TITLE
Recommendation to authorize City Manager to execute all documents necessary for lease of excess Terminal Island Freeway right-of-way to Wilmington-Lomita Blvd., LLC, a California limited liability company, for a period of 30 years, with options to extend, for an initial monthly rent of $6,900. (District 7)
DISCUSSION
The Terminal Island Freeway includes significant excess right of way that remains unimproved and unused. Please see the attached aerial exhibit. City staff has marketed this excess right of way for a number of years, with little resulting interest. Recently, two parties have approached staff regarding the right of way, one for crane storage and related uses and the other for green waste recycling. The green waste recycler determined that the property was not appropriately configured for efficient use. However, the crane user finds the site appropriate.
The excess right of way was appraised by an independent appraiser, Babcock & Macksoud, selected by the proposed lessee. Because of site constraints, including configuration, access, zoning and utility easements, the appraised value of the constrained right of way is reduced from market comparables to $800,000. The City had the appraisal reviewed by an independent appraiser, Lidgard & Associates, which reflected a value of $1,275,000. Because this site has unique constraints and limited market, an average of the two values was considered appropriate. Based on an averaged value of $1,037,500, the annual rent at an 8% return on value is $83,000 or $6,900 per month.
The Lessee will be responsible for all improvements necessary to access and utilize the site. Rent will be suspended for a period not to exceed six months, or until such time that entitlements are in place for the intended use, whichever first occurs. If the parties mutually agree, the period of waived rent may be extended for an additional six month period, or until entitlements are in place for the intended use. If requested by th...
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