interested in leasing the property. Mr. Glick also stated he would be interested in purchasing or possibly exchanging other property for this site, if these options would be more advantageous for future City plans. At the regular scheduled meeting of the City Council on June 1, 1992, staff recommended the City not lease the property to Mr. Glick but proceed with assisting Mr. Glick in the, relocation of the mobile home as required in the original mobile home purchase agreement. Council denied staff's recommendation and directed staff to evaluate the advantages and disadvantages of selling, trading, or leasing the property the mobile home occupies to Mr. � Glick. At Council's direction, staff has analyzed the possible advantages and disadvantages of selling, exchanging or leasing the property. A brief summary of that analysis is as follows. Sale of the property Mr. Glick would be interested in purchasing the property because he is concerned about security for his other properties located farther up Stenner Canyon and the current location of the mobile home is a good location for monitoring access further in the canyon. The parcel is currently zoned agriculture, and is included in both the City and County General Plan areas. It lies within the City's "green belt" as it currently defined in the City's draft Open Space Element. If the property is sold, the City could require Mr. Glick to merge the -s is Ili�l��flll'►11111(I��I� II�III city Of sap .,, s OBISPO Ge COUNCIL AGENDA REPORT Stenner Canyon Property Page 2 parcel with his other property, if possible, thus supporting the draft City Open Space Element policy of establishing a green belt around the City and the County goal of consolidating parcels to promote larger standard divisions of property in the area. The City Council must declare the property surplus prior to a sale. This could be done, as the Utilities Department currently has not identified any plan for this parcel. However, the Department would have to ensure that any disposition of the property assured continued access to its water facilities across the road and did not create access issues for adjoining property owners. The potential advantage of selling the property would be to produce additional revenue for the Water Fund and to resolve the issue of the mobile home remaining on City property. However, as the purchase price would be set by an appraisal of the property during the current soft real estate market, the projected revenues may not be as high as in a stronger economy. Exchange of the orooerty Mr. Glick has said that he would be willing to consider an exchange of some of his property that is contiguous to the City's Parcels 6 and 7 for Parcel 4, if the City were to favor an exchange over a sale. The terrain of the property adjoining parcels 6 and 7 is rolling grassland. It is difficult to assess the value of acquiring this additional property. The amount of property the City would receive through the exchange would be based on the appraised value of Parcel 4, not on the total acreage. As in a sale of the property, access to City, property and facilities would have to be addressed, as would the protection of any access rights for adjacent property owners. Leasing the orooerty Leasing the property to Mr. Glick would solve the current difficulty of the mobile home on City property. It would allow Mr. Glick to house a ranch foreman on the property to provide the security in the canyon he desires. The City, by maintaining ownership, would be in a better position to evaluate the sale of the property in a better real estate market in the future, if the sale of the property continues to be contemplated. Mr. Glick has indicated he would be willing to be responsible for all utilities, including the supply of water, in a lease arrangement. Process required to sell, trade, or Iease the property The following section outlines the process required to.sell, trade, or lease City owned real property. The purpose of outlining these steps in some detail for the Council j&=to create a perception that there are insurmountable barriers to a sale, trade, or lease. This is not the %/7- .��� 111���►�,►►►w�IIIII�piIUIN city of Sant, 3 OBISpo b 1939=15% COUNCIL AGENDA REPORT Stenner Canyon Property Page 3 case. Instead, staff wishes to point out that there is a process that must be followed to •- dispose of City property, and that this process will require a fairly sizeable investment of ' staff time and some costs. This investment of staff time and resources must be weighed against the possible advantages of pursuing such a transaction. The City Charter, Section 906, states that the sale or lease of City property must be by a F, resolution of the City Council. An appraisal will assure that fair market value is received if the property is sold. State lave places some requirements on the disposition of city-owned property. Government Code Section 65402 requires that all sales be reviewed by the Planning Commission to determine compliance with the General Plan. In this case, both the City and County planning commissions will need to issue conformity reports. Government Code 54220 