03-18-11 BPU RPT 05 - Laserfiche WebLink

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W A i C R E N E R G 5' f F 'r RIVERSIDE PUBLIC UTILITIES Board Memorandum P U 0 L I C UTILITIES BOARD OF PUBLIC UTILITIES DATE: March 18, 2011 ITEM NO: 5 SUBJECT: AMENDED AND RESTATED LEASE AGREEMENT WITH J.G. GOLFING ENTERPRISES, INC. ISSUE: That the Board of Public Utilities consider approval of the Amended and Restated Lease Agreement with J.G. Golfing Enterprises, Inc.,for the use of 62 acres identified by Assessor Parcel Numbers)0141-421-18,0141- 421-19,-141-421-20, 0141-431-17 and 0141-431-18; collectively known as the San Bernardino Golf Course, located in the City of San Bernardino (Exhibits A and B). RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the Amended and Restated Lease with J.G. Golfing Enterprises, Inc.; and 2. Authorize the City Manager, or his designee, to execute the Amended and Restated Lease Agreement. BACKGROUND: Since 1965, the City of Riverside through its Public Utilities Department has leased to various lessee's approximately 62 acres of land located along Waterman Avenue in the City of San Bernardino, for the operation of a public golf course. On April 24, 1979, the Assignment of Use Agreement and Lease and Consent Agreement transferred the lease from San Bernardino Investors to J.G. Golfing Enterprises, Inc. ("Lessee"), who has since maintained the golf course in an exceptional manner. The current lease is set to expire in June 2012 and Lessee is requesting a 25-year lease extension for the continued use and operation of the golf course. This proposed Amended and Restated Lease Agreement("Amended Lease") restates the existing terms of the lease and extends the lease for an additional 25-year period. Under the Amended Lease, the rental amount is set at$156,000 for the first year,while the remaining term will have annual adjustments as dictated by the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles-Long Beach- Anaheim Areas-All Items-Series A (1967=100) as published by the United States Department of Labor of Bureau of Labor Statistics. The Amended Lease also provides the City with the option to conduct a Fair Market Study every five years, for the purpose of adjusting the monthly rental to be commensurate with the market for similarly zoned land. Lessee will have the continued use of the property for the purpose of operating the golf course which shall not interfere or impede the Ufility's water rights, existing or future wells or appurtenances on or under the leased premises. FISCAL IMPACT: Revenue to the Water Fund for first lease year is $156,004,with annual CPI adjustments for the remaining 24-year lease period.