HomeMy WebLinkAbout09 - Sunset Ridge ParkCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 9
May 24, 2005
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
949/644 -3002 or dkiff @city.newport- beach.ca.us
SUBJECT: Sunset Ridge Park: Approval of Ground Lease, Budget Amendment,
and Escrow Instructions
ISSUE:
Should the City Council authorize the expenditure of $1,356,485.00 to control Sunset Ridge
Park via a Ground Lease with the California Department of Parks and Recreation?
RECOMMENDATION:
Authorize the City Manager or the Mayor to execute a Ground Lease with the California
Department of Parks and Recreation for the Sunset Ridge Park property at Superior and
Pacific Coast Highway in a form and substance substantially similar to the attached Draft
Ground Lease; and
2. Approve Budget Amendment #_ allocating $676,458.00 (in addition to the $680,000
already budgeted) to pay California State Parks to take title to the property per the terms of
Senate Bill 124 (Johnson, 2001); and
3. Authorize the City to open and administer an escrow account to cause the Sunset Ridge
Park property to transfer from Caltrans to State Parks according to the provisions of SB 124;
and
4. In the event that State officials offer a direct sale of the Sunset Ridge Park property
(including Director's Deeds #040766 -01 -01 and #040766- 01 -02) to the City, authorize the
City Manager to negotiate with Caltrans on a direct sale.
DISCUSSION:
After extensive negotiations with Caltrans over several years to purchase 15.05 acres of land
known as Sunset Ridge Park, the City eventually asked State Senator Ross Johnson (R- Irvine)
to carry Senate Bill 124, which became law in 2001 (SB 124 is now referred to as Chapter 761
of the Statutes of 2001 and is shown in Attachment C). Chapter 761 authorizes the City to pay
the California Department of Parks and Recreation to purchase these 15.05 acres (655,704
square feet) for roughly the land's 1966 purchase price of $1,356,485.00). Chapter 761 is the
Sunset Ridge Park
May 24, 2005
Page 2
legislative implementation of a provision of the California Constitution (Article XIX, Section 9)
which allows excess Caltrans land within the Coastal Zone to be sold at its purchase price if the
land is used for a park purpose. Article XIX, Section 9 was added by the voters of California in
1978 as Proposition 3.
Ground Lease. Chapter 761 requires the City and State Parks to enter into a Ground Lease that
authorizes the City to develop and maintain the Sunset Ridge parcel as a locally- operated State
Park unit. This lease has been under discussion and negotiation with State Parks since before
July 2004. A near -final draft of the Ground Lease is attached as Attachment A. A summary of
the Ground Lease follows:
Ground Lease Summary of Terms
Term: 10 -years or 25- years, depending on the passage of SB 306 (Campbell, 2005);
Term Extension: Additional 25- yearterm allowed if requested by City;
Consideration: Payment of $1,356,485,00 to State Parks, assurance that City will operate property
as a park, including construction, maintenance, and operation;
Improvements: State must approve plans for park improvements; City must develop the park per
Public Resources Code Section 5009.19 (see Attachment D) within 5 years of the
date this Ground Lease is executed. The operative section of §5009.19 is as follows:
(c) The purpose of the lease shall be for the development and operation by the city
of a locally operated state park unit with regional benefits. These benefits shall
include, but are not limited to, facilities for organized sports events as well as passive
park features incorporating native plant species, traits, paths, and benches. The park
shall be open to the public.
Hold Harmless City shall hold the State harmless for its park operations;
Insurance: City shall hold insurance of $1,000,000.00 General Liability and $500,000 Fire Legal
Liability and shall name the State as an additional insured;
Subletting: Prohibited without the written consent of the State;
Current law allows State Parks to enter into only 10 -year terms for properties like Sunset Ridge.
In order to secure a 25 -year term for the property, the City has sponsored SB 306 (Campbell,
2005) that would allow State Parks and the City to enter into a 25 -year lease. In order to not
delay planning for the park, the City may execute a 10 -year lease with State Parks immediately
and amend it to a 25 -year lease once SB 306 passes. SB 306 passed the State Senate and is
awaiting its committee assignment in the State Assembly (SB 306 included as Attachment D).
The transfer of the land from its current owner ( Caltrans) to State Parks is contingent upon the
execution of the Ground Lease, the issuance of a check from the City to State Parks for
$1,356,485.00, and the execution of a Transfer of Jurisdiction (TOJ) document issued by the
California Department of General Services (DGS).
Transfer Problems. Earlier this year, the City was frustrated with the pace of transfer activities
within the State departments. We used DGS' TOJ template and sent them a draft TOJ for the
Sunset Ridge Park site on August 10, 2004. Since that time, we have asked our legislative
advocate and State Senator John Campbell to assist us with getting the documents released
from DGS. DGS also must finally approve the Ground Lease.
In March 2005, DGS staff offered to serve as the escrow officers for the transaction. We agreed
and encouraged them to do so. Shortly thereafter, officials from the State and Consumer
Services Agency (SCSA), the State Agency that includes DGS as a department which reports to
Sunset Ridge Park
May 24, 2005
Page 3
it, directed DGS staff to stop working on the transaction. At the same time, SCSA has
introduced its Surplus Land Sales bill (AB 54, Negrete- McLeod, 2005) which includes two
sections relating to Sunset Ridge - a provision that repeals Chapter 761 of the Statutes of 2001
(Section 3 of the bill) and a section that reads as follows:
SEC. 9. (a) The Directorof Transportation may sell, exchange, orlease forfairmarket value or,
upon those terms and conditions and subject to those reservations and exceptions, as the Director of
Transportation determines are in the best interest of the state, all orpart of the following property:
Parcel 1. Approximately 16.9 acres of unimproved property, located at Pacific Coast Highway at
SuperiorA venue, Newport Beach, Orange County.
Parcel 2. Approximately 2.54 acres of unimproved property, located at Pacific Coast Highway at
Superior Avenue, Newport Beach, Orange County.
Parcel 3. Approximately 1.5 acres of property, located at 2477 Monterey Boulevard and Park
Boulevard, Oakland, Alameda County.
On May 11, Mayor Bromberg wrote a letter to Assembly Member Negrete- McLeod in opposition
to AB 54 and its proposed repeal of Chapter 761 (Attachment E). At the time of this staff report,
AB 54 is on the Assembly Floor.
Escrow. Given the direction to DGS staff from SCSA, we propose starting the escrow activities
at the city level to complete the transaction. This agenda item asks the Council to authorize the
City to open an escrow account with a $1,356,485.00 check and executed Ground Lease. With
those complete, the City will have done its part to complete the transaction. We will continue to
actively work with our legislators and SCSA/DGS to assist them in completing their obligations
to comply with SB 124.
What's gone on in the over three years since SB 124 became law? When SB 124 took effect
(January 2002), the City knew the following:
• On January 15, 2002, the State's Legislative Analyst Office (LAO) and Analyst Ms. Elizabeth
Hill released this statement as a part of her Overview of the Governor's Budget for FY 2002-
03:
"The 2002 -03 Governor's Budget lays out the administration's spending priorities and
offers a plan for addressing the slate's $12p /us bi/ /ion budgetary shortfall. While 'on
paper" the plan appears to work, many of its assumptions are overly optimistic, it relies
largely on one -time solutions, and it results in substantial long- term out -year costs.
Moreover, the plan does not resolve the state's budgetary imbalance in subsequent
years, thereby continuing the nsk of future shortfalls. "
• On January 12, 2003, Ms. Hill released this statement as a part of her Overview of the
Governor's Budget for FY 2003 -04:
On January 10, the Governor released a plan for addressing his projected $34.6 billion
General Fund budget shortfall. Although this shortfall estimate and the level of required
solutions is somewhat overstated, the problem is still enormous. The Governor has
proposed a comprehensive plan for addressing the slate's fiscal problems. The
Legislature faces a formidable task in carefully evaluating the plan's individual elements
and the many important policy issues i1 raises..... "
She noted as well that the FY 2003 -04 State Budget proposed a shift of 15.1 billion in
resources away from local governments in order to produce General Fund savings."
