Agenda Item AGENDA STAFF REPORT ASR Control 23-000896
MEETING DATE:	01/23/24
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
	Dylan Wright (714) 480-2788

Subject: Request for Proposals for Irvine Lake and Surplus Land Act Resolution

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement(s) and Resolution(s)

Discussion

3 Votes Board Majority

Budgeted: Yes

Current Year Cost: N/A

Annual Cost: See Financial Impact Section

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: See Financial Impact Section

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

Prior Board Action: 3/14/2023 #34, 6/11/2019 #S1B, 11/18/2014 #9

RECOMMENDED ACTION(S):

Approve updated joint Request for Proposals for master ground lease at Irvine Lake and authorize the Chief Real Estate Officer or designee to issue the joint Request for Proposals, in substantially the same form attached, with minor modifications that do not change the obligations for the County and return to the Board of Supervisors for approval of an option and master ground lease agreement with the Primary Proposer.

Adopt the attached Resolution finding that the County Service Area 26 property at Irvine Lake, to be contributed to the Request for Proposals, will result in agency uses and is therefore not subject to the Surplus Land Act; or, alternatively, the County Service Area 26 property is “exempt surplus land” pursuant to the Surplus Land Act.

SUMMARY:

Approval of an updated joint Request for Proposals with Irvine Ranch Water District and Serrano Water District for Irvine Lake property and adoption of a Resolution declaring certain County Service Area 26 property for agency uses and as exempt surplus land will facilitate the release of the Request for Proposals and subsequent mutual option to the lease and master ground lease involving properties owned at and adjacent to Irvine Lake, providing continued public fishing, enhanced recreational uses, reduction of management costs and future lease revenue.

BACKGROUND INFORMATION:

On November 18, 2014, the Board of Supervisors (Board) approved the acceptance of a donation of 2,500 acres of open space land from The Irvine Company LLC (TIC), which included land surrounding Irvine Lake, also known as Santiago Reservoir. As part of that donation, the Board also approved an Irrevocable Offer of Dedication (IOD) from TIC to the County, which included, among other things, the future conveyance of additional lands and rights at and around Irvine Lake, contingent on a number of requirements. On June 11, 2019, the Board approved acceptance of a 29-acre parcel adjacent to Irvine Lake that was originally included in the IOD.

Irvine Lake, including its underlying land and water supply, is owned equally by Irvine Ranch Water District (IRWD) and Serrano Water District (SWD) (collectively, the Districts). Irvine Lake and the surrounding lands have historically been used for fishing and other recreational purposes. With the Districts’ cooperation, public shoreline fishing remains open pursuant to an agreement between the County and Districts (collectively, the Parties), along with contracts between the County and various private contractors who provide services at Irvine Lake.

To maximize public recreational uses and reduce long-term property management costs, the Parties negotiated to combine their property ownerships at and around Irvine Lake in a joint Request for Proposals (Joint RFP) to solicit proposals for a mutual option to lease and master ground lease the properties to a long-term tenant. A long-term ground lease would transfer the County’s current fishing operations and property maintenance costs and obligations to a future long-term tenant and maximize the recreational and revenue potential of the properties.

On March 14, 2023, the Board approved a Cooperative Agreement between the Parties, which defined each party’s respective roles, rights and responsibilities for the preparation, solicitation and evaluation of the Joint RFP and the negotiation, preparation and execution of a subsequent mutual option to lease and master ground lease involving properties owned at and adjacent to Irvine Lake. The Parties are contributing their respective property and recreational rights to make Irvine Lake and its surrounding area available to the public for expanded park and recreational opportunities, including the continuation of public fishing (Project). The County is contributing certain real property (Attachment A) surrounding Irvine Lake that is administered by County Service Area 26 (CSA 26) through OC Community Resources/OC Parks, toward the Joint RFP (CSA 26 Property). CSA 26 is a county-wide dependent special district established by and for the County as the successor to the County’s former Harbors, Beaches and Parks District to administer and operate all County beaches, harbors and park lands.

Since the execution of the Cooperative Agreement, the Parties have continued to collaborate on drafting the final solicitation package for the Joint RFP (Attachment B), including but not limited to various exhibits and attachments regarding the properties and the proposed structure, including forms of the option and ground lease and a timeline for the Joint RFP process.

Through the Joint RFP, the County will invite proposers to utilize the legal authority and rights of CSA 26 to offer recreational amenities and activities, such as fishing, boating, bicycling and hiking to the public. The Joint RFP will encourage proposers in the provision of recreational services to share their vision on how best to serve the public at and around Irvine Lake, ultimately securing a concessionaire to develop, construct, operate and maintain public facilities for open space and recreational activities pursuant to a negotiated master ground lease. CSA 26 will retain its agency uses and obligations to its stakeholders throughout the Project, while simultaneously making the Joint RFP property available to public access and recreational uses.

CSA 26 is the repository for funding, real property and all other assets for all County-owned, operated and managed regional parks, harbors, beaches and recreational areas. As such, CSA 26 is a district as defined by the Surplus Land Act. The purpose of CSA 26’s work and operations include the orderly administration and control of recreational areas within the County, including County-owned property, in such a way as to achieve the maximum benefit to the public. CSA 26 will continue to use its land pursuant to this Board’s adopted plan for the option and master ground lease to continue CSA 26’s agency work or operations pursuant to Government Code section 54221(c)(1). As a district under the Surplus Land Act, CSA 26 is also empowered to engage in “commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue” pursuant to Government Code section 54221(c)(2)(B).

Prior to releasing the Joint RFP and participating in negotiations, the County is required to make findings that the CSA 26 Property is exempt surplus land pursuant to Government Code section 54221(f)(1)(N). Since CSA 26 will retain its agency uses throughout the Project, the CSA 26 Property is not surplus land as defined by the Surplus Land Act and should not be subject to the Surplus Land Act because the land remains necessary for the agency uses. Given that the statutory definition of “exempt surplus land” includes land that is currently being used for agency purposes, the Board is being requested to declare the CSA 26 Property to be “exempt surplus land” and adopt a Resolution (Attachment C) declaring that uses for the CSA 26 Property are agency uses that do not qualify as surplus land; or, alternatively, that the CSA 26 Property is exempt surplus land pursuant to Government Code section 54221(f)(1)(N).

Compliance with CEQA: This action is not a project within the meaning of CEQA Guidelines Section 15378 and therefore not subject to CEQA, since it does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The approval of this agenda item does not commit the County to a definite course of action in regard to a project since it includes adoption of a Resolution declaring agency uses and exempt surplus land and approval of an updated Joint RFP to solicit proposals. This proposed activity is therefore not subject to CEQA. Any future action connected to this approval that constitutes a project will be reviewed for compliance with CEQA.

FINANCIAL IMPACT:

Approval of an updated joint Request for Proposals and adoption of a Resolution declaring certain County Service Area 26 property for agency uses and exempt surplus land will not have a current fiscal year financial impact on the County, but these actions should facilitate future property management and maintenance cost savings estimated at approximately $640,000 annually and future lease revenue estimated at approximately $168,750 annually to the County. Future cost savings and revenues associated with this opportunity would be used to offset other costs related to the management and operation of the County’s park system including the Irvine Ranch Open Space.

STAFFING IMPACT:

N/A

REVIEWING AGENCIES:

OC Community Resources/OC Parks

ATTACHMENT(S):

Attachment A - CSA 26 Property Map
Attachment B - Joint RFP
Attachment C - Resolution
Attachment D - Government Code section 54221