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RESOLUTION NO. 2016-235 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AMENDED AND RESTATED LICENSE, LEASE AND OPERATIONS AGREEMENT BETWEEN THE CITY AND EASTON SPORTS DEVELOPMENT FOUNDATION
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
As part of the transfer of the Chula Vista Olympic Training Center Land and improvements to the City of Chula Vista (“City”), the City will take over the Lease with the Easton Sports Development Foundation (“Easton”) under similar terms as were negotiated between the USOC and Easton under their original lease entered into back in 2012. Under this new Amended and Restated Lease, the City will be the “Landlord” and Easton will be the “Tenant”. Elite Athlete Services (“EAS”) as “Operator” will administer the Lease on behalf of the City as part of their agreement for the overall operation of the Chula Vista Elite Athlete Training Center (“CVEATC”).
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
DISCUSSION
The City’s agreements with the USOC for the transfer of Olympic Training Center always contemplated the transfer of USOC’s rights and interests in the Easton Archery Center as well. For this to happen, however, Easton, as the developer and operator of the Archery Center, also had to consent. Easton was always supportive of the transfer because it facilitated the continued operation of the OTC and the value of Easton’s facility at that location. The City’s involvement created both issues and opportunities that needed to be addressed. These issues and opportunities have all now been successfully resolved in the Amended and Restated Lease and Operations Agreement (“Lease”) presented with this item for City Council approval.
The following is a summary of the terms of the Lease. The terms are substantially similar to the terms of the original lease between the USOC and Easton, with some modifications and clarifications to address the changed circumstances of City’s ownership of the facility, and a new agreement for City/Operator maintenance and use of the Easton housing units.
1. Parties
City of Chula Vista (“City”) will be the “Landlord” and Easton Sports Development Foundation (“Easton”) will be the “Tenant”. Elite Athlete Services (“EAS”) as “Operator” will administer the Lease on behalf of the City pursuant to City’s separate agreement with EAS for the overall operation of the Chula Vista Elite Athlete Training Center (“CVEATC”).
2. Property/Project
The leasehold property is comprised of approximately 11 acres (“Property”). The Property is improved with the Easton Archery Center building, storage building, one dedicated archery range field, one multi-purpose field, a 30 room housing facility (“Easton Housing”), 38 parking spaces, driveways, sidewalks and landscaping (collectively, the “Project”).
3. Term
The initial term for the lease is January 1, 2017 through December 31, 2036. Subject to certain conditions (primarily related to whether or not the CVEATC is continuing to be operated as and “elite athlete” training facility), Easton may extend the lease for two (2) additional 5 year terms. [Section 2] At the end of the term City would retain ownership of the Property and the Project.
4. Early Termination Option
Easton has the option terminate the Lease early if (a) City is no longer operating the CVEATC as an “elite athlete” training facility, (b) if the services provided to elite athletes drop below minimum standards, or (c) if usage at the Center by “elite athletes” drops below 15% of overall usage. If Easton exercises this option, City agrees to transfer fee title of the Property and the Project to Easton. [Section 8]
5. Rent
$1.00 per year. [Section 3]
5. Easton Housing
City/Operator shall act as the sole and exclusive manager of the Easton Housing facility (30 beds). Of a total possible 21,900 “bed days” per year, Easton shall receive access to (a) 5,840 “bed days” for resident archery (with City/Operator to recover the cost from the USOC); and (b) 3.650 “bed days” for other archery facility users at no cost. Additional “bed days” may be reserved at “Tier 1” (preferred rates). “Bed days” not used by Easton shall be available for lease by City/Operator to third party users on rates and terms determined in City/Operator’s sole discretion. Any profits from City/Operator’s lease of Easton Housing beds to third parties will be shared 80% (City/Operator), 20% (Easton). [Section 15]
6. Other Provisions
a. Maintenance. Easton shall be responsible for maintenance of the Easton Archery Center main building, storage building, and adjacent improvements. City/Operator shall inherit USOC’s obligation from the original Lease whereby USOC agreed to pay Easton $100,000 in partial reimbursement for Easton’s maintenance costs. City/Operator shall be responsible for maintenance of the fields, related improvements and the Easton Housing. [Sections 3 and 10]
b. Incremental Services. Easton archers shall also have access to services, meals and training facilities at the CVEATC. Such services (known as “incremental services”) shall be made available at “Tier 1” (preferred rates), on a priority basis, and/or subject to availability, depending upon the type of service or facility involved. [Section 6]
c. Use/Alteration Restrictions. Easton may use the Property and the Project for archery related uses, with alternative elite sports uses, and other uses possible subject to City/Operator prior approval. No uses or activities shall be allowed that are inconsistent with the City’s “Core Agreement” with the USOC or that compete with City/Operator’s activities at the CVEATC. Any proposed material alterations to the Project must be mutually approved. [Section 10]
d. Insurance and Indemnities. Insurance obligations and allocations of risk are provided on terms consistent with industry standards for lease arrangements. [Sections 11, 12 and 13]
Next Steps: With the approval of this Lease, the last major condition to close for the transfer of the OTC will be satisfied. The transaction remains on schedule to close on December 31, 2016, with operations turned over to the City (and EAS under contract) starting January 1, 2017.
DECISION-MAKER CONFLICT
Staff has reviewed the property holding of the City Council members and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequently this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11). For the purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a bases for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The amended and restated lease with the Easton Archery Foundation as part of the Chula Vista Elite Athlete Training Center support the Economic Vitality goal as the City will be able to maximize the use of this valuable asset as an economic driver.
CURRENT YEAR FISCAL IMPACT
Approving the terms of the agreement will have no fiscal impact in the current fiscal year.
ONGOING FISCAL IMPACT
At this time we are not aware of any future fiscal impacts. The cost of administering this contract will be assigned to Point Loma Trust.
ATTACHMENTS
Amended and Restated License, Lease and Operations Agreement between the City and Easton
Staff Contact: Kelley Bacon, Deputy City Manager