ITEM:		ACTION ITEM
23.	CONSIDER APPROVAL OF GROUND LEASE WITH CITY OF SEASIDE FOR SANTA MARGARITA ASR SITE EXPANSION
Meeting Date:			November 16, 2015	Budgeted:	Yes
From:			David J. Stoldt,	Program/	Water Supply Projects
			General Manager	Line Item No.:	1-2-1 A i
Prepared By:			David J. Stoldt	Cost Estimate:	$22,000 (Initial Lease Fee)
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: The Monterey Peninsula Water Management District (District) Board will consider authorizing the General Manager to execute a ground lease with the City of Seaside for the Santa Margarita Aquifer Storage and Recovery (ASR) site located at 1910 General Jim Moore Boulevard in Seaside. The purpose for entering the lease with Seaside is to allow a modest expansion of the existing Phase 1 ASR site so that pipelines and equipment can be installed at the site to accommodate treatment and distribution of water from other existing and planned additional ASR sites per current long-term water supply augmentation plans. Per the ground lease provisions, the term is forty years with extensions in five-year increments. The initial lease fee is $22,000 payable upon execution. The annual base rent payment will be established through negotiation subject to parameters established in Closed Session and subject to CPI-adjustment in five-year increments; the annual payments would not begin until the term of the lease commences upon the future date of underlying property transfer from the Fort Ord Reuse Authority (FORA) to Seaside.

RECOMMENDATION: The Board should consider the recommendation from its closed session discussion of this property negotiation and provide direction to the General Manager regarding execution of the ground lease with the City of Seaside.

BACKGROUND: The District began negotiations in 1999 with the U.S. Army for an easement on former Fort Ord property to install and test a full-scale ASR well in the Seaside Groundwater Basin. In 2000, the Army granted a 0.23 acre easement, which was amended to 1.09 acres in 2007 to allow an expansion area for a second well and facility building as part of the first phase of a permanent ASR project. Since then, plans have been developed to utilize this site for treatment and distribution of water delivered from additional ASR sites in the basin, in coordination with long-term water supply project planning with California American Water (Cal-Am). Expansion of the existing easement area to 1.90 acres is required in order to accommodate the space needs for the planned use of the site.

Currently, this portion of the former Fort Ord land is under the jurisdiction of the FORA. Per an agreement between FORA and Seaside, these entities must coordinate on this proposed property transaction, as the land is intended for future transfer to Seaside. The ground lease will also be subject to FORA’s review and concurrence per this agreement. The District has been working on this matter with both Seaside and FORA since 2010. The current ground lease reflects the multiple staff-level discussions and reviews that have taken place in order to get to closure on the site expansion issue.

IMPACTS ON STAFF/RESOURCES: A significant staff effort has been expended in planning, coordinating, analyzing and overseeing work on the District’s ASR program, as reflected in the District’s Strategic Plan. It is expected that District staff will continue this level of effort as part of the ongoing development of the ASR program in the Seaside Basin.

EXHIBITS

None

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