03-29-2016 BPU RPT 06 - Laserfiche WebLink

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L'; A I= R E N E R L Y I I F F PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum DATE: MARCH 29, 2016 ITEM NO: 6 File ID — 16 -0901 — Discussion SUBJECT: PROPOSED EXCLUSIVE NEGOTIATING AGREEMENT WITH HILLWOOD ENTERPRISES, L.P. FOR THE POTENTIAL LONG -TERM LEASE AND INDUSTRIAL DEVELOPMENT OF THE SAN BERNARDINO GOLF COURSE LOCATED AT 1494 S. WATERMAN AVENUE, SAN BERNARDINO, CALIFORNIA, FOR THE AMOUNT OF $10.00 ISSUE: The issue for Board of Public Utilities consideration is to enter into an Exclusive Negotiation Agreement with Hillwood Enterprises, L.P. to negotiate price and terms for a potential long -term ground lease to allow industrial development of the San Bernardino Golf Course located at 1494 S. Waterman Avenue, San Bernardino, CA (Site Map — Attachment 1) for the amount of $10.00. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: Approve an Exclusive Negotiation Agreement (ENA — Attachment 2) with Hillwood Enterprises, L.P. to negotiate price and terms for a potential long -term ground lease to allow industrial development of the San Bernardino Golf Course located at 1494 S. Waterman Avenue, San Bernardino, California, for the amount of $10.00 deposited to the Water Fund; and 2. Authorize the City Manager, or his designee, to execute the ENA, including making minor, non - substantive changes, and to sign all documents and instruments necessary to complete the transaction. BACKGROUND: Since 1965, the City of Riverside through its Public Utilities Department (City) has leased to various lessees approximately 62 acres of land located along Waterman Avenue in the City of San Bernardino (Property), for the operation and maintenance 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. The Lessee's current lease term expires on April 30, 2037. Lessee's current annual rent was $156,000 and is subject to annual consumer price index adjustments. The Lessee has been in discussions with Hillwood Enterprises, L.P. (Hillwood) and desires to assign the existing lease to Hillwood for future industrial development of the Property. It is anticipated that by assigning the Lease to Hillwood, the City would generate significantly higher rental revenue with the use of the Property changing from a public golf course to industrial use. Prior to accepting the lease assignment, Hillwood is requesting a six (6) month ENA to conduct investigatory analyses of the Property for the purpose of determining their interest in negotiating with the City for their possible long -term ground lease of the Property.