HomeMy WebLinkAboutItem 1a: Lease with Rusnak/Arcadia for Property at 21 Morlan PlaceP. '"7
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DATE: March 2, 2010
TO: Chairman and Members of the Agency Board
SUMMARY
BACKGROUND
DISCUSSION
STAFF REPORT
Arcadia Redevelopment Agency
FROM: Jason Kruckeberg, Assistant City Manager /Development Services Director,
By: Jerry Schwartz, Economic Development Manager jws
SUBJECT: Authorize the Executive Director to execute a lease with Rusnak/Arcadia
for the property at 21 Morlan Place and adopt a categorical exemption
from CEQA regarding the lease
Recommendation: Approve
The Redevelopment Agency Board has been working with Rusnak/Arcadia to facilitate
the expansion of its Mercedes -Benz dealership onto neighboring properties. The
dealership already leases a portion of the property at 21 Morlan Place from the Agency
for vehicle storage. Now that the building has been demolished and the lot is
completely paved, the dealership desires to utilize the entire 44,000 sq. ft. site to grow
its business. The property at 21 Morlan Place (the prior Church in Arcadia site), was
purchased by the Agency for the Rusnak /Arcadia expansion. A new lease for this site
has been prepared and reviewed by both parties.
In 2004, the Agency entered into a Land Assembly and Development Agreement
( "LADA ") with the Rusnak/Arcadia Mercedes -Benz Automobile Dealership to assemble
five parcels nearby the dealership site located at 55 West Huntington Drive. The
Agency acquired the site at 21 Morlan Place (Church in Arcadia) in 2008 as part of its
efforts to facilitate the expansion of the dealership.
In December 2008, the Agency approved short term leases with Rusnak/Arcadia for two
floors of the Arcadia Self Storage building for parts storage and the parking lot at 21
Morlan Place for auto storage and parking. In 2009 the Agency demolished the building
at 21 Morlan Place, and has recently completed grading and paving the entire property.
It is now a vacant 44,000 sq. ft. site that Rusnak /Arcadia can use for vehicle parking. It
was understood when the short term lease was approved, that once the building was
demolished, a new longer term lease would be negotiated. A new deal point letter was
prepared to incorporate the entire site into a new lease that covers two years with an
option for a third year. Based on the letter, the City Attorney's Office prepared a new
lease for Rusnak/Arcadia to lease the entire site at 21 Morlan Place. The new lease
supersedes the existing lease that covers only a portion of the site. The lease rate is
$1,500 per month. One provision of the lease involves the Agency paying to stripe the
parking lot, which was an option during the paving and has been requested by the
General Manager of Rusnak /Arcadia. The lease is in keeping with our efforts to work
with Rusnak to expand their business in Arcadia.
The use proposed by Rusnak /Arcadia for this site was previously approved by the
Planning Commission which granted a Conditional Use Permit to allow vehicle storage
at 21 Morlan Place on September 23, 2009.
This item must be considered pursuant to a public hearing under Section 33431 of the
Health and Safety Code, which provides that any lease made by the Agency to another
party without public bidding can only be approved following a public hearing, with notice
provided once per week for two weeks. For the purpose of this hearing, notice was
published in the Arcadia Weekly on February 15 and February 22, 2010.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
This project is categorically exempt from CEQA under Section 15301(a) (Class 1) of the
Guidelines, leasing or minor alteration of public structures or facilities. The Agency
should find that the project is categorically exempt and that a Notice of Exemption
should be filed with the Los Angeles County Recorder's Office.
FISCAL IMPACT
The impact to the Redevelopment Agency will be lease revenue of approximately
$36,000 over two years. Additionally, Rusnak /Arcadia may pay possessory interest
taxes on the leased area, a portion of which would accrue to the Agency.
RECOMMENDATION
That the Redevelopment Agency Board authorizes the Executive Director to execute a
lease with Rusnak/Arcadia for the property at 21 Morlan Place and adopt a categorical
exemption from CEQA regarding the lease.
Approved: 'Dane442
Donald Penman, City Manager /Executive Director
Staff Report
March 2, 2010
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