HomeMy WebLinkAbout10/03/2006, C5 - EXTENSION OF LEASE AGREEMENT WITH FRED GLICK FOR CITY OWNED PROPERTY IN STENNER CANYON council 1436�
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CITY OF SAN LUIS OBISPO
FROM: Shelly Stanwyck, Assistant City Administrative Officer
Prepared By: Neil Havlik,Natural Resources Manager 1'n-4
SUBJECT: EXTENSION OF LEASE AGREEMENT WITH FRED GLICK FOR
CITY OWNED PROPERTY IN STENNER CANYON
CAO RECOMMENDATION
Approve extension of the existing lease with Mr. Fred Glick of the city owned property in
Stenner Creek Canyon to June 30, 2007.
DISCUSSION
Background—The Property and Prior Agreements
The City of San Luis Obispo has owned this 14 acre property in Stenner Creek Canyon for many
years as part of the old water treatment plant. It has been leased to Mr. Ken Glick, who owns an
adjacent, 900 acre ranch, since at least 1993. A mobile home, once owned by the City but sold in
1993 to Ken Glick, is on the premises. At the time of sale of the mobile home, the property was
leased to Ken Glick for a period of five years. At the end of that period, (1998)the mobile home
was to be removed from the site and the site restored to a natural condition.
In March, 1998 Ken Glick approached City staff about the possibility of his acquisition of the 14
acre City-owned property in exchange for a conservation easement on all or part of his adjacent
ranch. Discussions about the possibility appeared promising enough that, in September 1998, the
City Council approved an extension of the lease, anticipating that some mutually acceptable
arrangement might be made during that time. For a variety of reasons, however, this did not
occur.
Extension and Assignment of the Lease Earlier This Year,and Current Proposal
The lease term has been extended numerous times, as neither party perceived a need to modify
the agreement, and there continued to be interest in some kind of land trade. The most recent
extension was in February 2006, when the lease was extended to July 31, 2006, and at the same
time was assigned from Ken Glick to his son and attorney in fact, Frederick Glick, due to Ken
Glick's failing health. During this extension we have begun to explore possibilities of a land
trade with Fred Glick involving the 50% undivided interest in the 194 acre Bowden Ranch,
which Fred Glick and his business partners continue to hold (the City holds the other 50%). This
gAavlik/councilagenda/glickrental3
Council Agenda Report—Extension of Lease Agreement Page 2
course of action was authorized by the City Council in February of this year, and the process is
continuing. Appraisals have been conducted on both the 14 acre City property and on the 50%
interest in the Bowden Ranch. The preliminary valuation of the City property by the appraiser
was considerably higher than either party expected ($620,000), and Fred Glick raised questions
about the assumptions of that value, particularly involving the cost of water well development
and septic system upgrades, which could affect the property's sale value. To resolve this and to
continue to move forward on the concept, Fred Glick has offered, at his cost, to have that
question answered by a qualified engineering firm. This may take some time, and since in staff's
opinion this represents good faith due diligence, staff feels it is appropriate to extend the term of
the lease to allow for conclusion of the matter.
In Paragraph 2, the Amended Agreement provides that, if negotiations for a land trade are not
successful, Fred Glick will remove the mobile home from the property and return the site to a
natural condition at the conclusion of the extended term. For that reason, enough time is
included in the lease extension to prepare for the move or to conclude the trade arrangements.
CONCURRENCES
The Utilities Department, which administers the property, has been a party to the discussions
with Fred Glick and concurs in the continued lease of the property to him until negotiations are
complete.
FISCAL IMPACT
Rental for the property will continue at its current level of$400 per month, for a total of$3,600
for nine months.
ALTERNATIVE
The Council could reject the extension. This is not recommended as the extension represents a
reasonable approach to concluding this long-standing arrangement, and which involve both the
need to continue to negotiate a potential sale or trade, or to allow for logistical preparations for
the physical removal of the mobile home.
Attachments:
1. Location Map
2. Extension of Lease Term
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ATTACHMENT 2
AMENDED LEASE AGREEMENT
This Amended Lease Agreement, made and entered into by and between the City of San Luis
Obispo, State of California, hereinafter referred to as "CITY", and Frederick Glick, hereinafter
referred to as "LESSEE"; as made with regard to the following
RECITALS
WHEREAS, City is the owner of certain described real property located in the County of
San Luis Obispo, State of California, identified as San Luis Obispo County APN 073-281-004; and
WHEREAS, Kenneth L. Glick, the original Lessee, has been replaced by his son and .
attorney in fact Frederick Glick, in this matter, and
WHEREAS, said real property has upon it a mobile home owned by Lessee; and
WHEREAS, City and Lessee are parties to a previous agreement, entitled "Assignment and
Extension of Lease Agreement" dated October 14, 1998, and extended on September 1, 1999, and
continuing on a month to month basis since the expiration of the term of the lease as extended; and
WHEREAS, City and Lessee now wish to extend said lease to June 30, 2007;
NOW THEREFORE, in consideration of the promises and agreements; covenants and
conditions stated in said Lease dated October 14, 1998, amended on September 1, 1999, and further
amended on February 1, 2006, the parties hereby agree as follows:
1. PREMISES: Lessee hereby rents from the City of San Luis Obispo the real property
located on Stenner Canyon Road for purposes of maintaining the mobile home currently at that
location and no other purpose.
2. TERM. The term of this Agreement shall be nine months, commencing on October 1, 2006
and terminating June 30, 2007. If Lessee remains in possession of all or any part of the property
after the expiration of the term hereof, with the express or implied consent of City, such tenancy
shall be from month to month only, and not a renewal hereof or an extension for any further term,
and in such case, monthly rent shall be payable in the amount specified in this.Agreement. Such
month-to-month tenancy shall be subject to every other provision, covenant and agreement
contained herein. Acceptance by City of rent after such expiration or earlier termination shall not
constitute a holdover hereunder or result in'a renewal. The foregoing provisions are in addition to
and do not affect the right of re-entry or any rights of City hereunder or as otherwise provided by
law or in equity, and in no way shall affect any right which City may otherwise have to recover
damages from Lessee for loss or liability incurred by City resulting from such failure by Lessee to
surrender the Premises. Nothing contained in this section shall be construed as consent by City to
any holding over by Lessee, and City expressly reserves the right to require Lessee to surrender
possession of the Premises to City as provided in this Agreement upon the expiration or other
termination of this Agreement. This Agreement may be renewed at the discretion of the City.
3. ALL OTHER CONDITIONS OF LEASE DATED FEBRUARY 1, 2006 TO REMAIN IN
EFFECT. All other terms and conditions of the Lease dated February 1, 2006, shall remain in full
force and effect.
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Assi_nment and Extension of Lease Agreement ATTACHMENT 2
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IN WITNESS WHEREOF. the parties hereto set their hands the day and year opposite their
signatures.
CITY OF SAN LUIS OBISPO
Date: By:
Ken Hampian
City Administrative Officer
Date: By:
Fred ric • lick, Lessee,
APPROVED AS TO FORM:
City Attorney, Jonathan P. Lowell
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