requires that the City offer property before a sale or lease is awarded to (1 ) Housing Authorities, (2) Parks, recreation and open space areas, (3) Enterprise zones, (4) Schools. An offer from these entities need only be accepted if the terms are acceptable to the City. SUMMARY Of the three options described above, selling, exchanging or leasing, a lease seems to have �. the most advantages. A lease addresses current issues and maintains options for the future. The amount of potential earnings from a sale or acquisition of additional land adjacent to parcel 6 and 7 from a property exchange do not seem like compelling reasons to proceed to dispose of the property at this time. ,. Staff's recommendation based on the above discussed options, would be to lease the property to Mr. Glick, as outlined in alternative number one. However, Council may wish to consider all of the alternatives and provide staff direction to proceed as appropriate. . Alternatives 4 and 5 of this report were not included in the Council's direction on June 1, 1992, however, staff feels they do deserve consideration by Council. Alternative #1 - Lease of the Property Direct staff to negotiate a lease for Council's review and approval. Staff recommends that in determining the appropriate lease amount, careful consideration be given to the actual market value of the mobile home versus what was actually paid by Mr. Glick. As part of the original agreement for sale of the mobile home, the buyer was required to move the mobile home from the property. This requirement was likely reflected in the price the City received for the mobile home, $21,000. Additionally, the lease amount should also consider the fair market price of comparable double wide mobile hom rent, less utilities. The lease would be for five years with an optional five year renewal, he rent to escalate annually with the CPI index. 112111h�11111i l�l�° j�UID city of san .. Js oBispo Ada COUNCIL AGENDA REPORT Stenner Canyon Property Page 4 Alternative #2 - Sale of the Prooertv If Council wishes to proceed with either the sale or property exchange, staff should be directed to obtain a formal appraisal of the property and to seek general plan conformity reports from both the City and County planning commissions. The appraisal has been estimated at $800 and the County's conformity report filing fee will be $500. The City's property management manual states that the sale of city property can be conducted through a Request for Proposal (RFP) process. Staff recommends this over an auction or formal bid (the other options), as it offers a means of negotiating various types of conditions and addressing departmental concerns about continued access to city facilities. If Council favors this option, staff will prepare a draft RFP for Council's review and approval. After a review of the proposals and staff's recommendation, Council would approve surplus and sale of the property. Alternative #3 - Exchange of the Property Following an appraisal of the property, staff would meet with Glick and negotiate a proposed property exchange. The City would seek to enlarge parcels .6 and 7 with a lot line adjustment. The exact terms of the exchange and a Resolution to sell would be brought to Council for final approval. Alternative #4 - Retain control and ownership of the Prooertv Direct staff to work with Glick for the removal of the mobile home per the original mobile home purchase agreement. The terms and requirements of the mobile home purchase agreement clearly identified the requirement to move the mobile home from the City owned parcel. Staff still feels that the original recommendation would best serve all the interests of the City, but recognizes that it may cause some hardship to Mr. Glick. Alternative #5 - Void the original mobile home purchase agreement Since the original purchase agreement for the mobile home required removal of the mobile home from the property, and Mr. Glick to date has been unable to comply with this requirement, upon mutual consent with Mr. Glick, Council may wish to void the original mobile home purchase agreement and refund Mr. Glick's purchase cost plus interest. Council may then direct staff to sell, lease, or trade the mobile home and property as a unit. This alternative would better insure that a fair market price for the mobile home would be received. Additionally, this alternative would relieve concerns over the fairness of the transaction since staff is aware of other property owners in Stenner Canyon, adjacent to the site, who would have bid on the purchase of the mobile home had it not been required to be moved. Attachments: Exhibit A - Area Map EXHIBIT A iePrt7193•�.�111' v::.: J~ - �_ \;, ':. _ JGS_:`6� o C_ e E /.�/ a •:� r�r '-_— -'...i7 �^ ` \��•. P�___ % J '! J - ChoFr Serrano ] 70 t 72 ._ —ray :^ C•FF: J °e RESERVOIR 2 �_ / iGG" _ °•`sa6-sPS ,P�3, •e _ ii'• .1• i' :l 'S� _ - •_ �a n <.Tinks�6:: i• .' - _- _ moi~`.! � 14� '�+ eM 599 •�'. �"e! - - _ 1: -�. y `�' �l qs. East \• - ,. -. Facility _ ;- :L PARCEL 4 �0 I" -; O �.;. �-_-� -- .� \Goa e �• � ( .-- '= �.~�___ -•- "_ E_ . . 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