HomeMy WebLinkAbout(1994, 01/24) - F-24 - Amended - changed to F-7F -7
INCOME PROPERTY
The City owns and manages an extensive and valuable assortment of property
including streets, parks, beaches, public buildings and service facilities. The
City also owns and operates a yacht basin, a mobile home park, a luxury
residential development and various other income properties. Most of the
income property is tidelands, filled tidelands or waterfront. Unencumbered fee
value of income property is estimated at upwards of one hundred million
dollars, and income typically contributes ten percent of all City revenues.
As owner of property, the City is the steward of: a public trust, and state law
requires the City to maximize its returns or be subject to a charge of making a
gift of public funds. Nevertheless, the City Council recognizes the importance of
this property not only as a revenue generators but also as a means to provide
otherwise unfeasible uses and facilities to benefit the community.
In managing its property, the City will continually evaluate the potential of all
City owned property to produce revenue.: This may include leasing unused
land, renting vacant space, establishing concessions in recreation areas or other
similar techniques. The City Council twill evaluate the appropriateness of
establishing new income properties us* sound business principals and after
receiving input from neighbors and user9. r
The policy of the City Council is that intome property be managed in accordance
with the following:
1. Whenever a lease, management contract, concession, sale or similar action
regarding income property is'' considered by the City, an analysis shall be
conducted to determine the maximum or open market value of the
property. This analysis shall be conducted using appraisals or other
techniques to determine th4 highest and best use of the property and the
highest value of the properly.
2. All negotiations regarding the lease, management contract, concession,
sale or similar action regfiarding income property shall include review of
an appraisal or analysis of the use being considered for the property
conducted by a reputable and independent professional appraiser, real
estate consultant or business consultant.
3. The City shall seek, whenever practical and financially advantageous, to
operate or manage all property and facilities directly with City stiff or
contractors.
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4. In all negotiations regarding the lease, management contract, concession,
sale or similar action regarding a non - residential income property, the
City shall seek revenue equivalent to the open market value of the highest
and best use; and, whenever possible the City shall conduct an open bid
or proposal process to insure the highest financial return.
5. Whenever less than the open market or appraised value is received or
when an open bid process is not conducted, the City shall make specific
findings setting forth the reasons thereof.
Such findings may include but need not be limited to the following:
a) The City is prevented by tideland grants, Coastal Commission
guidelines or other restrictions from selling the property or
converting it to another use.
b) Redevelopment of the property would require excessive time,
resources and costs which would outweigh other financial benefits.
c) Converting the property to another use or changing the manager, •
concessionaire or lessee of the property would result in excessive
vacancy, relocation or severance costs which would outweigh other
financial benefits.
d) Converting residential property to another use or opening
residential leases to competitive bid would create recompensable
liabilities and other inequities for long -term residents.
e) The property provides an essential or unique service to the
community that might not otherwise be provided were full market
value of the property be required.
f) The property serves to promote other goals of the City such as
affordable housing, preservation of open space or marine related
services.
6. Generally, lengths of leases, management contracts, concessions or similar
agreements will be limited to the minimum necessary to meet market
standards and will contain appropriate reappraisal and inflation
protection provisions. Also, all agreements shall contain provisions to
assure complete audits periodically through their terms. •
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7. All negotiations regarding the lease, management contract, concession,
sale or similar action regarding income property shall be conducted by
the City Manager or his designee under the direction of the City Council
Ad Hoc Income Property Committee or other appropriate committees
prior to consideration by the City Council.
Adopted - July 27,1992
Amended - January 24,1994
Formerly F -24
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