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HomeMy WebLinkAboutHuntington Harbour Yacht Club and Warner Avenue Fire Station — UNITED STATES DEP= ..,.MENT OF COMMERCE. The Assistant Secret, nomic Developme t w Washington. D.C. 20230 70A.,e c Project. No . : 07-51-00963 ' Offer Date : �{s♦� t OFFER OF GRANT ^ . Pursuant to its authority under the Local Public Works Capital Development and Investment Act of 1976 (P .L. 94-369) and subject to the Special Conditions (Exhibit "A") and the Standard Terms and Conditions (Exhibit "B-LPW" ,dated Povember 1 , 1970) which are herein incorporated by reference , the Economic Development Administration, U. S. Department of Commerce (Government) offers a Grant not to exceed $ 567 , 000 to the City of Huntington Beach , orange County, California , (Grantee) to provide financial assistance for the construction of a fire station on Warner Avenue, (Project) presently estimated to cost $ 567 , 000 . This Offer, the Acceptance , the Special Conditions , and the Standard Terms and Conditions shall constitute the Grant Agree- ment . Acceptance of this Offer must be returned to the Economic Development Administration prior to JAN 3I 1977 ECONOMIC DEVELOPMENT ADMINISTRATION By. f nt Secretary nomic DevelopmentThe fer of Grant is hereby accep Date : Leg 1 llame of G antee By Signature and Printed Name Title of Ac piing icla CERTIFICATION by authorized Official other than Accepting Official) The person signing this acceptance was so authorized by the Governing Body or Board of the Recipient . X7, _74 Signature Title ef C tif'yi g Offici-al z ,4O IOH �r J Zf I�df P4' e�P // Printed Name Pate U m : 7 r, Form ED-1029 � In � � � • 2. Huntington Harbour Yacht Club shall be responsible for construction of all structures , improvements and other faci- lities in accordance with the plans and specifications in Exhibit "B" . YACHT CLUB shall, at its expense, retain a licensed contractor for construction of the project . , This licensed con- tractor shall be 3. YACHT CLUB shall be responsible for the procurement and payment of all permit fees , building fees , testing fees and any other fees in the construction of this project in accord-. ance with plans and specifications of Exhibit "B", said permits to be treated in the same manner as if the project was the usual private project . 4 . YACHT CLUB in the construction of said project , as covered in the plans and specifications marked Exbibit "B" hereto, shall comply with all applicable laws , ordinances , rules , and regulations pertaining to construction of buildings and related . improvements . 5. Construction of all site improvements , as depicted on the plans in Exhibit "B", shall be the responsibility of YACHT CLUB, provided, however, that CITY shall be responsible for the installation of„ the irrigation system and landscaping, provided further that YACHT CLUB shall install any required "sleeves" between planter areas , as may be designed by the City Engineer. Cost of sleeves shall be paid by CITY. Any required top soil for the planter areas shall be placed in location and be the responsibility of YACHT CLUB; provided, 3. however, CITY shall pay the cost of location of such top soil. 6 . COMPLETION OF CONSTRUCTION. The project shall be completed within one ( 1) year of the date of approval -of the project by the California Coastal Coimnission. i 7. Huntington Barbour Yaclit Club shall cause a performance bond in the amount of 100 percent of the cost of the project to be posted in favor of CITY. YACHT CLUB shall also post labor and material bonds in the amount of 100 percent of project , and also fire and structural damage insurance during construction. Workmen ' s compensation insurance shall be maintained by YACHT CLUB throughout construction of the project . 8 . USE YACHT CLUB FACILITY. The ,yacht club facility structure shall be used exclusively for activities generally associated with the operation of a yacht club and for the benefit and enjoyment of its members and guests . YACHT CLUB shall not sublease the premises , shall not assign this agreement , or sublease the premises without the express written consent of CITY . 9 . YACHT CLUB shall not construct any other building or buildings on said premises without first obtaining the written consent and approval of CITY, nor shall YACHT CLUB make any changes in plans or structures or related improvements without obtaining the written consent of CITY. 10. CITY, at its sole cost and expense, shall keep and maintain the premises and improvements thereon, including sani- tary sewer, water, storm drain, parking lot surface , and land- scaping. YACHT CLUB shall be responsible for, and at its sole cost and expense , shall maintain the yacht club facility building and the ground on which it is situated as described in Exbibit "�", which is in an area ten (10) feet from ' and peripheral to said structure; and provided further YACHT CLUB shall be responsible for maintenance and upkeep of the dock structures . 11. PAYMENT OF TAXES. YACHT CLUB, before delinquent , shall pay any and all real property taxes , possessory interest taxes and any other taxes on the YACHT CLUB facility structure, and any other taxes generated by use of the premises by YACHT CLUB. 12 . YACHT CLUB shall pay all utilities and other expenses incurred in the use and operation of the yacht club facility except CITY shall supply without cost all water serving the site. 13. SANITARY CONDITIONS. CITY shall keep the premises in a clean and sanitary condition and shall provide and maintain in good condition ample trash and garbage containers , provided, however, YACHT CLUB shall provide and maintain trash and garbage containers , collection disposal services , etc . for any garbage, trash, rubbish or debris which is generated by YACHT CLUB operations. 14 . CITY shall use the fire station facility to house 5. its fire operations , and if the structure 's use as a fire station facility is discontinued, YACHT CLUB shall have the option of renting the fire station facility for the amount of Forty-five Hundred Dollars ( $4 ,500 .00) per quarter for any remaining portion of the original thirty ( 30) year term for payment of the construction of said facility, and improvements . Payments to commence upon acceptance of the fire station, facility by CITY. 15. OPTION TO LEASE. At the expiration of thirty ( 30) years from the completion of construction of said project , the - yacht club facility structure shall vest in the City of Huntington Beach without cost to CITY. YACHT CLUB shall have the option to lease said yacht club facility for a period not to exceed thirty ( 30) years , on such terms and coniditions as the parties may agree. If the parties cannot agree on the terms , conditions • and provisions of said lease, each of the parties shall appoint an arbitrator, and the two arbitrators shall appoint a third arbitrator, provided further that in the event the arbitrators cannot agree upon a third arbitrator, the third arbitrator shall be appointed by the court . Both parties. shall be bound by the determination of the arbitrators . . . 