City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00044 3/7/2023 Consent Item 3.
Supplemental Agreement: Funderland, Inc. Lease For the Children's Amusement Park Rides Area in William Land Park and Assignment of the Lease
File ID: 2023-00044
Location: 1350 17th Ave, Land Park, District 7, Represented by Councilmember Jennings Recommendation: Pass a Motion: 1) ratifying the approval of the transfer of ownership of Funderland, Inc., from Samuel Johnston to Gordon Johnston; and 2) authorizing the City Manager or the City Manager’s designee to execute the third amendment to the City Agreement No. 2006-0258 with Funderland, Inc. extending the term of the agreement to March 31, 2031, assigning the lease agreement, and terminating City Agreement No. 2018-0704 for the construction of a concession building at Funderland Amusement Park.
Contact: Kristina Byrd, Administrative Officer, 916-808-7154, [email protected], Convention & Cultural Services Department
Presenter: None
Attachments:
1-Description/Analysis
2- Third Amendment to Funderland, Inc., Lease Agreement Description/Analysis
Issue Detail: The proposed amendment to the lease agreement (City Agreement No. 2006-0258) between the City of Sacramento and Funderland, Inc. would extend the agreement from its current expiration date in 2026, for an additional five years, ending on March 31, 2031. In October 2020, Lessee’s owner, Samuel Johnston, notified the City of his intention to sell Funderland, Inc. to Gordon Johnston. The City later learned that Lessee transferred ownership of Funderland, Inc., to Gordon Johnston. This amendment will ratify the transfer and consent to the assignment of Funderland, Inc., and the obligations, duties, and responsibilities of this lease agreement to the new owner, Gordon Johnston. This amendment will also update the Exhibit B operations schedule, Exhibit C fee schedule, and Exhibit D ride schedule.
File ID: 2023-00044 3/7/2023 Consent Item 3.
Regarding the assignment of the lease agreement, the Convention and Cultural Services Department has conducted a review of Gordon Johnston’s qualifications and experience in operating an amusement park. Having worked in various capacities at Funderland for several years, he is familiar with its rides, operations, and finances. Staff is confident that based upon Gordon Johnston’s previous experience, financial resources, and qualifications he will be able to continue to successfully operate Funderland Park in the manner that visitors have come to expect when spending time with family and friends at this iconic location.
The amendment of the lease agreement will also serve to terminate City Agreement Number 2018- 0704, which was for the construction of a replacement concession building at Funderland. In September 2017, the concession building located inside Funderland was destroyed by a fire. The City received insurance proceeds and agreed to provide financial assistance to Funderland, Inc., to construct a replacement concession building. The obligations, responsibilities, and project timeline between the City and Funderland, Inc., were set forth in City Agreement No. 2018-0704. Funderland Inc. hired an architect to provide design plans for the replacement concession building, but the proposed costs were much more than the parties anticipated. The project schedule was further delayed as a result of the COVID-19 pandemic due to decreased revenues and supply chain issues for goods and services that would have been needed to construct the concession building. Since the destruction of the concession building, Funderland has been able to provide food and beverages from a trailer that is located on-site. This has proven to be effective in allowing customers to purchase food and beverages while visiting Funderland. Moving forward with construction of a replacement concession building would be cost prohibitive and no longer seems necessary so that City Agreement No. 2018-0704 shall be terminated as part of the amendment and assignment of the lease agreement from Samuel Johnston to Gordon Johnston.
Policy Considerations: The proposed amendment supports the City’s 2035 General Plan Goal ERC
4.1 to provide a diversity of arts and cultural facilities and programs for people of all ages to improve knowledge of Sacramento’s history, enhance quality of life, and enrich community culture, and policies that encourage partnerships with organizations to support cultural educational activities and programming, children’s programming, and reinvestment in City facilities.
Economic Impacts: Not applicable.
Environmental Considerations: The report concerns administrative activities that will not have a significant effect on the environment and is exempt from the California Environmental Quality Act (CEQA) review [CEQA Guidelines Sections 15061(b)(3); 15378(b)(2)].
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
File ID: 2023-00044 3/7/2023 Consent Item 3.
Rationale for Recommendation: Funderland, Inc. has proven itself an effective partner in running the amusement park known as Funderland. Staff recommends extending the lease and continuing this relationship to capitalize on Funderland, Inc.’s experience and success in the amusement park business, as well as take advantage of Funderland, Inc.’s willingness to continue to make improvements in the property.
With the transfer of ownership from Samuel Johnston to Gordon Johnston, an assignment of the lease agreement is necessary. Gordon Johnston is operating the park successfully and attendance and revenues have returned to pre-pandemic levels. Gordon Johnston will also complete all outstanding renovations that were agreed upon in the second amendment to the lease agreement.
Financial Considerations: Last fiscal year, the lease agreement with Funderland provided over $303,000 in revenues to the City. The City splits this revenue equally between the following funds:
Sacramento Zoo (Fund 2605), Fairytale Town (Fund 2606), and Land Park (Fund 2507).
Local Business Enterprise (LBE): Not applicable.
SAC�MENTO
Office of the City Clerk
CONTRACT
ROUTING SHEET
Contract Cover/Routing Form: Must Accompany ALL Contracts; however, it is NOT part of the contract.
General Information (Required)
Original Contract# (supplements only): 2006-0258 SupplemenUAddendum #: _3 _______ _ Assessor's Parcel Number(s): __________________________ _ Contract Effective Date: 01/24/2023 Contract Expiration Date (if applicable):03/31/2031 $ Amount (Not to Exceed):_________ Adjusted$ Amount (+/-): ________ _ Other Party: Funderland, Inc
Project Title: Third Amendment and Reassignment to Lease Agreement Project#:_______________ B id/RFQ/RFP #: ___________ _
City Council Approval: YES if YES, Council File ID#: ___ _ Contract Processing Contacts
Department: Youth, Parks and Community Enrichmer
Contract Coordinator: K ristina Byrd ----------
Depa rt men t Review and Routing
Accounting:
(Signature)
Supervisor:
(Signature)
Division Manager:
(Signature)
Other:
(Signature)
Project Manager: _K_ri_st_in_a_B_y_rd _______ _
Email: kbyrd@cityofsacrament o.org
(Date)
(Date)
(Date)
(Date)
Special Instruction/Comments (i.e. recording requested, other agency signatures required, etc.) D Recording Requested 0 Other Party Signature Required
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CANCELLATION
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