Agenda Item: 4
CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
CITY MANAGER APPROVAL:
DATE: February 14, 2023
SUBJECT: PROPERTY ACQUISITION AND LEASE AGREEMENT FOR YMCA
BUILDING
DEPARTMENT: Neighborhood Services
PRESENTER: Susan Nelson
RECOMMENDED ACTION
City Council:
1. Approve a Donation Agreement with the YMCA for the transfer of ownership of the building located at 26147 McBean Parkway, at no cost to the City.
2. Amend the Lease Agreement between the YMCA and the Summit Homeowners Association, removing the YMCA as the tenant and naming the City of Santa Clarita the tenant for the duration of the lease.
3. Authorize the City Manager or designee to execute all documents, subject to final language approval by the City Manager and City Attorney.
BACKGROUND
Since 1988, the Young Men’s Christian Association of Metropolitan Los Angeles (YMCA) has operated in their building (Building) located on property leased by the Valencia Summit Homeowners Association (HOA). In 2016, the YMCA announced plans to close the Building and focus their efforts on construction of a new facility adjacent to the new Senior Center, Bella Vida, located off of Golden Valley Road. In March of 2020, the Building closed due to the pandemic and reopened briefly before closing to the public permanently.
Last year, representatives of the YMCA approached the City of Santa Clarita (City) to inquire about the City’s interest in purchasing the Building. The 12,000 square foot facility has space for offices, childcare, and group exercise. In the center of the Building is a 4½ foot deep indoor pool, which was designed to accommodate learn-to-swim and water exercise programs.
The YMCA has a zero-dollar, renewable 50-year lease with the HOA for use of the property where the Building is located, which began on March 24, 1986. The building was subsequently constructed in 1988. The lease stipulates that the premises are to be used for supervised recreation, and activities and programs for the public, such as swimming lessons, exercise classes, child care, educational seminars, arts and crafts classes, and community meetings.
Further, the property is zoned Open Space.
Analysis
Since being approached by the YMCA, City staff has visited the Building on several occasions to determine the feasibility of implementing recreational programs at the site and to assess the condition of the Building, the pool, and associated equipment. Staff has determined that while improvements to the Building are needed, it is a location that could support the expansion of the City’s Primetime Preschool program and serve as the central hub for Contract Classes. Based on staff's evaluation of the building, initial repairs upwards of $1,000,000 would be brought to Council for consideration as part of the Capital Budget process for Fiscal Year 2023-24.
The YMCA initially asked the City to purchase the Building; however, the amount and cost of needed repairs and the restrictions in the lease constrain the site, and ultimately, the value of the facility. The City and representatives of the YMCA have negotiated terms where the City accepts ownership of the Building at no cost, and assumes the role of “Tenant” in the lease with the HOA.
Because the Building is being donated to the City by the YMCA, the City did not pay for a formal property appraisal. The YMCA has reviewed the property details and determined the value of the lease and facility to be approximately $2,017,000.
Potential Property Use
There is currently no City-owned recreational building of this size on the west side of the City.
The nearest reservable community room is located at Old Orchard Park, which is only 627 square feet.
City staff envisions the primary activities at the Building will be Primetime Preschool, Contract Classes, Aquatics Programs, and Camp Clarita. Each of these programs currently waitlisted and in high demand have the ability to generate revenue, offsetting some of the ongoing costs associated with operating the Building.
Due Diligence
Staff has met with the Board of the HOA to determine if they would be supportive of the City assuming ownership of the Building and replacing the YMCA as the tenant on the lease. Overall, the Board supported the idea of the City becoming the owner of the Building, especially given that the City currently maintains Valencia Summit Park. The HOA Board has approved the draft lease amendment, which is attached. City staff has also received verbal agreement from the YMCA on the draft donation agreement, attached as reading file, which would transfer ownership of the Building to the City at no cost.
Environmental Review
The proposed acquisition has been reviewed pursuant to the California Environmental Quality Act (CEQA) and the acquisition is exempt under CEQA Section 15301 Class 1, Section 15316 Class 16, and Section 15323 Class 23. A Notice of Exemption has been prepared and any subsequent or proposed changes in the use or condition of the property will be subject to CEQA guidelines.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
There is no fiscal impact as a result of this action. Staff will return to the City Council with detailed estimates associated with the one-time cost of renovations, the ongoing cost to operate and maintain the building, and the ongoing revenue to be generated by activities at the location.
ATTACHMENTS
Site Plan
Third Amendment to Lease
YMCA Donation Agreement Document Including Exhibit (available in the City Clerk's Reading File)