16. NOTICES. All notices to CITY under this agreement shall be directed to: City of Huntington Beach, Post Office Box 190, Huntington Beach, California, Attention: Michael H. . Zambory. All notices to Huntington Harbour Yacht Club shall be directed to Huntington Harbour Yacht Club , Attention: Don Hartfelder, 6 . EXECUTED in Huntington Beach, California, the day, month and year appearing below. DATED: 1976. CITY OF HUNTINGTON BEACH, a municipal corporation, By ATTEST: Mayor City Clerk APPROVED AS 'TO CONTENT: APPROVED AS TO FORM: City Administrator City Attorney APPROVED BY INITIATING DEPARTMENT: • DATED: , 1976 HUNTINGTON HARBOUR YACHT CLIJB5 a nonprofit California corporation, By President T By • 7 . f z' i U . S . DEPARTMENT OF COMMEPCE Economic Development Admi:nisti-ation EXHIAIT "A" Local Public Worka Program Project No . : 07-51-00963 SPECIAL CONDITIONS The Grantee ag.rec.s to conduct under the consultation of the Snits Historic Preservation Officer (SHPO) an historical/ archeological survey of the area to be affected by the Proja'ct . A copy of the completed survey shell be provided to the SHPO - arid the Government . if the survey discloses that a property which is either listed on the Nlationnl Register' of Historic hlaces or eligible f ,->r the Register is located within the affuctu(l area , the Gc.>vernment will implement the Advisory Council on Historic Preservatic)n ' "Prccekiutes for. the Pro- tection of Historic and Cultural Properties . Th(2 Grantee further agrees to coniply with the results of said "Procedures" <�nd understands that such results may include recluiremant for salvage operations , relocation or redrsicln of the Project , or even deobligation of Project funds . The requiremr.nts of this special condition shall be concluded prior to the Government ' s approvcil c)f the ini.t_ iRtion of construction activi- ties . However , Lased upon the results of the Survey and the approval of the Advi-'c>r :� Council. ran Histor.i.c Preservmtion, construction activit. ies may be allowed to begin for those (� .. Project facilities which will not affect any ellgib.le or listed ' property. .:._ Prior to start of construction the Grantee will present evidence to the Regional Director , WRO , F.DA that : A. The South Coast Regional Commission , California Coastal Zone Conservation Commission has reviewed the project plz)ns for public parking time limitations at the project site and is } satisfied that they allow maximum public use of the ramp lG facilities . Form ED-1030 � r i U. S .. DEPARTMENT OF COMMERCE Economic Development Administration EXHIBIT "A" Local. Public Works Program Project No . : 07-51-00963 SPECIAL CONDITIONS u B . The Orange County Planning Department , Envir.onnental Health Department , has reviewed and approved the project plans and is satisfied that the mitigating measures ,proposed to decrease the noise level created by the project are adequate , x C . The U . S . Fish and Wildlife Service , is satisfied that the project will not further degrade the current water quality in the harbor , ' particularly concerning the red tide condition and biota loss caused from poor water circulation , and that the project will not adversely affect the nearby nesting sites of the Least Tern . D. The State Department of Fish and Game has reviewed the plans and is satisfied that the project will not adversely affect the Bolsa Chica Ecological Reserve . E t I k ii is I' I 4 Form ED-1030 '7- r 2JMO CITY OF HUNTINGTON BEACH CA 76-199 COUNCIL ADMINISTRATOR COMMUNICATIQN . HUNTINGTON B[A01 To i'}ie Honorable Mayor and From Floyd G . Bels,ito City Council Members ' City Administrator Subject WARNER STATION FIRE FACILITY Date ecember 2 , 1976 In December ; 1975 , the Huntington Harbour �.�'acht Club proposed to the City Council the improvement of the City-,owned property at the inter- section of Warner Avenue and Pacific Coast Highway with afire station facility and a yacht club facility. At/that time , the Council approved the proposal in concept , with direction to staff to work with the Huntington Yacht Club in developing ar% agreement which would be mutually satisfactory to both the 'City and tk6 Yacht Club. The main, thrust of the proposal was` that the Yacht Club would build a fire station for the City and a yacht club for their own use . The City would own the fire station and reimburse the Yacht Club for construction of the facility over a 30-year period , payable at $1 , S00 monthly for a total of $S40 , 000 over the 30-y,.ear period. The yacht club structure would be owned by the Yacht Club for a 30-year period . The land be- neath the footprint of the structure would be leased by the Yacht Club during that 30-year period , and at the end of 30 years the ownership of the yacht facility structure would automatically vest in the City . The Yacht Club would have the option to lease the facility from the City for an additional 30-,year period ,. if it so desired. At the time of the original proposal , the City' s financial picture was dismal , and we were in t'he process of budget reductions to balance the bud et . Realizing the/heed for the fire station facility, the Yacht ClT s proposal was a /viable means of meeting the need . Since the original proposal , two major changes have occurred : ' 1 . The monthly payments to the Yacht Club doubled from $1 , 500 per month or $540 , 000 oven a 30-year period to $3 ,000 per ,month for a total cost of $1 ,080,r000 over a 30-year period. Reasons for this are increased construction costs , failure to consider site preparation and boat docks , and interest costs . 2 . The City ' s financial picture has changed, and funds are available in General Revenue Sharing , Continggency Fund or unapppropriated surplus . Also, the City has appplied for funds under the Public Works Employment Act recently passed by Congress . The need for /the fire station facility has existed since 1967 . The fire station located in Sunset Beach is totally inadequate, structurally unsound , and' is located 1 -1/4 male out of position. Because of its location , the Sunset Beach Station does not meet response time criteria and provide's poor backup coverage for the Heil/Springdale area . 