HomeMy WebLinkAbout06/19/2007, C7 - LEASE AGREEMENT FOR JOHNSON RANCH HOUSE ,
Meeting Dere
council June 19,2007
AD aagenaa REpont N.J. C I
CITY OF SAN LUIS OBISPO
FROM: Shelly Stanwyck, Assistant City Administrative Officer
Prepared by: Brigitte Elke, Principal Administrative Analyst
SUBJECT: LEASE AGREEMENT FOR JOHNSON RANCH HOUSE
CAO RECOMMENDATION
Approve continued lease of the Johnson Ranch House by City Ranger Doug Carscaden and
authorize the City Administrative Officer to execute the new Lease Agreement.
DISCUSSION
On December 2001 the City acquired the Johnson Ranch Open Space (Attachment 1 —vicinity
map.) The ranch is located southwest of the City, at the lower Higuera freeway off ramp. The
ranch contains a viable older house and immediately adjacent to the house are several historic
farm structures in various states of repair. The ranch house is approximately 1,000 square feet in
area, has three connected bedrooms, a living room, a kitchen, and a bathroom.
Since the Johnson Ranch is currently not open for public use, any activity requiring access is not
viewed as appropriate at this time. The Conservation Plan for the Johnson Ranch Open Space is
in the stage of evaluation and staff estimates that the opening of the ranch to the public is several
years away. The house is presently leased to a City Ranger who provides maintenance and
oversight of the property. With no one living at the ranch, there is concern that it could become
an attractive location for parties or for transient individuals to take up residence. In the past, prior
to the current lease, patrolling rangers have noted on occasion that individuals have gained entry
to the ranch house.
Houses in open space. Public agencies often acquire open space that used to be a farm or ranch
with one or more homes. The Monterey Peninsula Regional Park district, for example, owns four
old ranch houses. Typically, the agencies place staff in these houses as tenants. The rents vary,
depending on the arrangements. They fall into three categories:
1. Full Rent
Tenants who occupy the residence and provide no service or benefit to the agency pay a full rent.
This could be a house located on an isolated open space with little or no public contact. The
tenant is simply a renter with no added responsibilities..
2.Mutual Benefit
In the case where a mutual benefit is provided, rents are set at half of the market rate. On the
Johnson Ranch, the tenant has to serve as caretaker and emergency contact. These duties include
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Council Agenda Report—Johnson Ranch House
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a weekly walking inspection of the ranch, checking: fence conditions, roads, ponds and creeks,
cattle grazing, and evidence of unauthorized use. The tenant is expected to contact anyone who
has entered the property, and is not authorized to be there. Such contact would be expected
regardless of the time or day. Depending on the time of the year, this could be a significant
responsibility.
3. No Rent
In open space areas that are heavily used, including activities such as camping, tenants (usually
park rangers) are expected to respond to all public disturbances. This can become a 24-hour a day
job during certain times of the year. In these cases, no rent is charged.
Present Lease Agreement. On March 4, 2003 the City Council approved the first lease
agreement for the 1,000 square feet ranch house located on the Johnson Ranch property. The
house has since been rented to Park & Recreation Department staff and is currently occupied by
Ranger Doug Carscaden. The house is rented as is and it is a small, modest house. The tenant is
expected to keep the interior of the house in a clean and neat condition. The tenant is also
responsible to maintain the grounds around the house, as this property is in public view. As
would be expected, the City will continue to make all necessary repairs to the house. The City
will be able to inspect the property, at any time, with proper notice.
At the time of the approval of the original lease agreement, it was determined that a mutual
benefit formula at fifty percent (50%) of the market rate would be a fair valuation of the property.
This was based on the City's need for on site security and the tenant serving as caretaker of the
property, as well as the emergency contact. This agreement has since mutually benefited both
parties.
The original lease agreement was entered into for the duration of one year, with an option to
extend the lease for one additional year. The lease agreement was amended on July 12, 2004 and
the tenant had subsequently leased the property on a month-to-month basis. A new yearly
agreement was entered into in September 2007 that will expire on June 30, 2007. Mr. Carscaden
has been an excellent, responsible tenant and staff recommends continuing to lease the property
on those mutually beneficial terms and for a duration of one year expiring June 30,2008..
