TO: Honorable City Council
FROM: City Manager
SUBJECT: A Resolution of the City Council of the City of Commerce, California, Approving a Temporary License Agreement with Belogi, Inc. for Real Property at 5926 Sheila Street, Commerce, CA 90040 MEETING DATE: July 18, 2023
RECOMMENDATION:
The City Council will consider approving the Temporary License Agreement with Belogi, Inc. for real property located at the former Commerce Refuse to Energy Facility Site, located at 5926 Sheila Street, Commerce, CA 90040, (Latitude: 33.994836 N Longitude: 118.153387 W), consists of 6.51 acres (283,677 ft.²).
BACKGROUND:
The Commerce Refuse to Energy Authority (“CREA”) was a joint powers agency established on November 23, 1983, pursuant to Government Code Section 6500 et. seq., by the City of Commerce and the Los Angeles County Sanitation District No. 2. CREA was established for the purpose of incinerating commercial refuse primarily from Commerce and converting it to electricity for sale to Southern California Edison. CREA was permanently closed on June 26, 2018.
On October 15, 2019, the City of Commerce purchased the former CREA property for the purpose of building a new Transit Maintenance Facility (TMF) on the CREA site. The new TMF will enable the City to better serve its customers, residents, employees, visitors, and future transit riders. The real estate purchase and the subsequent creation of housing on the current transportation site will also work towards enhancing the City’s vision for the Housing Opportunity overlay area which includes the transformation of existing commercial/industrial sites into residential housing within the Rosewood Neighborhood Planning Area.
On August 17, 2021, the City of Commerce awarded a professional service agreement with Stantec Architecture Incorporated (Stantec), for architecture and engineering services to design the new TMF.
On February 16, 2023, City Council approved the 60% Design Concept for the New Transit Maintenance Facility Project.
NEXT STEPS:
Before the City can proceed with construction of the new TMF project, and to ensure the project is deemed “shovel ready” as required for Federal funding purposes, the former CREA site must be demolished. The tenant that is being considered under this lease agreement has agreed to demolish the site in accordance with all applicable laws and regulations as part of consideration for the lease terms that are incorporated as part of the proposed lease agreement. The tenant would lease the site for a minimum of 18 months under the proposed temporary license agreement.
PROJECT SITE:
ANALYSIS:
The licensee’s demolition scope of work shall include the following:
Provide the City a pre-demo hazmat assessment report, and if any hazmat is found, it must be appropriately abated before demolishing of any buildings and/or equipment on site. Upon completion of the hazmat testing, the hazmat report must be submitted to AQMD, per South Coast Air Quality Management District Rule 1403.
Shall cause the demolition of any existing structures within the Licensed Premises.
Licensee shall acquire any permits or approvals required by any governmental agency with applicable jurisdiction.
The demolition shall include any abandoned electric, telephone or other cables and repaving of the Licensed Premises in accordance with any conditions of approval.
Licensee shall perform the required demolition without any disturbance or interference to any other licensees or property owners in the vicinity of the Licensed Premises. If applicable, the demolition of the existing structures within the Licensed Premises shall be subject to and performed in compliance with Chapter 6.19 “Construction and Demolition Debris Diversion” of the Commerce Municipal Code, and any other applicable laws associated with the demolition.
Licensee shall be responsible for repaving the area of the demolished building to be consistent with the remainder of the parcel.
All improvements or alterations shall become property of the Licensor upon expiration or termination of the License.
The demolition of any structures in the Licensed Premises shall be the sole financial responsibility of the Licensee, and Licensee shall not be entitled to any offset of the License Fee or any other financial contribution from the Licensor.
ALTERNATIVES:
Approve staff recommendation
Reject staff recommendation
Provide staff with further direction
FISCAL IMPACT:
As part of the License Agreement, the licensee shall complete the scope of work referenced above and pay the City monthly rent as referenced below:
Term
Monthly Rent
Total Revenue
18 Months (July 2023 – January 2024)
$27,000
$486,000
Per the License Agreement, the term will continue on a month-to-month basis unless notice is provided by the City, per the License Agreement. However, the term of the License Agreement may not reach a term of five (5) years. As a result, the City will net at minimum $486,000 total revenue. It is also worth noting that in 2015 the Commerce Refuse to Energy Authority (partnership with Sanitation District) contacted five companies to request a quote and obtained one bid from a local company for $1.1 million dollars to perform the demolition work including scrap credit for recyclable materials on the site. Thus, the City will be saving approximately $1.1 million it would have to budget to demolish the site.
RELATIONSHIP TO 2016 STRATEGIC GOALS:
The issue before the Council is applicable to the following Guiding Principle 3: “Support a long-range planning vision through the City’s General Plan, Page 3 of 3 zoning ordinance, and related land use planning documents that incorporate community and stakeholder input and provide a compass for strategic economic growth, infrastructure investments and City fiscal planning” as identified in the 2016 Strategic Plan.
Prepared by: Claude McFerguson, Director of Transportation Fiscal impact reviewed by: Vilko Domic, Assistant City Manager Approved as to form by: Noel Tapia, City Attorney
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CITY OF COMMERCE
AGENDA REPORT
Item No.