Sunset Ridge Park
May 24, 2005
Page 4
On January 13, 2004, Ms. Hill reported that following about Governor Schwarzenegger's
proposed FY 2004 -05 budget:
"On January 9, the Governor released his proposed plan for addressing the state's large
($15 billion) budget problem. The Governor proposes an approach that relies on
substantial spending cuts; a large shift of property faxes from local governments; as well
as additional borrowing, deferrals, and fund shifts.... The Legislature faces a formidable
challenge in evaluating the many important policy issues the plan raises... "
Eventually, cuts to local government funding from the State amounted to $3.6 billion statewide
across fiscal years 2004 -05 and 2005 -06. Newport Beach lost $2.2 million in this shift (called
the Education Revenue Augmentation Fund III or "ERAF" III) in FY 2004 -05 and will likely lose
another $2.2 million in FY 2005 -06. This is in addition to the roughly $4 million in property tax
lost from the city each year for ERAFs I and II. The City's FY 2005 -06 budget proposes a loss of
more than $6 million to ERAFs I, ll, and III (see chart).
Newport Beach ERAF Losses
61.000,000 - - —. - - -- — - • . .
t6.000.G99 (--
:6.999.999 1,— - — - - - • —
6.,999.999
6).909.900
63.900.900
ft,9o9,099
69 1 u ... .a. , -. � ..:., .. �. .. 6:.3 tr . . . - L _ _ �.. -t.L
194. ,m4. 1w5- 1996. 199x. 1999 1999 mm- 319U]. 3003. 7993 M9. 200 5 .
9J 94 96 96 91 96 99 00 .1 93 O) 04 06 06
Total: $60,342,249
With so much uncertainty for our own finances given the State's circumstances, the City decided
to seek to ensure that our own budget was prepared for the significant obligations of the Ground
Lease - including a requirement that Sunset Ridge Park's improvements be developed within 5
years of the Lease's execution. A $1,356,485.00 purchase obligation plus the $5 -6 million it
might take to develop the park were and are substantial investments for the City to make.
When our fiscal picture and that of the State cleared in mid -2004, we restarted work on the
Ground Lease and the transfer. At the same time, the Parks, Beaches, and Recreation
Commission and your Council have started park development work for Sunset Ridge Park via
your Council's approval on April 12`h, 2005 of a $70,000.00 Professional Services Agreement
(PSA) with RJM Design Group Inc.
Environmental Review: Approval of this Agenda Item is Categorically Exempt under Class 16
(certain acquisitions or sales of land in natural condition ... to establish a park). Development of
the park itself will require CEQA review.
Public Notice: This agenda item may be noticed according to the Brown Act (72 hours in
advance of the public meeting at which the City Council considers the item).
Sunset Ridge Pat*
May 24, 2005
Page 5
Funding Availability: This action will require a budget amendment of $1,356,485.00 to place the
amount in an escrow account. Transfer of $331,048.25 from 7021- C5100562, increase
expenditure appropriations from Park In Lieu Reserves ($150,000), and allocate unappropriated
General Fund fund balance ($195,680.75).
Submitted by:
Dave Ki
Assistant City Manager
Attachments: A— Draft Ground Lease
B — Text of Chapter 761 of the Statutes of 2001
C — Text of SB 306
D — Mayor Bromberg's Letter re: AB 54
E — Budget Amendment # _
GROUND LEASE
LEASE COVERIN PREMISES LOCATED AT
Newport Beach, California
APN: #424 - 041 -08 and #424 - 041 -10
Orange Couutv
LESSEES FED TAX. LD.. NO. OR SOCIAL SECURITY NO.
Lease No.:
Draft 5 -14 -05
Pursuant to the provisions of SB 124, Chapter 761, Statutes of 2001, and Public Resources Code Section 5003.19,
this LEASE, dated this day of , 2005, by and between tine State of California, acting by and
through the Department of Parks and Recreation, with the approval of the State Public Works Board, hereinafter
called STATE, and the City of Newport Beach, a Municipal Corporation, hereinafter called LESSEE.
WITNESSETH:
DESCRIPTION 1. STATE does hereby lease to LESSEE, and LESSEE hereby hires from STATE,
upon the tenus, agreements, and Conditions hereinafter set forth, those certain premises as
outlined on the attached legal description designated as Exhibit "A ", and plot plan
designated as Exhibit "B" which is incorporated herein and by this reference made a part
hereof and more particularly described as follows:
Approximately 15.05 acres of property located in the coastal zone of the City of
Newport Beach, adjacent to Superior Avenue and Pacific Coast Highway, Consisting Of
Assessor Parcel Numbers 424 - 041 -08 and 424 - 041 -10 in the County of Orange, State of
California, hereinafter called Premises.
TERNI 2(a). The following TERM shall apply if Senate Bill 306 (Campbell, 2005) is
chaptered and therefore authorizes a 25 -year Term:
The term of this Lease Shall be for 25 years, Commencing on January 1, 2006 and
ending on December 31, 2030, with such rights of termination as are hereinafter expressly
set forth; or (if SB 306, Campbell, 2005 is signed into law);
2(b). The following TERM shall apply if Senate Bill 306 (Cambell, 2005)is not
chaptered and does not authorize a 25 -year Tenn:
The term of this Lease shall be for 10 years, Commencing On July 1, 2005 and ending on
June 30, 2015, with such rights of termination as are hereinafter expressly set forth:
EXTENSIONS OF 3. (a) Upon one year's written notice from LESSEE and upon STATE's written consent
TERM as granted pursuant to the STATE's sole discretion, this Lease may be extended for an
additional twenty five year term commencing on the first calendar day after the date set for
expiration of this Lease. In exercising its discretion to extend the term of tine Lease, the
STATE may modify, add or delete terms and conditions of the original lease, including the
addition of a requirement for monetary consideration for the use of tine Premises, as the
STATE may determine to be in the best interests of the STATE.
(b) STATE and LESSEE agree to use their best efforts to extend this Lease in
accordance with the provisions of Subsection (d) of Section 5003.17 of the Public
Resources Code provided that LESSEE is in full compliance with this Lease.
-I
C0NSIDERATI0N 4. This Lease is a non- compensation lease with respect to regular rental payments.
Consideration for the Lease which is deemed to meet or exceed the fair market rental value
of the property is LESSEE's acceptance of all terns and conditions of the Lease, including:
(a) The requirement to assume and finance all development, operation and maintenance
of the Premises; and
(b) To provide the public benefits of a city park as hereinafter provided; and
(c) A one -time payment of $1,356,485.00 to the STATE per the terms of Senate Bill
124 (Chapter 761 of the Statutes of 2001).
USE 5. The Premises shall be used by LESSEE during the term hereof for the purpose of
developing, operating and maintaining a city park providing organized sports and
recreational facilities with regional benefits and for no other purposes whatsoever.
PERFORMANCE BY 5. LESSEE sliall have the sole responsibility for funding the development, operation
LESSEE and maintenance of the Premises pursuant to Section 5003.19 of the California Public
Resources Code. LESSEE shall develop the Premises for the purposes specified in Section
5003.19 within five (5) years of the execution of this Lease. Net profits, if any, resulting
from LESSEE's operation of the Premises shall be used exclusively for the Premises.
