CITY OF SIMI VALLEY
MEMORANDUM
June 24, 2024
TO: City Council
FROM: Office of the City Manager
SUBJECT: CONSIDERATION OF A LETTER OF INTENT TO LICENSE CITY OWNED PROPERTY LOCATED ON GALENA AVENUE APPROXIMATELY 300
FEET SOUTH OF COCHRAN STREET (APN# 633- 0-170-105) TO THE
SOUTHEAST VENTURA COUNTY YMCA
STAFF RECOMMENDATION
It is recommended the City Council authorize the Mayor to execute a Letter of Intent with the Southeast Ventura County YMCA regarding the potential licensing of City property.
BACKGROUND AND OVERVIEW
In 1989, the City acquired a 1.22 acre site located on Galena Avenue, approximately 300 feet south of Cochra n Street. At the time of the acquisition, the City had no plans for development of the property (subject property) and have since held the property for future use. Imm ediately adjacent (east) of the subject property, the City operated the Simi Valley Police Facility and the County of Ventura operated a Courthouse facility. In 1995, the City was part of a three -party transaction to transfer the Police Facility/Courthouse property to the Southeast Ventura County YMCA (YMCA). The Police Facility/Courthouse property was eventually transferred to the YMCA in 1996 and the YMCA subsequently constructed a 23,700 square foot facility.
Currently, the YMCA is processing a Development Permit application with the City for the expansion of their facility. Discussi ons between the City and the YMCA have occurred over the past several years about the future of the subject property, the YMCA expressing interest in acquiring the property from the C ity. In an effort to provide community amenit ies and to facilitate the YMCA’s desire to provide additional uses that are needed in the community, the City and YMCA have drafted a License Agreement to allow the YMCA to use the City’s property to construct improvements and other amenities. Staff recommen ds the City Council consider the benefits provided by the YMCA should the property be licensed and consider authorizing staff to draft a License Agreement.
AGENDA ITEM NO.
9C
2 FINDINGS AND ALTERNATIVES
Historical Background
In 1989, no longer having a need for the propert y, the owner of the subject property approached the City regarding a potential sale of the property. Reaching an agreement on purchase price, the City acquired the property in May 1989 for $625,000. The property was acquired without any particular future use or development except to increase the City’s options for short -term and long -term use of the government facilities. After acquisition, the property was used as overflow parking for the Simi Valley Police Department and the Ventura County Courthouse, both formerly located at the current YMCA site on Cochran Street.
The subject property is depicted below outlined in red; the YMCA facility is immediately right (northeast) of the subject property.
Due to increasing use and the inadequate size of the C ourthouse, the County proposed a new courthouse to be located at the Simi Valley Civic Center. To facilitate the construction of a new East County Courthouse, i n March 1988, the City and the County exchanged properties, the City receiving the C ourthouse property located on Cochran Street adjacent to the Police Facility and the County receiving 5.77 vacant acres at the Civic Center site. Subsequently, the Cochran Street C ourthouse was closed in 1991, relocating courthouse services to the new Civic Center C ourthouse. And, as a result of the 1994 Northridge Earthquake and the resulting damage to the Simi Valley Police Facility, a new Police Facility constructed at the Simi Valley Civic Center and opened in 1998.
3 As noted above, the Simi Valley Pol ice Department was located on Cochran Street and prior to 1984 shared the site with Simi Valley City Hall. In 1984, City Hall was relocated to the Simi Valley Civic Center on Tapo Canyon Road and as noted above the Police Department was relocated to the C ivic Center due to the damage to the Cochran Street building during the 1994 Northridge Earthquake.
The Cochran Street property where the Police Station and City Hall were located was donated to the City for government purposes by the Larwin Company (Larwin), a residential housing developer active in Simi Valley. Although the land was donated, the land carried a deed restriction noting that should the property cease to be used for public purposes, the propert y would revert back to Larwin. With the Poli ce, City, and Court services relocated to the Simi Valley Civic Center, in 1995 the City and the Larwin entered into an agreement with the YMCA for the transfer of the former Courthouse and Police facility properties (both owned by the City) to the YMCA. To effectuate the transfer, the City quit-claimed the land to Larwin, who subsequently donated the land to the YMCA.
