Smart Growth and Land Use Committee Meeting – April 12, 2017
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Smart Growth and Land Use Committee Meeting – April 12, 2017
The Smart Growth and Land Use Committee met on April 12, 2017, at 10:00 a.m. to approve minutes, hear public comments, and consider two major items: a ground lease extension for a hotel property and a 15-year flat rate ground lease for hangar tenants at Montgomery Gibbs Executive Airport. Both items were approved unanimously and forwarded to the full City Council.
Public Comments & Testimony
- Martha Welch (speaking as a resident) expressed strong concerns about overdevelopment, particularly near the library, trolley station, and along Kettner and Laurel. She questioned the city’s permit process, criticized lease structures based on percentage of gross revenue, and argued that the city’s maintenance rules infringe on property rights. She stated that many new hotels appear empty at night and that occupancy figures are misleading.
- Ann Feige (Chair, Community Forest Advisory Board) provided an urban forestry update, noting that tree health has declined due to deferred maintenance, budget cuts, drought, disease, and storms. She highlighted that the city has only one arborist for the street tree program (compared to 25–30 in comparable cities) and requested a $1 million budget allocation to plant 2,000 trees and $500,000 to improve shade tree pruning cycles. She committed to advocating at upcoming budget hearings.
- S. Clive Richard (resident of Council District 9) reflected on the committee’s evolution from Transportation and Land Use to Housing, Land Use, and now Smart Growth. He stressed the need for infrastructure investment to support smart growth and urged the committee to consider the full range of issues—housing, transportation, and infrastructure—as the city grows.
Consent Calendar
- The minutes of the March 24, 2017 meeting were approved by unanimous consent with no objections.
Discussion Items
- Item #2: Ground Lease Extension for Hotel Property (Presented by Sabelle Thompson, Director of Real Estate Assets)
The committee considered an amendment to extend the ground lease for a city-owned hotel property (the leasehold is currently under 30 years remaining). The minimum rent is $1.8 million annually, but the city expects to receive approximately $3.8 million annually from percentage rent. The extension would run to 2067, with an additional option for 10 or 20 years. Councilmember Alvarez raised concerns about the long-term value of the property, noting that the minimum rent is far below actual revenue, and questioned whether the city could get a better deal by putting the lease out for bid when it expires. He requested that the Independent Budget Analyst (IBA) prepare a report on the city’s leasing practices for such properties. Councilmember Kate supported the extension, noting that the lessee has invested in improvements since 2010 and that the city has delayed action for nearly a decade. The motion to forward the item to the full City Council passed unanimously, with the request that the IBA report be provided as soon as resources allow. - Item #3: 15-Year Flat Rate Ground Lease for Montgomery Gibbs Airport Hangar Tenants (Presented by Rod Propes, Deputy Director for Airports; Debbie Schogger, Acting Supervising Property Agent; and Wayne Ryder, Program Manager, Airports Division)
Staff presented a template for a 15-year flat rate ground lease (optional) for up to 99 current month-to-month tie-down tenants. Key terms: rent starts at $0.11/sq. ft. (same as current), with annual CPI increases beginning in year two, and market value adjustments at years five and ten. Tenants may store vehicles in hangars as long as the aircraft remains flyable and accessible. The lease also includes a 2% equity-sharing payment to the city upon sale of the hangar. A minor amendment was noted—removing the word “physical” from the non-discrimination clause to cover all disabilities. Councilmember Kate asked about the Montgomery Gibbs master plan, which is underway with an 18- to 24-month timeline, and requested that the committee be updated on the master plan’s implications for these leaseholds. Councilmember Alvarez inquired about revenue maximization; staff noted that rents have not increased since 2003 and that the new lease ensures annual CPI increases. The motion to approve the lease template and forward it to the full City Council passed unanimously, with a recommendation that the master plan discussion be brought back to the committee.
Key Outcomes
- Approval of Minutes: The minutes of March 24, 2017, were approved by unanimous consent.
- Item #2 (Hotel Ground Lease Extension): Approved and forwarded to the full City Council. The IBA was requested to provide a report on leasing practices for city-owned properties.
- Item #3 (Montgomery Gibbs Airport Hangar Ground Lease): Approved and forwarded to the full City Council, with a commitment to return to the committee for a discussion of the master plan’s impact on the leaseholds.
- Next Meeting: The next Smart Growth and Land Use Committee meeting is scheduled for Wednesday, May 17, 2017, at 2:00 p.m.
Meeting Transcript
We're gonna approve the uh minutes of our March twenty-fourth, twenty seventeen meeting by unanimous consent unless anybody has any issues with uh then they will be approved by unanimous consent. I don't see do we have any non-agenda? I do not have any speaker. Oh, we do have three non-agenda, here we go. We will start with Martha Welch. I'm concerned about prevents by Park 3 Park and uh K and La on Island. They always build a lay uh a l um uh L of a building is too close. Right now, the more and more coming down with expensive. Now across the library, new one. By the uh by uh pallet, another one over there. Pacific gate over there, and across over there, also. That's only and also by the trolley um station, another one behind there. Uh there's more of them coming on every year. Uh uh every week says new ones coming up all the time. Where's the permits? I don't know. It's just going out crazy down there. And now we have empty ones. The Ray, Form 50, EV, Sprota, and Van. They're not full. And there's more of them also, also, they're not full. And also, the hotels, I don't think you have the vacancy right because um if you go out, I walk downtown uh at night all the time, and it's they're dark, dark, everyone's dark. You know, and also the pen trade, you said uh it's lie what you said with that too. I was in that building. Also, so I don't like also what you do with permit oh your leases, it's always percent of uh of a gr uh gross. That's not right when you do this. I've never heard this stuff like you do here, percent of uh leases. I think that's crazy. You know, um, if they go up more, you get more money. And I don't think that's how if I also if I had a house and I was writing it out, and something happened, I'm the owner, I would fix it. Not here. You have to you have them how much maintenance they have to do and everything. You all these rules, if you tell them Zaki how much maintenance they had to do, but they're uh gross if there's a rent, that's not right. That's not right. You're like you're controlling them. This is America and it's free. People should have a right to do what they want their property. And also if you have a property, you would fix it up. And you don't do that. Why you have a maintenance? We know that. But it's just wrong what you do. It's it's not right. It's not free uh free um, it's not free uh enterprises because you tell them exactly what to do. Thank you, Ms. Welch. Next, Ann Feige. Welcome. Hello, hello, um give you a quick um urban forestry update. Um as many of you know, tree trees are really important assets in land use.
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