City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: February 20, 2024
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution No. 2024-04 - Lease Agreement with Pisoni Farms
RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2024-04, A Resolution of the City Council of the City of Gonzales Authorizing Execution of a Lease Agreement between the City of Gonzales and Pisoni Farms for a City-Owned Parcel Adjacent to Canyon Creek Park.
BACKGROUND
When the Canyon Creek Subdivision was constructed, the developer deeded a 9.24-acre parcel to the City which is comprised of the Canyon Creek Park (6.32 acres) and a remainder parcel (2.92 acres) just west of the park. The remainder parcel (“Property”) was to be developed as a City park, with use for agricultural activities until the park plans came to fruition. The Property was thereafter leased to Pisoni Farms as part of the nearby Breschini Ranch in 2006. However, that lease was allowed to expire in or around 2008.
Over the last ten years, staff pursued grant funding on several occasions to develop the parcel as an extension of the existing Canyon Creek Park without any success. Last August, City staff engaged Piini Realty to prepare a “fair market” rental appraisal of the Property that was completed in November 2023.
REVIEW & ANALYSIS
The recent appraisal calculated an annual rent for the Property of $3,855. The rental value is diminished as the Property has no physical access, no water, or other utilities, and borders other farmland.
Staff prepared the attached lease agreement for the Property at an annual rent of $3,855 with an annual increase of 3.0% or Consumer Price Index, whichever is greater. According to John Piini, farmland AGENDA
ITEM
19 leases run from November 1st to October 31st, so the new lease is effective November 1, 2023 for an initial three year term with one 23-month extension based on mutual agreement.
Due to the recent adoption of the Surplus Lands Act (“SLA”), codified at Government Code Section 54220 et seq., leases, and sales of surplus City property suitable for the development of affordable housing are subject to a process whereby, unless otherwise exempted, the property must first be made available to affordable housing developers before it can be conveyed or leased for other purposes.
Surplus land is property that is owned by a City in fee simple which has been deemed unnecessary for City use. (The act of selling or leasing the property reflects the fact that the property is unnecessary for City use.)
However, a lease of City property for which no development or demolition will occur and that has a term of less than five years is not considered a “disposition of surplus property” and is not subject to the provisions of the SLA. (See Surplus Land Act Guidelines-Section 102(h)(1)). The proposed lease, which involves unimproved property without plans for demolition or development and has a maximum term of less than 5 years, is outside the scope of SLA requirements.
Therefore, staff recommends that the City Council authorize execution of a lease with Pisoni Farms for the Property, a parcel adjacent to Canyon Creek Park, at a cost of $3,855/year.
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Establishing fair market rental agreements for City-owned properties provides a reasonable source of income to the City. Continued accommodation of agricultural uses, where possible, is also in keeping with City policies and commitments.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: See Vision explanation above.
City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes X No N/A
• Housing Yes X No N/A
• Recreation Yes X No N/A
• Environment Yes X No N/A
• Education Yes X No N/A
Explain: See Vision above.
ALTERNATIVES
Direct staff to adjust the annual lease payment or other lease terms.
BUDGET IMPACT
Approving this new lease will bring additional rental income to the City.
CONCLUSION
It is recommended that the City Council adopt Resolution No. 2024-04, A Resolution of the City Council of the City of Gonzales Authorizing Execution of a Lease Agreement between the City of Gonzales and Pisoni Farms for a City-Owned Parcel Adjacent to Canyon Creek Park.
Attachments:
1. Resolution No. 2024-04
2. Appraisal
3. Lease Agreement