Southeast Ventura County YMCA
The YMCA has been providing services to the Simi Valley community since 1984 and has primarily been housed in rented buildings and modular structures located on school campuses. With the City/Larwin donated land, the YMCA began to plan for its community facility, a facility that would cater to youth as well as the adult population of Simi Valley.
Today, the YMCA’s site is a 23,700 square foot facility that houses various activities and programs for the community including a pool, health and fitness center s, rooms accommodating youth and teen programs, after-school care, an outdoor recreation area, and a game room. On an annual basis, the YMCA facility in Simi Valley provides services to over 3,000 unique clients and has a history of establishing partnerships with medical and non-profit providers in the community for use of their facility.
The current YMCA facility was intended to be the first of a three phase complex. The second phase of the complex is currently being proposed by the YMCA and they have submitted a Development Permit application presently being reviewed by the City. This planned second phase includes a gymnasium, building expansions to accommodate flexible space and food preparation, additional parking areas, and outdoor activity areas.
The YMCA is anticipating approval of this Phase 2 plan in 2024 with fundraising to occur shortly thereafter. With the YMCA’s planned Phase 2 project, it is expected that the expanded facility will provide services to over 8,000 unique persons annually, with most of the expansion targeted to the community’s youth population.
Proposal for a License Agreement
As physical and financial planning for subsequent phases are years in the making, the YMCA is proposing to establish the parameters of Phase 3. With growth limited on property currently under their control, the YMCA is proposing a partnership with the City for use of the City’s land adjacent to Galena Avenue, west of the YMCA facility. Based on an evaluation of needs in the Simi Valley community, the amenities proposed in the 4 original phased plan for the Simi Valley YMCA, and in discussion with City staff, the YMCA is proposing the following amenities for their Phase 3:
• R
ecognizing the need for additional conference and meeting space in the community, the YMCA is proposing a 5,000 square foot space which will include a catering kitchen and food preparation area. The room would be available for rental use by the community for events, meetings, conferences, and private parties. • In partnership with medical providers, including current interest from Adventist Health Simi Valley, creation of 2,000 square feet of space available for use by medical personnel for physical therapy, mental health counseling and assistance, and other health and wellness services
• Addressing the current need for additional assistance to students that may be falling behind in studies and education, creation of 3,000 square feet for use as youth and adult enrichment and by education personnel for tutoring of K -12 students residing in Simi Valley.
• Addressing the need for additional workforce housing in the State and community, development of building space of approximately 50,000 square fee t consisting of mixed uses including commercial space on the first floor and for-lease housing on upper floors. Conceptually, the provision of the housing could provide funding for implementation of the other components listed above.
• Parking lot and necessary landscaping and lighting to support the above amenities.
Should the parking lot be constructed on the City’s property, it would make available land on the YMCA’s property for construction of the amenities.
The amenities proposed by the YMCA fill current needs in the community and are anticipated to continue to be future needs as well. Additionally, the YMCA’s experience at their Westlake Village facility demonstrates the need for these amenities. In licensing the YMCA’s use of the property, the City’s residents would receive valuable services through all age ranges, provide needed workforce housing, and provide much needed m
eeting and event space.
A Letter of Intent (LOI) was drafted by staff and is attac hed on page 7. This LOI is proposed to establish initial terms that are acceptable to both Parties and is not an agreement and does not obligate YMCA or City to enter into a lic ense agreement for the property. The LOI is a statement of intent to c ontinue to move forward with negotiations. Any commitment to license the property, if reached, will be memor ialized in a separate agreement. The term of this Non-B inding LOI begins on the date it is last executed and continues for five (5) years. The YMCA and the City agree that there remains no obligation upon either par ty and that the LOI is non-b inding upon either party.
5 During the duration of the LOI, the City shall not solicit, deal with, offer or accept an offer for t he purchase, license, or lease of the property. Further, the City shall not market, entertain, solicit or deal with any offers or expressions of interest of the sale, lease, license, or other disposition of the property through the duration of the LOI.
The City is proposing the licensing of the City property to the YMCA in exchange for the provision of the proposed amenities. In order to ensure the City receives at least equal value for the land, as part of an agreement to license the property and prior to the City Council’s final action to license the property through a subsequent agreement , the City will commission an appraisal of the property. The property was originally acquired for $625,000; a current appraisal will be conducted to ensure the City and its residents are receiving at least equal value from the YMCA for the property.