LESSEE sliall keep all records pertaining to the development, operation and maintenance of
the Premises for no less than five (5) years from the date of each record and sliall make such
records available to the State for inspection and /or copying upon the STATE'S request. The
STATE shall have the right to declare the LESSEE in breach of its obligations under this
Lease, terminate the Lease, and seek all applicable legal and contractual reined ies in the
event LESSEE fails to develop the Premises within this five (5) year period.
TERMINATION 6. Termination of this Lease by either party to this Lease sliall be for breach of the
terns and conditions of the Lease. Upon termination, LESSEE sliall immediately surrender
possession of the Premises to the STATE and comply with all other applicable requirements
mandated by this Lease.
uoLUOM'ER 7. Any holding over after the expiration of the term or any extension thereof, with the
written consent of STATE, expressed or implied, sliall be deemed to be a tenancy only from
nnonth- to- nnontln and sliall otherwise be subject to the terns and conditions specified in this
Lease.
UTILI "VIES S. No utilities, including but not limited to electricity or gas, will be provided by
STATE and STATE assumes no liability for the existence or nonexistence of utilities.
WATER. 9. It is understood and agreed between the parties hereto that STATE does not
ST0RNIwA] ER AND guarantee the availability, quality or quantity of water on the Premises. LESSEE sliall
IRRIGATION manage stormwater discharge on the Premises in a manner consistent with the best
management practices as determined by the public regulatory entity or entities having
jurisdiction over enforcement of water quality laws and regulations for the LESSEE's
project.
NonCES 10. All notices or other communications required or permitted under this Lease shall be
in writing, and shall be personally delivered (including by means of professional messenger
service), or sent by overnight courier, or sent by registered or certified mail, postage
prepaid, return receipt requested to the addresses set forth below, or seat by electronic
facsimile to the telefacsimile munnbers set forth below. All such notices or other
communications shall be deemed received upon the earlier of: (a) if personally delivered or
sent by overnight courier, the date of delivery to the address of the person to receive such
notice; (b) if mailed as provided above, on the date of receipt or rejection; or (c) if given by
electronic facsimile, when received by the other party if received Monday through Friday
between 6:00 a.m. and 5:00 p.m. Pacific Standard Time so long as such day is not a state or
federal holiday and otherwise on the next day provided that if the next day is Saturday,
Sunday, or a state or federal holiday, such notice shall be effective on the following business
day.
To the LESSEE: City of Newport Beach
c/o Director of Public Works
3300 Newport Boulevard
Newport Beach, California
Telephone: 949-644-3311
Facsimile: 949-644-3020
To the STATE: Department of Parks and Recreation
C/o District Superintendent, Orange Coast District
3030 Avenida del Presidente
San Clemente, CA 92672
Telephone: 949 - 492 -0802
Facsimile: 949 - 492 -8459
With a copy provided to:
Department of Parks and Recreation
C/o Chief. Acquisition and Real Property Services
One Capitol Mall, Suite 500
Sacramento, California 95814
Notice of change of address or telefacsimile number shall be given by written notice in
the manner described in this section. LESSEE is obligated to notice all STATE offices
listed above and the failure to provide notice to all STATE offices will be deemed to
constitute a lack of notice.
The address to which notices shall be mailed to either party may be changed by written
notice. Nothing herein shall preclude the giving of any notice by personal service.
ACTION BROUGHT 11. If action is brought by the STATE for any breach of the provisions of this Lease, or
MR 13REACU to restrain the breach of any agreement contained herein, or for the recovery of possession
of said Premises, or to protect any rights given to the STATE against the LESSEE
(including the appeals of such action and any action or proceeding under title I I of the
United States Code), and if STATE shall prevail in such action, LESSEE shall pay to the
STATE such amount in attorneys' fees in said action as the court determines to be
reasonable.
uOLB 12. This Lease is made upon the express condition that the STATE is to be free from all
HARNILESS liability and claims for damages by reason of any injury to any person or persons, including
LESSEE, or property of any kind whatsoever and to whomsoever belonging, including
LESSEE, from any cause or causes whatsoever while in, upon or in any way connected with
the Premises during the tenor of this Lease or any occupancy hereunder except those arising
out of the sole negligence of the STATE. LESSEE agrees to defend, indemnify and hold
harmless STATE from all liability, loss, cost or obligation on account of or arising out of
any such injury or loss, however occurring. LESSEE further agrees to provide necessary
Worker's Compensation Insurance for all employees of LESSEE upon said Premises at the
LESSEE's own cost and expense.
0
INSURANCE 13. LESSEE shall furnish a certificate of insurance with the STATE's Lease Number
indicated on the face of said certificate, issued to STATE with amounts of Commercial
General Liability of at (cast $1,000,000 per occurrence and Fire Legal Liability of at least
$500,000 naming the State of California, its officers, agents and employees as additional
insureds. Said certificate of insurance shall be issued by and insurance company with a
minimum Best Insurance Guide rating of A- or better.
It is agreed that STATE shall not be liable for the payment of any premiums or assessments
on the insurance coverage required by this paragraph. The certificate of insurance shall
provide that the insurer will not cancel LESSEE's coverage without thirty (30) days prior
written notice to STATE. LESSEE agrees that the insurance herein provided for shall be in
effect at all times during the tern of this Lease, all extensions thereof, hold -over periods or
any other occupancy of the Premises by LESSEE. In the event said insurance coverage
expires at any time or times during the tern of this Lease, LESSEE agrees to provide
STATE at ]cast thirty (30) days prior to said expiration date. a new certificate of insurance
evidencing insurance coverage as provided for herein for not less than one (1) year. In the
event LESSEE fails to keep in effect at all times insurance coverage as herein provided,
STATE may. in addition to any other remedies it may have, terminate this Lease upon the
occurrence of such event.
If LESSEE is self - insured, LESSEE shall provide STATE with written acknowledgment of
this fact at the time of the execution of this Lease. LESSEE shall annually thereafter, on the
anmivcrsary of the date of execution of this Lease, provide STATE with a written
acknowledgment of the continuation of its self - insured status. If. at any time after the
execution of this Lease, LESSEE abandons its self - insured status, LESSEE shall
immediately notify STATE of this fact and shall comply with the terms and conditions of
Paragraph 13 of this Lease.
LOSSES 14. STATE will not be responsible for losses or damage to personal property, equipment
or materials of LESSEE and /or any of LESSEE's agcuts, employees, officers, contractors,
invitees. All losses shall be reported to STATE immediately upon discovery.
NON- 15. In the performance of this Lease. LESSEE shall not discriminate. harass, or allow
DISCRIMINATION harassment against any employee or applicant for employment because of race, religious
creed. color, national origin. ancestry, physical disability (including HIV and AIDS); mental
disability. medical condition, age (over 40); marital status. sex, sexual orientation. or use of
family care leave. LESSEE shall insure that the evaluation and treatment of its employees
and applicants for employment arc fi'ce from such discrimination and harassment. Such
action shall include. but not be limited to. the following: employment, upgrading, demotion
or transfer, recruitment or recruitment advertising. layoff or termination, rates of pay or
other forms of compensation, and selection for training. including apprenticeship.
LESSEE shall comply with the provisions of the Fair Employment and Housing Act
(Government Code Section 12990 (a -f) et seq.) and the applicable regulations promulgated
thereunder (California Code of Regulations, Title 2. Section 7285 et seq.). The applicable
regulations of the Fair Employment and Housing Commission implementing Government
Code Section 12990 (a -f), set forth in Chapter 5 of Division 4 of Title 2 of the California
Code of Regulations, arc incorporated into this Lease by reference and made a part hereof as
if set forth in full, LESSEE shall give written notice of its obligations under this clause to
any labor organizations with which they have a collective bargaining or other agreement.
