Agenda Item AGENDA STAFF REPORT ASR Control 25-000812
MEETING DATE:	12/02/25
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	3
SUBMITTING Agency/Department:	County Executive Office (Approved)
Department contact person(s):	Thomas A. Miller (714) 834-6019
	Brian Bauer (714) 834-5663

Subject: Assignment & Transfer of Corporation Stock with Southern Sierra Land & Cattle Co

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Consent Calendar

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: N/A

Staffing Impact:

# of Positions:

Sole Source: No

Current Fiscal Year Revenue: N/A

Funding Source: N/A	County Audit in last 3 years: No
Levine Act Review Completed: Yes

Prior Board Action: 11/19/2024 #30, 1/12/2016 #24, 12/9/2008 #16, 3/16/2004 #15

RECOMMENDED ACTION(S):

Find that the Project is categorically exempt from the California Environmental Quality Act (CEQA), Class 1 (Existing Facilities) pursuant to CEQA Guidelines Section 15301.

Approve and authorize the Chief Real Estate Officer or designee to execute the Assignment and Transfer of Corporation Stock of 100 percent of the corporation stock for the ownership of Southern Sierra Land & Cattle Company from David Charles Edgar II to Baotou Lujie Logistics Company, Ltd. for the operation of the Santiago Equestrian Center within Whiting Ranch Wilderness Park.

Authorize the Chief Real Estate Officer or designee to execute subsequent documents or amendments that make non-monetary and/or monetary changes that do not increase County costs by more than $75,000 per fiscal year as approved by County Counsel and Director of OC Parks.

SUMMARY:

Approval of the Assignment and Transfer of Corporation Stock will allow Baotou Lujie Logistics Company, Ltd. to assume 100 percent ownership of Sierra Land & Cattle Company dba Santiago Equestrian Center which will provide continuing and uninterrupted services at the Santiago Equestrian Center, including horse boarding, training, riding lessons and equestrian related community service activities and complete various capital improvement projects.

BACKGROUND INFORMATION:

Southern Sierra Land & Cattle Company was formed as a stock corporation in 1980 and is doing business as Santiago Equestrian Center (SEC), located at 18381 Santiago Canyon Road, Silverado, California 92676 (Premises). The Premises currently includes 62 horse stalls and multiple riding arenas across approximately 6.3 acres of land within Whiting Ranch Wilderness Park (Park). When the County of Orange (County) acquired the Park in 1997 as part of a broader land expansion of the Park, SEC was already occupying and operating the Premises as an equestrian center.

On March 16, 2004, the Orange County Board of Supervisors (Board) authorized County staff to negotiate a prior lease agreement between SEC and the County allowing SEC to continue operating the Premises to provide horse boarding, training, riding lessons, equestrian-related community service activities, and ancillary uses. SEC has consistently offered affordable horse boarding rates, with monthly fees below comparable equestrian centers within Orange County.

On December 9, 2008, the Board approved a new 20-year Lease Agreement (Lease) with SEC, contingent upon the completion of specific benchmark improvements. SEC did not meet the benchmark improvement requirements within the designated timeframe and the Lease was reduced to a five-year term expiring on December 13, 2013, and subsequently continued on month-to-month holdover until 2016.

Following multiple site visits and a comprehensive review of the improvements already completed by SEC, the County recommended the removal of the remaining benchmark improvement requirements. As an affordable equestrian option on County property, the cost of these improvements was considered too high for SEC’s operational income to sustain. As a result, on January 12, 2016, the Board approved the First Amendment to the Lease which eliminated the benchmark improvement requirements and extended the Lease term to December 31, 2024. On April 15, 2020, the Second Amendment to the Lease was executed under delegated authority in response to the COVID-19 state of emergency to provide a tolling period that abated rent and extended the Lease expiration date to December 7, 2027.

On November 19, 2024, the Board approved a Third Amendment to the Lease (Third Amendment) which extended the Lease term to December 7, 2042, in exchange for the completion of the following Capital Improvement Projects (CIPs), requiring a minimum investment of $1,300,000 by SEC:

1. Erosion-Related Soil Loss/Retaining Wall

In April 2023, the County was notified that the slope behind the main stable area was showing signs of soil loss due to erosion. The County reviewed options with SEC to explore different methods for stabilizing the slope and, in order to provide a permanent solution and prevent damage to the existing stables, the Third Amendment authorized SEC to construct a retaining wall behind the main stable.