1 CA 76-19y WARNER STATION FIRE FACILITY -Z- The City owns the property the new fire station is to be located on and has already made a substantial investment ($350 , 000) in improve meats ; i . e . , bulkheading, dredging , etc . The site is to include public parking and a public boat launching ramp, as stipulated by State Tide Lands to guarantee public access . The project also has received the various permits required, including the Coastal Commission ' s . The City also `selected the architect in 1973 and the drawings have been made . Originally, the site was to be a combination fire station and harbor facility for both Fire and Harbors and Beaches . With the transfer of the Harbor Patrol to the County, Harbors and Beaches need was reduced and this made site space available. The Yacht Club has received a bid on the project totaling $599 ,662 . Add to that approximately $81 , 800 in bonds , construction interest , points on loam, insurance costs , and new docks for an approximate total cost of $681 , 462 . Breakdown on the construction costs are as follows : 1 . Fire Station $369 ,473 2 . Yacht Club 107 , 620 3. Site Work 122 , 569 Total $599 ,662 Chief Picard has met with the architect , Richard Tom, and reviewed the bid. If the City were to build the fire station, with site improvements needed. only for the fire station, estimated costs would be $425 , 000 . At a later date, the City could put in the public launching ramp and. parking. Alternatives 1 . Proceed with Huntington Harbour Yacht Club on original proposal with modification to reflect increased costs , i . e . , from $1 , 500 per month or $540, 000 to $3, 000 per month or $1 , 080 , 000 . 2. The City could redesignate General Revenue Sharing funds , use Contingency Fund or unappropriated reserves and partially fund, approximately $250, 000, construction of the entire facility thereby reducing the monthly payments back to $1 , 500 per month or $540 , 000 over the thirty year period. 3 . The City could redesignate General. Revenue Sharing f1l[Ids , use,, Co»- tingency funds or unappropriated reserves and fund the entire pro- ject , approximately $680 , 000 , and lease the yacht club facility .to Huntington Harbour Yacht Club for $2 , 200 per month for thirty years . 4 . City do all site preparation including parking and launch ramps and build fire station for qpp`roximately- $495, 000 , then lease foot- print of yacht club site to Huntington Harbour Yacht Club for a cost yet to be determined. The Yacht Club would then build the /Elacility and turn it over to the City. Y Ct . 199 -3- " NtI R STATION FIRE FACILIA S . (.,S I tiy only co the site work needed for the fire stati and build . fire station. Cost is estimated to be $42S , 000 . a later date , the parking and launching ramp be constructed. 6. The City and Yacht Club share in the cost of s to preparation in proportional amounts . Amounts to be determirtcd through negotiations . City construct fire station facility, Yacl�VClub to lease footprint from City and construct yacht club facil y, turn it over to City on a 30-year .lease . 7 . City has applied under the Public Wo ''ks Employment Act for funding of the project excluding yacht club�'facility. Yacht Club would Lease the footprint site from the City, construct their own facility, turn it over to the Cite and receive a 30-year lease for the entire facility . To date , we have not heard as to whether it will be funded . Last date of dotification is December 26 , 1976 . RI.COMMENDA'I'.ION i Alternati've seven--is the most desirable recommendation: However , if the City is"unable to- obtain Federal funding, I recommend the City (;ota )cil; adopt alternative six and authorize staff to renegotiate with I lull tj.'ff t.au Harbou.x ,Yacht, Club an agreement. Also , authorize the City to go out 11 to bi.d on" he fire station now due to rapid increase in con- struction costs . 1?Unding ;for the project to come from redesignated General Revenue Sharin'g,- Contingency, or unappropriated surplus . Respectfully submitted , lei i Fl.oy G. Belsito City Administrator FGB :EIIM:bh i CITY OF HUNTINGTON BEACH � . CA 76-82 COUNCIL - ADMINISTRATOR COMMUNICATION HUNTINGTON BEACH - To Honorable Mayor and From Acting City Administrator City Council Members Subject HUNTINGTON HARBOUR YACHT CLUB'S Date June 3 , 1976 PROPOSAL TO DEVELOP WARNER PROPERTY WITH FIRE STATION FACILITY AND YACHT CLUB FACILITY Several months ago the Huntington Harbour Yacht Club proposed to the City Council the improvement of the city-owned property at the intersection of Warner Avenue and Pacific Coast Highway with a fire station facility and a yacht club facility. At that time, the Council approved the proposal in concept, with direc- tion to staff to work with the Huntington Harbour Yacht Club in developing an agreement which would be mutually satisfactory to both the City and the yacht club . A draft of a tentative agreement, based on the proposal of the yacht club, has been developed and is attached hereto for your information. The essence of the agreement is that the yacht club will construct a fire station facility for the City of Huntington Beach and a yacht club facility for their own use . The City will own the fire station facility and reimburse the yacht club for construction of the facility over a thirty year period, payable at $1500 monthly for a total of $540,000 over the thirty year period. The yacht club facility structure would be owned by the yacht club for a thirty year period. The land beneath the footprint of the structure would be leased by the yacht club during that thirty year period, and at the end of thirty years the ownership of the yacht facility structure would automatically vest in the City. The yacht club would then have an option to lease the structure from the City for an additional thirty year period if it so desired. This information is transmitted to the City Council at this point in time in order to allow the new council members to familiarize themselves with the background of this proposal. The matter will be coming before the City Council in final form at the later meeting in June. Floyd Belsito Acting City Administrator FGB: cs AGREEMENT THIS AGREEMENT made and entered into by and between the City of Huntington Beach, a municipal corporation, hereinafter referred to as CITY, and the Huntington Harbour Yacht Club , a nonprofit California corporation, hereinafter referred to as YACHT CLUB. RECITALS WHEREAS, CITY is the owner of unimproved land situated at the intersection of Warner Avenue and Pacific Coast Highway in the city of Huntington Beach, said land specifically de- scribed in Exhibit "A" which is attached hereto and incorporated herein by reference; and WHEREAS, CITY needs a fire station facility on said prop- . erty to serve the needs of the surrounding area; and WHEREAS, YACHT CLUB is desirous