Date: December 4, 2012 Prepared by: Jason Stilwell

City Council Agenda Item Summary

Name: Receive an update on the environmental review process; consider the process for the potential lease of Flanders Mansion; provide direction to staff to initiate a process to retain the services of a real estate professional; authorize the City Administrator to enter into an agreement with a real estate professional and direct staff to return with options. Description: On June 14, 2012, the City prepared a Recirculated Draft Environmental Impact Report (RDEIR) for the Sale of the Flanders Mansion Property that included an updated analysis of Alternatives. One Alternative includes the lease of the property as a single-family residence. Council will consider whether to initiate a process to consider the lease of Flanders, including retaining the services of a real estate professional. The real estate professional would solicit and evaluate lease proposals using criteria considered by the Council during its December 4, 2012 meeting. Overall Cost: City Funds: N/A Grant Funds: N/A Staff Recommendation: Initiate a process to utilize a real estate professional to solicit and evaluate lease proposals. Important Considerations: The Council may consider whether to sell or lease the Flanders Mansion. There has been unsolicited interest by the private sector in a potential lease agreement. A real estate professional would assist in identifying and evaluating any forthcoming proposals. Decision Record: None Reviewed by:

___________________________ Jason Stilwell, City Administrator

__________________ Date

CITY OF CARMEL-BY-THE-SEA STAFF REPORT TO: THROUGH: DATE: SUBJECT: MAYOR BURNETT AND COUNCIL MEMBERS JASON STILWELL, CITY ADMINISTRATOR 4 DECEMBER 2012 FLANDERS MANSION LEASE PROCESS

RECOMMENDED MOTION Receive an update on the environmental review process; consider the process for the potential lease of Flanders Mansion; provide direction to staff to initiate a process to retain the services of a real estate professional; authorize the City Administrator to enter into an agreement with a real estate professional and direct staff to return with options. BACKGROUND On June 14, 2012, the City prepared a Recirculated Draft Environmental Impact Report (RDEIR) for the Sale of the Flanders Mansion Property that included an updated analysis of Alternatives. The release of the 2012 Final Environmental Impact Report (FEIR) for the Flanders Mansion is scheduled for December 4, 2012. Subsequent to the release, it will be presented to the Forest and Beach Commission, the Historic Resources Board, the Planning Commission, and then City Council in January 2013. City Council will review the FEIR and provide direction regarding alternatives at its January 2013 meeting. Once the City Council certifies the EIR, they could initiate a process to sell/lease the Mansion. The sale process would occur from January to August and culminate in the placement of a ballot measure on the November 5, 2013 election. Or, Council could consider leasing the Flanders Mansion as a parallel effort to the process of selling the Mansion. Should Council consider the possibility of leasing the Flanders Mansion, staff recommends that a process be established to use a real estate professional to solicit and review lease proposals. STAFF REVIEW The Proposed Project is the sale of the Flanders Mansion property. The 2012 RDEIR also considers the lease of Flanders Mansion for single-family residential use and for public or quasi-public use as project alternatives. According to the 2012 DEIR, the single family residential use lease alternative has an impact comparable to the Proposed Project in relation to aesthetics, biological resources and cultural resources and an impact less than the Proposed Project related to land use and planning, parks and recreation and traffic. Should Council pursue leasing the Flanders Mansion, staff recommends that a Request for Proposals (RFP) process be used to obtain the services of a real estate professional interested in soliciting proposals on behalf of the City regarding the lease of the Flanders Mansion. Staff is seeking direction regarding the criteria to use in a RFP as noted below: 1. Property Use by Proposed Tenant

Flanders Mansion Lease December 4, 2012 Page 2 of 2

a. Intended use of the property as a single-family residence, including proposed tenants reason for interest in leasing the Mansion b. The proposed tenants experience with historic properties and/or plan to ensure historic features are preserved c. The proposed tenants plan to allow public access to the Mission Trail Nature Preserve and the Lester Rowntree Arboretum 2. Proposed Terms of the Lease a. Proposed length of time of lease b. Proposed amount of rent per month c. Amount of funding the proposed tenant is willing to invest to restore the property and plan for completion of repairs to building and property d. Proposed tenant will be responsible for utilities and building and ground maintenance e. Proposed tenant will comply with mitigated measures contained within the final certified EIR and other planning conditions 3. Financial Commitment by Proposed Tenant a. Ability of proposed tenant to establish bond or escrow account to cover cost of restoration of property, estimated at $1.2 million b. Ability of proposed tenant to provide escrow account for the lease amount c. Ability of proposed tenant to provide liability insurance estimated at $2.8 million Based upon Council direction to initiate the process to solicit lease proposals, staff would issue a RFP that includes the criteria included above as well as instructions to applicants regarding proposal length, format and submission requirements. Staff would then evaluate proposals received and the City Administrator would enter into agreement with a real estate professional to solicit and review proposals and return to Council with lease options at a later date FISCAL IMPACT The leasing of Flanders Mansion does not divest the City of the property. However, it provides an alternative that allows the City to receive revenue for the use of the property and may allow the City to transfers costs associated with building restoration and maintenance to a potential tenant. ATTACHMENTS Draft Flanders Mansion Project and EIR schedule

