CHAPMAN ESTATE
FOUNDATION
January 19, 2025
City of Pismo Beach
Jorge Garcia, City Manager
Mary Ann Reiss, Council Liaison to the Chapman Estate Foundation Honorable Mayor Ed Waage and Council Members Guthrie, Newton, and Inman Subject: Chapman Estate, Shell Beach
Restatement of Interest in Successor Estate Ownership
Dear Mr. Garcia and Honorable Councilmembers,
This is to follow up with communications regarding the Chapman Estate with regard to the August 6, 2024 Council decision to direct City staff to:
• Proceed with selling or transferring pursuant to the Distribution Agreement, the properties that comprise the Chapman Estate.
• Allow for a six-month period of time for City staff and/or the Chapman Estate Foundation to develop the approximately$6.8 million in funding needed for baseline repairs. • Return to Council within 6 months [February 6, 2025]with next steps that would be needed to prepare for sale or transfer.
This is to confirm that the Chapman Estate Foundation is prepared to accept the vested ownership of the properties that comprise the Chapman Estate, as the successor owner to the City in a deed conveyance made in accordance with the provisions of the Distribution Agreement.
Distribution Agreement
As you are aware, when the City accepted the property from the Chapman Estate, it entered into a Distribution Agreement that spelled out the intentions of property use and stewardship, and the provisions for any City divestiture. Key provisions state:
City shall use its best efforts to maintain and operate the Property in perpetuity in the manner contemplated by this Agreement. City further agrees that if continued operation of the Property by City becomes impractical or not feasible for any reason, then City shall use its best efforts to identify one or more private nonprofit organizations which will continue to operate and maintain the Property in conformity with the terms of this Agreement.
Successor Ownership
The Chapman Estate Foundation is a 501(c)(3) Non-Profit Public Benefit Corporation that hereby confirms its availability, interest, and capability to accept successor ownership of the Estate, all real property that comprises the Estate and all personal property located thereon, and to own, operate and maintain the Property for recreational use and the enjoyment of the general public in conformity with the terms of the Distribution Agreement.
City of Pismo Beach
Jorge Garcia,City Manager
Honorable Mayor and Council Members
January 19,2025
Chapman Estate Foundation
The Chapman Estate Foundation was created as a 501(c)(3) non-profit organization to establish a fundraising and management entity to support the Chapman Estate. The Foundation has been allocated one major fundraising event at the property annually, which it has conducted successfully each year to raise money through ticket sales and live and silent auctions to support the Estate. The Foundation also has volunteer gardeners, fruit tree specialists, begonia specialists and docents. Volunteers maintain the gardens, fruit trees, and begonias on the property and offer docent-guided tours. Volunteers also plan and implement the annual fundraiser and other authorized activities at the property, and the Chapman Estate Foundation Board coordinates maintenance and repair projects on the property, when City provides approval for such projects.
The Foundation's goal is to preserve the Estate for public access and use, to open the gates and carry out Mr. Chapman's vision and intentions of granting the community access to enjoy the property"for recreational use and the enjoyment of the general public", to strike a balance of free or affordable community uses, along with the fundraising necessary to support maintaining the property. With the completion of the construction of two accessible restrooms on the property, the stage is finally set for more effective use of both the outside gardens and viewpoints and the inside of the home. We believe that with greater access to this unique and beautiful coastal blufftop gem, greater donor support will also follow.
The Foundation has been expanding its Board, volunteer network, professional advisors, and donors, as well as perfecting operational policies and procedures in preparation for successor Estate ownership. We believe that with the historical depth of knowledge about the Estate, the Shell Beach community, and of Mr. Chapman's intentions, that the Foundation is well positioned and ready to take on this lead ownership and operational public benefit role. Our Board members are primarily Pismo Beach residents and we have the sensitivity and relationships to operate the Estate in conformance with the provisions of the Distribution Agreement and the Conditional Use Permit, and with focused sensitivity to the Shell Beach neighbors and community.