Further, LESSEE shall post in conspicuous places available to employees and applicants for
employment, notices to be provided by the STATE setting forth the provisions of this Fair
Employment Practices Section. (Government Code, Section 12920 - 12994).
Remedies for willful violations:
I I'
(a) The STATE may determine a willful violation of the Fair Employment Practices
provision to have occurred upon receipt of finaljudgment having that effect from
a court in an action to which LESSEE was a party, or upon receipt of a written
notice from the Fair Employment Practices Commission that it has investigated and
determined that the LESSEE has violated the Fair Employment Practices Act and
has issued an order pursuant to the appropriate provisions of the Government Code.
(b) The STATE shall have the right to terminate this Lease and any loss or damage
sustained by the STATE by reason thereof shall be borne and paid for by the
LESSEE.
DEBT LIABILITY 16. The STATE will not be liable for any debts or claims that arise from operation of
DISCLAIMER this Lease.
PARTNERSHIP 17. LESSEE and any and all agents of LESSEE shall act in an independent capacity and
DISCLAIMER not as officers or employees of the STATE. Nothing herein contained shall be construed as
constructing the parties herein as partners, agents, or a joint powers entity. Neither party
shall have the right or power to bind the other to agreement or any other liability at law.
sum.ETIING 18. LESSEE shall not assign this Lease in any event and shall not sublet the Premises or
any part thereof and will not permit the use of the Premises by anyone other than the
LESSEE without prior written consent of the STATE which consent shall be given at the
State's sole discretion.
'ruses AND 19. LESSEE agrees to pay all lawful taxes, assessments, or charges, which at any time
ASSESSMENTS may be levied upon the Premises or any interest in this agreement. It is understood that any
sublease or concession to a private entity that may be permitted by this Lease may create a
possessory interest subject to property taxation and LESSEE or such sublessee or
concessionaire may be subject to the payment of property taxes levied on such interest.
COMPLIANCE 20. LESSEE shall, at its sole cost and expense, comply with all the laws and
WTrH LAWS requirements of all Municipal, County, State, and Federal authorities now in force or which
may hereafter be in force pertaining to the Premises and use of the Premises as provided by
this Lease.
CONDITION OF 21. LESSEE accepts the Premises "AS IS, WHERE IS, WITH ALL FAULTS"
PREMISES without representation or warranty. LESSEE is experienced in real property transactions
and acknowledges that it has the ability to investigate and evaluate the risks, if any,
associated with the receipt of the Premises and further acknowledges that it has had
adequate time to properly and completely review and analyze the condition of the Premises
to the extent it deems necessary or appropriate. LESSEE hereby accepts the Premises in its
existing condition and acknowledges that any preparation of the Premises for LESSEE's use
shall be the sole responsibility, obligation and expense of LESSEE. LESSEE agrees on the
last day of the term, or the earlier termination of this Lease, to surrender up to STATE the
Premises, with any appurtenances or improvements therein (as required or allowed by this
Lease), in the same condition as when received, reasonable use and wear thereof and
damage by acts of God excepted.
MAINTAINING 22. LESSEE shall, at LESSEE's sole cost and expense, be responsible for the
PREMISES development, maintenance and operation of all Improvements permitted to be constructed
upon the Premises by LESSEE in furtherance of the purposes of this Lease. LESSEE shall
keep the Improvements in good, clean and safe condition and shall comply with all laws and
regulations regarding the maintenance standards for such Improvements.
PROTECT ION 01: 23. LESSEE shall not commit or suffer to be committed any waste or nuisance upon the
PREMISES Premises.
PLANNING AND 24. Except otherwise agreed to by STATE, LESSEE shall be solely responsible for all
DEVELOPatENT planning and development of the facilities, buildings, playing fields, and infrastructure (the
Improvements) on the Premises contemplated by the purposes for which the Premises may
be developed under this Lease.
IMPROVEMENTS 25. Development of the Premises or construction of Improvements thereon shall not be
permitted to begin until STATE (including Department of General Services, as necessary)
has approved the complete plans and specifications for the project, said plans to be prepared
by an architect, civil engineer, or other professional, that is duly qualified and registered by
the State of California. Once LESSEE has provided STATE said plans and specifications,
STATE shall have a thirty (30) day minimum review period before granting LESSEE
approval or disapproval of project in writing. LESSEE shall, at the time of the request,
specify if LESSEE desires to retain ownership and /or possession of the alteration, addition,
or Improvement. Review and approval of all plans and specifications for the Improvements
by STATE shall be for concurrence and compatibility with the collaborative planning
process contemplated and provided for herein above. Any approvals shall not relieve
LESSEE from its responsibility to plan, design, construct and operate facilities in a safe
manner according to all laws, codes, regulations or other standards applicable to such
facilities.
CEQA 26. LESSEE acknowledges that environmental documents under the California
Environmental Quality Act (CEQA) may be required for this Lease and for any of
LESSEE'S anticipated future improvements to the leased Premises.
DISPOSITION Or 27. Upon termination of this Lease for any cause, LESSEE shall use its best efforts to
miPROVEMEMS remove any and all personal equipment and Improvements of the LESSEE and restore the
entire Premises to its condition prior to the execution of this Lease, except, however, the
STATE may approve, in writing, any deviation front this requirement or may direct
LESSEE as to its intentions with respect to the Improvements. Any Improvements
remaining at the Premises at the expiration or termination of this Lease shall become the
property of the State.
FIRE AND 28. STATE will not keep Improvements which are constructed or installed by LESSEE
CASUALTY under the provisions of this Lease insured against fire or casualty, and LESSEE will make
DAMAGES no claim of any nature against STATE by reason of any damage to the facilities or property
of LESSEE in the event of damage or destruction by fire or other cause, arising other than
from or out of the negligence or willful misconduct of agents or employees of the STATE in
the course of their employment.
HAZARDOUS 29. The following activities are prohibited on the Premises:
SUBSTANCES
(a) Use or storage of any hazardous substance or hazardous chemical as those tenns are
used in CERCLA (42 USC 9601.14) or SARA (42 USC 11021(e)) or any similar
state law, or any pesticide, oil, petroleum product or fuel (except only materials
packaged and purchased for consumer use in containers not to exceed one (I )
gallon, or fnel in a vehicle fuel tank). Use of pesticides should be minimized, and
will be applied only by authorized personnel and in accordance with all applicable
laws, regulations, and label instructions. Aerial application is prohibited.
(b) Accumulation, storage, treatment, or disposal of any waste material (excepting only
ly
temporary storage, not to exceed fourteen (14) days), or non - hazardous solid refuse
produced from activities on the Property for pick up by a municipal or licensed
commercial refuse service, and lawful use of sanitary sewers (if any) for domestic
sewage.
(c) Manufacturing, maintenance of equipment or vehicles, or use, installation or
construction of vessels, tanks, (stationery or mobile), dikes, sumps, or ponds, or any
activity for which a license or permit is required from any government agency for
(I ) transportation, storage, treatment, or disposal of any waste, and (2) discharge of
any pollutant, including but not limited to discharge to air, water, or a sewer system.
Any spill, release or discharge of a hazardous material to the air, soil, surface water, or
groundwater will be immediately reported to the STATE as well as to appropriate
government agencies, and sliall be promptly and fully cleaned up and the Premises
(including soils and surface water and groundwater) restored to its original condition.
LESSEE agrees to comply with the requirements and orders, if any, of the California
Department of Toxic Substances Control with respect to the Premises.
Should LESSEE desire to use pesticides on the area (either herbicides, rodenticides, or
insecticides), all applicable Environmental Protection Agency (EPA) standards must be met
and prior approval must be received from the STATE (as specified below) as not all EPA
approved pesticides may be used on wildlife areas, No aerial applications of pesticides will
be permitted. No dumping of hazardous wastes (Petroleum) shall be permitted. LESSEE
will fill out Form FG -880 and submit it to the area manager at least seven (7) days prior to
application of pesticides. STATE reserves the right to disapprove the use of any pesticide.
