HomeMy WebLinkAbout(1992, 07/27) - F-24 - Adopted (Revenue Producing Property), combining F-15 & F-24 into F-24F -24
REVENUE PRODUCING 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 revenue producing
properties. Most of the revenue n property is tidelands, filled
tidelands or waterfront. Unencumbered ee value of revenue producing
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 generator, but also
as a means to provide otherwise infeasible 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 will evaluate the
appropriateness of establishing new revenue producing properties using
sound business principals and after receiving input from neighbors and
users.
The policy of the City Council is that revenue producing property be
managed in accordance with the following:
Whenever a lease, management contract, concession, sale or similar
action regarding a revenue producing 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 the highest and
best use of the property and the highest value of the property.
2. All negotiations regarding the lease, management contract,
concession, sale or similar action regarding a revenue producing
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.
The City shall seek, whenever practical and financially
advantageous, to operate or manage all property and facilities
directly with City staff or contractors.
In all negotiations regarding the lease, management contract,
concession, sale or similar action regarding a non - residential
revenue producing 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.
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.
F -24 •
REVENUE PRODOCING PROPERTY - Page 2
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.
7. All negotiations regarding the lease, management contract,
concession, sale or similar action regarding a revenue producing
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