The Foundation has recently partnered with the Lido Restaurant in hosting lavish private dinners at the Estate. At the September 2024 fundraiser auction, 3 private dinners for 12 were each sold at$12,000, a net of$9,400 per dinner. The Foundation believes that with the freedom to effectively manage the property with bookings of such uses, within total compliance with the existing Conditional Use Permit restrictions, that the property is capable of generating significantly more revenue than it has historically under the City's ownership. Further, as a private rather than public entity, the Foundation will have the capability to implement maintenance and repair work more cost effectively, without the restrictions and requirements of the public bidding and prevailing wage obligations, with private donations and grants.
Fundraising and Operations
The Foundation has initiated fundraising campaigns and investigated public and private funding options in preparation for taking on the future obligations of maintaining the Estate. The
City of Pismo Beach
Jorge Garcia,City Manager
Honorable Mayor and Council Members
January 19,2025
Foundation is confident that it can relieve the City of its perceived financial burden by taking over the ownership of the property and rise to the occasion of successfully operating the property for the community benefit.
To meet the greater operational needs of self-sustaining ownership, the Foundation will hire a site director with experience in business operations and with excellent connections with local vendors in the tourism and wine industries. The Foundation will fund this position with its current assets. The Foundation will collaborate with other local non-profits and develop relationships with local restaurants and hoteliers, evaluate concession opportunities and partnerships that will jointly support the mission of the Foundation in the intended public benefit activities at the Estate while also supporting Pismo Beach tourism and businesses, and will promptly undertake the goals of the Strategic Plan for the stewardship, management and operation of the Chapman Estate, as adopted by the City on June 7, 2016.
Conditional Use Permit
In order to implement the Strategic Plan activities at the Estate, the Foundation will abide by the provisions of the existing Conditional Use Permit on the Estate property as successor in interest to the City, per the following provisions of the CUP:
CITY OF PISMO BEACH CONDITIONS
CITY COUNCIL MEETING OF APRIL 20, 2021
PERMIT NO. P20-000069 (CUP and CDP)
LOCATION: 1243 OCEAN BOULEVARD, APNs: 010-302-012 & 010-302-013 The conditions set forth in this permit affect the title and possession of the real property which is the subject of this permit and shall run with the real property or any portion thereof. All the terms, covenants, conditions, and restrictions herein imposed shall be binding upon and inure to the benefit of the owner(applicant, developer), his or her heirs, administrators, executors, successors and assigns. Upon any sale, division or lease of real property, all the conditions of this permit shall apply separately to each portion of the real property and the owner (applicant, developer) and/or possessor of any such portion shall succeed to and be bound by the obligations imposed on owner (applicant, developer) by this permit.
It is imperative that this CUP"run with the real property"as indicated, and transfers to the Foundation as the City's successor in interest.
Property Maintenance,Taxes and Insurance
The Foundation acknowledges that by accepting ownership of the property, the propertywill no Longer be insured by the City or maintained by City staff. The Foundation intends to work with the Tax Assessor for tax-exempt status as a non-profit public benefit entity and will seek insurance of the property at its cost. The Foundation acknowledges that it would also lose the City lawn mowing and other maintenance support and that all of these costs would need to be borne by the Foundation through its current financial resources, property revenues, donor contributions, and grants that it will obtain.
City of Pismo Beach
Jorge Garcia,City Manager
Honorable Mayor and Council Members
January 19,2025
In Summary
The Foundation's goal is to ensure that if the City decides to divest the Estate, that a successor non-profit takes ownership of the Estate, committed to manage the Estate for public access and use in accordance with the provisions of the Distribution Agreement, the Conditional Use Permit, and the generalities of the adopted Strategic Plan. The property was given to the residents of Pismo Beach as a generous gift of Mr. Chapman. He entrusted the City with ensuring that the residents of this community would have access to use and enjoy the property for recreational purposes, to enjoy music, art, the coastal vistas, and the serenity that the property offers to all who visit. The Foundation seeks to bring this vision to a reality, with access and use that will be appreciated by Pismo Beach residents and visitors, creating a true asset to the community that will be a benefit to all.
The Foundation's representatives have offered to participate in stakeholder's meetings to work cooperatively and collaboratively with the City to ensure a smooth and successful ownership transition. Thank you for your consideration. Please contact the Foundation at [email protected] with any questions. We look forward to working with the City to accomplish this ownership transfer.
Sincerely,
ll
Secary f the Board
Chapman Estate Foundation