of locating a yacht club facility in the Huntington Harbour area of the city of Huntington Beach; and WHEREAS, the property owned by CITY, as specifically described in Exbibit "A", is of adequate size and location to accommodate a fire station facility for CITY use and a clubhouse facility for YACHT CLUB use, NOW, THEREFORE, IT IS MUTUALLY AGREED BY THE PARTIES AS FOLLOWS : A . YACHT CLUB shall improve the property by constructing; a fire station facility, a yacht club facility , docks and all JOC: er 1 5/4/76 other improvements in accordance with the plans and specifications , in Exhibit "A" which is incorporated herein by reference and made • a part of this agreement . B. CITY grants YACHT CLUB a license for the placemerit of the yacht club structure on city property, in the area de- scribed in Exhibit "C", for a period of thirty ( 30) years from the date of completion of said structure . YACHT CLUB shall own the yacht club facility structure, provided, however, that at the expiration of said thirty ( 30) year period the yacht club facility structure shall vest in CITY. C . CITY shall pay YACHT CLUB the sum of Five Hundred Forty Thousand Dollars ($540,000 . 00) for construction .of the fire station facility and site improvements as provided in Exhibit "B" , said construction costs payable over a thirty (30) year period, commencing from the date of acceptance and occupancy of the fire station facility by CITY, and payable in advance quarterly in the amount of Forty-five Hundred Dollars ( $, 500 . 00) per quarter. This agreement is subject to the following terms and con- ditions : 1. The project architect shall be compensated for his services by the City of Huntington Beach for development of the project in accordance with the plans and specifications in Exhibit "B", provided, however, that any modifications of existing plans requested by YACHT CLUB and approved by CITY shall be at the expense of YACHT CLUB. Richard R. Tom shall be the archi- tect of record for this project . 2. IC Y ;® ® City of Huntington Bleae h Mario J. Antoci ^� William E. Foster > Boyd A.Johnson 6Oster P.O. BOX 190 • 2000 MAIN STREET • CALIFORNIA 92648 Phillip L.John E. Rydeyd4rr William Winn Ivan M. Marks CITIZEN'S ECONOMIC ADVISORY COMMISSION n� TO: Ci Council FROM: E. A. C. SUBJF7CT: Huntington Harbour Yacht Club DATE: March 24, 1976 Fire Station Proposal Project Description: The Huntington Harbour Yacht Club (HHYC) has proposed to the City of Huntington Beach (City) to construct improvements on a city-owned parcel lying between Warner Avenue and the Huntington Harbour Main Channel. The improvements to be constructed are shown on the attached plot plan, Exhibit 1, and include a Fire Station, Yacht Club building, public rest roan facilities, and associated parking, landscaping, and other ancillary on-site facilities. These improvements would be constructed at no cost to the City; but the City . would pay to HHYC the sum of $1500 per month for a period of 30 years as total reimbursement for the facilities. In addition, HHYC would receive the exclusive use of the Club building for a 30 year term. Scope of Analysis: The EAC was requested by the City Council to analyze the financial and economic implications of this proposal in order to assist the Council in reaching a decision on acceptance, rejection or modification of the proposal. This analysis is solely concerned with the economic factors of the project as described; and specifically excludes considerations of operational feasibility, public policies, definition of scope of work, contractural terms, financial capability of HHYC, intangible civic benefits of the use proposed, and other similar matters. Major Find ngs and Conclusions: 1. Based upon the cost estimates presented, the out-of-pocket costs to the City of constructing the proposed public improvements are more favorable under this proposal than under any usual method of financing City�rovenmts. 2. If the City Council determines that a co miercial establishment serving the general public were an acceptable and permissible alternative use of this property, the subject proposal is probably less favorable than the best alternative use that could be developed. However, such a use would involve a higher degree of'uncertainity, or risk to the City. City Council Page 2 March 24, 1976 3. The decision for acceptance or rejection must be based on the City Council's determination of public policy. The use proposed is not the "highest and best" use in a purely economic sense; but does meet all the requirements for prudent financing of City facilities if a use such as this one is preferable in the overall public interest. Discussion: If only the value of improvements constructed for the City's benefit is compared to the City's out-of-pocket costs ($1500 per month)., the subject proposal is very attractive. If the improvement costs of the fire station and other public site facilities are approximately as estimated ($250,000) the City's monthly payment represents an effective interest cost of 6.0% on the total expended. If the improvement costs to HHYC should run as high as $300,000, the net effective interest to the City is reduced to 4.4%. These effective interest rates compare to our estimate of current municipal bond interest rates on the open market of 7.0% to 7.5% for a comparable repayment schedule. However, the above computations do not include the value to HHYC of the site itself. It is, in effect, receiving a rent-free,30-year lease on an extremely valuable parcel of land. The minimum amount of City land to be encumbered by HHYC usage is the area underlying the Club building itself (3100 sq. ft.) . Based on current market values of $8.00 per sq. ft. land value and an 8% annual rental, the land under the proposed building should rent for approximately $165 per month, or $2000 per year. Adding this rental value to the City's amortization cost of $1500 per month, the net effective interest cost to the City is raised to 7.0% if the total improvement costs are $250,000; or 5.3% if the costs to HHYC should reach $300,000. These imputed interest rates still compare favorably with alternative financing available to the City. The above computations of interest rates are based solely on "out-of-pocket costs", plus the very limited "opportunity cost" of foregoing land rental under the building only. If the City Council were to decide that the subject land parcel could equally well be used for a higher commercial use - say, a water- front restaurant, a small shopping area, or the like - an evaluation must be made of the probably rental income that the City could receive from such a use. If a comniercial facility of the same size as the proposed Yacht Club were to