LESSEE sliall obtain all County, State, or Federal permits required, including restricted
pesticide use and burning permits, and comply with all conditions of those permits.
LESSEE shall submit to the area manager a copy of all permits.
PESTCONTROL 30. All non- routine pest control activities (defined as activities not normally used for
the maintenance of ball fields and supporting structures), chemical or non - chemical, sliall be
approved by the STATE prior to any action performed by the LESSEE, LESSEE's
employees, agents, or contractors. The LESSEE, or a pest control contractor acting on
belialfofthe LESSEE, must submit a pest control recommendation on a form approved by
the STATE to the Orange Coast District Superintendent for approval. The STATE sliall
have fourteen (14) days to approve or deny the request. LESSEE, or the pest control
contractor acting on behalf of the LESSEE, must submit a report of completed work for
each pest management action to the District Superintendent no later than seven (7) days
after performance of the work. LESSEE and all of LESSEE's employees, agents, or
contractors shall prevent the inadvertent transport of pest species into or out of the STATE's
park unit.
LESSEE shall have a written training program for LESSEE's employees who handle
pesticides. This program shall comply with California Code of Regulations Title 3, Section
6724. Any pest control contractor hired by the LESSEE sliall comply with all California
laws and regulations.
atGin' 31. During continuance in force of this Lease, there shall be and is hereby expressly
OF ENTRY reserved to STATE and to any of its agencies, contractors, agents, employees,
representatives, or licensees, the right at any and all times, and any and all places, to
temporarily enter upon said Premises for survey, inspection or other lawful STATE
purposes.
EASEMENTS AND 32. LESSEE's interest under this Lease will be subject to all easements, access rights,
IS
RIC[ITS Or wAV licenses and permits in favor of or as granted by the STATE or its predecessors in interest.
INUNF,RAL RIGnTS 33, LESSEE agrees not to interfere in any way with the interests of any person or
persons that may presently (or in the future) ]told oil, gas, or other mineral interests, if any,
under said Premises, nor shall LESSEE interfere in any way with the rights of ingress and
egress of said interest holders.
RELOCATION 34. LESSEE acknowledges that LESSEE, its employees, contractors, subordinates and
assigns are not entitled to any Relocation Payment or Relocation Advisory Assistance due to
their occupancy of the Premises.
In the event subleasing is permitted, LESSEE shall incorporate the above paragraph into
each sublease. Failure to do so will obligate LESSEE for damages and costs resulting from
claims for relocation payment by sublessees.
DEFAULT 35. The occurrence of any of the following shall constitute a material breach and default
of this Lease by LESSEE:
(a) LESSEE's failure to develop the Premises within five (5) years of the date of
execution of this Lease.
(b) The abandonment or vacation of the Premises by LESSEE. Failure to occupy and
operate the Premises for thirty (30) consecutive days following the mailing of
written notice from STATE to LESSEE calling attention to the abandonment shall
be deemed an abandonment or vacation.
(c) A failure by LESSEE to observe and perform any other provision of this Lease to be
observed or performed by LESSEE, where such failure continues for thirty (30)
days after the date of written notice thereof by STATE to LESSEE; provided,
however, that if the nature of such default is such that it cannot be reasonably cured
within such thirty (30) day period, LESSEE shall not be deemed to be in default if
LESSEE shall within such period commence such cure and thereafter diligently
prosecute the same to completion.
(d) The making by LESSEE of any general assignment or general arrangement for the
benefit of creditors, and the appointment of a trustee or receiver to take possession
of substantially all of LESSEE's assets where possession is not restored to LESSEE
within forty -five (45) days, or the attachment, execution or other judicial seizure of
substantially all of LESSEE's assets where such seizure is not discharged within
thirty (30) days.
35.1 STATE'S Remedies
lu the event of any material default or breach by LESSEE, STATE may at any time
thereafter, without limiting STATE in the exercise of any right or remedy at law or in equity
which STATE may have by reason of such default or breach, immediately terminate this
Lease and LESSEE shall immediately Surrender possession of tite Premises to STATE. In
such event, STATE shall be entitled to recover from LESSEE all damages incurred by
STATE by reason of LESSEE's default including, bill not limited to, the following:
(a) any amount necessary to compensate STATE for all the detriment proximately
caused by LESSEE's failure to perform its obligations under this Lease or which in
the ordinary course of events would be likely to result therefrom, including
attorney's fees and costs; plus
N
(b) such other amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by applicable state law; and
(c) the costs of all reasonable repairs, alterations or modifications to the Premises which
the STATE, in its sole discretion, deems reasonable or necessary as a result of
LESSEE possession, including removal of the Improvements and restoration of the
property as required on termination by other provisions of this Lease.
FAILURE TO 36. In the event of the failure, neglect, or refusal of LESSEE to do, or perform work, or
PERFORM any part thereof, or any act or thing in this Lease provided to be done and performed by
LESSEE, STATE shall, at its sole option, have the right to do and perform the same, and
LESSEE hereby covenants and agrees to pay STATE the cost thereof on demand.
1VAIVER 37. If the STATE waives the performance of any term, covenant or condition contained
in this Lease, such waiver shall not be deemed to be a waiver of that or any subsequent
teen, covenant or condition. Failure by STATE to enforce any of the terms, covenants or
conditions of this Lease for any length of time shall not be deemed to waive or decrease
STATE'S right to insist thereafter upon strict performance by LESSEE. Waiver by STATE
of any tern, covenant or condition contained in this Lease may only be made by a written
document property signed by an authorized STATE representative.
SEVERA nt t.1T1 38. If any tenn, covenant, condition or provision of this Lease or application thereof
shall, to any extent, be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby, and shall be valid and enforceable to the fullest extent permitted by law.
AMERICANS 111111 39. Lessee shall comply with all federal requirements established under 28 Code of
DISAuu.I'r1 ACT Regulations. Part 36, Americans with Disabilities Act, in order to make improvements and
programs accessible to all participants and to provide equally effective communications.
The requirements of CCR Title 24. State Building Code relative to Access Law
Compliance, and Americans with Disabilities Act (ADA), and Uniform Federal Access
Standards (UFAS), must be included in the design and development of all facilities
constructed under this Lease and all Sub- Leases, including the Lease - Financing.
All new construction work shall be planned to comply with the above mentioned
standards.
SUPERSEDURE 40. This Lease supersedes and voids any prior license, lease or agreement between the
STATE and the LESSEE identified in this Lease with regard to the Premises.
6
vot.UNTARV 41. Permittee accepts this Lease, and the Premises, in its as -is condition and has made
r•.xecnnoN such investigation of the facts pertaining to this Lease and all the matters pertaining thereto
as it deems necessary.
WARRANTTV OF 42. The undersigned represents that it has the authority to, and does, bind the person or
All ruORITV entity on whose behalf and for whom it is signing this Lease and the attendant documents
provided for herein, and this agreement and said additional documents are, accordingly,
binding on said person or entity.
ARITUAL CONSENT 43. Notwithstanding any provision contained herein to the contrary, this Lease may be
altered, changed, or amended by mutual consent of the parties hereto in writing.
HmmNC 44. The terms of this Lease and covenants and agreements herein contained shall apply
to and shall bind the agents, employees, officers, contractors and licensees of the parties
hereto.
ASSIGNARHTI'V 45. 'Phis Lease is non - assignable.
CHOICE OF LAW 46. This Lease will be governed and construed by the laws of the State of California.
secrwN 47. All section headings contained herein arc for convenience of reference only, and are
HEADINGS not intended to define or limit the scope of any provisions of this Lease.