The downside of mutual benefit. Some agencies have reported problems with their leasing of
homes to staff. Long-term residents at times can develop a proprietary attitude about the house.
Some agencies have not even been able to remove residents after they left their employment.
The proposed lease agreement carefully addresses these issues by limiting the mutual benefit
term to the term of employment with the City. In addition, this agreement does not preclude the
City from finding a use other than housing for the facility upon proper notice to the tenant.
CONCURRENCE
Neil Havlik, Natural Resources Manager, and Betsy Kiser, Parks & Recreation Director, concur
with the staff recommendation.
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Council Agenda Report—Johnson Ranch House
Page 3
FISCAL IMPACT
The proposed rent is based on the Housing Authority's assessment of similar structures and is
currently valued at $1,080.00 per month. Applying the mutual benefit formula at fifty percent
(50%) of the market lease value, the monthly rent is $540.00. The Johnson Ranch house will
therefore generate $6,480.00 in revenue for the City of San Luis Obispo per year.
The City provides for and pays for all charges for water, sewer, gas, and electricity used on the
premises. The rent charged includes full cost of utilities based on the previous calendar year
billings to the City. Currently the tenant is charged $100.00 per month for full cost recovery of
utility payments based on the actual cost of utilities for the past calendar year.
ALTERNATIVES
The Council could determine to no longer rent the house. This alternative is not recommended at
this time since it would eliminate necessary security and upkeep and no other use has been
identified at this time.
ATTACHMENTS
1. Vicinity Map
2. Lease Agreement
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CITY OF SAN LUIS OBISPO
GREENBELT PROTECTION PROGRAM
Johnson Ranch Open Space
Scale 1"=1,000'
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ATTANMEM2
LEASE AGREEMENT
This Lease Agreement, made and entered into by and between the City of San Luis Obispo, State
of California, hereinafter referred to as "CITY', and Doug Carscaden, an employee of the City of
San Luis Obispo, hereinafter referred to as "TENANT";
WITNESSETH
WHEREAS, City is the owner of certain described real property located in the City of San
Luis Obispo, State of California, as more fully described herein; and
WHEREAS, Tenant is currently an employee of the City of San Luis Obispo;
WHEREAS, the monthly lease value placed on this home as of June 30, 2007 is $1,180.00
($1,080 for rent and$100 for the cost of utilities); and
NOW THEREFORE, FOR AND IN CONSIDERATION of the following covenants and
conditions, it is hereby agreed as follows:
1. PREMISES: Tenant hereby rents from the City of San Luis Obispo the residence located at
the Johnson Ranch and commonly known as the "Ranch House", upon the following terms and
conditions.
2. TERMS OF LEASE AGREEMENT
2.1. TERM. The term, for one year, hereof shall commence on July 1, 2007 and unless earlier
terminated as provided herein, terminate on June 30, 2008. This agreement is solely a lease
agreement and it shall not be construed as an employment contract between City and Tenant. In
the event Tenant is terminated from employment with City, or should Tenant give City his notice
of resignation from his employment with City, this Agreement shall be deemed to terminate on the
earlier of either the 30`h calendar day following the effective date of such termination or
resignation, without need for notice by either party of the termination of this Agreement.
2.2. MONTH TO MONTH PROVISION. If Tenant remains in possession of all or any part of
the Premises 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 Tenant for loss or liability incurred by City resulting from such failure by
Tenant to surrender the Premises. Nothing contained in this section shall be construed as consent
by City to any holding over by Tenant, and City expressly reserves the right to require Tenant to
surrender possession of the Premises to City as provided in this Agreement upon the expiration or
other termination of this Agreement. This lease may be renewed at the discretion of the City.
Johnson Ranch House Lease
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3. RENT AMOUNT DUE
3.1. MONTHLY RENT & UTILITIES AMOUNT: Tenant shall pay the sum of $640.00 per
month beginning July l't, 2007 with payment due on the first of each month.