Denise Duffy & Associates, Inc.

PLANNING AND ENVIRONMENTAL CONSULTING

MEMORANDUM
Date: November 5, 2012 To: City of Carmel-by-the-Sea Council From: DD&A

The following information is intended to accompany material being presented before the Council concerning the Flanders Mansion Project and EIR schedule. The following dates highlight recent deliverables and key milestones associated with the CEQA project schedule. DD&A has submitted two (2) administrative draft documents to the City for review and comment, as summarized below. DD&A received written comments on the 151 Admin Draft FEIR and subsequently prepared a 2nd Admin Draft FEIR to reflect those comments. October 3, 2012 DD&A submits 1st Admin Draft FEIR October 23, 2012 DD&A receives comments from MBPS on 151 Admin Draft FEIR November 1, 2012, DD&A submits 2"d Admin Draft FEIR

The 2"d Administrative Draft FEIR is currently being reviewed by the City and legal counsel. DD&A will make final revisions to the FEIR based on the City's comments. Please note that DD&A is not responsible for the election schedule. If there is anything that DD&A can do to help facilitate the election process, please do not hesitate to contact us. DD&A will do everything in our ability to help the City achieve the schedule in a timely and efficient manner should the City require additional information and/or material. Please do not hesitate to contact me. Thank you.

Flanders Mansion Lease Timeline

(Draft: 5 November 2012)

Date
4Dec Dec Dec Dec Jan FebS

Tasks
Release 2009 FEIR Forest, Parks and Beach Commission Review Historic Resources Board Review Planning Commission Review City Council review ofFEIR Council takes action and adopts Resolutions

Comments
10-day public review period begins Forwards recommendations to PC Forwards recommendations to PC Commission advises CC on EIR adequacy and General Plan consistency Public hearing. Council deliberation. Council provides direction on which alternative to pursue. Staff to prepare findings for final action. Resolutions include: (1) Certification of the EIR, (2) Adopting the Flanders Project or Alternative, (3) Adopting the MMRP, (4) Adopting Findings and (5) Approval of Lease Agreement.

Flanders Mansion Ballot Timeline

(Dtalt: S November 2012)

DIBi
4Dec
Dec Dec Dec

Task! Release 2009 FEIR

Cgments

10-day public review period begins

Forest. Parks and Beach Commission Review Historic Resources Board Review Planning Commission Review
City Councilteview ofFEIR Council takes action and adopts Reso1utions

Fo.rwards recommendations to PC Forwards .recommendations to PC Commission advises CC on EIR adequacy and General Plan consistency
Public hearing. Cotmcil deliberation. Council provides direction on which alternative to pucsue. Staff to prepare findings for final action. Resolutions inciude: (1) Certification of the EIR, (2) Adopting the Flanders Project or Alternative, (3) Adopting the MMRP. (4) Adopting Findings and (S} Initiating the process to sell parkland (if applicable). Publication must occur hri by 20 days before the Protest Hearing. City Council holds a Protest Hearing. Protests are sustained unless a 213 majority ofCouncil members vote to override the protests and pass an ordinance: ..calling. ondftxitlg the dare of, a special election lo submit to the ciJy electon the question ofdiscontJmgmce and abandonment of tJ~e use of park land on which prolesiS were overruled.', TIUs must be at a regular City Council meeting.
30 days after second t-eading.

JaR
2adWk

Jan24to
Mar28

Apr Sand Apr 12 7May

Publish and Post Notice

Protest Hcw.ing and consideration ofan ordinance calling for an election (first reading)

4Jw

Final adoption of ordinance (second reading) The Ordinance takes effect

File the baUot measure

4 Jul
9Aug

This .is a deadline. This must be filed with the County by S PM to meet the "88 day requirement'" in the Elections Code. Set by Statute as: First Tuesday after first Monday in June, or first Tuesday after first Monday in November.

SNov

Public Vote