ENTIE 48. This Lease and all attached Exhibits constitute the entire agreement between STATE
AGREEMLNr and LESSEE. No prior written or prior, contemporaneous or subsequent oral promises or
representations shall be binding.
ESSENCE OF'FmIE 49. Time is of the essence for each and all of the provisions, covenants and conditions of
this agreement.
IN WITNESS WHEREOF, this Lease has been executed by the parties hereto as of the Executed Date first
written hercinabove.
STATE OF CALIFORNIA:
DEPARTMENT OF PARKS AND RECREATION
By:
Stephen R. Lehman, Deputy Director
Acquisition and Development Division
APPROVED
STATE PUBLIC WORKS BOARD
BOB CLARK
Assistant Administrative Secretary
10
LESSEE:
CITY OF NEWPORT BEACH
IC
If
I hereby certi, that all conditions for exemption have been complied with and this document is exempt from the
Department of General Services approval.
By
Name: Stephen R. Lehman, Deputy Director
Title: Acquisition and Development Division
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29
I STATE OF CALIFORNIA -- DEPARTMENT OF TRANSPORTATION -- DISTRICT 1 2
Pt AT ACCCWANYINC SCALE: NONE
DIRE-CTORS DEED DD 040766-01-01 DRwN: EK CHKD:RC.
DATE: 8 -28,9)
12/03/2004 FRI 09:43 FAX 2138975603 CBLTRANS 16002
EXHIBIT B
Parcel No. DD 040766 -01 -01
That portion of Lot 1 of Tract No. 463 in the City of Newport Beach, County of
Orange, State of California as shown per a map filed in Book 32, Pages 2 and 3 of
Miscellaneous Maps in the office of the County Recorder of said county; that
portion of Lot 1 of Tract No. 2250 as shown per a map filed in Book 104, Pages 6
and 7 of said Miscellaneous Maps; that portion of Melrose Mesa (Tract No. 15) as
shown on a map filed in Book 9, Page 19 of said Miscellaneous Maps; that portion of
Lot D of the Banning Tract, as shown on a map of said tract filed in the case of
Hancock Banning, et al. vs. Mary H. Banning for partition, and being Case No. 6385
upon the Register of Actions of Superior Court of Los Angeles County, California,
bounded as follows:
Bounded northeasterly by the northeasterly line of the lands described as Parcel 1 of
State Parcel No. 40767 in a Grant Deed recorded February 14, 1966 in Book 7839,
Page 739 of Official Records in the office of the County Recorder of Orange County,
California;
Bounded westerly by the westerly line of said Grant Deed, said westerly line also
being the described as a portion of the northerly prolongation of the westerly line of
Annexation No. 55 to the City of Newport Beach dated September 19, 1963;
Bounded southwesterly by the northeasterly line of "new" Pacific Coast Highway as
described in a Director's Deed (State Parcel No. DD 040767- 03 -01) from the State of
California to the City of Newport Beach, a municipal corporation, recorded May 6,
1993 as Instrument No. 93- 0304178 of said Official Records;
Also bounded southerly and southeasterly by the center line of "new" Superior
Avenue as described in a Director's Easement Deed (State Parcel No. DE 040766 -1)
from the State of California to the City of Newport Beach, a municipal corporation
and charter city, recorded May 6,1993 as Instrument No. 93- 0304175 of said
Official Records.
EXCEPTING THEREFROM those rights and interests previously excepted from
that parcel of land described in the deed from A.E.S. Chaffey, et al., to the State of
California (State Parcel No. 40766), recorded January 7, 1966 in Book 7801, Page
108 of said Official Records.
ALSO EXCEPTING THEREFROM those rights and interests previously excepted
from those parcels of land described in the deed from BEECO, LTD., to the State of
California (State Parcel No. 40767), recorded February 14, 1966 in Book 7839, Page
739 of said Official Records.
SUBJECT TO an easement for storm drain purposes, 35.00 feet wide; and an
easement for sanitary sewer purposes, 30.00 feet wide, both as described in a
>t
12/03/2004 FRI 09:43 FAX 2138975603 CaL1Ros
Director's Deed (State Parcel No. DE 040767- 01 -02) from the State of California to
the Newport Crest Homeowners Association, a California Nonprofit Mutual Benefit
Corporation, recorded September 11, 1990 as Instrument No. 90479322 of said
Official Records.
There shall be no abutter's rights of access appurtenant to the above - described real
property in and to the adjacent state highway over and across those portions of the
northeasterly line of "new" Pacific Coast Highway hereinabove described in said
deed recorded as Instrument No. 93. 0304178 of Official Records, said portions of
the northeasterly line being further described as having a bearing and a distance of
"North 54 °21152" West, 215.42 feet" and "North 53013'OT' West, 167.37 feet ".
This real property description has been prepared by me, or under my direction, in
conformance with the Professional Land Surveyor's Act.
LAND
lam''
Signature: , t— '
S&tTT E. ESTEP, PLS 7066
EXPIRATION: 1231 -2006 � EXP 12/31/06
Date: I l g u e T N0.7066
1 �f4lF 0r rnk \EOQ�
10003
.y,
Sunset Ridge Park
May 24, 2005
Attachment B
Chapter 761 of the Statutes of 2001
INTRODUCED BY Senator Johnson (Coauthor: Assembly Member John Campbell)
An act relating to state property.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Department of Transportation shall transfer to the Department of Parks
and Recreation, upon payment by the City of Newport Beach of consideration of one million
three hundred fifty -six thousand four hundred eighty -five dollars ($1,356,485), which is at least
equal to the acquisition cost paid by the state, pursuant to Section 9 of Article XIX of the
California Constitution, the state -owned real property described in subdivision (b), for state park
purposes. The funds paid pursuant to this section shall be deposited in the State Highway
Account.
(b) The property to be transferred pursuant to subdivision (a) consists of approximately 15.05
acres, located in the coastal zone of the City of Newport Beach, adjacent to Superior Avenue
and Pacific Coast Highway, identified by Director's Deed #040766 -01 -01 and known as
"Caltrans West."
SEC. 2. Execution of the property transfer specified in Section 1 of this act shall be contingent
upon the execution of an agreement between the Department of Parks and Recreation and the
City of Newport Beach that requires the city to accept and perform all of the responsibilities
relating to, and to assume the liability for, the construction, operation, and maintenance of the
park and its improvements.
SEC. 3. Due to the unique circumstances concerning the Department of Transportation
property in the City of Newport Beach, the Legislature finds and declares that a general statute
cannot be made applicable within the meaning of subdivision (b) of Section 16 of Article IV of
the California Constitution, and that this special statute is necessary.
SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the
California Constitution because the only costs that may be incurred by a local agency or school
district are the result of a program for which legislative authority was requested by that local
agency or school district, within the meaning of Section 17556 of the Government Code and
Section 6 of Article XIIIB of the California Constitution.
a�
Sunset Ridge Park
May 24, 2005
Attachment C
Public Resources Code §5009.19
(as proposed by Senate Bill 306, Campbell, 2005)
SECTION 1. Section 5003.19 is added to the Public Resources Code, to read:
5003.19.
(a) The department may lease to the City of Newport Beach a parcel, not to exceed 20 acres
of unimproved real property situated in the City of Newport Beach, known as Sunset Ridge
Park.
(b) Notwithstanding subdivisions (b) and (c) of Section 5003.17, the term of the lease shall be
for a period not to exceed 25 years and shall be without monetary consideration for use of the
property, except that the city shall fund the development and operation of the park. The terms of
the lease shall specify the nature of the city's control of, and responsibility for the operation of,
the parcel.
