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HomeMy WebLinkAbout2021-06-15; City Council; ; Third Annual Update on the Real Estate Strategic Plan, Wireless Communication Facilities, and acquisition of Open Space parcelsCA Review __AF___ Meeting Date: June 15, 2021 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Curtis M. Jackson, Real Estate Manager curtis.jackson@carlsbadca.gov, 760-434-2836 Subject: Third Annual Update on the Real Estate Strategic Plan, Wireless Communication Facilities, and acquisition of Open Space parcels District: All Recommended Action Receive the third annual update on the overall implementation of the adopted Real Estate Strategic Plan, the city’s management of its Wireless Communication Facility license agreements and acquisition of open space parcels. Executive Summary In October 2017, the City Council approved the Real Estate Strategic Plan (Resolution No. 2017- 200). At that time, city staff indicated that they would provide annual updates to the City Council on the plan’s overall implementation. This report presents the City Council with an update on the status of the plan, the city’s management of its wireless communication facility license agreements and the acquisition of open space parcels for the 2020 calendar year (third annual reporting period – Jan. 2020 – Dec. 2020). As detailed below, this report shows that during the reporting period: •The city continued to carry out the strategic plan’s recommendations •The lease agreements for all city-owned properties generated $661,323.62 in annual revenue •Wireless communication agreements generated $737,767 in annual revenue •The city completed its second acquisition of open space in compliance with a 2017 lawsuit settlement agreement Discussion Background The purpose of the plan was to take a more strategic approach to how the city’s major real estate assets are managed, both to maximize the return on the investment of public dollars and to leverage properties for the greatest public benefit, including addressing future city facility needs. The city’s Real Estate Division has also been tasked with managing the city’s wireless communication facility portfolio and with negotiating acquisition of open space parcels in compliance with General Plan lawsuit settlement agreement established with North County June 15, 2021 Item #8 Page 1 of 33 Advocates in 2017, which requires the city to continue to consider and evaluate properties to acquire for open space. Real Estate Strategic Plan The strategic plan addresses 22 properties over a five-year planning horizon with targeted timeframes that include: • A plan for completing six real estate transactions that were in progress • A one-to-three-year strategic plan for nine specific properties • A longer-term plan for seven properties that are currently being used for city purposes and are likely to be needed for the foreseeable future The third annual, or 2020, update on the overall implementation of the strategic plan is included with this staff report for the City Council’s consideration as Exhibit A. This update covers the reporting period of January through December 2020. Real Estate Property Leases This third annual reporting period update addresses properties that were included in the adopted 2017 Real Estate Strategic Plan, as well as properties that were not included: Properties included in the Real Estate Strategic Plan During the second annual reporting period, the city received approximately $346,648 in annual lease revenue. Over the third annual reporting period, no new leases were executed. However, annual lease revenue increased $163,715, to $510,363, an approximately 47% increase. The primary source of the revenue increase was the Bob Baker Auto Group lease becoming fully effective and the corresponding commencement of rent, as well as annual lease rate increases. Over the next annual reporting period in calendar year 2021, the city anticipates finalizing renegotiations for the Mira Costa lease at the Las Palmas building, which will result in additional overall lease revenue. In addition, the city anticipates finalizing the sale of one property (Pajama Drive), which will net approximately $245,000 in one-time revenue to the city. Staff also anticipates issuing requests for proposals for the long-term lease of Golf Course Lots 4 and 5, and the Foussat & Mission Avenue property located in Oceanside. Properties not included in the Real Estate Strategic Plan The Real Estate Division manages leases on other city properties that were not included in the Real Estate Strategic Plan. These include the Callaway Golf lease, the MAAC project lease at the Library Learning Center and the Rey River Farms lease at the future Cannon Lake Park site. Collectively, the city received approximately $150,960 from these three leases. Over the next annual reporting period in calendar year 2021, the city anticipates finalizing new leases for both the Callaway Golf and Rey River Farms properties. Combined, the lease agreements