3.2. RENT COLLECTION: Rent shall be collected as a payroll deduction twice a month.
This Agreement constitutes the authorization to begin the deduction. In the event tenant holds over
in possession of the premises after termination described above, tenant shall be obligated to pay the
full lease value of the premises and utilities, namely, $1,180.00 per month. The tenant is not
entitled to and shall not be paid additional compensation from City for fulfilling the conditions of
this Agreement, except as provided herein. As a condition of this lease and in consideration of the
reduction in fair market rent set forth herein, tenant hereby agrees to perform certain caretaker
activities and serve as emergency contact for the Johnson Ranch property. Said activities shall
include a weekly walking inspection of the ranch, checking: fence conditions, roads, pond and
creeks, cattle grazing, and evidence of unauthorized use. The caretaker is expected to contact
anyone who has entered the property, and is not authorized to be there. Said activities are
estimated to take eight (8) hours a week. Tenant shall not perform these duties during such times
as he/she is being paid as an employee of the City.
3.3. TAX CONSEQUENCES: Tenant acknowledges, pursuant to IRS tax regulations, that
the difference between the fair market value of the rent and the amount paid is a taxable fringe
benefit that will be included on the employee's Form W-2. Tenant agrees to indemnify, defend
(upon request by City) and hold City, its elected officials, agents, officers and employees harmless
from and against any and all losses, costs, expenses, claims, liabilities, actions or damages arising
out of any dispute over the tax treatment of the benefits received by Tenant as a result of this
Agreement. The taxable fringe benefit amount is $540.00 per month.
4. IMPROVEMENTS AND REPAIRS: Tenant hereby accepts the Premises in its "as is"
condition existing as of the execution date of this Agreement subject to all applicable zoning,
municipal, county, state, and other governmental laws, ordinances and regulations governing and
regulating the use of the Premises, and any easements, covenants, restrictions or other matters of
record, and accepts this Agreement subject thereto and to all matters disclosed thereby. City will
make improvements and repairs to the Premises when considered necessary by City, including but
not limited to the repair of roofs, heaters and water heaters, replacement of broken plumbing
fixtures and water service pipes to fixtures. City shall provide drapes and carpets, and City may, at
its option, provide stoves, ovens, and a refrigerator. City will provide only such additional
maintenance as is deemed necessary by City. In the event Tenant encounters a condition, which, in
his/her view, requires maintenance, he/she shall submit a written request to the designated Agent of
the City Administrative Officer [hereinafter "City's Agent"] to repair such condition. City shall
not be obligated to make such repairs unless it deems such repairs necessary to protect the
Premises. Should Tenant replace drapes and carpets, stoves, ovens, refrigerator, roofs, heaters and
water heaters, broken plumbing fixtures or water service pipes to fixtures without prior written
approval from City's Agent any replacement costs and expenses shall be borne solely by Tenant,
and such improvements shall become the property of City. Tenant is responsible for all minor
repairs, including but not limited to clogged drains, leaky faucets, and broken windows. Tenant
will properly use and operate all electrical, gas, and plumbing fixtures and keep them as clean and
as sanitary as their condition permits. Tenant is responsible to maintain the exterior of the house
and the surrounding grounds in a reasonable manner considering that the property is owned by City
and is in the public view. /
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Johnson Ranch House Lease'—
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5. UTILITIES: City shall provide for and pay for all charges for water; sewer, gas, and
electricity used on the Premises. Rent charged shall include full cost of utilities based on the
previous calendar year billings to the City which was $1,200 for 2006. Tenant shall provide and
pay any additional utilities such as telephone and cable television.
6. OCCUPANTS`. Tenant shall not permit anyone other than tenant and his/her immediate
family, or other City Rangers, as designated on the Lease Agreement to reside on the Premises for
more than five (5) consecutive days without first obtaining written consent of City's Agent. In any
case, there shall not be more than three (3) occupants, including tenant.
7. ASSIGNMENT: Tenant shall not assign, sublet or otherwise transfer this Agreement or
any portion thereof and any attempt to do so shall be void and of no effect for any purpose and
shall furnish grounds for immediate termination of this Agreement.