As the proposed LOI is non- binding upon the parties and the proposed use of the property, if transferred, would provide certain amenities to the Simi Valley community, staff recommends the City Council approve the LOI with the YMCA.
The following alternatives are available to the City Council:
1. Authorize the Mayor to execute a Letter of Intent with the Southeast Ventura County YMCA regarding the potential licensing of City property.
2. Modify the proposed Letter of Intent and authorize the Mayor to execute the Letter of Intent with the Southeast Ventura County YMCA regarding the potential licensing of City property.
3. Elect not to execute the Letter of Intent at this time.
4. Provide staff with further direction.
Staff recommends Alternative No. 1.
SUGGESTED CITY COUNCIL MOTION
I move to authorize the Mayor to execute a Letter of Intent with the Southeast Ventura County YMCA regarding the potential licensing of City property.
SUMMARY
In 1989, the City acquired a 1.22 acre site located on Galena Avenue, approximately 300 south of Cochran Street. Adjacent to this property, the Southeast Ventura County YMCA operates a 23,700 square foot facility that houses various activities and programs for the community including a pool, health and fitness center, rooms accommodating youth and teen programs, after -school care, and a game room. The YMCA is proposing several expansion to their facility, one would require the acquisition of the City’s 1.22 acre property. The proposed expansion to the City’s land would provide needed amenities to 6 the community. The City and the YMCA have drafted a Letter of Intent to license the City property to the YMCA in exchange for the provision of the proposed amenities. Staff recommends the City Council consider and approve the Letter of Intent with the YMCA.
____________________________________
Brian P. Gabler
City Manager
INDEX Page
Letter of Intent .................................................................................. 7 Mr. Ronnie Stone, President & CEO
Southeast Ventura County YMCA
31105 Thousand Oaks Blvd.
Westlake Village, CA 91362
SU
BJECT: NON-BINDING LETTER OF INTENT
T
his non-binding letter of intent (“LOI”), between the City of Simi Valley (“City”) and the Southeast Ventura County YMCA (“YMCA”) (the “Parties”), will constitute the basis for the entering into a License A greement (the “Agreement”), on terms agreeable by both Parties.
T
his LOI is proposed to establish terms that are acceptable to both Parties. This LOI is not an agreement and does not obligate YMCA or City to enter into an agreement but instead is a statement of intent to continue to move forward with negotiations. No specific actions or commitments are required by either party as a result of entering into this LOI. Any commitment to license the use of the Subject Property, if reached, will be memorialized in separate agreement. The term of this Non- Binding LOI begins as of the date executed by the last signatory below, and continues for five (5) years, unless sooner superseded by a separate license agreement between the Parties.
S
ubject Property: The Subject Property (Property) is located on the east side of Galena Avenue, approximately 250 feet south of Cochran Street, in Simi Valley, California. Property is 1.22 acres and carries Assessor Parcel Number 633-0-170-105.
E
ffective Date: The Effective Date of this LOI shall be the date the City Council takes an action to approve this LOI.
P
roject: YMCA proposes to use the Property, combined with adjoining property owned by the YMCA, for purposes that would benefit the community of Simi Valley. Proposed uses include:
• One large conference/community room of approximately 5,0 00 square feet that includes a catering kitchen and food preparation area for rental use by the community for events, meetings, conferences, private parties. • Building space of approximately 2,000 square feet for use by medical personnel for physical therapy, mental health counseling and assistance, and other health and wellness services
• Building space of approximately 3,000 square feet for use as youth and adult enrichment and by education personnel for tutoring of K-12 students residing in Simi Valley.
• Building space of approximately 50,000 square feet consisting of a mixed uses including commercial space and for-lease housing. Housing shall include units available at affordable rents; affordable level to be determined. • Parking lot and requisite landscaping and lighting.
Y
MCA may construct any of the above noted uses on Property. 7 License Agreement : City recognizes the value of the Project to the Simi Valley community. In exchange for providing Project, City agrees to License Property to YMCA concurrent with the issuance of Simi Valley Building Permit for the large conference/community room space building. YMCA and City shall enter into a License Agreement to document terms and conditions of the Parties’ rights and obligations of the Property.
State Law: California law (Surplus Land Act) imposes restrictions and requirements upon cities in the sale, lease, or transfer of government owned land. The City and YMCA agree to work cooperatively to comply with California law in the execution of this LOI.
