8B
Date: November 19, 2024
To: Honorable Mayor and Members of the City Council
From: Craig Bilezerian, Public Works Director
By: Charles Schaich, Policy and Resources Specialist | [email protected] Subject: Public Works – Approve First Amendment to Goldsworthy Desalter Ground Lease Agreement with Water Replenishment District of Southern California (WRD) and Adopt RESOLUTION Determining Portion of Certain City-Owned Property Not Required for City Purposes and that Leasing the Property is in the Public Interest.
Expenditure: None.
RECOMMENDATION
Recommendation of the Public Works Director that City Council:
1. Approve a first amendment to the site lease agreement with the Water Replenishment District of Southern California (WRD) of Lakewood, CA (C2021-164) for the Goldsworthy Desalter at the City Services Facilities (City Yard) located at 20500 Madrona Avenue to provide approximately 16,591 square feet of additional leased land for the expansion of the Goldsworthy Desalter; and
2. Adopt a RESOLUTION determining a portion of certain City-owned property is not required for City purposes and that leasing the property is in the public interest.
FUNDING
None required.
DISCUSSION
In 1999, the City and the Water Replenishment District (WRD) executed a 20-year ground lease agreement (C99-031) for the Goldsworthy Desalter treatment plant, a brackish groundwater well and ancillary facilities located in the southwest area of the City Yard. In December 2021, the City and WRD negotiated a new ground lease agreement (C2021-164) that adjusted the lease payments to the market rate based on an appraisal performed by the Klabin Company. This agreement (Attachment 3) is for an initial period of ten (10) years with two (2) five-year extensions.
Based on the current rental lease rate of $0.45 per square foot, the City receives $9,509 per month or $114,108 annually in rental income from the leasehold. The rental rates are adjusted every three (3) years based on the cumulative change in consumer price index (CPI) for the Los Angeles-Long Beach area over the prior three-year period. The first adjustment in the rental rate will occur in January 2025.
City Council
November 19, 2024
Currently, the Goldsworthy Desalter converts approximately 3,000 to 4,000 acre-feet of brackish water into a fresh water supply through a reverse osmosis treatment process. WRD, in conjunction with the City, is planning a major expansion of the Goldsworthy Desalter that will nearly double its capacity. This expansion project is estimated to produce an additional 3,000 to 4,000 acre-feet of high quality local desalinated groundwater that will further reduce our Torrance Municipal Water system’s dependence on vulnerable and more expensive imported water purchased from the Metropolitan Water District (MWD). WRD will require an additional lease area of approximately 16,591 square feet for the Goldsworthy Desalter expansion project. The precise size of the additional leased property will be determined once the project is completed. The new lease area will generate approximately $89,592 in additional annual rental income for the City, which will bring the total annual leasehold payments to approximately $203,700 at the current rental rate, once the Desalter expansion is completed.
The Public Works Director recommends that City Council approve an amendment (Attachment 1) to the existing site lease agreement with WRD for the expansion of the Goldsworthy Desalter and approve the attached Resolution (Attachment 2) regarding leasing city-owned property not required for city purposes.
ATTACHMENTS
1. First Amendment to Goldsworthy Desalter Site Lease Agreement (C2021-164)
2. Resolution
3. Goldsworthy Desalter Site Lease (C2021-164)