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~;,Y o, City Council Report
SantaMoniea
City Council Meeting: September 8, 2009
Agenda Item: ~ "-'~
To: Mayor and City Council
From: Marsha Jones Moutrie, City Attorney
Subject: Resolution re Jonathan Club Lease Extension
Recommended Action
Staff recommends that Council adopt the attached resolution regarding the ten year
extension of the Jonathan Club Lease of three parcels on Santa Monica beach.
Executive Summary
At its meeting of July 28, 2009, the Council again considered the matter of the Jonathan
Club's request for a ten year extension of its lease with the City and the Club's proposal
to provide benefits to the City which would be used to enhance public use of the beach.
Council concluded that the ten year extension should be granted. The attached
proposed resolution documents the Council's decision and makes the finding necessary
for the lease extension.
Background
The Jonathan Club's 25 year lease with the City of three beach parcels immediately
seaward of the clubhouse expires at the end of this year. The lease makes provision for
one ten-year extension conditioned. upon a finding that there has been no change in the
City and State's need to use the three parcels. Several months ago, the Club requested
an extension and threatened suit if it was not granted. At three recent Council
meetings, the Council considered the issue of whether need for the parcels has
changed since the lease was made and whether the lease would be extended. Input to
the Council on this issue has included staff reports, documentary evidence submitted as
staff report attachments, submissions by the Jonathan Club, information provided orally
by staff and public testimony. Most recently, the Jonathan Club submitted a proposal
including significant financial benefits to the City which would bolster the Beach Fund
and thereby assist the City's efforts to make public improvements to the beach,
particularly the north beach.
1
These benefits consist of an annual rent payment $125,000, an annual improvement
contribution of $75,000 and release of the Club's $212,300 overpayment claim. The
Council considered this proposal at its meeting of July 28th and ultimately concluded
that, to date, there has been no significant change in the City's need to use the Lease
parcels for public purposes. While additional beach improvements and beach
recreational opportunities are needed, such improvements and opportunities need not
be sited on the Lease parcels during the next ten years. Moreover, at the end of the.
ten-year option period, the Lease will expire by its own terms and the City will, in
conjunction with the State, be able to exercise unfettered discretion as to the parcels'
use.
Discussion
The attached proposed resolution makes the requisite finding and documents the
Council's considerations and conclusion that the ten year extension should be granted.
In particular, the resolution notes that the Club's proposal will increase the City's ability
to enhance public use of the beach and that, in ten years, at the expiration of the lease
the City will have discretion as to public use of the parcels, subject only to State control,
since the Club's current legal claims will be extinguished by the expiration of the Lease.
Financial Impacts & Budget Actions
Adoption of the resolution and extension of the lease will benefit the City financially
through the receipt of annual revenues and forgiveness of the Club's overpayment to
the City.
Prepared by: Marsha Jones Moutrie, City Attorney
Approved: F~ryvard~d to
J
,y
P.r
Manager
2
Reference Resolution No.
10426 (CCS).