Title
Chief Administrative Office and County Counsel recommending the Board approve and authorize the Chair to sign Resolution 019-2022 authorizing execution of the Agreement and Ground Lease with City of South Lake Tahoe for Development, Operation, and Maintenance of the 56-Acre Property.
FUNDING: N/A
Body
DISCUSSION / BACKGROUND
El Dorado County owns approximately 41 acres of land in the City of South Lake Tahoe on which the El Dorado County Library, the City’s Campground by the Lake, the County’s vector control operations, the Senior Center, the City’s Lakeview Commons recreational area, and other existing community buildings are located. The City owns approximately 15 acres of land on which some City Public Works functions, the City’s Ice Arena, and the City’s existing Recreation / Swim Complex are located. Combined, these parcels comprise the land area commonly known as the “56-Acres”, which has historically been utilized for recreation and government facilities serving the people of South Lake Tahoe and nearby unincorporated areas of El Dorado County.
Under the terms of multiple agreements initially executed in 1968 and amended numerous times over the past 52 years, the City and the County have jointly utilized the “56-Acres”. The most significant of the existing agreements is set to expire in 2023. On January 14, 2020, both the City of South Lake Tahoe Council and the El Dorado County Board of Supervisors approved resolutions with the proposed terms to be included in a new agreement for the future use of the area (Legistar Item 20-0024, Resolution 007-2020). The terms reflected input received from elected officials representing both entities and incorporate ideas and concepts generated during previous master planning efforts.
Several components of redevelopment and use of the 56 Acres have been moving on a parallel track: negotiating the final terms of the new agreement, the new 56-Acres Master Plan, and the Multi-Generational Recreation Center design process. The Master Plan process was conducted by the City, with involvement by El Dorado County staff, and with extensive public engagement in order that the final plan will benefit the community. The final Master Plan and the associated environmental review document was approved by the City Council at their January 18, 2021 meeting.
On behalf of the City Council and the Board of Supervisors, County and City staff have continued to negotiate terms that meet the needs of both entities for redevelopment of the site, long-term recreational use and enjoyment, and in accordance with the Master Plan.
As set forth in Resolution 007-2020, with modifications based on subsequent negotiations, the new 56-Acres agreement includes the following:
1) The City will develop, operate, and maintain the 56 acres for recreation and government facilities to serve the residents and visitors of South Lake Tahoe and El Dorado County, with the primary emphasis placed on recreation facilities, pursuant to the final Master Plan.
2) The County will transfer to the City ownership of approximately 10 acres on the northern portion of the 56 Acres to the City for the construction of a new Multi-Generational Center. In exchange, the City will transfer to the County ownership of approximately 10 acres of land where the existing Recreation Center is located.
3) The County retains ownership of the Vector Control site until the Vector Control facility is demolished within 15 years and transferred to the City for future redevelopment. Demolition of the Vector Control facility is contingent upon locating a suitable replacement site of one acre of improved City-owned property to be transferred to the County at no cost.
4) The City will demolish the existing Recreation Center within 15 years and the City and County will meet and confer to address potential redevelopment and re-use of the site, including a new City-County governmental facility.
5) The County retains ownership and control of the Library Property and the prior Lake Tahoe Visitors Authority building (to be used for the County’s ambulance service provider). The City will provide snow removal services for both sites.
6) A reserve fund will be established for the purpose of paying for the cost of repairs, replacements, renovations, or upgrades (but not routine maintenance). The reserve fund will be funded with (i) the fees generated from the campground, and (ii) two percent (2%) of the total asset value of all of the facilities on the 56-Acre Property, excluding the ice arena. Each year the City and County will review and determine, together the expenditure plan for this fund.
7) As rent for the property leased from the County, the City will pay (i) 50% of net operating profits from all existing and future revenue sources, excluding the ice arena, that remains after the City funds the reserve fund and (ii) starting in the later of year 30 of the new agreement or full retirement of debt to finance construction of the New Multi-Generational Center, $200,000 per year, to be adjusted for inflation from the effective date of the new agreement.
8) County will reinvest 100% of the net profits received from the City into County infrastructure and services in Tahoe basin (e.g. County facilities, roads, and services).
9) Approximately 9,000 square feet of space in the New Multi-Generational Center will be allocated for older adult services and programs, including a commercial kitchen and dining room for the purpose of accommodating the County Senior Nutrition Program.
10) Residents of El Dorado County that do not reside within the City limits will use existing and new recreation facilities on the 56-Acre Property under the same policies and fee schedule applicable to City residents.
11) The County and City will meet at least annually to review the status of the terms of the agreement, ensure adequate communication, and strengthen the partnership between the two entities.
Approval of the new 56-Acres agreement and Ground Lease by a public agency is considered a project pursuant to California Environmental Quality Act (CEQA) Guidelines 15378(a)(3). The City of South Lake Tahoe, as the lead agency, prepared the Initial Study/Mitigated Negative Declaration for the 56 Acres Master Plan. The IS/MND is available at City offices (1052 Tata Lane) and online at https://www.cityofslt.us/DocumentCenter/View/15116/56-Acre-Master-Plan-PDF. The new 56-Acres agreement and Ground Lease are within the scope of the Initial Study/Mitigated Negative Declaration adopted by the City Council on January 18, 2022.
The following documents relating to the ownership, development, operation, maintenance, and stewardship of the 56 Acres are attached to the item:
1) Agreement for Development, Operation, and Maintenance of the 56-Acre Property by and between the County and the City of South Lake Tahoe;
2) Grant Deed transferring a 10.2-acre portion of County-owned portion of the 56-Acre Property to the City for the purpose of development and construction of a new Multi-Generational Center, civic center, and parking lot, and an approximately 4.8 acre site to be used as a right-of-way.
3) Certificate of Acceptance of Grant Deed transferring an 11.45-acre portion of the City’s portion of the 56-Acre Property to the County for the purpose of future County governmental or recreational use;
4) Grant Deed transferring a 1-acre portion of County-owned portion of the 56-Acre Property, which currently houses the County-operated Vector Control building to the City for future recreational purposes;
5) Ground Lease for the City’s ongoing development and use of the 56-Acre Property in accordance with the Master Plan and the County’s use of certain portions of the 56-Acre Property; and
6) Amendment to the Grant Deed, amending and restating the deed restrictions for public use of the property.
7) The Final 56-Acre Master Plan document.
ALTERNATIVES
The Board could choose to not adopt the Resolution.
PRIOR BOARD ACTION
See discussion above.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
Department of Planning and Building - Tahoe Stormwater and Planning, CAO Parks, CAO Facilities, and the City of South Lake Tahoe
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
Although the total amount is unknown at this time, the agreement will provide for an increase in revenue to the County, first through the provision as part of the lease that 50% of net operating profits from all existing and future revenue sources, excluding the ice arena, will be paid to the County. It is likely that this amount will increase over time, with the build out of the 56 Acres in accordance with the Master Plan. In addition, in year 30 of the Lease (or retirement of debt for the New Multi-Generational Center) an amount equal to $200,000 (increased annually for inflation from the Effective Date), will be paid to the County annually. 100% of these funds will be reinvested into County infrastructure and services in Tahoe basin (e.g. County facilities, roads, and services). Funds will be included in future years’ budgets.
CLERK OF THE BOARD FOLLOW UP ACTIONS
Obtain the Chair's signature on the Resolution and each of the accompanying documents and return one copy to County Counsel.
STRATEGIC PLAN COMPONENT
Good Governance
CONTACT
Don Ashton, CAO
Janeth San Pedro, Assistant County Counsel