HomeMy WebLinkAbout05/21/1996, C-5 - YMCA SITE LEASE AT JOHNSON PARK council '�°5--21-96
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CITY OF SAN LUIS 0 B I S P 0
FROM: John Dunn, City Administrative Officer
Prepared Byaul LeSage, Director of Parks and Recreation
SUBJECT: YMCA SITE LEASE AT JOHNSON PARK
CAO RECOMMENDATION
By motion:
1. Amend the lease agreement for the YMCA's use of a portion of Johnson Park reducing
the rent from $200 per month to $1 per year, and authorize the Mayor to execute the
amended agreement.
2. Forgive any past due rent, currently estimated at $3,300.
DISCUSSION
Background
In 1977, the City entered into a long-term ground lease for the development of a racquetball
facility on City property located in Johnson Park at 1020 Southwood Drive. In 1981, the City
consented to an assignment of the lease to the San Luis Obispo County YMCA. On two
occasions, the lease was assigned to a lending institution to protect their interests in the event of
a default on the YMCA building loan. The lease is currently held by the YMCA.
The original lease was developed between the City and a commercial racquetball operation. The
lease called for a monthly rental fee of$200 and 2% of the gross revenue of the club. Since the
lease was assigned to the YMCA, only the $200 per month rent has been collected.
Mike Mogensen, General Director of the YMCA, has requested, on behalf of their board of
directors that this fee be reduced from the current rate to $1 per year. A further request was
made to forgive the back rent owed, currently in the amount of$3,300. The YMCA sees this
as a part of a continuing effort to stabilize their fiscal situation. Like most non-profit
organizations, the San Luis Obispo County YMCA has experienced a reduction in revenue over
the past few years. In spite of a major belt tightening effort, which included the refinancing of
the building loan, and the reduction of overhead costs by 25%, the YMCA operated at a deficit
of $11,600 in 1995.
Staff is in support of this request, because it is consistent with facility rental fees charged by the
City to.other non-profit groups. This includes: the ECOSLO Recycling Yard, Little Theater,
Art Center, and Children's Museum.
Additionally, it is in the best interest of the City to have a strong, full-service YMCA in the
community. Citizens would expect the Parks and Recreation Department to offer many of the
programs now available at the YMCA. The City is not in a position to be able to take on that
additional level of programming.
FISCAL IMPACT
1. Reduction of the rental fee will result in an annual revenue loss of $2,400.
2. Forgiving the back rent will result in a one-time revenue loss of about $3,300.
ALTERNATIVES
1. The City Council may choose not to consent to this item. The most likely result would
be a reduction in programs offered by the YMCA to make up the shortfall.
ATTACHMENTS
1. Letter from Mike Mogensen on behalf of the San Luis Obispo County YMCA
2. Amendment #lof the YMCA's Lease Agreement for Johnson Park
GACAORMYMCAT FAq.WP
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San Luis Obispo
County YMCA
1020 Southwood Drive April 16, 1996
San Luis Obispo CA 93401 p
Fzr(�54 San Luis Obispo City Council
990 Palm Street
Five Cities Family YMCA San Luis Obispo, CA 93401-3249
340 Pomeroy Avenue
Pismo Bich,CA x3449
-04182
(805)773182 Dear Members of the City Council,
Fax(805)773182
Sometime ago the YMCA requested that the Southwood Drive site rental fee of$200
BOARD OF DIRECTORS per month be waived and back rent forgiven.
Ezecurm CommiBee
Jadc Higbee q
President This request is a vital element to the YMCA's continued efforts to stabilize
financially and to YMCA programs that increasingly meet countless needs of Youth,
Steve McCarty Families, and Seniors in San Luis Obispo.
Vice President
Greg Stafford Mr. Le Sage has been most professional in the way he has guided me through the
Stay process that has resulted in this request of the City Council.
Bill Roberts The YMCA Board of Directors is most anxious to hear of your favorable decision.
Finance Char
Jun Gall If I can be of any further assistance please do not hesitate to call. The same goes
FnarxialDevelopment for our Board President Mr. Higbee (541-6424)
Roy Livingston Thank you.
Past President
Board limbers Sincerely,
Leslie Ba r
Darcy cry Boyd
Adrian Bray
Lam Brown
Barrie Cleveland Mike Mo
Pete Dougau ensen 9
Mickey Feuer General Director
Mike Glavin
Brad Hair
TracyHyde cc: Jack Higbee
Uoyd
Vince Maloney Paul Le Sage
Steve Mathis
Steve McCarty
Warren Mindheum
Miguel Paredes
Ted Rich
Mike Seitz
David Wong
Mike Mcgensen
Genera!Dsectar
ATTACRIENT 1
We Build Strong Kids Strong Families Strong Communities
1447z:9
AMENDMENT NO. 1
GROUND LEASE
BETWEEN THE CITY OF SAN LUIS OBISPO
AND THE SAN LUIS OBISPO COUNTY YMCA
FOR A PORTION OF JOHNSON PARK
The AGREEMENT, dated December 31, 1977, between the CITY OF SAN LUIS
OBISPO, a municipal corporation, hereinafter referred to as "City" and the SAN LUIS OBISPO
COUNTY YMCA hereinafter referred to as "LESSEE" is hereby amended as follows:
ARTICLE VI. RENT
6.01 Basic Minimum Annual Rent. TENANT shall pay the City the sum of
$1.00 per year for this ground lease.
(ARTICLE VI SECTIONS 6.02 THROUGH 6.06 HAVE BEEN DELETED.)
All other terms and conditions of the AGREEMENT remain the same.
Both CITY and LESSEE do covenant that each individual executing this addendum on
behalf of each party is a person duly authorized and empowered to execute Agreements for such
Pty•
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
on the day of , 1996.
ATTEST: CITY OF SAN LUIS OBISPO
A Municipal Corporation
City Clerk, Allen Settle, Mayor
APPROVED AS TO FORM: LESSEE:
r
/effoqornsfCi Attorney Mike Mogensen, YMCA
ATTACHMENT 2