for all city properties generated $661,323.62 in annual revenue for the city over this third-annual reporting period. Overall, the city anticipates combined property lease agreement revenues to increase approximately 3% over the fourth annual reporting Period to $681,163.33, primarily generated from annual rental increases. Wireless communication facility agreements The city’s Real Estate Division is responsible for managing the city’s wireless communication facility portfolio, which currently includes 14 macro facility license agreements and five small- June 15, 2021 Item #8 Page 2 of 33 cell master license agreements. Managing the portfolio includes negotiating new licenses on city property, renewal of existing licenses on city property, and the negotiation of new master license agreements for small-cell within the city’s right-of-way. A detailed breakdown of the city’s facility assets is attached as Exhibit B. Macro wireless communication facility agreements Over the second annual reporting period, 12 macro wireless communication facility agreements were effective and generated annual revenues of $497,824, a $70,424 increase over 2018. In this third annual reporting period, revenue increased from $497,824 to $505,986, a $8,162 – or 2% – in annual license revenue. During the third annual reporting period, two new macro facility agreements were entered into. However, rent will not commence on these agreements until those sites have been constructed and are operational. Small-cell wireless communication facility agreements Throughout the city, small-cell facilities may be placed on city-owned street-light poles, vendor owned poles, telephone poles, power poles and any other location with line-of-site of personal cellular devices. As part of this update, city staff conducted an audit of the city’s small-cell wireless communication facilities to determine an accurate count of how many small-cell facilities are located on city-owned poles. The results of the audit found that there is a total of 161 small-cell facilities located on city-owned poles. The correct amount of small-cell facilities reported in 2019 should have been 133. This discrepancy resulted from the inclusion of 53 small-cell facilities located on vendor-owned poles in the previously reported count of 186 small-cell facilities. In the third annual reporting period, 28 new small-cell facilities were installed, which brought the overall number on city-owned poles to 161. Additionally, staff entered into one new small- cell facility master license agreement, with ExteNet, bringing the total number of master license agreements to five. ExteNet has yet to install any facilities. During the second annual reporting period, small-cell wireless communication facility revenues were reported to be $309,740. However, that number was based on the inclusion of 53 additional Crown Castle small-cell facilities, which are actually located on vendor-owned poles. The city only receives rent revenue from small-cell facilities located on city-owned poles. Actual revenue received from small-cell facilities on 131 city-owned poles in the second annual reporting period was $205,044. Small-cell facility revenues for the third annual reporting period totaled $231,781, a $26,737 increase in annual small-cell facility revenue, primarily due to 28 new AT&T small-cell facility licenses becoming effective in 2020. Combined, the macro and small-cell facility agreements generated $737,767 in annual revenue for the city over this third annual reporting period. Overall, the city anticipates revenues to increase approximately 3% over the fourth annual reporting period to $759,900, primarily generated from annual rental fee increases. Open Space Acquisitions The city’s Real Estate Division completed the acquisition of the Aura Circle property (APN 207- 100-48) for $2,070,000 during the reporting period. Aura Circle is a 15.02-acre vacant parcel, located at the terminus of Aura Circle, north of Hillside Drive and west of Kelly Drive. The Aura Circle property is the second acquisition of open-space the city has completed in compliance June 15, 2021 Item #8 Page 3 of 33 with the 2017 settlement agreement with North County Advocates. The city’s acquisition of this property became effective on March 16, 2020. In addition, although the city purchased its first open-space acquisition property, the Paseo del Norte Preserve, in 2019, the official transfer of the property occurred within this reporting period, on Jan. 6, 2020. Fiscal Analysis There is no fiscal impact associated with this update. Next Steps City staff will continue implementing the approved Real Estate Strategic Plan, managing the city’s wireless communication facility portfolio and negotiating Open space acquisitions. Staff will return to the City Council for review and approval of documents on each individual property as required and as appropriate. In addition, staff will continue to provide an annual progress update to the City Council on the overall