Public Works Agency
www.santa-ana.org/public-works
Item # 31
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
August 20, 2024
TOPIC: License Agreement for the Use of City-Owned Parcels
AGENDA TITLE
License Agreement with K&C Logistics, LLC for their use of City-Owned East and West Alton Avenue/SR-55 Freeway Parcel
RECOMMENDED ACTION
Authorize the City Manager to execute a license agreement with K&C Logistics, LLC for use of real property owned by the City at the western terminus of Alton Avenue between Standard Avenue and the SR-55 Freeway and at the eastern terminus of Alton Avenue between Daimler Street and the SR-55 Freeway, for a three-year term beginning August 20, 2024 and expiring August 19, 2027, automatically entering into a month-to-month renewal thereafter for an additional two years, for a total revenue amount of $1,590,640 (Agreement No. A-20024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The Public Works Agency (PWA) owns and manages two vacant lots for the purpose of a future freeway overpass bridge. In the meantime, the City leases these lots to various commercial users. On December 1, 2020, the City Council approved an exclusive license agreement with K&C Logistics to utilize the City property located at the western terminus of Alton Avenue and the SR-55 Freeway (Exhibit 1) in the amount of $4,400 per month for the use of the City-owned vacant lot. The property is 49,330 square feet, with approximately 31,700 square feet net usable land area.
The City plans to construct a new overpass at the SR-55, linking the cities of Santa Ana and Irvine at Alton Avenue. The subject property is included within the overpass project area. However, construction is not expected to begin for another three to five years.
Thus, the property is expected to be available for uninterrupted use by the licensee until construction commences. To allow for maximum scheduling flexibility, the agreement includes a 60-day cancellation notice option.
Recently, the lot located in the eastern terminus of East Alton Avenue between Standard Avenue and the SR-55 became vacant. City staff reached out to K&C Logistics regarding the vacancy, whereby K&C Logistics expressed their interest in
License Agreement for the Use of City-Owned Parcels
August 20, 2024
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utilizing the eastern terminus (Exhibit 1) for additional storage of shipping equipment.
The property is 86,626 gross square feet, with approximately 66,546 net usable square feet. In agreement with K&C Logistics, the City is moving forward with entering into a new license agreement to include both the eastern and western terminus lots, aggregating to approximately 98,246 square feet. The City took the opportunity to update the annual lease and update to the current market rate, generating an increase in revenue to a new monthly rate of $24,967.
Staff recommends approval of the recommended actions to award the license agreement to K&C Logistics, LLC, generating an estimated revenue in the amount of $1,590,640 over the period of three years (Exhibit 2). Revenue generated will be utilized for maintenance and upkeep of vacant City parcels.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with the action.
FISCAL IMPACT
This agreement will result in revenue of $24,967 per month into the Select Street Construction, Rental of Property revenue account (No. 05917002-57960). The agreement will commence on August 20, 2024 and expire August 19, 2027. The agreement will automatically renew each month thereafter for an additional two years unless a notice to vacate the premises is provided by the City or Licensee.
Fiscal Year
Accounting
Unit - Account
#
Fund
Description Accounting Unit,
Account Description Amount
2024-25
(Sept- Aug) 05917002-57960 Select Street
Construction
Select Street
Construction, Rental
Of Property
$299,604
2025-26
(Sept- Aug) 05917002-57960 Select Street
Construction
Select Street
Construction, Rental
Of Property
$308,593
2026-27
(Sept- Aug) 05917002-57960 Select Street
Construction
Select Street
Construction, Rental
Of Property
$317,850
Optional Extensions:
2027-28
(Sept- Aug) 05917002-57960 Select Street
Construction
Select Street
Construction, Rental
Of Property
$327,385
License Agreement for the Use of City-Owned Parcels
August 20, 2024
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Fiscal Year
Accounting
Unit - Account
#
Fund
Description Accounting Unit,
Account Description Amount
2028-29
(Sept- Aug) 05917002-57960 Select Street
Construction
Select Street
Construction, Rental
Of Property
$337,208
Total Contract Amount: $1,590,640
EXHIBIT(S)
1. Location Map-West/East Alton Lot
2. License Agreement
Submitted By: Nabil Saba, P.E., Executive Director – Public Works Agency Approved By: Alvaro Nuñez, City Manager