(c) The purpose of the lease shall be for the development and operation by the city of a locally
operated state park unit with regional benefits. These benefits shall include, but are not limited
to, facilities for organized sports events as well as passive park features incorporating native
plant species, trails, paths, and benches. The park shall be open to the public.
(d) If the department determines that the city has failed to develop a local park with regional
benefits within five years of execution of the lease, the state shall have the right to terminate the
lease.
(e) Notwithstanding subdivision (d) of Section 5003.17, the State Public Works Board shall
review and approve the lease, and shall report any action taken to the Legislature and the
Governor.
(f) Upon one year's written notice from the city and upon the state's written consent as granted
pursuant to the state's sole discretion, the lease may be extended for an additional 25 years
commencing on the first calendar day after the date set for expiration of the lease. In exercising
its discretion to extend the term of the lease, the state may modify, add, or delete terms and
conditions of the lease, including a requirement for monetary consideration for use of the
property, as the state may determine to be in the best interest of the state. Pursuant to
subdivision (d) of Section 5003.17, the Legislature shall review and approve any extension of
the lease.
(g) The lease, and any extension of the lease, entered into pursuant to this section shall
require the city to comply with applicable storm water waste discharge requirements prescribed
by the Santa Ana Regional Water Quality Control Board or the State Water Resources Control
Board.
(h) The City of Newport Beach shall not use the lease to meet its funding match requirement
when applying for grant funds under the Roberti - Z'berg- Harris Urban Open -Space and
Recreation Program Act (Chapter 3.2 (commencing with Section 5620), or any other state grant
funds, to develop Sunset Ridge Park.
94
Sunset Ridge Park
May 24, 2005
Attachment D
Mayor Bromberg's Letter re: AB 54
0
CITY OF NEWPORT BEACH
May 10, 2005
The Honorable Gloria Negrete- McLeod
Member of the State Assembly
State Capitol, Room 5016
Sacramento, California 95448
VIA FACSIMILE: 916- 319 -2161
RE: AB 54 — OPPOSE UNLESS AMENDED TO DELETE SECTION 3
Dear Assembly Member McLeod:
This letter respectfully requests that you delete Section 3 from your AB 54. Section 3 of that
bill repeals legislation that we and many others (including open space advocates, parks and
recreation organization, the League of California Cities, environmental groups, and water
quality advocates) worked very hard for in 2001. The legislation was SB 124 (Johnson), and
helped us preserve 15 acres of parkland -- set to be a State Park facility -- from development.
We used a section of the California Constitution (Article XIX, Section 9) -- a section put in
there by the voters of the State of California.
We are sure that you are unaware of the specifics of this provision, since we have a hard
time believing that any Legislator will want to undo what your predecessors agreed to AND
what protects the dwindling public open space we have along Southern California's coastline.
Repealing this bill also flies in the face of the will of the voters when they passed Proposition
3 in the 1970s that set in place a section of the Constitution that protects coastal open space
from development.
The following groups /agencies supported SB 124 when it came through the Legislature:
• My city, the City of Newport Beach
• Orange County Coastal Coalition
• California Park and Recreation Society
• Orange County Supervisor Thomas W. Wilson
• Endangered Habitats League
• Newport Beach Chapter, Surfrider Foundation
• Friends of Harbors, Beaches and Parks
• Biomerica
• Newport Harbor Area Chamber of Commerce
• The Newport Conservancy
• Orange County Coastkeeper
• City of Huntington Beach
• Planning and Conservation League
Letter to Assembly Member Negrete - McLeod
May 10, 2005
Page 2
• Supervisor Thomas Wilson
• Surfrider Foundation
SB 124 preserves parkland by the coast that will be open and accessible to all persons in
California, including the many in your district from Chino, Ontario, and Pomona who drive
down the 55 Freeway and enjoy the beach on weekends.
Please move quickly to amend AB 54 to delete Section 3.
Sincerely,
MAYOR STEVE BROMBER G
Mayor of Newport Beach
cc: Members of the Newport Beach City Council
The Honorable Judy Chu, Appropriations Chairwoman (via fax: 916 - 319 -2149)
The Honorable John Campbell (35`" Senate District) (via fax: 916 - 445 -9263)
The Honorable Van Tran (68`" Assembly District) (via fax: 916- 319 -2168)
The Honorable Chuck DeVore (701" Assembly District) (via fax: 916 - 319 -2170)
Mr. David Jones, Emanuels Jones and Associates (via fax: 916- 444 -0303)
Mr. Homer L. Bludau, City Manager
z
City of Newport Beach NO. BA- 063
BUDGET AMENDMENT
2004 -05 AMOUNT: $s7s,ass.00
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates Increase in Budgetary Fund Balance
Increase Expenditure Appropriations AND Decrease in Budgetary Fund Balance
Transfer Budget Appropriations No effect on Budgetary Fund Balance
SOURCE:
from existing budget appropriations
from additional estimated revenues
PX from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase and transfer expenditure appropriations for the ground lease with California Department of Parks and
Recreation to control Sunset Ridge Park.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account Description
010 3767 General Fund - Park In Lieu
010 3605 General Fund - Fund Balance
REVENUE ESTIMATES (3601)
Fund /Division Account Description
EXPENDITURE APPROPRIATIONS (3603)
Division Number
Account Number
Division Number
Account Number
Signed
Signed
Signed
Pinancial Approval: Administrative Services Director
Amount
Debit Credit
$150,000.00 '
$195,680.75 '
$331,048.25
Automatic
$676,729.00
,S -18' aT
Date
S�l� -tom
Date
City Council Approval: City Clerk Date
Description
Division
Number
7021
General Fund - Park In Lieu
Account
Number
C5100562
Bayview Park Planning
Division
Number
7021
General Fund - Park In Lieu
Account
Number
C5100515
Sunset Ridge Park
Division Number
Account Number
Division Number
Account Number
Signed
Signed
Signed
Pinancial Approval: Administrative Services Director
Amount
Debit Credit
$150,000.00 '
$195,680.75 '
$331,048.25
Automatic
$676,729.00
,S -18' aT
Date
S�l� -tom
Date
City Council Approval: City Clerk Date
Y
\\
17
t
r
�T
SEC. 9. Notwithstanding any other provision of this
Constitution, the Legislature, by statute, with respect
to surplus state property acquired by the
expenditure of tax revenues designated in Sections
1 and 2 (State Gas Tax) and located in the Coastal
Zone, may authorize the transfer of such property,
for a consideration at least equal to the acquisition
cost paid by the State to acquire the property, to the
Department of Parks and Recreation for state park
purposes ...
• Proposition 3, 1978
i •.•
SB 124 (Johnson, 2001) Text °
• SECTION 1. (a) (Caltranshall transfer to the
Department of Parks and Recreation, upon payment
by the City of Newport Beach of consideration of ...
$1,356,485.00, which is at least equal to the
acquisition cost paid by the state, pursuant to Section
9 of Article XIX of the California Constitution, the state -
owned real property described in subdivision (b), for
state park purposes. The funds paid pursuant to this
section shall be deposited in the State Highway
Account. (b) The property to be transferred pursuant to
subdivision (a) consists of approximately 15.05 acres,
located in the coastal zone of the City of Newport
Beach, adjacent to Superior Avenue and Pacific Coast
Highway, identified by Director's Deed #040766 -01 -01
and known as "Caltrans West."
2
Article
XIX,
Section
9
lo'
SEC. 9. Notwithstanding any other provision of this
Constitution, the Legislature, by statute, with respect
to surplus state property acquired by the
expenditure of tax revenues designated in Sections
1 and 2 (State Gas Tax) and located in the Coastal
Zone, may authorize the transfer of such property,
for a consideration at least equal to the acquisition
cost paid by the State to acquire the property, to the
Department of Parks and Recreation for state park
purposes ...