8. USE OF PREMISES: Tenant agrees to occupy the Premises as Tenant's abode, and to
utilize the portions thereof for living, sleeping, cooking and dining purposes only and consistent
with the purposes for which they were respectively designed or intended to be used for such
occupancies; to keep the Premises in a neat, clean, sanitary, and orderly condition at all times
during occupancy, and not to permit rubbish, recyclables, garbage, etc., to accumulate at any time;
to not commit, suffer or permit any waste of the Premises, nor any acts to be done in violation of
any laws or ordinances, nor to use or permit the use of the Premises for any commercial, illegal or
immoral purposes; and to comply with all City laws and local ordinances concerning the Premises
and the use thereof.
9. DAMAGES: Tenant waives the right to claim damages from City for any damage resulting
to the Premises in the event that it is damaged or destroyed by fire and any other cause. City shall
not be responsible for loss of any personal property on the Premises unless such damage or loss is
due to City's sole negligence.
10. HOLD HARIIILESS: Tenant agrees to indemnify, defend (upon request by City), and save
harmless City, its elected officials; agents, officers and employees and each of them from and
against any and all losses, costs, expenses, claims, liabilities, actions or damages, including liability
for injuries to Tenant's family members, or other person or persons or damage to property of
Tenant's family members or other persons arising out of or in any way connected with the use or
occupancy of the Premises by Tenant or Tenant's family members, guests and invitees. Tenant
shall not be responsible for any damage to the Premises by park users. City will provide only
insurance as is deemed necessary to protect City's interest in the Premises.
11. ADMITTANCE: Tenant shall permit City or its agents to enter the Premises in the
company of the Tenant at reasonable times and upon reasonable notice for the purpose of making
necessary or convenient repairs or for inspection of the Premises. In the event of an emergency,
City shall have access to Premises at any time when necessary to protect City property where
advance notice to Tenant of such access is not practical.
12. BREACH: Noncompliance with provisions of this Agreement shall constitute a material
breach thereof, and, in addition to any other remedies provided by law or this Agreement in the
event of such noncompliance, City shall have the right to terminate this Agreement upon 30-day
written notice, and the interest hereby created, without liability therefore.
13. POSSESSORY INTEREST TAX: Pursuant to sections 107 et seq. of the Revenue and
Taxation Code, this Lease Agreement may subject Tenant to the payment of a possessory interest
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tax. If such a possessory interest tax is levied against Tenant, City agrees to reimburse Tenant for
the amount of the tax paid by Tenant.
14. GENERAL PROVISIONS: The failure of City or Tenant to insist in any instance on the
strict keeping, observance or performance of any covenant or agreement contained in the
Agreement, or the exercise of any election contained in the Agreement shall not be construed as a
waiver or relinquishment for the future keeping, observance or performance of such covenant or
agreement, but the same shall continue and remain in full force and effect. If any provision or
condition contained in this Agreement shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such provision or condition to persons or
circumstances other than those with respect to which it is invalid or unenforceable, shall not be
affected thereby, and each and every other provision and condition of this Agreement shall be valid
and enforceable to the fullest extent possible permitted by law. This Agreement and the rights and
obligations of the parties set forth herein shall be governed by, construed and interpreted in
accordance with the laws of the State of California. The prevailing party in any action filed arising
out of the terms of this Agreement or any alleged violation thereof shall be entitled to recover that
party's reasonable attorneys' fees and costs incurred in such an action.
15. ADDRESSES'. All notices, requests and letters should be sent to:
Director
Parks and Recreation Department
City of San Luis Obispo
1341 Nipomo St.
San Luis Obispo, Ca. 93401
Names of persons residing on Premises:
16. ENTIRE AGREEMENT: This Agreement constitutes the sole and entire agreement
between the parties with respect to the subject matter hereof. This Agreement correctly sets forth
the obligations of the parties hereto to each other as of the date of this Agreement. All agreements
or representations respecting the subject matter of this Agreement not expressly set forth or referred
to in this Agreement are null and void.
IN WITNESS WHEREOF, the parties hereto set their hands the day and year opposite their
signatures.
CITY
Date: By:
Dave Romero
Mayor
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TENANT
Date: By:
Doug Carscaden
APPROVED AS TO FORM:
City Attorney, Jonathan P. Lowell
GASIgMAWJKVohnson Ran W.EASE for lohn nRanch-Carscaden 2007-08.doc