Report Prepared by: Karen Baker, Development Associate, Merced Yosemite Regional Airport
Title
SUBJECT: Approval of a Three-Year Lease Renewal Option for an Agricultural Ground Lease Between the City of Merced and Fagundes Dairy for Use of Approximately Thirty-Five (35) Acres in and Around the Merced Yosemite Regional Airport with Rent Starting at $5,355.00 per Year for a Term of Three (3) Years
REPORT IN BRIEF
Considers a lease agreement (3-year term) with Fagundes Dairy for use of approximately thirty-five (35) acres located in and around the Merced Yosemite Regional Airport.
RECOMMENDATION
City Council - Adopt a motion approving the lease agreement between Fagundes Dairy and the City of Merced and authorizing the City Manager or the Deputy City Manager to execute all necessary documents.
Body
ALTERNATIVES
1. Approve as recommended; or,
2. Approve, subject to modifications as conditioned by Council; or,
3. Deny the request completely; or
4. Refer back to staff for reconsideration of specific items as requested by Council; or,
5. Continue item to a future Council meeting (date to be specified in City Council motion).
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
City of Merced adopted Budget Fiscal Year 2022-2023.
DISCUSSION
The City of Merced owns property north and south of the runway located at Merced Regional Airport. The property was acquired to protect the takeoff and landing flight lines at the Merced Yosemite Regional Airport from dense or incompatible land uses, and is zoned as Restricted Agriculture, A-1-20. Other than agriculture, land uses such as residential, commercial, and industrial are restricted, which is consistent with the Merced Airport Master Plan.
The Merced Yosemite Regional Airport has had an agricultural ground lease with Fagundes Dairy, a local ranching Family, for approximately 35 acres, currently farming alfalfa. Fagundes Dairy has indicated that they would like to continue leasing the land from the City at the Airport and they choose to exercise the lease renewal option for three years (see Attachment 2).
Key Lease Terms: Notable term of the Lease Agreement include:
Parties: Lessor: City of Merced
Lessee: Fagundes Dairy
Premises: The subject site is Thirty-Five (35) Acres of City-owned property located north of the Merced Yosemite Regional Airport on Thornton Road. (See Exhibit A).
Term: Three (3) year lease.
Tenant
Improvements: No tenant improvement allowance is included.
Utilities and Maintenance: Fagundes Dairy will be responsible for all utilities and
maintenance for the premises. Lessee agrees to cut and
remove all weeds each season and will take steps to
control all pests and rodents as necessary.
ASSIGNMENT and SUBLETTING: Lessee is prohibited from assigning or subletting his
interest in said premises.
IMPACT ON CITY RESOURCES
The rent revenue generated are deposited into the Airport Revenue Account 561-1303-352.03-05 and this rent revenue is included in the annual budget process.
ATTACHMENTS
1. Fagundes Dairy Lease Agreement
2. Original Lease Agreement