lease a portion of the subject parcel, approximately 29,000 sq. ft. (or 30% of the total site) would have to be designated for their sole use for building, related parking, and ancillary facilities. Based on the same current market values as defined above, such a use might be expected to pay a total land rental to the City of approximately $1500 per month, or $18,000 per year. Such a land rental, if consummated, should allow the City to construct the desired fire station facilities at no out-of-pocket cost. City Council Page 3 March 24, 1976 It should be emphasized that,in addition to questions of public policy, the above pro-forma analysis of the "highest" commercial use contains considerably more uncertainty than does the proposed HHYC use. Finding the right operator and negotiating the best lease could take as long as several years. The operation's financial success would not be assured and could leave the City with a.problem.property; the constraints of the parcel's restrictions on use may present a problem; and the Coastal Commission might not approve such a use even if the City Council were to endorse it. Conditions of Proposal: If the City Council accepts the subject proposal from HHYC, the following factors should be considered in its documentation. 1. The City should avoid any subordination or hypothication of its fee interest in the land, or any form of guarantee of HHYC's performance under its loan agreement. . 2. An assessment should be made of HHYC's ability to perform its obligation to the City and to its lender. Guarantees, bonds, or other performance securities should be evaluated. 3. The contract should contain a clearly defined description of improvements to be made by HHYC, and maximum and minimum amounts to be expended. A maximum expenditure of $300,000, if required, does not appear unreasonable. 4 The City's obligations to reimburse HHYC should be fixed, or otherwise clearly defined. 5. The permitted uses under the lease to HHYC should be clearly defined to avoid changes of use at .a later date. The right of assignment should be subject to City approval. Conclusion: The City Council's decision on this matter is not one that can be made on economic factors alone, but we hope that the above analysis is helpful in defining the financial parameters. If the Council desires additional input, analysis or participation from the EAC in this matter, please advise. 'Chairman Attachment cc: Mr. J. Don Hartfelder, HHYC • Mr. David D. Rowlands, City Administrator Mr. Raymond Picard, Fire Chief Mr. A. Ross, Internal Auditor (For distribution to EAC members) ..,I.'Ilya •aam w....µrar 'V'I V 17311H:)bV 13A1311MVH NOO Y B�0 d 0• 0-6 A` •�9MLLhIL 1 IV G s..ywy CO9 .. '_..�__. kaL 9 N N !V M 7 .. T JIEIIHXH , a 30 March 1976 TO: City Administrator FROM: John O ' Connor, Deputy City Attorney SUBJECT: Huntington Harbour Yacht Club Proposal We have briefly reviewed the agreement and lease which was transmitted to our office by Mr. Hartfelder relative to the proposal to construct a fire station and yacht facility on property, owned by the city in the Huntington Harbour area. Our comments at this time are of a general nature to apprise you of certain legal concerns of the city, and to suggest the inclusion of provisions which would adequately protect the city' s interest. We will first discuss some overall considerations which should be specifically included in this type of agreement, and then comment very generally on some of the provisions in the pro- posed agreement and lease . Since the land is owned by the City o'f Huntington Beach and the proposed buildings are to be .constructed upon city-owned land, it would seem necessary first to enter .into some type of an agreement whereby Huntington Harbour Yacht Club leases this property from the city, or at, least leases that portion of . the property 'immediately under the footprint of the buildings . Tf it is not the intent of Huntington ,Harbour Yacht Club to lease the, property, then some type of provision must be' made conferring on Huntinton Harbour Yacht Club the right to construct the buildings thereon and authorize the structures remaining on the property for the designated term of the lease. We do not have a copy of the plans and specifications which were referenced as Exhibit A, however, it would seem highly desirable that such, plans and specifications be subject to approval by the city.; that the time of commencement and- completion of the project ,be designated, and appropriate bonding and indemnification afforded the city during the construction process to protect the city from any claims which may arise from this phase of the operation. Further, the ownership of the 'fire station' facility, after its construction, is not indicated in the agreement . However, since the city would be paying rent for the. structure , presumably the intention is that the structure would remain under the ownership of Huntington Harbour Yacht Club until expiration of the thirty 1 year term. The ownership of this. structure, as well as the j _ t, j yyy F dr Memorandum to City Administrator 3 March 1976 . Huntin g p ton Harbour Yacht Club Pro osal� P ; e 2 ., f. 5 yacht club facility structure , should clearly be spelled outPz� ` r with a provision (if ownership is to be retained by Huntington Harbour Yacht Club) that the structures revert to the city under the express terms of the agreement . If the structures are not owned by the city , this brings up the question of payment of the taxes which although generally referred to , is not clearly covered by the agreement and should be specifically delineated to obviate. future controversy. Turning now to the, provisions in the proposed agreement, we have the following comments thereon: _ 1. Section 3 , page 3. One of the tenets of municipal law is that a city cannot contract to abdicate its police power:' Any provision in, an agreement with a private party that the city would maintain a fire station at a particular location . for a period of thirty years would seem to transgress the inherent authority of the City Council to reassess the location and ne- cessity of fire stations in the best interests of the city under its police power. Legally there is no impediment to the city leasing the structure for a period of thirty years , but a provision that the city would actually utilize the structure as a fire station for thirty years would appear unenforceable against the city . 