FROM: Robert Thompson, General Manager
Originator: Mike Dorman, Director of Engineering
SUBJECT:
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LEASE AGREEMENT WITH FOUNDERS RSG LP, PROVIDING ORANGE COUNTY SANITATION DISTRICT PARCEL FOR PARKING AND/OR RELATED ACTIVITIES
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GENERAL MANAGER'S RECOMMENDATION
recommendation
RECOMMENDATION: Recommend to the Board of Directors to:
Approve the execution of a Lease Agreement with Founders RSG LP, a California limited partnership, to allow paving, striping, parking, and related improvements over a 4-foot wide portion of the Orange County Sanitation District's 50-foot wide utility corridor which abuts 21532 South Brookhurst Street in Huntington Beach, for an initial term of five (5) years beginning on the date the Agreement is executed; and an option to extend for up to two (2) additional five-year periods, at an annual rent of $500, and the collection of $442.50 in back rent, for the interim occupancy period, in a form approved by General Counsel.
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BACKGROUND
Since 1993, the Orange County Sanitation District (OC San) has leased a four-foot-wide portion of its 50-foot-wide utility corridor adjacent to 21532 South Brookhurst Street, Huntington Beach, to support additional parking within the adjoining commercial center. The leased area has historically been used for portions of a trash enclosure, parking, and related improvements that benefit the adjacent commercial property while remaining compatible with OC San's ownership and operational requirements.
The most recent lease agreement with Megdal Green, LLC expired on November 20, 2023. Following the lease expiration, OC San learned that ownership of the adjoining commercial property had transferred to Founders RSG LP on April 27, 2022. OC San subsequently worked to identify and contact the new property owner to negotiate a replacement lease agreement.
The proposed lease agreement with Founders RSG LP will allow the continued use of the four-foot-wide portion of OC San's 50-foot-wide utility corridor. The agreement provides for an annual rental payment of $500 for a five-year term. Founders RSG LP will be responsible for maintaining all improvements within the leased area in good condition throughout the term of the lease. Notwithstanding the five-year term, either party may terminate the lease for any reason by providing at least sixty (60) days' advance written notice to the other party.
In addition, the proposed lease requires Founders RSG LP to pay $442.50 back rent for the interim occupancy period from November 20, 2023, through August 1, 2026, representing the period between the expiration of the previous lease and the commencement of the new lease.
RELEVANT STANDARDS
• Maintain collaborative and cooperative relationships with regulators, stakeholders, and neighboring communities
PROBLEM
The OC San property is adjacent to a busy commercial center with limited space. The commercial property has transferred ownership, requiring a new lease agreement with the new owner.
PROPOSED SOLUTION
By leasing this strip of land to Founders RSG LP, the lessee becomes responsible for keeping the area clean, maintained, and free from loitering while also being able to utilize an enclosed area for trash collection.
TIMING CONCERNS
N/A
RAMIFICATIONS OF NOT TAKING ACTION
OC San would not have an agreement with Founders RSG LC to maintain the area, and OC San staff or contractors would then have to monitor litter and loitering.
PRIOR COMMITTEE/BOARD ACTIONS
November 2019 - Approved a five-year lease agreement with Megdal Green, LLC, a California limited liability company, to allow paving, striping, parking, and related improvements over a 4-foot wide portion of the Orange County Sanitation District's 50-foot wide utility corridor which abuts 21532 South Brookhurst Street in Huntington Beach owned by Megdal Green, LLC, at an annual cost of $250, for a term of five-years.
July 2018 - Approved a one year and five-month lease agreement, beginning August 2018, with Carl Karcher Enterprises, Inc (CKE), a California Corporation, to allow paving, striping, parking, and related improvements by CKE within the Orange County Sanitation District's 4-foot wide utility corridor located at 21532 South Brookhurst Street, Huntington Beach.
April 2008 - Approved a five-year lease agreement extension, beginning August 2008, with Carl Karcher Enterprises, Inc., a California Corporation (CKE), to allow paving, striping, parking, and related improvements by CKE within OCSD's four-foot wide utility corridor located at 21532 South Brookhurst Street, Huntington Beach, in a form approved by General Counsel.
August 2003 - Approve the five-year lease agreement, beginning August 2003, with Carl Karcher Enterprises, Inc. (CKE), a California Corporation, to allow paving, striping, parking, and related improvements by CKE within District's 4-foot wide utility corridor located at 21532 South Brookhurst Street, Huntington Beach.
August 1993 - Adopted Resolution No. 93-102, approving authorizing execution of Lease Agreement with Carl Karcher Enterprises, Inc. re Interplant Pipeline and Utility Corridor, Job No. 1-9, authorizing use of a four-foot wide portion of Districts’ utility corridor for parking, for a five-year period beginning August 11, 1993, with option for one additional five-year period. Said resolution, by reference hereto, is hereby made a part of these minutes.
ADDITIONAL INFORMATION
N/A
CEQA
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FINANCIAL CONSIDERATIONS
N/A
ATTACHMENT
The following attachment(s) is included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package:
• Lease Agreement