Should a License of Subject Property become incompatible with State law, this LOI shall become null and void.
Duration: YMCA shall have five (5) years from the Effective Date to file a City of Simi Valley Planned Development Permit (PD) application for the development of Project. At YMCA’s discretion, PD application may include a phased development of Project.
Expiration: In the event YMCA fails to file a PD application in compliance with the Duration requirement set forth above, this LOI shall expire.
Use of the Subject Property: Property may be used by YMCA for Project as approved in the PD application. Modifications to the Project prior to the YMCA filing a PD application shall be approved by the Simi Valley City Council as an amendment to this LOI. Modifications to Project after execution of a License Agreement shall be approved by the City of Simi Valley in conformance with City’s PD modification process.
As Is Condition: License Agreement shall provide Property in “As-Is” condition.
Due Diligence: YMCA shall perform all necessary and appropriate due diligence of Property and shall conduct evaluations, studies, and reviews as necessary for a PD application. City licens es YMCA and their vendors unrestricted access to Property in order to conduct due diligence.
City agrees that, from and after full execution and delivery of this LOI, City shall license YMCA, and their vendors, agents, individuals, consultants, or engineers, entry to Property to review, inspect or test the Property and to conduct standard due diligence.
YMCA shall have the right to conduct physical inspection and testing of Property, or any portion thereof, which testing shall be conducted at YMCA’s option and expense and, provided that with respect to invasive testing, City shall have the right to approve any testing plan, provided further that such right shall be exercised in a reasonable manner and without delay to YMCA or its contractors.
YMCA shall be responsible for all costs associated with construction, architectural and civil drawings, and materials necessary to make the Subject Property suitable for its intended uses.
8 YMCA shall conduct its Due Diligence of the Property in a first class manner consistent with generally accepted construction and testing methods and at all times shall keep Subject Property in first class condition and repair consistent with the condition of Subject Property.
Current City Usage of Subject Property: YMCA recognizes City has allowed a contractor to utilize the Property as a staging yard. City shall allow the current usage of property to continue for twelve months from the date of this LOI. At the expiration of the twelfth month, current usage of Property shall cease unless mutually extended by the Parties. YMCA shall not have any rights or authority to allow temporary uses on Property during the term of this LOI unless authorized by the City.
Taxes: City represents and warrants to YMCA that City is generally exempt from the payment of Taxes (except possessory interest taxes) pursuant to law since it is a public entity. Further, California Revenue and Taxation Code Section 107.6 requires that any lease between a public entity and a private party that may create possessory interest tax shall include a statement that “the property interest may be subject to property taxation if created, and that the party in whom the possessory interest is vested may be subject to the payment of property taxes levied on that interest.” which statement shall be included in a future Transfer Agreement according to the requirements of law. In such event, YMCA shall be responsible for any property tax liability.
Zoning and permitted use: The Parties will work collaboratively in order to get zoning and use approval by the City of Simi Valley and other jurisdictional authorities.
Security: YMCA shall be responsible for all security of Property through the Duration of this LOI.
Insurance: YMCA shall provide City with evidence of insurance coverage for all activities during Due Diligence and add City as an additional party insured consistent with the City’s insurance requirements.
Permits and authorizations: YMCA shall be responsible for all necessary authorizations from the City and other jurisdictional authorities during due Diligence and any activities through the Duration of this LOI. YMCA shall be responsible for the cost of all permits, fees, studies, analyses, and approvals needed in order to use Property.
Non-Solicitation: City shall, and shall direct its agents and representatives, not to solicit, deal with, offer or accept an offer for the purchase, lease, or license of Property (directly or indirectly) from any other party(ies) through the Duration of this LOI. City shall not market, entertain, solicit or deal with any offers or expressions of interest of the sale, lease or other disposition of Property or any part thereof through the Duration of this LOI.
This Non-Binding LOI shall be interpreted under California law, and venue lies in Ventura County. In case of dispute, each party shall bear its own fees and costs (including attorneys’ fees).
9 IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed the day and year first above written.
Attest: City of Simi Valley,
A Municipal Corporation
By:
Lucy Blanco, City Clerk Fred D. Thomas, Mayor
Approved as to Form: Southeast Ventura County YMCA
Algeria R. Ford, City Attorney By:
Title:
Approved as to Content:
Print Name:
Brian Paul Gabler, City Manager By:
Title:
Print Name:
10