City of Santa Paula
City Council
MAYOR JENNY CROSSWHITE
VICE MAYOR ANDY SOBEL
COUNCILMEMBER RICHARD ARAIZA
COUNCILMEMBER CARLOS JUAREZ
COUNCILMEMBER LESLIE CORNEJO
CITY COUNCIL SPECIAL MEETING OF THE
SANTA PAULA CITY COUNCIL
WEDNESDAY, SEPTEMBER 21, 2022
4:30 PM - City Council Special Meeting
SANTA PAULA CITY HALL
970 VENTURA STREET
SANTA PAULA, CA 93060
JULIE LATSHAW, CITY CLERK
DAN SINGER, CITY MANAGER
MONICA CASTILLO, INTERIM CITY ATTORNEY
BRINGING ITEMS BEFORE THE CITY COUNCIL
City of Santa Paula - City Council - City Council Special Meeting 1
1. CALL TO ORDER
REMINDER: in order to minimize distractions during public meetings, all personal communication devices should be turned off or put in a non-audible mode.
2. ROLL CALL
3. STUDY SESSION
3.A OIL MUSEUM LEASE STUDY SESSION
RECOMMENDATION:
Staff recommends that the City Council:
1. Accept and file the staff report and supporting documents.
2. Provide staff with feedback and guidance as to any future Oil Museum Lease Agreement with Chevron, particularly as it relates to extending the current term.
4. PUBLIC COMMENT
At this time, members of the public may comment on any item appearing on the agenda only. Individual Councilmembers may briefly respond to Public Comments or ask questions for clarification. Public Comments are limited to three minutes.
5. ADJOURNMENT
You are invited to participate in all Regular City Council meetings. Agendas are posted in the front of Santa Paula City Hall, 970 Ventura Street, Santa Paula, 72 hours in advance of the scheduled meetings. The City Council's regular meetings start at 6:30 p.m. the first and third Wednesday of each month in the City Hall Council Chambers located at 970 Ventura Street in Santa Paula. Special and Closed Sessions vary by date and time.
HOW TO PARTICIPATE IN PERSON DURING THE MEETING: If you wish to speak at a City Council meeting, please fill out a Public Comment Form noting your name and address and submit the form to the City Clerk. Include the Agenda item number you wish to speak on. Members of the public may address the Council on items on this agenda only. Public Comments are limited to 3 minutes.
HOW TO PARTICIPATE BEFORE THE MEETING: Members of the public are encouraged to submit email correspondence on any agenda item by sending an email to [email protected]. All public correspondence received by three hours before the meeting date will be provided to the legislative body before the meeting.
Public Comments received after, will be provided to the legislative body the next day.
Your Participation in this meeting is in the public domain; meetings are cablecast; minutes of this meeting will reflect your participation in this meeting and are posted on the city’s website.
PLEASE NOTE: Be advised that if you bring a legal challenge to an action, you may be limited to raising only those issues you or someone else raised at the meeting described in this Agenda, or in written correspondence delivered to the City Council at or before the meeting. Any action is subject to the ninety-day time period set forth in Code of Civil Procedure § 1094.6.
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (805) 933-4208. Notification 48 hours before the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 35, 102-35.104 ADA Title II). Written materials distributed to the City Council within 72 hours of the City Council meeting are available for public inspection immediately upon distribution in the City Clerk’s office.
SPECIAL MEETING - COUNCIL CHAMBERS
City of Santa Paula - City Council - City Council Special Meeting 2 State of California )-
County of Ventura )- ss
City of Santa Paula )-
I declare under penalty of perjury that I posted this City Council Agenda on the bulletin board near the front door of City Hall, 970 Ventura Street, Santa Paula, California.
On_________________ at______________Signed:_________________________ Julie Latshaw
City Clerk
City of Santa Paula - City Council - City Council Special Meeting 3 To: Honorable Mayor and Members of the City Council
From: Greg Barnes, Parks and Recreation Director
Subject: OIL MUSEUM LEASE STUDY SESSION
Date: September 21, 2022
Agenda Item: 3.A
CITY OF SANTA PAULA
MEMORANDUM
RECOMMENDATION:
Staff recommends that the City Council:
1. Accept and file the staff report and supporting documents.
2. Provide staff with feedback and guidance as to any future Oil Museum Lease Agreement with Chevron, particularly as it relates to extending the current term.