• Proposition 3, 1978
i •.•
SB 124 (Johnson, 2001) Text °
• SECTION 1. (a) (Caltranshall transfer to the
Department of Parks and Recreation, upon payment
by the City of Newport Beach of consideration of ...
$1,356,485.00, which is at least equal to the
acquisition cost paid by the state, pursuant to Section
9 of Article XIX of the California Constitution, the state -
owned real property described in subdivision (b), for
state park purposes. The funds paid pursuant to this
section shall be deposited in the State Highway
Account. (b) The property to be transferred pursuant to
subdivision (a) consists of approximately 15.05 acres,
located in the coastal zone of the City of Newport
Beach, adjacent to Superior Avenue and Pacific Coast
Highway, identified by Director's Deed #040766 -01 -01
and known as "Caltrans West."
2
More about Sunset Ridge
• About 15.05 acres, exclusive of right -of -way.
• Landlocked — access only through Banning Ranch
property.
• GP and Zoning Information:
• GP Designation is Single Family Attached with a "preferred
alternative" as Recreational and Environmental Open
Space.
• Zoning is PC Text. PC Text allows:
• 15 units per acre.
• Six acres must be for a neighborhood or view park,
• Can build up to 135 units on up to 9 acres,
•<c
3
Hs•
•ss
Sunset Ridge Park Timeline
1966 — Land purchased by Caltrans for $1,356,485.00
1976 — Caltrans declares property "surplus."
1978 — Voters pass Proposition 3 (same ballot as Prop 13)
1992 — Caltrans rejects City's offer of $2.5 million for parcel.
1993 — Caltrans puts parcel out to bid, gets no response.
1993 — 1999 — Caltrans keeps property on market, no offers.
1999 — Caltrans offers to sell parcel to City for $3.7 million. City
accepts, offers an option plan with a deposit. CTC's Airspace
Advisory Committee (AAC) rejects Caltrans' staff's and City's offer.
2000 — Caltrans offers to sell parcel to City for $4.85 million. City
accepts. On 1 -13 -2001, CTC's AAC overrules Caltrans' staff's
recommendation.
Sunset Ridge Park Timeline
2001 — City asks Senator Johnson to carry SB 124. Assembly
Member Campbell is a co- author. Governor Davis signs SB 124
over the objections of DOF, Caltrans, and AAC.
2002 — SB 124 takes effect. State Budget deficit = $12 BN.
2003 — City waits to see how State will address a $34 BN deficit.
Davis presents budget with estimated shift from Local Governments
of $5.1 BN
2004 — Budget deficit still $15 BN, with $3.6 BN shift planned from
Local Government. Budget solution meant NB will lose $2.2 million
(ERAF III) on top of almost $4 million lost annually from ERAF I and
ERAF II -- $6+ million total.
2004 — City and State Parks work on Ground Lease. Finalized in
late 2004. City consults with State Lands Commission, prepares
Transfer of Jurisdiction (TOJ) document for State General Services
as template.
0
Sunset Ridge Park Timeline
• Feb 2005 — Senator Campbell introduces SB 306 which would allow
State Parks to enter into a 25 -year lease with us instead of just a 10-
year lease.
• Feb 2005 — DGS has draft Ground Lease and TOJ. Offers to
complete transaction and to serve as Escrow Officers.
• March 2005 — State and Consumer Services Agency (SCSA) tells
DGS to stop working on Sunset Ridge Park documents.
• April 2005 — AB 54 amended April 18 to include repeal of SB 124
and direction to Caltrans to sell Sunset Ridge for "fair market value."
• May 2005 — Mayor sends letter in opposition to AB 54, City Manager
sends letter to SCSA Secretary asking him to expedite the
provisions of SB 124. On May 2311, AB 54 passes State Assembly,
is referred to Senate Rules Committee for future committee
assignment.
Did SB 124 Set a Precedent?
• No. Coastal Land has been preserved for parkland
three times since Prop 3 passed, including AB 2049
(1988):
• Allowed DF &G to get 11 acres of land in San Mateo
County at land's acquisition price.
• Allowed DF &G to be reimbursed using non -state funds.
• Allowed DF &G to transfer the 11 acres to the federal
government for park purposes.
• AB 2049 actually amended the Coastal Zone to allow those
11 acres to fall within Article XIX, Section 9.
E
What Caltrans Says About its
Own Property
• Access
• The "site has no vehicular access, and is only developable
by proposed access from a future road." There "is no
vehicular access permitted ... because of safety concerns
borne of the property's topography."
Hazardous Materials
• The "risks associated with trespassers and of illegal
dumping of ... hazardous wastes are ever - present (should
the State retain ownership of the land)."
• Sale ... is "in the best interest of the State," given that "the
Department's attempt to sell at auction the subject in 1993
produced no bidders."
Why has this taken so long?
First, we did take too long. We thought SB 124 was the law (it is!).
Why did the City do what it did?
• The City's obligation isn't just $1.3 million. It's $6 -8 million. Every version of
the proposed Ground Lease has had terms that require the rapid
development of the park.
• 2002, 2003, and 2004 were all characterized by significant uncertainty in
Sacramento as to how the State would address its budget crises. Spending
$6 -8 million in those years may have been unwise.
• In mid -2004, when we knew what the State was going to take from us and
we had Proposition 1A pending, we began work on the transaction
documents for Sunset Ridge Park. Council Member Rosansky's prompting
helped, too.
• Completed a draft lease in September 2004 and finalized it by December;
• We gave the State Department of General Services draft documents to
assist them in completing the transaction. DGS offered to serve as our
escrow agents.
• In early 2005, the Administration (SCSA) directed DGS to stop work on the
transfer documents. Then the same people introduced AS 54.
What should we do next? °
• AB 54 is NOT law — it's only gone through the State Assembly. Our
elected officials know of our concerns. AB 54 cannot become law
until 1-1-06.
• A direct purchase of Sunset Ridge is preferable to the Ground Lease
concept, but the price is very important — we're willing to talk with
SCSA about this.
• We need to approve the item tonight.
• City Attorney will follow up with SCSA to see that State complies
with SB 124.
• We will aggressively oppose AB 54 unless it is amended to remove
references to Sunset Ridge. Today we asked Little League and
AYSO to contact Governor Schwarzenegger.
• Work with Senator Campbell and Assembly Member Tran to get
SCSA to move on the SB 124 transaction.
• Write Governor Schwarzenegger. Tell him to stop supporting AB
54. A letter is always best. FFaxes or a -mails are less effective.
The Honorable Arnold Schwarzenegger
Governor of California
State Capitol, First Floor
Sacramento, CA 95814
Fax Governor Schwarzenegger at 916- 445 -4633 or fi II out the brief form
at htto: / /www.govmail.ca.gov/
Send a fax or e-mail to:
• State Senator John Campbell at senator.camobell(o)sen.ca.gov and
fax at 916 -445 -9263.
• Assembly Member Van Tran at assemblvmember.tran(o)assembly.
ca.aov and fax at 916- 319 -2168.
M
ii:•
How you
can help
c'
• Write Governor Schwarzenegger. Tell him to stop supporting AB
54. A letter is always best. FFaxes or a -mails are less effective.
The Honorable Arnold Schwarzenegger
Governor of California
State Capitol, First Floor
Sacramento, CA 95814
Fax Governor Schwarzenegger at 916- 445 -4633 or fi II out the brief form
at htto: / /www.govmail.ca.gov/
Send a fax or e-mail to:
• State Senator John Campbell at senator.camobell(o)sen.ca.gov and
fax at 916 -445 -9263.
• Assembly Member Van Tran at assemblvmember.tran(o)assembly.
ca.aov and fax at 916- 319 -2168.
Census and Park Info
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