2 . Section 5, page 3. We would suggest deletion of the word "major" and have the section provide in effect that the Huntington Harbour Yacht Club shall not make any , changes 'in Building No. 2 without "first "obtaining the written consent of the city. ("Major" could be a ,50 percent expansion of the building; ) - 3. Maintenance of the premises . We suggest this be spelled out more specifically as to the type of maintenance,, i.e . , plumbing, etc. and relative responsibilities, plumbing, sewers, water mains , etc. 4. Use of mooring facilities . This section provides that , "The ,Yacht Club shall have for itself and its designated members the exclusive right to use all slips for mooring of boats which may be available for use in conjunction with the project . " This provision appears in conflict with a statement by Mr. Scott of the State Lands Use Commission who expressly states in his letter, dated January. 29 , 1976 , that the State Lands Use Commission has no objection to the proposal, "provided that the boat-launching ramp and posed boat slips remain available to the public , without charge ." Mr. Scott goes on to state, "These facilities must remain free to ,the public as provided for in agreement be- tween Huntington Harbour Corporation and the States Lands Memorandum to City Administrator 30 March 1976 Huntington Harbour Yacht Club Proposal Page 3 Commission under Agreement PRC 2686(b ) . " Mr. Selich of the Planning Department has been attempting to procure a copy of that agreement from the State Lands Use Commission, however, it has not been made available to us at this time . Mr. Scott subsequently indicated in a letter to Mr. Selich that the city had assumed this obligation (letter attached) . This needs further clarification. 5 Section 8, page 4 . Reference is made in this section to the payment of taxes and payment for utilities . We suggest that the payment of taxes ,on the structures be clearly de- lineated. Further, the payment of utilities for the mooring facilities (assuming that. Section 7 remains in) should be clearly spelled out in the agreement . 6 . Section 9 , page 4 . Liens and encumbrances ., This section should be re-examined in the light of ownership of the buildings as discussed previously. 7. Section 10 , page 4. Delivery of possession. This section reads , "Upon termination of this lease by lapse of time or in the manner provided for herein, the City shall de- liver possession, of the leased premises in a good condition, reasonable wear and tear excepted.'" It was our understanding that at the termination of the lease , ownership of the struc- tures would vest in the city; therefore , it Would be Huntington Harbour Yacht Club which would deliver possession and ownership to the city, not vice versa. Some clarification is necessary in this section. 8. Section 11, page 4 . Hold harmless. The hold harmless provision in Section it is too broad and unduly onerous on the city. The city should not be placed in a position where it would indemnify officers and employees arising out of use of the park- ing lot or the launching facility and while the section makes reference to demised premises , it is not at all clear specifi- cally to what portion of the property this applies . 9 . Section 12, page 5 . This section affords no protec- Lion to the city . If insurance provisions are to be included, there should be a provision which would protect the city against the actions of the Huntington Harbour Yacht Club , its officers and employees and requires their posting public liability in- surance in accordance with the existing regulations of the city . These is some reference to the fact that "the yacht club shall be bound by all the provisions of this paragraph with reference to its control and occupancy of Building No . 2 . " However, this does not deal with the other areas which would be utilized by the yacht club members , employees and guests , nor does it -43 Memorandum to City Administra-or 30 March " 19"10 Huntington Harbour Yacht Club 'Proposal ,{,ge 4 specifically comply with the city 's insu_rance . requirements , and should be " clarified. An obligation is imposed that the city maintain the leased' premises in a clean and sanitary condition and that the city proV e and maintain trash and garbage containers . It may be deemed appropriate that this obligation be handled on an equitable allocation of responsibilities , unless, of course, the city decides as a policy decision that it desires to assume this obligation fully. 11 . The restoration and insurance provision is made ap- plicable only to the city, and it would seem that it should also be applicable to Huntington Harbour Yacht Club insofar as the rebuilding of the yacht facility is concerned in the event of destruction, or at least a provision inserted in the agreement which would deal with the contingency of destruction of the fa- cility. There are also some provisions in this section that deal with an agreement to agree that "any repairs shall be , made satisfactory to and meet the approval of the City of 13u.ntington Beach and the yacht club ." These provisions . a.re not readily enforceable since it is an agreement to agree, and we suggest a more definitive provision (i .e . , arbitration in the event of disagreement ) . 12 . Assignment or sublease. There is a prohibition against the city from any type of: subleasing, however, a` prohbition should clearly be included which would preclude Huntington Harbour Yacht Club from assigning this lease without the ex press consent and authorization of the city insofar as the use of the yacht facility building is concerned; The foregoing briefly summarizes some of our concerns , and since our role is legal adviser to the city , we are compelled to pro- tect the city 's interest . With clarification of the areas in- dicated, the proposed agreement would appear appropriate from ,a legal standpoint . A brief conference with all parties should re- solve these matters , and permit proceeding with the project if the Council so .directs . APPROVED : JOHN ' OI1N0F Deputy City Attorney ON P. ONFA, Cz Attor ey JOCoahb cc ; Mr. Don Hartfelder Attachment M - � a w� BEACH STATE.OF CAtiFORNIA---5TATE.IANDS COMMISSIOr, 'jO �I� D G*.