BACKGROUND:
On July 1, 1993, the City entered into a lease agreement with Union Oil Company of California ("Union Oil") to lease the Union Oil Building on the corner of Main Street and 10th Street. This agreement was for an initial period of 15 years at $1 per year, with two possible extensions of 15 additional years each. The City is currently in the second 15-year term of the lease, which expires July 1, 2023. The lease can be extended for one more 15-year term. To extend the lease for this third 15-year term, the City must give written notice to Chevron, Union Oil's successor-in-interest to the lease, of its intent to exercise this option at least six months before July 1, 2023.
The agreed upon use of the building and purpose of the lease was to guarantee that the building continue to be used as a "First-class quality museum" and to keep the Rig Room and second floor furnishings and artifacts configured as is.
During some point of the lease, Union Oil was acquired by Chevron, who now owns the property and was assigned the lease.
In past years, the City was responsible for daily programming and staffing of the Oil Museum, but at some point came to a verbal agreement with the California Oil Museum Foundation that they would assume those responsibilities.
In 2018, the City attempted to assign its interest in the lease as tenant to the California Oil Museum Foundation. However, Chevron was not agreeable to this and therefore the transfer was never completed.
4 In addition, the City has no formal agreement with the California Oil Museum Foundation or any user to operate the museum and occupy the building.
In September of 2021, the California Oil Museum decided to close daily operations of the Oil Museum. Since the closure, staff has been in discussions with the California Oil Museum Foundation and Leap Lab to reopen the Union Oil Building with some new programming opportunities downstairs while still offering the upstairs for visitors to tour the oil museum.
ANALYSIS:
Staff has concerns around the current structure of the lease, primarily involving liability and maintenance responsibilities as outlined in the current lease and the lack of a supporting budget for needed repairs and upkeep.
Some of the major deferred maintenance issues are:
Expired life of the current roof. There have been issues with leaks during the rainy season.
HVAC units that have reached end of normal service life.
A basement which is prone to flooding.
Various water damage to walls and floors.
The lease is set to expire July 1, 2023 at midnight, unless the City delivers to Chevron written notice of its election to extend the lease at six months before the lease expires. Choosing to extend the lease will also extend the current maintenance terms.
Staff has attempted to contact and schedule meetings with Chevron and start negotiations around terms of the lease and to discuss the future of the building. However, outside of a virtual meeting in May and a verbal commitment from Chevron to continue discussions by the end of the summer, staff has not heard back and has been unable to solicit any response.
Chevron did make it clear during the meeting in May that they are not interested in funding anything related to the Union Oil Building, but are willing to allow the City to exercise the third and final 15-year term of the lease.
However, the lack of any additional communication from Chevron has left staff uneasy that the landlord of an iconic Santa Paula landmark and an aging asset is not reachable when contacted about negotiating lease terms and/or ownership of the building.
Council did hold a Study Session in September of last year and had consensus around requesting staff to negotiate with Chevron in regards to gaining ownership of the building.
Much like last September, staff is looking for consensus as to what Council's preference would be in regards to the City's relationship with Chevron and the future of the lease. Below are some options for discussion:
1. Renew Lease for an additional 15 years.
a. Maintain status quo; this would require the City to identify an ongoing maintenance budget for the building.
2. Allow the lease to expire July 1, 2023; this will not change the City's liability for current 5 deferred maintenance and repairs.
3. Explore purchasing the building.
a. Negotiate the purchase of the building for $1 or as a gift; this is currently challenging based on the lack of response from Chevron.
STRATEGIC PLAN:
This item does not directly address any of City Council's strategic goals.
FISCAL IMPACTS:
There are no fiscal impacts directly related to today's study session. However, there will be a long-term financial impact depending on which option Council would like staff to pursue.
1. The City will need to potentially budget hundreds of thousands of dollars for repairs and maintenance over the 15-year term.
2. Regardless of which option is pursued, the City will be financially responsible for the current deferred maintenance.
OPTIONS:
ATTACHMENTS:
ATTACHMENT A - Oil Museum Lease.pdf
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Oil Museum Lease
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