implementation of the Real Estate Strategic Plan, the management of the city’s wireless communication facility portfolio and open space purchases. Environmental Evaluation (CEQA) This action does not constitute a “project” within the meaning of the California Environmental Quality Act under Public Resources Code section 21065 in that it has no potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and therefore does not require environmental review. Public Notification and Outreach Public notice of this item was posted in keeping with the Ralph M. Brown Act and it was available for public viewing and review at least 72 hours before the scheduled meeting date. Exhibits 1. Real Estate Strategic Plan update, other properties 2. Wireless communication facility update June 15, 2021 Item #8 Page 4 of 33 Real Estate Strategic Plan Annual Update January 2020 – December 2020 June 15, 2021 Item #8 Page 5 of 33 Exhibit 1 2 City of Carlsbad 2020 Real Estate Strategic Plan Update Introduction On Oct. 17, 2017, the Carlsbad City Council approved the Real Estate Strategic Plan (Resolution No. 2017-200). At that time, city staff indicated that staff would provide annual progress updates to the City Council on the overall implementation of the Plan. On Nov. 18, 2018, staff presented the First Annual Update (First Annual Reporting Period – Nov. 2017 to Oct. 2018), and on Jan. 28, 2020, staff presented the second annual update (Second Reporting Period – Nov. 2018 to Dec. 2019). The purpose of this report is to update the City Council on the status of the Strategic Plan, the city’s management of its WCF license agreements, and the acquisition of Open Space parcels, for the 2020 calendar year (Third Annual Reporting Period – Jan. 2020 – Dec. 2020). The purpose of the strategic plan was to take a more strategic approach to how major real estate assets are managed, both to maximize the return on the investment of public dollars and to leverage properties for the greatest public benefit and to meet future city facility needs. The adopted Real Estate Strategic Plan (Strategic Plan) included targeted timeframes as follows: (1) A plan for completing real estate transactions that are in progress (“In Progress”); (2) A one-to-three year strategic plan for specific properties (“One-to-Three Year Plan”); and, (3) A longer-term plan for properties which are currently still being utilized for city purposes and are likely to be needed for the foreseeable future (“Three-to-Five Year Plan”). The following is an update of the real estate assets within each targeted timeframe: June 15, 2021 Item #8 Page 6 of 33 3 City of Carlsbad 2020 Real Estate Strategic Plan Update 1. In Progress At the time the Plan was adopted, the following properties had leases underway but were not fully implemented, were currently leased but the lease was expiring in the near future, or the City Council had previously given direction on the disposition of the property. All of the following properties have leases that were negotiated over the last year or are currently being negotiated. NEW LEASE IMPLEMENTATION The following properties are existing approved lease agreements. Lot 9 Property Lot 9 Size Lot: 3.15 Acres Location Adjacent to the Westin Resort and Spa and the Crossings Drive. Strategic Plan Recommendation Continue to implement and monitor the ground lease with Grand Pacific Carlsbad, L.P. on Lot 9. Specific Milestones During Reporting Period • Staff commenced negotiations on Lease Amendment No. 1, related to a) reducing the amount of Phase 2 hotel rooms from 31 rooms to 25 rooms; b) extending the additional Sheraton building’s “outside completion date” from Aug. 31, 2022, to Dec. 21, 2026; and c) adding a provision for early construction of Phase 2 if certain metrics are met. Lease Start Date Lease Term • December 15, 2016. • Sixty-five (65) years, with two (2) options to extend for ten (10) years each. Next Steps Continue to monitor and manage Lease Agreement. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $159,965 • Annual Lease Revenue Rate/Increase: 0% increase over first 5- years of lease term. • Current Annual Rent: $159,965 (Year 3 of Agreement) • Amount Received in Reporting Period: $159,965 (12 months) June 15, 2021 Item #8 Page 7 of 33 4 City of Carlsbad 2020 Real Estate Strategic Plan Update Village Grille - Shorehouse Kitchen Property Shorehouse Kitchen Size • Lot: 0.11 Acres • Building: 1,850 Square Feet Location 2833 State Street Strategic Plan Recommendation Continue to implement and monitor the retail lease agreement with Shorehouse Kitchen. Specific Milestones During Reporting Period • New sidewalk dining enclosure opened to use by restaurant patrons. Lease Start Date Lease Term • April 4, 2018. • Ten (10) years, with two (2) options to extend for five (5) years each. Next Steps Continue to monitor and manage Lease Agreement. