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Home My WebLink About10-16-2018 Item 8 - Calle Joaquin AG reserve Lease amendment no 2 Meeting Date: 10/16/2018 FROM: Derek Johnson, City Manager Prepared By: Robert Hill, Interim Deputy Director SUBJECT: CALLE JOAQUIN AGRICU LTURAL RESERVE – LEASE AMENDMENT NO. 2 RECOMMENDATION Approve Lease Amendment No. 2 (Attachment A) with Central Coast Grown for the City of San Luis Obispo’s Calle Joaquin Agricultural Reserve in order to allow for an on-site caretaker on the property. DISCUSSION Background The City of San Luis Obispo acquired approximately 25 acres of land that is now known formally as the “Calle Joaquin Agricultural Reserve” and colloquially as “City Farm” through two separate land dedications arising out of the Gearhart/McBride commercial auto dealership subdivision and the Prefumo Creek Commons project. Of this, 17 acres is considered prime farmland, while the remaining acreage is primarily comprised of the riparian area of Prefumo Creek. In January 2011, the City Council adopted the Agricultural Master Plan for the City of San Luis Obispo’s Calle Joaquin Agricultural Reserve that contemplated the dispo sition of the property through long-term lease to an organization interested in sustainable agriculture practices and agricultural education with students and the community (see complete text: http://www.slocity.org/home/showdocument?id=1916). On January 7, 2013, the City entered into a 20-year agricultural ground lease with Central Coast Ag Network (CCAN) dba Central Coast Grown for such purposes. On May 2, 2013, following the successful re solution of a prior title issue pertaining to a portion of the property, the City entered into Amendment No. 1 to its lease with Central Coast Grown to include that additional area. Present Lease Agreement The stated purpose of the City’s lease arrangement with Central Coast Grown is to “put the majority of the Premises into active sustainable agricultural use, while permitting development of a portion of the Premises, not to exceed the percentage allowable per zoning regulations, for facilities for the aggregation, light processing and distribution of agricultural products grown locally or on the Premises as part of a local food system as well as facilities to provide educational and agricultural support.” In consideration of the community benefit provide d by CCAN and its non-profit 501(c)3 status, the annual rent is $1. In exchange for this favorable rate, the lease specifies certain time-based performance milestones including: annual reporting; active agricultural production of food crops (beginning December 13, 2013); plans and implementation of public programming, demonstration gardens, and educational programming and facilities. Central Coast Grown is in good standing relative to these milestones and is a valuable community partner to the City. Packet Page 27 Item 8 Current Sub-Leases In addition to the terms and conditions stated above, the City’s lease with Central Coast Grown specifically allows for subletting to other farmers, provided that the lease revenues are used in furtherance of Central Coast Grown’s non-profit status and mission driven activities occurring on the property. Mr. Javier Magana (Red Barn Farms) currently enjoys an approved sublease area of 10.75 acres. Mr. Michael Huggins (Dacite Farms) is farming an approved one -acre sub-lease area. Theresa Lees is farming and providing educational activities on a small, one-quarter acre lease area. Carmichael Environmental is leasing a two-acre plot primarily for vegetable production, as well as a small area of ornamental landscape species. Most recently, Mr. Corey Richmond has subleased a two-acre plot and is currently growing pumpkins for Halloween and other mixed vegetables. The current tenant mix is shown in the table below: 1. Magana – Red Barn Farms 10.75 acres 2. Huggins – Dacite Farms 1.00 acre 3. Lees – Our Global Family 0.25 acres 4. Carmichael Environmental 2.00 acres 5. Central Coast Grown 1.00 acres 6. Corey Richmond 2.00 acres TOTALS 17 acres Lease Amendment No. 2 Central Coast Grown and its subtenants have experienced ongoing crop pilferage, theft of tools and farm equipment, and property damage over the past several years; City Farm has very porous boundaries, is adjacent to US 101, and is located away from other active evening land uses, making it an easy target for trespass, theft, and other negative behavior. While the City’s Police Department is aware of the issue and does provide regular nighttime patrols, Central Coast Grown nevertheless desires the ability to allow for an on-site caretaker in order to provide a presence on the property at all hours. Paragraph 7(G) of the City’s master lease with Central Coast Grown specifically states that Central Coast Grown shall not “Permit any residential use or overnight camping or occupancy.” However, the City’s zoning code does allow for a caretaker fa cility in both Conservation and Open Space and Agriculture designations. The following language is proposed here to be added to paragraph 7(G): "A single recreational vehicle may be parked on the Premises, for the purpose of providing an on-site caretaker function, by an existing on-site tenant only. The purpose of the caretaker is to provide site security to the entire Premises to prevent crop and equipment theft, as well as overall site stewardship. Any such recreational vehicle shall not be parked so as to prevent tenants of any other