2. Covered Arena Shade Structure

The Third Amendment approved SEC’s proposal to install a covered shade structure over a reconfigured horse arena for the safety and comfort for clients, staff, and horses.

3. Additional Horse Breezeways/Stalls

The 2008 Santiago Fire significantly impacted SEC operations, resulting in the loss of 49 of the original 120 horse stalls. Since then, the number of stalls has fluctuated as SEC has built new stalls to replace those lost or deemed uninhabitable. SEC currently has 62 stalls and the Third Amendment authorized the construction of two additional breezeways containing an additional 40 stalls, bringing the total number of stalls to 102. The Third Amendment limits the maximum number of stalls allowed on the Premises to 120, thus allowing SEC to construct 18 more stalls in the future without further amendment to the Lease.

All CIPs listed above will require SEC to acquire all necessary permits from the appropriate regulatory agencies.

The Third Amendment also granted the County’s consent to transfer and assign all of SEC’s corporation stock from Sheryl Lynn Edgar (Sheryl Edgar), former SEC president and sole owner, to her son, David Charles Edgar II (David Edgar).

During negotiations for the Third Amendment in 2024, David Edgar received an unsolicited offer to purchase controlling stock in SEC from Baotou Lujie Logistics Company, Ltd. (Baotou), a foreign corporation. In accordance with Section 25 (Assigning, Subletting and Encumbering) of the Lease, any transfer of ownership greater than 25 percent requires prior written approval from the County. Under a Business Purchase Agreement (Agreement) dated June 20, 2024, David Edgar transferred five percent of SEC’s stock to Baotou upon execution and closing of the Agreement. A subsequent Amendment to the Agreement dated July 15, 2024, further provides that the remaining 95 percent of SEC’s stock will be transferred from David Edgar to Baotou upon the County’s approval of the ownership change. If your Board approves the Assignment, David Edgar will transfer the remaining 95 percent of SEC’s stock to Baotou and retain only an advisory role in the operation of SEC. Upon completion of the transfer of stock, SEC will remain the lessee and operator of the equestrian center under new management and continue to be subject to all applicable federal, state, and local laws and regulations.

CEO Real Estate has requested and reviewed the following documents and information from Baotou and SEC:

1.	Business plan for the assumption and operation of SEC.
2.	List of the proposed SEC leadership team which includes:
		a. Yuhao Zhang, General Manager of Baotou and SEC. b. David Edgar, Business Advisor c. Francisco Flores, Maintenance Manager (40-year history with SEC) d. Jessica Lawson, Communications Manager e. Habib Alaidroos, CPA
3.	List of Baotou’s proposed architects, engineers, and contractors which includes:
		a. Basic Engineering, Architectural/Engineering b. SJD&B Inc., General Contractor c. American Stalls, General Contractor
4.	Analysis of fair market horse stall fees.
5.	Statement of Information filed with the California Secretary of State.
6.	IRS Form 2553 listing shares of stock in SEC.
7.	Copy of original articles of incorporation.
8.	Bank account statements from January 1, 2025, through May 30, 2025, showing at least $1,000,000 average deposit.
9.	Income and expense projections for the next 5 years.
10.	SEC’s bank statements for the previous 3 months.
11.	Certificate of insurance.
12.	Financial statements from 2023 through 2025.

County staff have met with Mr. Zhang, who will be the general manager of SEC, to discuss the proposed sale of SEC and the expectations for completing the CIPs within the timeline established by the Third Amendment, and a detailed CIP timeline was requested. In response, Mr. Zhang worked with the County to develop and submit a proposed timeline that is satisfactory to all involved parties and does not require modification to the timeline established by the Third Amendment, or the capital improvements to be completed thereunder.

After thorough review of Baotou’s plans and supporting documentation, CEO Real Estate recommends approval of the Assignment, allowing Baotou to assume 100 percent ownership of SEC and operation of the equestrian center.

Compliance with CEQA:

The proposed project was previously determined to be categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Class 1) of the CEQA Guidelines, on November 19, 2024, when it was originally approved because it includes the lease of public facilities involving no expansion of existing use. The proposed project is still consistent with this determination.

FINANCIAL IMPACT:

N/A

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Location Map
Attachment B - Assignment and Transfer of Corporation Stock
Attachment C - Lease Including Amendments