^ . BRAWN JR.,Governor STATE LANDS DIVISION 1807 13TH STREET SACRAMENTO, CALIFORNIA 95814 r 1 e+ 4916) 445-7738 p 0. Box 190 Huntington Beach, CA 92648 January 29, 1976 File Ref.: SD 76=1-12 Mr. Edward D. Selich, assistant Director City of Huntington Beach P. 0. Box 190 Huntington Beach, CA 92648 Subjects Proposed construction by Huntington Harbour Yacht Club of facilities on land granted to the City by Huntington Harbour Corporation. Dear Mr. Selich: The State Lands Commission has no objection to the proposal of the Huntington Barbour Yacht Club to construct fire facilities and a Yacht ..Club building on the city's property west of Warner Avenue in Huntington Harbour, provided that the boat launching ram and proposed boat sli s remain avai ab a to the pu is without charge. hese facilities must remain free to the public as 2rovided for .in e a eement etween Huntington I_ar OUI Or oration and the State an s ommission under agreement F.R.C.1 2ZT6 b Should you have any further questions please feel free to, contact me. Very trtk Y yours, ALAN C. SCUTT Land Agent ACSJg V CITY OF HUNTINGTON BEACH CA 7 6-7 COUNCIL - ADMINISTRATOR COMMUNICATION HUNTINGTON BEACH To Honorable Mayor and From City Administrator City Council Members Subject HUNTINGTON HARBOUR Date January 15 , 1976 YACHT CLUB PROPOSAL Attached is correspondence from Ed Selich, Planning Department and Don Bonfa, City Attorney, regarding the Huntington Harbour Yacht Club proposal. According to Mr. Selich, the City must file a new application to the Coastal Commission, amend the original EIR, and submit a construction schedule. There is no problem with the State Lands Commission. The City Attorney recommends that there be a title company examination and report ; and that a financial feasibility study including .an appraisal be conducted on the project . RECOMMENDATION If the City Council concurs with this project , approve the recommendations of the Planning Department and the Ci.ty ,Attorney' s Office . Respectfully submitted , n � David D. Rowlands City Administrator DDR/FGB :p G" C to c � *nD Er GCS 1 E J AN CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION CiTlY OF HUNT:HTON HUNTINGTON BEACH To David D. Rowlands, From Ed Selich City Administrator Planning &eptment Subject Huntington Harbour Yacht Date January 8 , 1976 Club Proposal As directed in your December 12 , 1975 memo, I contacted the State Lands Commission and Coastal Commission regarding the Huntington Harbour Yacht Club proposal. The following is the result of my investigation. State Lands Commission - The State Lands Commission feels the proposal presents no conflict as long as the boat launching ramp is available to the public at large. Written confirmation of this should arrive by January 23 , 1976. There was some question by State Lands on whether encroachment permits would be required for the boat slips. According to Bill Hartge the slips are being placed on City land. I have sent the supporting documentation necessary to substantiate the claim to the State Lands Commission Staff. We should also receive confirmation on this by January 23 , 1976 . fj Coastal Commission - The Coastal Commission Staff has determined that the Yacht Club pr6posal is an "intensification" of use and thereby requires resubmission for a full public hearing before the Coastal Commission. I directed my inquiries directly to the Executive Director, Mel Carpenter, and argued against having to resubmit. This was to no avail as they are adamant on the City refiling the application. Copies of relevant correspondence are attached. Upon receipt from the State Lands Commission, the written confirmation will be forwarded to your office. EDS:gc cc: Richard Harlow Vince Moorhouse Ray Picard Bill Hartge Norm Worthy Don Bonfa STATE OF CALIFORNIA EDMUND G.BROWN JR.,Governoi CALIFORNIA COASTAL ZONE CONSERVATION COMMISSION SOUTH COAST REGIONAL COMMISSION -» 666 E. OCEAN BOULEVARD, SUITE 3107 P. O. BOX 1450 LONG BEACH, CALIFORNIA 90801 (213)WP1i (714) 846-0648 590-5071 2 January 1976 File: SCRC 844 Mr. Edward D. Selich Assistant Director of Planning & Environmental Resources City of Huntington Beach '' P. 0. Box 190 Huntington Beachy CA 92648 Dear Mr. Selich: In response to your correspondence to Mr. Carpenter dated December 23 , 1975 regarding the modifications of a previously approved project in the Huntington Harbour Areap I have reviewed the current project proposal and P-2160 approved by the Commission on January 28, 1974. Since the currently proposed Yacht Club use was never mentioned in either application P-2160 or the Coastal Commission Resolution of Approvalp the current proposal essentially represents a new project. It will' thereforey be necessary for the City to file a new application accompanied by all material normally required. In addition: (a) The original EIR should be amended or an environmental assessment provided•, and, (b) A construction schedule should be provided indicating project phasing. Very truly yours, SOUTH COAST REGIONAL COMMISSION David N. Smith Deputy to the Director DNS: do ® CITY OF HunTinGTOn BEKH ®/ P.O BOX 190 CA11FORNIA 92648 PLANNING DEPT 1 41 536-5271 December 23, 1975 Mr. M. J. Carpenter Executive Director South Coast Regional Commission 666 East Ocean Boulevard - Suite 3107 P. O. Box 1450 Long Beach, 'California 90301 Dear Mel: Enclosed is the proposal by the Huntington Harbour Yacht Club to build the marine and fire facility for, the City of Huntington Beach. In summary, the proposal is to construct: the entire complex (estimated cost $40.0, 000) and lease the fire station to the City applying all lease payments against the eventual purchase price of the fire station. The yacht club would lease the developed clubhouse (former marine faci:'ity) from the City. At .the end of the lease period the complex (fire station and yacht club) would be turned over to the City. It is important to note that the only changes to be made to the approved plans that now exist is to modify the interior partitions of the marine facility for conversion t<<.3 a yacht club use. The boat launching ramp will be open to the publc .as previously planned. The boat slips in front of the marine facility will be public slips except for those occupied by City fire boats. The City Council has tentatively approved this proposal subject to concurrence of the State Lands Commission and Coastal Commission. Would you please review the proposal to determine if it is necessary for the City to resubmit the project for a new permit. Please advise me of your determination as soon as possible. Very truly yours, Edward D. Selich Assistant Director of Planning and Environmental Resources EDS : ja Enclosure a a r , • CITY OF HUnTInGTon BEACH / R.O. BOX 190, CALIFORNIA 92648 PLANNING DEPT. (714) 536-5271 December 23, 1975 Les Grimes Assistant Director, Land Operations State Lands Commission 1807 13th Street Sacramento Ca. 95814 Dear Mr Grimes : Enclosed is the proposal. by the Huntington Harbour Yacht Club to build the marine and fire facility for the City of Huntington , Beach. In summary , the proposal :ir, to co,istruct: thc entire complex (estimated cost $400 ,000) +ncl lease the fire station to the City applying all lease payment; against the event ual purchase price of the fire station. The r!;, ht club wou ic! lease the developed clubhouse (former marine f 1,- 1 lity) from ilia City . At the enr l of the lease period the complex: ( fire stati( !aand yacht club) would be turned over to the City . It is important to note that she only ehtages to be made to . the approved plans that now exist s to modi iy the interior pak`t_itions of the marine facility for con�i(.