DATE: September 25, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Public Works Department
TITLE: AMENDMENT 2 TO AGRICULTURAL LEASE AGREEMENT WITH RANCHO DEL ORO LANDSCAPE & MAINTENANCE, INC.
RECOMMENDATION
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Staff recommends that the City Council approve Amendment 2 to the Agricultural Lease Agreement between the City of Oceanside and Rancho Del Oro Landscape & Maintenance, Inc. for the premises located on the east side of Rancho Del Oro Drive between Mesa Drive and Ocean Ranch Boulevard, for a three-year minimum total revenue of $241,090; extending the term of the agreement from October 3, 2024, through October 31, 2027; and authorize the City Manager to execute the amendment.
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BACKGROUND AND ANALYSIS
The City of Oceanside (“City”) entered into an Agricultural Lease Agreement dated October 3, 2012 and Amendment 1 dated September 19, 2019 (“Agreement”), with Rancho Del Oro Landscape & Maintenance, Inc. (“Lessee”), for a 2.134-acre parcel (“Property”) that is a portion of a 5.28-acre remnant parcel remaining from the construction of Ranch Del Oro Road and is utilized by Lessee for low intensity landscape growing and landscape vehicle storage. The agreement expires on October 2, 2024 and provides for two three-year renewal options. Lessee has requested a three-year extension of the Agreement.
The proposed Amendment 2 to the Agricultural Lease Agreement (“Amendment”) extends the term of the Agreement for three years commencing on October 3, 2024, and terminating October 31, 2027. The Amendment also provides for one additional three-year renewal extension option.
Originally, Lessee provided weed abatement maintenance services for specific City-owned parcels in consideration for utilizing the subject parcel for low intensity landscape growing and storage of its landscape vehicles. At this time, Lessee will lease the subject parcel and pay a minimum lease payment of $78,000 per year, payable monthly in advance at the rate of $6,500 per month and three percent annual rent increases, with the first increase effective on October 1, 2025. The Agreement provides the City the right to terminate by providing 120 days advance written notice.
FISCAL IMPACT
|
Description |
1st Year Annual Amount |
3-Year Minimum Revenue Amount |
Revenue Account |
|
Rancho Del Oro Landscape & Maintenance, Inc. Minimum Rent Revenue |
$78,000 |
$241,090 |
1101.4351 |
Over the three-year term, the Agreement will result in revenue for the premises in the minimum amount of $241,090 which will be deposited into account number 1101.4351.
COMMISSION OR COMMITTEE REPORT
Does not apply.
CITY ATTORNEY’S ANALYSIS
The referenced documents have been reviewed by the City Attorney and approved as to form.
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Prepared by: Julie Cook, Property Agent II
Reviewed by: Hamid Bahadori, Public Works Director
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Staff Report
2. Amendment 2
3. Amendment 2 Rent Adjustment Calculation