sublease on the Premises from using their farmable area . The recreational vehicle shall be fully self-contained and discharge of waste or sewage into the City’s sewer system or by any others means is prohibited. No hose, electrical cord, pipe, wire, or other device extending from the vehicle may be permitted. The recreational vehicle shall be parked in a location and be maintained in a condition wherein it can be moved upon 24 hours' notice by either City or CCAN. The City Manager shall approve in advance any such sublease amendment for an on-site caretaker function." Packet Page 28 Item 8 CONCURRENCES Lease Amendment No. 2 has been reviewed by the City Attorney’s office for sufficiency and to ensure that the City’s master lease is properly incorporated therein. ENVIRONMENTAL REVIEW A Mitigated Negative Declaration (MND) was adopted by City Council in association with Council’s approval of the Agricultural Master Plan for the City of San Luis Obispo’s Calle Joaquin Agricultural Reserve (ER # 44-10). The subject area has been regularly farmed for many years and no additional environmental review is required in association with the subject Lease Amendment under the California Environmental Quality Act (CEQA). FISCAL IMPACT The fiscal impact of the proposed Lease Amendment is comprised of modest staff time to oversee and manage the chain of lease agreements. It is beneficial and fiscally positive to the City to have a master tenant responsible for day-to-day management, maintenance, and upkeep of the property, as well as contribute to the local agricultural economy through the production of food crops. ALTERNATIVES The City Council could choose to: 1. Approve Lease Amendment No. 2 with requested changes. 2. Deny Lease Amendment No. 2. 3. Continue the item with specific direction of more information or discussion time is required before taking action. Attachments: a - CCAN Lease Amendment No. 2 Packet Page 29 Item 8 1 AMENDMENT NO. 2 AGRICULTURAL GROUND LEASE BETWEEN THE CITY OF SAN LUIS OBISPO AND CENTRAL COAST AG NETWORK This Amendment No. 2 to the Agricultural Ground Lease (“Lease”) is entered into this __ day of __________, 2018, by and between the City of San Luis Obispo (the "City") and Central Coast Ag Network, a California public benefit non-profit corporation ("CCAN"). RECITALS A. The City owns certain agricultural land within City limits, commonly identified as the Calle Joaquin Agricultural Reserve, 0 Calle Joaquin, San Luis Obispo. B. CCAN is a nonprofit corporation whose purpose is to champion a sustainable local and regional food system to ensure a nourishing, diverse and abundant supply of food that is resilient, safe and secure, and CCAN seeks to manage the on-site agricultural production and agricultural education and activities under sustainable agriculture practices. C. On January 7, 2013, the City and CCAN entered into the Lease for the purpose of putt ing the majority of the Premises into active sustainable agricultural use, while permitting development of a portion of the Premises, not to exceed the percentage allowable per zoning regulations, for facilities for the aggregation, light processing and distribution of agricultural products grown locally or on the Premises as part of a local food system as well as facilities to provide educational and agricultural support. D. On February 1, 2013, the City acquired additional property and on May 2, 2013 entered into Amendment No. 1 with CCAN to add this additional property into the Premises. E. The City and CCAN now desire to amend the lease agreement to allow for an on-site caretaker in order to help prevent trespass, theft, and property damage . AGREEMENT For good and valuable consideration, City and CCAN hereby agree as follows: 1. Paragraph 7(G) of the City’s master lease with CCAN is hereby amended to read as follows: CCAN shall not “Permit any residential use or overnight camping or occupancy. However, a single recreational vehicle may be parked on the Premises, for the purpose of providing an on- site caretaker function, by an existing on-site tenant only. The purpose of the caretaker is to provide site security to the entire Premises to prevent crop and equipment theft, as well as overall site stewardship. Any such recreational vehicle shall not be parked so as to prevent tenants of any other sublease on the Premises from using their farmable area. The recreational vehicle shall be fully self-contained and discharge of waste or sewage into the city’s sewer system or by any others means is prohibited. No hose, electrical cord, pipe, wire, or other device extending from the vehicle may be permitted. The recreational vehicle shall be parked in a location and be maintained in a condition wherein it can be moved upon 24 hours' notice by Packet Page 30 Item 8 2 either City or CCAN. The City Manager shall approve in advance any such sublease amendment for an on-site caretaker function." 2. All other terms and conditions of the Lease remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first written above. CITY OF SAN LUIS OBISPO _________________________________ Mayor ATTEST: ____________________________ City Clerk Approved: ____________________________ City Manager Approved to as form: ____________________________ City Attorney CENTRAL COAST AG NETWORK, a California public benefit non-profit corporation __________________________ President ___________________________ Secretary Packet Page 31 Item 8 Page intentionally left blank. Packet Page 32 Item 8