�rsion to a yacht club use . The boat launching ramp will be open to i. he publ . as previously planned. The boat slips in front of the marine facility will be public slips except for .those occupied by City fire be"sits . The City Council has tentatively approvo,l this proposal subject to concurrence of the State Lands (:ommissii and. Coastal Commission. ` 'Would you please review the proposal. to Aetermine if it is within the parameters of the present agreement Ietween State Lands and the. City or if some modifications to the agreement is necessary or action bv the State Lands Commission :is essential to this project proceeding. l'iease advise me of your determination as soon as possible: V(.: ,y,trul.y yours , Edv;,:r 5e c Assistant Directory Pla'noi:ng and Envi r.,onmental Resources EDS: hb 4 r OFFICE OF CITY ATTORNEY E(r � 1�75 P. O. Box 190 l �a C3 HUNTING'TON BEACH CITY Or' HUNTINGTON BEACH CALIFORNIA92648 ,,� ADMINISTRATIFSf DF DON P. BONFA TELEPHONE CITY ATTpRtJ£'! - t7141 December 26, 1975 638450 TO: Hon. Mayor and Members of the City Council David D. Rowlands, City Administrator FROM: Don P. Bonfa, City Administrator SUBJECT: Huntington Harbour Yacht Club After reading the , p ease instruct the City Attorney if you desire the next steps to be taken: I. Title Company examination and report; and 2. Finance feasibility study. DON P. BONFA City Attorney DPB•er Attachment Y 7 CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To City Attorney From John O'Connor Deputy City Attorney Subject Huntington Harbour Yacht Club Date 19 December 1975 Proposal This memorandum responds to your request for a written, informal opinion on the legality of the Huntington Harbour Yacht Club Proposal . The law is well established that as a charter city, the City .of Huntington Beach has all the powers granted by the Constitution, and the Charter, is a limitation of those powers, not a grant of powers. Grass Valley v. Walkenshaw, 34 C2d 595, 212 P2d 894 . Unless prohibited by the Constitution, California statutory law, or the ordinances or resolutions of the city, the City Council has the power to determine what is a lawful municipal purpose and a public purpose with which the city may proceed. McQuillin,, Municipal Cor2orations , Vol. 2, Section 10. 31 and citations thereunder. It Would appear there are no restrictions; therefore the City Council could proceed with approval and participation in this project provided other legal impediments were not present . r. Moorhouse in a conversation and as adequately set forth in his letter, ndicates that there may be certain other legal impediments to this project . 1. Mr. Moorhouse indicated that there were certain restrictions im- posed upon the subject property at the time it .was granted to the city. These restrictions apparently emanate from conditions imposed by the California. State Lands Commission at the time they relinquished ownership of the subject property. These documents must be thoroughly reviewed to determine whether or not the proposed project would comply with the con- ditions imposed by the State Land Use Commission. Also a title search on the property would be required to determine if there are other existing restrictions'. This would appear to be the initial concern--whether or not there are restrictions imposed upon the property which would prohibit its development according to the proposal of the Huntington Harbour Yacht Club , 2. The second issue which must be considered is whether or not the proposal is fair and equitable insofar as the city is concerned. Since. we are .dealing with a private development and a private use of the im- proved property, the consideration for the use of the city land must be fair and equitable. This would require a financial evaluation by the Finance Department or possibly the Economic Advisory Commission to insure that the city is receiving fair and just compensation for use of the subject property, and equitable value for the monthly payments which the city would be required to make under the proposal. If the benefits to the city were not fair and equitable, then, of course , it could be held an llegal expenditure of public funds and invalid. a # Memorandum to City Attorney 19 December 19715 Huntington Harbour Yacht Club Proposal. Page 2 3. The third consideration would be the preparation of an appropriate agreement to insure that the rights and obligations of the respective par- ties be clearly delineated, for example: possessory interest tax, main- tenance of structure, rights in the event of forfeiture , etc. , etc . 4. Mr. Moorhouse also expressed some concern whether or not a coastal permit would he issued for a project of this type, however, that, is a long way down the road and something wholly beyond the control of the city. Appropriate arrangements could be embodied in the agreement to cover the contingency of a denial of a coastal permit. To summarize, the concept of this type of proposal is legally permissible and has been held valid by the courts in analogous situations. (See for example, County of Los Angeles v. Dodge, 51 Cal App 492; Wills v. Los Angeles, 209 Cal ; 9 ALR 1044, and many other cases . ) The next steps would be: (a) Examination of the title and all agreements and documents rela- tive to the land owned by the city to determine whether or not any re- strictions on the land would prohibit the proposed project . (b) A financial feasibility study to determine whether or not the city is receiving a fair and just return for use of the land and any monies which it is required to expend under the proposal. (c) Working out a specific and detailed agreement with the Huntington Harbour 'Yacht Club relative to the project, possessory interest tax, parking,, and the many other sundry items which of necessity would be required in a project of this magnitude. The proposal submitted by. the Huntington Harbour Yacht Club to the- city was to elicit the city' s' reaction to the project and Council reaction ap- pears .favorable. Based. on my research, there are no legal impediments td` the concept; however, the next step would be a. title examination and fi- na.ncial feasibility study. Please advise if you desire to proceed with jthe title report in order to ascertain whether or not any impediments exist which would prohibit the project . Also, at the same time it would seem 4 desirable to request a financial evaluation to ascertain whether or not the } economics of the project are fair and equitable as far as the city is con- cerned. eN 0' NN© eputy City Attorney JOC:ahb O