Title
Report regarding two resolutions authorizing the City Manager to approve a Lease Agreement with the Boys & Girls Club of the Peninsula for a portion of City-owned land at 201 West Orange Avenue for an existing building and a Consent, Assignment, Assumption and Amendment Agreement to assign an existing loan related to the building. (Sharon Ranals, Assistant City Manager)
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RECOMMENDATION
Recommendation
It is recommended that the City Council adopt two resolutions authorizing the City Manager to approve a Lease Agreement and a Loan Transfer Agreement, titled Consent, Assignment, Assumption and Amendment Agreement, with the Boys & Girls Club of the Peninsula (BGCP) for a building located on City-owned property at 201 West Orange Avenue.
Body
BACKGROUND/DISCUSSION
In 1958 a building was constructed at 201 West Orange Avenue by an organization which at that time was the Boys’ Club. The building was constructed on land which was owned by the San Francisco Water Department, now the San Francisco Public Utilities Commission (PUC), which issued a Revocable Permit, dated January 7, 1958. The Permit granted the Boys’ Club permission to utilize the land for the purpose of constructing and occupying a building “of a temporary, removable nature,” for providing recreational activities for youth. The Permit was superseded by subsequent Permits in 1959 and 1961. In the 1990’s BART acquired a swath of this PUC property for their underground train alignment.
In 2007/08, in conjunction with the development of plans for Centennial Way linear park and the Centennial Way Dog Park, the City’s Redevelopment Agency purchased property from the PUC between Orange Avenue and Chestnut Avenue, including the land under what evolved into the Boys and Girls Club as well as the adjacent parking lot. The Redevelopment Agency executed an Assignment and Assumption of Lease with the PUC, dated January 30, 2008, in which the terms of the agreement between the San Francisco Water Company and the Boys and Girls Club transferred to the City’s Redevelopment Agency as the new land owner. However, a new agreement between the Redevelopment Agency and the Boys and Girls Club was never created. With the dissolution of the Redevelopment Agency, ownership of the property transferred to the City in 2016.
Over the years the City has provided significant support to the Boys and Girls Club. City staff have painted out graffiti on the building, repaired exterior electrical lights, picked up dumped garbage, offered shared staff training opportunities, coordinated their use of Orange Pool during the summer, etc. In addition to in-kind support, some financial support has also been provided. In response to damage caused by winter storms, the City granted the Boys and Girls Club $29,000 from Community Development Block Grant (CDBG) funds in 2013 toward the cost of repairs. The City further provided $100,000 in CDBG funds in a zero-interest forgivable loan, also to address building repairs. Assuming compliance with the loan agreement, the City agreed to forgive the loan in 25 years in 2038.
DISCUSSION
This year the Boys and Girls Club is in the process of merging with Boys & Girls Club of the Peninsula (BGCP). They made the decision to return the Paradise Valley Recreation Building, which had been programmed by the Club for many years, back to the City, and to focus on programming at the Orange Avenue facility. The BGCP is considering making significant investment to improve the aging facility and expand programming, which would be of great community benefit.
The merger process requires a review of all existing agreements and documents, some of which the BGCP was unable to locate in their files. The City assisted by obtaining a preliminary title report, researching City records, and providing legal assistance from the City Attorney. The transfer of property to the BGCP requires that a new agreement with the City be made and any outstanding loans be transferred.
The City Attorney’s office drafted a new agreement, which has been reviewed and edited by both parties. Some of the key elements of the new agreement include:
• BGCP is only permitted to use the facility for the provision of youth related programs and such use shall be conducted in a manner that does not negatively impact the surrounding neighborhood with respect to parking and/or noise;
• The facility shall only be used a community membership club for youth, offering programs in character and leadership development, education and career development, health and life skills, the arts, sports, recreation, and fitness, with 3rd party uses and rentals not permitted;
• City-owned parking lots adjacent to the building are excluded from the lease, remain open to the public, and are subject to City control;
• Term is 3 years from the date of execution, with an option for (3) one-year extensions, for a total of 6 years;
• Rent is $1.00 per year;
• BGCP is responsible for all taxes, insurance, utilities, maintenance, landscaping, and repairs;
• In the event the agreement is terminated, or the building is damaged beyond repair, the BGCP is responsible to remove the building;
• Alterations to the building must be pre-approved by the City.
The exhibits to the Lease Agreement are presently being updated to provide a proper description of the portion of the City-owned property at 201 West Orange that is proposed to be leased to BGCP. Once those exhibits have been prepared, they will be attached to the lease, and the parties will sign the lease. The exhibits will not affect the terms of the Lease Agreement, so staff is seeking Council approval now to allow for the merger process to continue.
Although not specified in the agreement, staff has requested that the BGCP refer to their facility at 201 West Orange Avenue as the Orange Avenue Clubhouse, or other name of their choice, and not the “Orange Park Clubhouse,” as it has been named in the past, to avoid the perception that the City owns, controls, or programs the facility. It should also be noted that if the BGCP is able to make significant capital improvements it will be necessary to create a new agreement in the future.
With respect to the transfer of the $100,000 CDBG loan, the City Attorney reviewed the terms and CDBG guidelines and recommended that this issue be handled separately between the parties with an Assignment, Assumption, and Consent Agreement to be prepared by the BGCP and accepted by the City. The BGCP has prepared this document, which is attached to a resolution which accompanies this report.
ENVIRONMENTAL REVIEW
The proposed Lease Agreement for a portion of the City-owned property at 201 West Orange is exempt from review under California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the agreement may have a significant effect on the environment. The Lease Agreement pertains only to the portion of property on which buildings already exist. If the owner of the buildings proposes any modification in the future that require review under CEQA, the City will undertake that review at the earliest feasible time.
FUNDING
Execution of this agreement protects the City by renewing insurance requirements and clarifying maintenance and operational responsibilities. Transfer to the Boys and Girls Club of the Peninsula a $100,000 forgivable loan made by the City in 2013 also protects the City against premature default on the loan. Some legal fees and staff time have been expended in the research and preparation of the agreement. No additional financial impact is anticipated.
RELATIONSHIP TO STRATEGIC PLAN
Supporting the efforts of the BGCP by executing this agreement at no cost to the organization strengthens the relationship between the two agencies and will contribute to the provision of affordable or free youth development and recreation programs to enhance the quality of life in South San Francisco.
CONCLUSION
It is recommended that the City Council adopt a resolution authorizing the City Manager to approve a Lease Agreement with the Boys and Girls Club of the Peninsula; and adopt a resolution transferring a $100,000 forgivable loan made in 2013 with a Consent, Assignment, Assumption and Amendment Agreement for a building located on City-owned property at 201 West Orange Avenue.