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $95,000 • Annual Lease Revenue Rate/Increase: 3% increase annually • Current Annual Rent: $101,672 (Year 3 of Agreement) • Amount Received in Reporting Period: $101,672 (12 months) June 15, 2021 Item #8 Page 8 of 33 5 City of Carlsbad 2020 Real Estate Strategic Plan Update Dove Library Café - Chapters Property Dove Library Cafe Size Square Feet: 750 Location Dove Library Strategic Plan Recommendation Staff to return to the City Council for authorization to release a Request for Proposals (RFP) for leasing the Dove Library Café space. Specific Milestones During Reporting Period • Due to COVID-19, Tenant Received one (1) Rent Deferral Amendment that deferred rent for nine months from May 1, 2020 to Jan. 31, 2021. Lease Start Date Lease Term • April 30, 2019 • Five (5) years, with one (1) option to extend for five (5) years. Next Steps • Continue to monitor and manage Lease Agreement. • Assist tenant with rent deferral process due to COVID-19. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $14,796 • Annual Lease Revenue Rate/Increase: 0% increase • Current Annual Rent: $14,796 (Year 2 of Agreement) • Amount Received in Reporting Period: $2,000 (12 months) o COVID-19 Rent Deferral Lease Amendment Received through Jan. 31, 2021. June 15, 2021 Item #8 Page 9 of 33 6 City of Carlsbad 2020 Real Estate Strategic Plan Update LEASE EXPIRATION AND RENEWAL PROPERTIES The following properties were leased at the time of Plan adoption, but the leases were expiring in the very near future. Bio, Tech, and Beyond Property Farmers Property Size • Lot: 1.46 Acres • Building: 6,000 Square Feet Location 2351 Faraday Avenue Strategic Plan Recommendation Staff to negotiate a one-year lease agreement with a nominal annual rent increase that covers all or at least some of the city’s actual landscape maintenance costs and all of the trash charges for the property. Specific Milestones During Reporting Period • Lease terminated Jan. 28, 2020. Bio, Tech, and Beyond purchased and relocated to a new 7,200 square-foot building in Carlsbad on Corte Del Cerdo. Next Steps • NA Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $8,820 • Annual Lease Revenue Rate/Increase: 0% increase • Current Annual Rent: $0.00 (Lease Terminated January 2020) • Amount Received in Reporting Period: $0.00 (12 months) June 15, 2021 Item #8 Page 10 of 33 7 City of Carlsbad 2020 Real Estate Strategic Plan Update New Village Arts Property Bauer Lumber Building/NVA Size • Lot: 0.23 Acres • Building: 9,400 Square Feet Location 2887 State Street Strategic Plan Recommendation For staff to negotiate two new and separate lease agreements with New Village Arts, one for the 6,300 square foot rear theatre suit, and one for the 3,100 square foot front arts incubator suit, including nominal rent increase. Specific Milestones During Reporting Period • Staff received City Council Direction to Negotiate New Long- Term Lease Agreement: January 2020. Lease Start Date Lease Term • Apr. 9, 2019 • Five (5) years, with no renewal or extension options. Next Steps • Continue negotiations for a new long-term lease agreement. • Continue to monitor and manage existing Lease Agreement. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $6,000 • Annual Lease Revenue Rate/Increase: 0% increase • Current Annual Rent: $6,000 • Amount Received in Reporting Period: $6,000 (12 months) June 15, 2021 Item #8 Page 11 of 33 8 City of Carlsbad 2020 Real Estate Strategic Plan Update PREVIOUS CITY COUNCIL DISPOSITION DIRECTION The City Council had previously provided disposition direction for the Buena Vista Reservoir Property. Buena Vista Reservoir Property Buena Vista Reservoir Size Lot: 3.16 Acres Location Located on the south side of Buena Vista Way, east of Highland Drive and west of James Drive/Lido Place Strategic Plan Recommendation For staff to staff continue to implement and monitor the Community Benefit Agreement and the Poinsettia 61 project approvals. Specific Milestones During Reporting Period • Park construction commenced in November 2020 Next Steps • Park improvements were to be completed by January 25, 2021. • Unforeseen property conditions have delayed construction beyond January 2021. • Park improvements to be completed by December 2021. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: NA • Annual Rent: NA • Amount Received in Reporting Period: NA June 15, 2021 Item #8 Page 12 of 33 9 City of Carlsbad 2020 Real Estate Strategic Plan Update 2. One-to-Three Year Plan The following properties were scheduled to be addressed within the initial one-to- three year period of the five year plan horizon (November 2017 – October 2020). Old Fire Station No. 3 Property Old Fire Station No. 3 Size • Lot: 0.21 Acres • Building: 2,151 Square Feet Location 3701 Catalina Drive Strategic Plan Recommendation Staff to complete an appraisal of the property to establish the minimum asking price and list the property for sale by owner in an “as-is’ condition. Specific Milestones During Reporting Period • Issued RFP: February 2019 • Sold Property: June 11, 2019 • Deed Recorded: July 10, 2019 Next Steps • None. Annual Reporting Period Revenue • Sold property for $803,333 in July 2019, $158,333 above the Strategic Plan’s estimate of $645,000 (April 2016). June 15, 2021 Item #8 Page 13 of 33 10 City of Carlsbad 2020 Real Estate Strategic Plan Update Hawthorne Property – Bob Baker Auto Group Property Hawthorne Property Size • Lot: 3.08 Acres • Building: 5,000 Square Feet Location 2065 Camino Vide Roble Strategic Plan Recommendation Staff to issue a competitive RFP for a short-term lease that included a right of first offer to purchase the property. Specific Milestones During Reporting Period • Bob Baker Auto Group finalized improvements and commenced paying rent. Lease Start Date Lease Term • Nov. 4, 2019 • Five (5) years, with two (2) options to extend for three (3) years each. Next Steps • Continue to monitor and manage Lease Agreement. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $156,000 • Annual Lease Revenue Rate/Increase: 3% increase • Current Annual Rent: $160,680 (Year 2 of Agreement) • Amount Received in Reporting Period: $160,680 (12 months) June 15, 2021 Item #8 Page 14 of 33 11 City of Carlsbad 2020 Real Estate Strategic Plan Update The Shoppes at Carlsbad Parking Lot Properties Property The Shoppes Size Lot(s): 56.9 Acres Location Located south of Highway 78, north of Marron Road, east Monroe Street, and west of El Camino Real, including the southwest corner of El Camino Real and Marron Road. Strategic Plan Recommendation For staff to explore options for entering into a long-term lease agreement for the parking lot properties with Brookfield Properties, and to return to City Council for review and approval of documents as required and as appropriate. Specific Milestones During Reporting Period • Rouse Properties sold mall to Brookfield Properties. Next Steps • Continue discussions with Brookfield Properties. Annual Reporting Period Revenue • N/A June 15, 2021 Item #8 Page 15 of 33 12 City of Carlsbad 2020 Real Estate Strategic Plan Update Golf Course Lots 4 and 5 Property Lots 4 and 5 Size • Lot 4: 7.1 Gross Acres • Lot 5: 11.4 Gross Acres Location Located on the south and north sides of College Boulevard respectively, just west of the intersection of College Boulevard and Palomar Point Way. Strategic Plan Recommendation For staff to issue a competitive RFP for offers for a long-term ground lease of the properties for either a hotel or class A multi-tenant corporate commercial office building. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Contract with real estate broker to assist in the RFP and leasing of the property: Fall/Winter 2021/22. • Release RFP for long-term ground lease of Property: Winter 2022. • Negotiate long-term ground lease for property: complete by end of Fall 2022. Annual Reporting Period Revenue • The Plan estimated lease revenues of approximately $86,062 per month, or $1,032,739 annually (September 2017). June 15, 2021 Item #8 Page 16 of 33 13 City of Carlsbad 2020 Real Estate Strategic Plan Update Pajama Drive - Oceanside Properties Property Pajama Drive Property Size Lot: .25 Acres Location Pajama Drive, Oceanside, CA Strategic Plan Recommendation For staff to issue a competitive RFP for offers for the sale of the Pajama Drive Property. Specific Milestones During Reporting Period • Property re-Appraised at $220,000 on Nov. 30, 2020. • RFP Issued Sept. 17, 2020 and closed with no responses on Nov. 5, 2020. • Staff thereafter received five offers to purchase. Next Steps • City Council approved purchase and sale agreement on May 4, 2021. Annual Reporting Period Revenue • The Plan estimated city sale proceeds of approximately $220,000 to 245,000 (September 2019 and November 2020 Appraisal). • City is selling property for $255,000. June 15, 2021 Item #8 Page 17 of 33 14 City of Carlsbad 2020 Real Estate Strategic Plan Update Foussat & Mission Avenue – Oceanside Properties Property Foussat Road & Mission Avenue Property Size Lot: 2.75 Acres Location Southeast corner of Foussat Road and Mission Avenue Strategic Plan Recommendation For staff to issue a competitive RFP for offers for the lease of the Foussat & Mission Avenue Property. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Contract with real estate broker to assist in the RFP and leasing property: Summer-Fall 2021. • Release RFP to lease property: Fall/Winter 2021/22. • Negotiate long-term ground lease for property: complete by end of Fall 2022. Annual Reporting Period Revenue • The Plan estimated city lease proceeds of approximately $16,737 per month, or $200,842 annually (September 2017). June 15, 2021 Item #8 Page 18 of 33 15 City of Carlsbad 2020 Real Estate Strategic Plan Update Las Palmas Property Las Palmas Property Size • Lot: 2.29 Acres • Building: 22,627 Square Feet Location 2075 Las Palmas. Strategic Plan Recommendation Staff to negotiate a rent increase with an annual minimum rent adjustment percentage that would cover all of the city’s actual cost to maintain, repair, or improve the exterior of the property, as well as provide the city with some additional financial