Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Nicholas J. Calderon, Parks Director
Subject: Fourth Amendment to Lease No. 5025 with the Coyote Point Yacht Club to extend the term of the lease agreement and to transfer ownership of the tenant’s improvements on the leasehold to the County upon the lease agreement’s termination unless the County declines to accept such transfer
RECOMMENDATION:
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Adopt a resolution authorizing:
A) The President of the Board of Supervisors to execute a Fourth Amendment to Lease No. 5025 with the Coyote Point Yacht Club: (1) to extend the term of the lease agreement through August 1, 2027, with three (3) one-year options to further extend the lease agreement’s term which are exercisable upon mutual written agreement by the parties, and (2) to transfer ownership of the tenant’s improvements on the premises to the County upon the lease agreement’s termination/expiration, unless the County declines to accept such transfer; and
B) The County Executive Officer, or the County Executive Officer’s Designee, to take any and all actions necessary to implement the intent of this Resolution, including by executing any and all documents, as reviewed and approved by the County Attorney, to effectuate the transfer of ownership of the tenant’s improvements on the premises to the County.
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BACKGROUND:
The Coyote Point Recreation Area (“Coyote Point”) is a 149-acre County owned and operated park that is located in the City of San Mateo. Although Coyote Point is best known for its playgrounds, beach, trails, and picnic areas, its marina (“Coyote Point Marina”) is a popular resource for the local boating and sailing community. Complimenting the services provided at the Coyote Point Marina is the Coyote Point Yacht Club (“Yacht Club”), a private club that features a clubhouse with a kitchen and bar, lounge, expansive backyard with barbeque facilities, locker rooms, and parking lot (“Improvements”). The Yacht Club also leases a guest dock at the Coyote Point Marina to support its youth sailing program.
The Yacht Club’s ground lease (the “Lease”) with the County, as originally authorized by San Mateo County Resolution No. 24252 (September 16, 1967), granted the Yacht Club the right to occupy specified land adjacent to the Coyote Point Marina and construct the Improvements upon its leasehold. Per the Lease, the Improvements are the Yacht Club’s property, and do not automatically transfer to the County upon the Lease’s termination.
The Lease, which had an original term of 25 years, has been amended by this Board three times to extend its term and modify certain other Lease provisions: first in 1997 to extend the Lease term to September 2011 (Resolution No. 57634); second in 2004 to extend the term of the Lease to September 15, 2024 and to (among other things) require the Yacht Club to make specified improvements to its clubhouse on the premises, as approved by the County, to comply with the Americans with Disability Act (Resolution No. 067048); and third in 2024 to extend the term of the Lease to August 1, 2025 and to grant the County the right to access the premises to inspect the premises and post notices (Resolution No. 080624).
The Parks Department (“Department”) and Yacht Club now desire to amend the Lease for a fourth time to further extend the term of the Lease and to require ownership of the Yacht Club’s Improvements to transfer to the County upon the Lease’s termination/expiration, unless the County declines to accept such transfer.
DISCUSSION:
The Fourth Amendment to the Lease (“Fourth Amendment”), as proposed, would extend the term of the Lease to August 1, 2027, and provide for up to three (3) additional one-year extensions to be exercised upon mutual written agreement by the County and Yacht Club. Therefore, if the parties agree, the Lease could be extended to August 1, 2028, to August 1, 2029, and to August 1, 2030. Recognizing that Coyote Point’s eastern waterfront is underutilized and could be improved to provide enhanced services to park visitors and the region, the Department is currently investigating various alternative uses for the premises and Improvements. As a result, the County has communicated to the Yacht Club that it should not assume additional extensions of the Lease beyond August 1, 2027. With that said, the Department acknowledges that the Yacht Club provides unique services to the local boating and sailing community, and therefore, if the Department redevelops the eastern waterfront, it will make all reasonable efforts to secure a location in the park for the Yacht Club so it may continue to operate.
Pursuant to the Fourth Amendment, upon expiration or earlier termination of the Lease, ownership of the Yacht Club’s Improvements on the premises would transfer to the County, at no cost to County, unless County provides written notification that it does not desire to accept such transfer. If the County declines to accept the Improvements, the Yacht Club is contractually responsible for restoring the land to its natural condition at the Yacht Club’s sole cost and expense. In 2024, the Department had a property condition assessment prepared for the Yacht Club’s clubhouse, and determined it to be in fair condition with a remaining useful life estimated to be no less than 35 years if properly maintained.
The Yacht Club currently pays $2,946.32 per month for rent and utilities; this amount increases annually based on the Consumer Price Index for the San Francisco-Oakland Metropolitan Area. There is no proposed change to this provision pursuant to the Fourth Amendment.
The County Attorney’s Office has reviewed and approved the resolution and amendment as to form and language.
COMMUNITY IMPACT:
Extending the term of the Lease allows for the Yacht Club to continue to provide unique services to the local boating and sailing community, most services of which have no alternative provider in the region.
FISCAL IMPACT:
There is no Net County Cost associated with adoption of the resolution.