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Home My WebLink About06/19/2007, C5 - EXTENSION OF LEASE AGREEMENT WITH FRED GLICK FOR CITY OWNED PROPERTY IN STENNER CANYON council j agenda Repout C I TY O F SAN LU I S O B 1 S P 0 FROM: Shelly Stanwyck,Assistant City Administrative Officer Prepared By: Neil Havlik,Natural Resources Manager° SUBJECT: EXTENSION OF LEASE AGREEMENT WITH FRED GLICK FOR CITY OWNED PROPERTY IN STENNER CANYON CAO RECOMMENDATION Approve the Amendment of the lease Agreement with Fred Glick for the City property in Stenner Creek Canyon to extend the Agreement to June 30, 2008, and authorize the CAO to execute the Agreement. 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 terminate the agreement, and there continued to be interest in some kind of land trade. The most recent extension was in September 2007, when the lease was extended to June 30, 2007, 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 staff has begun to explore possibilities of a land trade with Fred Glick involving the 50% undivided interest in the 194 acre Bowden Ranch, g/havlik/councilagenda/glicckieental4 l� Council Agenda Report—Extension of Lease Agreement Page 2 which Fred Glick and his business partners continue to hold (the City holds the other 50%). This course of action was authorized by the City Council in February 2006, 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, 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 value. To resolve this and to continue to move forward on the concept, it was agreed that Fred Glick would, at his cost, research the water question with a qualified engineering firm, and that the parties would split the cost of a new appraisal. This is currently getting underway, and is expected to take some.time. In staff's judgment this represents a continuation of good faith negotiations, and therefore staff feels it is appropriate to extend the term of the lease to allow for continued discussion of the matter. 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 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 $425 per month, for a total of$5,100 for twelve months. ALTERNATIVE The Council could reject the extension. This is not recommended as the extension represents a continued good faith effort concluding this long-standing arrangement, and which involves 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 Mill 2/ �\ 200 / O O G � it II i I\ 1 x/ Q�t- 11 I 1! 800 121 Glick Ranch ` a• 4 1 i 1 111 0 \ 81O 720 n at Old TP site (City) H a 5 �i 6� J .- ' 743 'f- _ J/ \\ •� r II rr bi City property 1 rp 6 Subject to lease r � 00 CITY OF SAN LUIS OBISPO GREENBELT PROTECTION PROGRAM Glick Ranch Area 1"= 1_nnn'nnnmv 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 "CI'T'Y", 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 WIiEREAS, 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, February 1, 2006 and October 1, 2006; and WHEREAS, City and Lessee now wish to extend said lease to June 30, 2008; NOW THEREFORE, in consideration of the promises and agreements, covenants and conditions stated in said Lease dated October 14, 1998, and amended on September 1, 1999, February 1, 2006, and October 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 twelve months, commencing on July 1, 2007 and terminating June 30, 2008. 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. RENTAL. Rental for the property shall be FOUR HUNDRED AND TWENTY-FIVE DOLLARS ($425.00)per month,payable in advance without demand. es-y �, Assignment and Extension of ease Agreement ATTACHMENT 2 Page 2 of 2 4. ALL OTHER CONDITIONS OF LEASE DATED FEBRUARY 1, 2006 AS AMENDED TO REMAIN IN EFFECT. All other terms and conditions of the Lease dated February 1, 2006, as said lease has been amended from time to time, shall remain in full force and effect. IN WITNESS W 1EREOF, 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: Frederick Glick, Lessee, APPROVED AS TO FORM: ttorney,Jonathan P. Lowell G:\St4WAVLmGUCAV"d Rental Agreement Ruenswa.dw