return that is at, or closer to, current market rates. Specific Milestones During Reporting Period • Staff and Mira Costa continued ongoing negotiations at the property, based on City Council direction. Next Steps • Negotiate extension of Lease Agreement. • Continue to monitor and manage Lease Agreement. Annual Reporting Period Revenue • Annual Lease Revenue Rate: $64,881 • Annual Lease Revenue Rate/Increase: 0% increase • Current Annual Rent: $64,881 • Amount Received in Reporting Period: $64,881 (12 months) June 15, 2021 Item #8 Page 19 of 33 16 City of Carlsbad 2020 Real Estate Strategic Plan Update Calavera Waste Water Facility Property Tamarack Avenue Size Lot: 4.55 Acres Location Northwest side of Tamarack Avenue, midway between Carlsbad Village Drive and El Camino Real. Strategic Plan Recommendation Staff to retain ownership of the Calavera property until the city explores and identifies a long-term solution that addresses the city’s storage needs. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Continue to use, monitor, and manage the property for the foreseeable future. Annual Reporting Period Revenue • NA June 15, 2021 Item #8 Page 20 of 33 17 City of Carlsbad 2020 Real Estate Strategic Plan Update 3. Three-to-Five Year Plan The following properties addressed in the three-to-five year section of the Plan are currently still utilized for city purposes and are likely to be needed for the foreseeable future. The goal is to strategically consider and address how these properties should be managed in the longer-term, both to maximize the return on the investment of public dollars and to leverage properties for the greatest public benefit. Farmers Property Property Farmers Property Size • Lot: 13.51 Acres • Building: 128,846 Square Feet Location 2351 Faraday Avenue Strategic Plan Recommendation Staff recommended to continue to utilize the Farmers property for its current uses for the foreseeable future. If property is not the location selected for a new city hall/civic center, city is required to sell property and return funds to the CFD No. 1 fund account. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Continue to use, monitor, and manage the property for the foreseeable future. Annual Reporting Period Revenue • The Plan estimated city sale proceeds estimated to be between $25,206,000 and $38,493,843 (December 2016). June 15, 2021 Item #8 Page 21 of 33 18 City of Carlsbad 2020 Real Estate Strategic Plan Update CMWD Property Property CMWD Property Size • Lot: 6.09 Acres • Building(s): 18,000 square feet Location 5950 El Camino Real Strategic Plan Recommendation Staff to continue to utilize the CWMD property for its current uses for the foreseeable future. When the CMWD property is no longer needed due to completion of the Orion Center, it is recommended that the city issue a competitive RFP for lease of the property. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Continue to use, monitor, and manage the property for the foreseeable future. Annual Reporting Period Revenue • The Plan estimated lease revenues of approximately $31,590 per month, or $379,080 annually (September 2017). June 15, 2021 Item #8 Page 22 of 33 19 City of Carlsbad 2020 Real Estate Strategic Plan Update Village Properties Property State Street Parking Lots, Roosevelt Parking Lots, Oak Yard Size • State and Grand parking Lot: .23 Acres • South State Street parking lot: .37 Acres • Roosevelt parking lots: .9 Acres • Oak Yard: 1.35 Acres Location • State and Grand parking Lot: Northwest corner of State Street and Grand Avenue. • South State Street parking lot: State Street between Carlsbad Village Drive and Oak Avenue. • Roosevelt parking lots: Roosevelt Avenue between Grand Avenue and Carlsbad Village Drive. • Oak Yard: 405 Oak Avenue Strategic Plan Recommendation Staff to continue to utilize the Village Properties for their current uses for the foreseeable future. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Continue to use, monitor, and manage the property for the foreseeable future. Annual Reporting Period Revenue • NA June 15, 2021 Item #8 Page 23 of 33 20 City of Carlsbad 2020 Real Estate Strategic Plan Update Faraday Center Property Faraday Administration Center Size • Lot: 7.24 Acres • Building: 68,000 Square Feet Location 1635 Faraday Avenue Strategic Plan Recommendation For staff to continue utilizing the Faraday Center for city administrative offices for the foreseeable future. If a new civic center is developed, and the Faraday Center is not the location for the new city hall/civic center, the decision to lease or sell the Faraday Center should be made at that time. Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Continue to use, monitor, and manage the property for the foreseeable future. Annual Reporting Period Revenue • The Plan estimated city sale proceeds between $9,800,050 and $17,798,950; and lease revenues of approximately $165,240 per month, or $1,982,880 annually (September 2017). June 15, 2021 Item #8 Page 24 of 33 21 City of Carlsbad 2020 Real Estate Strategic Plan Update OTHER PROPERTIES NOT INCLUDED IN THE REAL ESTATE STRATEGIC PLAN The following properties were leased at the time of Plan adoption, however, we omitted in the Plan. These properties are now under the purview of the Real Estate Department. Callaway Golf Property Callaway Golf Testing Facility Size • Lot: 0.84 Acres Location APN: 212-270-08-00 Specific Milestones During Reporting Period • Lease negotiations for a new lease agreement commenced in September 2019 and continued throughout 2020. Next Steps • Renegotiate new 10-year lease agreement with Callaway to continue using property as part of their golf testing facility. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $18,996 • Annual Lease Revenue Rate/Increase: 3.5% increase • Current Annual Rent: $31,860 (Lease expired August 2019) • Amount Received in Reporting Period: $31,860 (12 months) June 15, 2021 Item #8 Page 25 of 33 22 City of Carlsbad 2020 Real Estate Strategic Plan Update MAAC Project Property Library Learning Center Size • Building: 4,800 Square Feet Location 3368 Eureka Place, Carlsbad, CA 92008 Specific Milestones During Reporting Period • No reportable action milestones during the Annual Reporting Period. Next Steps • Lease executed June 26, 2019 and expires June 25, 2022. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $118,124 • Annual Lease Revenue Rate/Increase: 2% increase • Current Annual Rent: $120,486 (Year 2 of Lease) • Amount Received in Reporting Period: $120,486 (12 months) June 15, 2021 Item #8 Page 26 of 33 23 City of Carlsbad 2020 Real Estate Strategic Plan Update Rey River Farms Property Future Cannon Lake Park Size • Lot: 3.01 Acres Location APN: 210-090-17-00 Specific Milestones During Reporting Period • NA Next Steps • Lease expires on May 6, 2021. City staff will renegotiate new one-year lease agreement with extension options with tenant. Annual Reporting Period Revenue • Initial Annual Lease Revenue Rate: $2,250 • Annual Lease Revenue Rate/Increase: 0% increase • Current Annual Rent: $2,250 • Amount Received in Reporting Period: $2,250 June 15, 2021 Item #8 Page 27 of 33 24 City of Carlsbad 2020 Real Estate Strategic Plan Update IV. Appendix Properties Included in the Real Estate Strategic Plan Property APN SF Acres Acquisition Date Acquisition Price Source of Funds Estimated Sale Price Estimated Lease Price Lot 9 137,214 3.15 1952 NA NA NA $159,965/Yr Village Grille/ Shorehouse Kitchen 2833 State Street 203-294-02 203-294-03 5,000 0.11 1977 $118,000 General Funds NA $95,000/Yr 3% Annual Inc. Dove Library Café 215-050-70 750 0.017 1999 NA General Funds NA $14,796/Yr Bio, Tech, and Beyond 5815 El Camino Real 213-062-13 6,000 (Bldg. SF) 1.46 2002 $1,699,909 10% of Total Price CFD No. 1 NA $998360/Yr ($1.38/SF/Mo) Bauer Lumber/ New Village Arts 203-295-01 203-295-02 10,019 0.23 1997 $498,944 Redevelopment Tax Bonds $1,376,310 $6,000/Yr Buena Vista Reservoir 156-200-16 119,339 2.74 1958 Unknown General Fund NA NA Old Fire Station #3 3701 Catalina Drive 167-154-20 9,200 0.21 1966 $94,850 General Fund $803,333 NA Hawthorne 2065 Camino Vida Roble 213-061-28 114,409 *5,000 (Bldg. SF) 2.63 2010 $2,487,000 CFD No. 1 $2,250,000 To $3,100,000 $156,000/Yr The Shoppes at Carlsbad Parking Lot Properties (Rouse Properties) 156-301-06 156-301-10 156-301-11 156-302-24 165-120-59 69,260 63,162 1,033,679 39,204 1,273,259 1.58 1.45 23.73 0.90 29.23 1969 1969 1969 1969 1992 $1,535,000 1969 Parking Revenue Bonds (paid off in 1995) Unknown Unknown Golf Course Lots 4 & 5 College Blvd. & Palomar Point Way 212-270-04 212-270-05 217,800 304,920 18.51 2010 $4,229,417 General Fund Up to $15,109,875 Up to $1,032,739/Yr Oceanside Properties Foussat & Mission Pajama Drive 160-550-01 149-070-47 119,790 10,891 2.75 0.25 1952 1952 Unknown Unknown NA NA Up to $3,012,626 $245,000 Up to $200,842/Yr NA Las Palmas 2075 Las Palmas Drive 213-061-19 22,627 2.29 1987 $1,602,000 PFF $4,600,479 $659,803/Yr Calavera Waste Water Facility 167-101-09 198,198 4.55 1982 Unknown Unknown NA NA Farmers Property 5815 El Camino Real 213-062-12 (Building) 213-062-13 (Claims Center) 213-062-14 (Land) 588,496 *133,922 (Bldg. SF) 13.51 2002 $15,730,000 CFD No. 1 $25,206,000 To $38,493,843 *As-Is vs. Renovated NA CMWD Property 5950 El Camino Real 209-050-19 265,280 6.09 1973 $18,000 Enterprise Fund $5,500,000 Up to $379,080/Yr June 15, 2021 Item #8 Page 28 of 33 25 City of Carlsbad 2020 Real Estate Strategic Plan Update Property APN SF Acres Acquisition Date Acquisition Price Source of Funds Estimated Sale Price Estimated Lease Price Village Properties State and Grand Parking Lot 2829-2897 State St. South State Street Parking Lot 3045 State Street Roosevelt Street Parking Lots 2922, 2936-2944 Roosevelt St. 2992 Roosevelt St. Oak Yard 405 Oak St. 203-294-02 203-294-03 203-296-06 203-304-02 203-304-05 203-296-06 204-010-05 204-010-06 5,000 16,117 14,375 10,890 39,204 0.11 .37 0.33 0.25 0.90 1977 2009 1985 1995 1965 $1,260,000 $1,150,000 $990,000 $765,000 Unknown General