AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 17-000868
MEETING DATE:	09/12/17
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	3
SUBMITTING Agency/Department:	County Executive Office (Approved)
Department contact person(s):	Scott D. Mayer (714) 834-3046
	James Campbell (714) 834-3767

Subject: Lease Agreement with R&S Soil Products on West Alton Parcel

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: N/A

Current Fiscal Year Revenue: $220,800

Funding Source: N/A	County Audit in last 3 years: N/A

Prior Board Action: N/A

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 Interim Use Lease Agreement with R&S Soil Products, Inc. for 31 acres at the former Marine Corps Air Station El Toro, located at Irvine Boulevard and Alton Parkway in Irvine, California and authorize Chief Real Estate Officer or designee to execute the Lease in substantially the form attached for a term of five years, subject to a 90-day termination clause.

Authorize the Chief Real Estate Officer or designee to sign all documents related to the Lease and perform all activities specified under the terms of the Lease.

SUMMARY:

Approval of an interim-use Lease Agreement with R&S Soil Products, Inc. will allow for short-term revenue generation on the West Alton Parcel, former Marine Corps Air Station El Toro, prior to commencement of the ultimate and long-term development of the property by the County.

BACKGROUND INFORMATION:

Upon closure of the Marine Corps Air Station (MCAS) El Toro in 1999, the County received approximately 144 acres of the roughly 1,400 acres comprising what is now the Orange County Great Park and surrounding communities located in Irvine, California. The West Alton Parcel (Property), which comprises 31 acres of the 144 acres, is currently undeveloped and available for short-term revenue generation. The Property is located in a highly desirable area on the corner of Alton Parkway and Irvine Boulevard in the City of Irvine.

The County entered into a Development Agreement with Lowe Enterprises to develop a multi-family community on the Property. With the Environmental Impact Report (EIR) process currently ongoing, the County is seeking to utilize the Property to generate short-term revenue until commencement of the ultimate and long-term development of the Property by the County.

In April 2016, the County released a Request for Proposals (RFP) seeking qualified entities willing to enter into an Interim Use Lease Agreement (Lease) with the County. The RFP was designed to maximize revenue generation.

CEO Real Estate received one proposal for the Property, which is being brought forth for your Board’s consideration and approval.

Proposer

Length of Lease Agreement

Proposed Rent Payment

R&S Soil Products, Inc.

5 years

(Subject to 90-day County Termination Clause)

$23,000/month

Since May 2012, R&S Soil Products, Inc. (R&S) has been operating under a County Property Permit (CPP) to occupy the Property as a green waste facility, which recycles local compost from landscapers into reusable mulch. Currently, R&S has a month-to-month permit. R&S has been a responsible permittee by following City and County Best Management Practices (BMP) and regulations. R&S pays fees on time and maintains the Property to the County's satisfaction.

R&S has proposed a five-year Lease with a monthly rent of $23,000. The Lease will be effective upon approval from your Board and can be terminated by the County with a 90-day notice in the event that the County requires the Property for any purpose. Approval of the Lease will allow R&S to close its month-to-month permit and continue to use the Property for a longer term at a higher rate of revenue to the County.

Compliance with CEQA: The proposed project is Categorically Exempt (Class 1) from the provisions of CEQA pursuant to Section 15301, because it involves permitting, leasing of an existing County facility, involving negligible or no expansion of use beyond the existing use.

FINANCIAL IMPACT:

Currently, R&S pays a monthly fee of $19,500, which is credited to El Toro Improvement Fund 15T. Under the proposed agreement, monthly rent would increase to $23,000 for a total annual revenue of $276,000. Additional lease revenue will also be credited to El Toro Improvement Fund 15T.

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Interim Use Lease
Attachment B - Map of Property
Attachment C - Conveyance Questionnaire