Fund Parking In-Lieu Redevelopment Tax Bonds Redevelopment Tax Bonds General Fund $1,376,310 $2,213,992 $1,974,694 $1,495,959 $5,385,453 NA NA NA NA NA Faraday Center 1635 Faraday Avenue 212-130-31 315,810 7.25 2001 $9,100,000 PFF $11,667,500 $1,982,880/Yr June 15, 2021 Item #8 Page 29 of 33 26 City of Carlsbad 2020 Real Estate Strategic Plan Update V. Appendix Other Properties Not Included in the Real Estate Strategic Plan Callaway Golf Test Facility 212-270-08 36,590 0.84 2010 $4,229,417 (portion) General Fund NA $31,860 MAAC Project 3368 Eureka Place 205-112-37 4,800 0.11 2004 Unknown General Fund NA $118,124 Rey River Farms Cannon road 210-090-17 131,116 3.01 1976 Unknown General Fund NA $2,500 June 15, 2021 Item #8 Page 30 of 33 Wireless Communication Facility Annual Update January 2020 – December 2020 June 15, 2021 Item #8 Page 31 of 33 Exhibit 2 2 City of Carlsbad 2020 WCF Update Macro Wireless Communications Facilities (WCF) Revenue Annual Reporting Period (January 2020-December 2020) Carrier Location License Term Beginning License Term Expiration Second Annual Rent Reporting Period Rental Rate Third Annual Rent Reporting Period Rental Rate Minimum Annual Rent Increase 1) Sprint Safety Center 11/6/2006 5/23/2022 $46,691 $47,482 CPI 2) Sprint Utilities Safety Center 11/6/2006 5/23/2022 $6,755 $7,277 NA 3) Sprint Calavera Hills Comm. Park 2/24/2004 11/19/2022 $50,130 $51,792 3% 4) Sprint/Crown Castle Ellery Reservoir 8/19/2016 8/18/2026 $47,426 $49,647 4% 5) Crown Castle* Robertson Ranch 7/28/2020 7/27/2023 $0.00 $10,000 3% 6) T-Mobile/Crown Castle Calavera Hills Comm. Park 04/12/2019 4/11/2029 $46,929 $46,928 4% 7) Verizon Squires Dam 6/14/2017 3/2/2020 $47,618 $49,184 3% 8) Verizon** La Costa High Reservoir 2/26/2020 2/25/2030 $60,792 $60,792 0% 9) Verizon Calavera Hills Comm. Park 8/1/2014 7/2/2023 $49,046 $54,617 3% 10) Verizon Twin D Water Tanks 12/17/2016 12/16/2026 $45,769 $43,637 2% 11) AT&T Twin D Water Tanks 8/15/2016 8/14/2026 $48,929 $50,851 4% 12) AT&T*** The Crossings 7/1/2018 6/30/2028 $47,739 $33,738 4% 13) AT&T Calavera Hills Comm. Park 6/11/2020 6/10/2030 $0.00 $0.00 3% 14) San Diego County Regional Communication System Ellery Reservoir 4/13/2017 4/12/2037 $0.00 $0.00 NA Annual Reporting Period Total Revenue: $505,986 • * = new WCF Macro Agreement • ** = New WCF Macro Agreement for Existing Facilities • *** = Any rental payments not matching rental rates are due to some rental payments occurring outside this Third Annual Reporting Period. All Tenants are reasonably current in their rental payments at this time. June 15, 2021 Item #8 Page 32 of 33 3 City of Carlsbad 2020 WCF Update Small-Cell WCF Master License Agreements Annual Reporting Period (January 2020 – December 2020) Negotiated new WCF Micro Master License Agreements • ExteNet – Small- Cell (0 new WCFs to date) Carrier Facilities Second Reporting Period Revolving Fees Collected Second Reporting Period Total Revenue Crown Castle 133 $213,225 $213,225 Mobilitie 0 $0 $0 AT&T 28 $18,556 $18,556 Verizon Wireless 0 $0 $0 ExteNet (New) 0 $0 $0 Annual Reporting Period Total Revenue: $231,781 June 15, 2021 Item #8 Page 33 of 33 Annual Update on the Real Estate Strategic Plan and Wireless Communication Facilities and Open Space Acquisitions June 15, 2021 Curtis M. Jackson, Real Estate Manager •Third annual update on: •The Real Estate Strategic Plan •Wireless Communication Facilities (WCFs) •Open Space Acquisitions Agenda Real Estate Srategic Plan•Adopted Oct. 2017 •Plan addresses 22 properties •Framework for future decision making •Staff committed to providing annual updates •Third annual update covers Jan. 2020 through Dec. 2020 •Other properties not in 2017 Strategic Plan Reporting Period Highlights•Lot 9 Lease Amendment (Grand Pacific) •New Village Arts: New Lease negotiations commenced •Hawthorne Property/Bob Baker Auto Group Lease: Lease effective •Pajama Drive: listed for sale Revenue During Reporting Period •Properties Listed in the Strategic Plan •Lease Revenue:Increased from $346,648 to $510,363 (+47%) •Other Properties Not Included in Strategic Plan •Lease Revenue: $150,960 •Combined:$661,324 2021 Reporting Period Projected Revenue •Projected 2021 lease revenue: $681,163 (+3%) •Projected 2021 one-time revenue:to $255,000 Wireless Communication Facilities (WCFs)•Macro WCFs: •Existing Licenses:14 total License Agreements •Micro WCFs (Small Cell): •5 Existing Master License Agreements •Crown Castle,Mobilitie,AT&T,Verizon Wireless ,and ExteNet (new) •161 Facilities Combined WCF Revenue During Reporting Period •2020 Revenue: $737,767 •Projected 2021: $759,900 (+3%) Open Space Acquisition Highlights •Paseo Del Norte Preserve •1.31 acres; $94,100 •Closed Escrow:Jan. 6,2020 •Aura Circle •15.02 acres; $2,070,000 •Closed Escrow:March 16,2020 •Continue implementing Real Estate Strategic Plan, manage city’s WCF portfolio, and continue exploring acquisition of open space parcels •Provide annual progress update to City Council for the 2021 Annual Reporting Period. Next Steps