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HomeMy WebLinkAbout1992-04-21 - AGENDA REPORTS - COMMUTER RAIL STATION LEASE (2)AGENDA REPORT City Manager Apprc Item to be presented UNFINISHED BUSINESS DATE: April 21, 1992 SUBJECT: COMMUTER RAIL STATION - LEASE AGREEMENT DEPARTMENT: Public Works BACKGROUND At. their March 19, 1992 meeting, the City Council approved the Rail Station Plot Plan and certified the Negative Declaration for the Commuter Rail Lease Agreement. At tonight's meeting, staff is recommending that the City Council approve the lease agreement with the Whittaker Corporation for an initial take of 6.57 acres of land for the Rail Station's roadways, parking and platform (see Attachment I). If the Lease is approved tonight, this will culminate one years' worth of Council/Commission history (see Attachment Il). Over this time, information on environmental concerns, the Lease, the Station's cost and its benefits to our community and its funding have been presented by City staff, environmental consultants, representatives from CALEPA, Department of Toxic Substance Control (DTSC) and the LACTC. The purpose of this report is to focus on the lease, however, staff will be prepared to respond to questions outside of this focus. LEASE AGREEMENT Attachment III lists the major points of the Lease Agreement between the City and the Whittaker Corporation. In summary, the lease represents a five year commitment of which the first three years the City pays $1.00 per year. In the remaining two years, the City must make lease payments in the amount of 10% of the property's appraised value. An appraisal of the property shall be made at the end of the first three years. This appraised property value shall be the cornerstone of the purchase price if the purchase option is exercised at the end of, the three years or at the end of the five year agreement. The appraisal shall be based on the current value of similar unimproved land. Staff estimates that the lease cost of each of the remaining years is $500,000 per year. Staff recommends the approval of this lease only after toxic and geology reports prove negative, may be mitigated or the City is protected from lawsuits and clean up of possible toxic contamination of the rail site. APPROVED pgMaNun:-42L Commuter Rail Lease Agreement April 21, 1992 Page 2 ENVIRONMENTAL Staff has and continues to work toward eliminating or shifting the City's liability from litigation and clean up costs resulting from toxics potentially being discovered on the 10 -acre Rail Station site. This has and is being accomplished first through testing for the presence of toxics and language in the lease agreement. Two independent toxic consultants have investigated the 10 -acre Rail Station site and CALEPA is working with the Whittaker Corporation on the entire 976 acre Bermite site. CALEPA has submitted a letter dated February 25, 1992 (see Attachment IV) and given testimony to both the Planning Commission and City Council, which, when summarized, states that there are 14 toxic sites at Bermite; however, none are on the parcel of land being considered for the Rail Station. The first toxic report on the Rail Station site was completed for the Anden/Whittaker Group. Its results were relatively clear with trace elements of petroleum hydrocarbons (probably motor oil) and radiator fluid found at the site. The second toxic report has been developed for the City and its data collected independently from the fust and completed on March 3, 1992. The results of the report proved to be favorable. However, the report recommended additional testing (two subsurface borings) to provide the City with an assurance that the Rail site does not have toxic substances on it. Staff has requested the consultant to conduct the additional testing and at the time of writing this report, the results are not available. Staff anticipates having the results by the April 21, 1992 Council meeting. In addition to the above toxic investigations for the site, staff is pursuing a new procedure recommended by CALEPA, DTSC called a Preliminary Endangerment Assessment, (PEA). Generally, the PEA is similar in scope and content to the Phase I performed by the City, but is to be done under the auspices and supervision of DTSC personnel. The Anden/Whittaker Group has tentatively agreed to pay for the PEA (now estimated at at least $60,000). Staff estimates that the results from the PEA would not be available for two to three months. It should be noted that the PEA is not required by law, but is an additional investigation and priority measure to assure the City that the rail station site is free of toxic containments. Staff has conferred with the City Attorney (see Attachment VIII) over the City's liability of signing the lease agreement before the PEA is -complete. The City Attorney recommends that the lease with Whittaker provides that.they will proceed to promptly complete the PEA and to perform only remedial work that may be required by DTSC. The City should have the option to cancel the lease in the event the City is not satisfied with the PEA report, the DTSC's response, or the remedial action (if any) undertaken by Whittaker. The City Attorney believes that with these provisions in the lease, failure to obtain the PEA report _by April 21, 1992 should not preclude the City from executing the lease. Commuter Rail Lease Agreement April 21, 1992 Page 3 Finally, under the heading of Environmental, staff is working with geologists to determine the location of faults in this area. No habitable structures are planned for the rail site. Pending the distance from a fault, the rail platform canopy may have to be modified or removed. The City's Building Official will make a determination when geology is complete. STATION COSTS The financial impact to the City may be broken down into three components; rail site, development and construction, $5.5 million. Lease costs are estimated at $1,000,003 and if optioned by the City, forego the extension of the lease and purchase the. land outright. This acquisition cost is estimated to be $5 million (see Attachments V and VI). These costs would not use General Fund monies but would come from four currently identified transit sources; loan of Proposition A funds, Transit Capital Improvement funds, SB300 funds and Proposition C funds. There is a provision in the lease which gives the City credits or a discount on the purchase price of the site for any appreciation of surrounding Whittaker land due to the construction of the Rail Station. This discount is available starting the third year of the lease. Staff is currently in the process of working with a financial consultant to determine if it is better to buy the land before the end of the lease's third year or until after the third year to receive the discount. Staff will report back with this analysis and its recommendation when the analysis is completed. In previous reports to the City Council as a requirement to receive the loan of Prop A funds on future Prop C funds, the loan had to be secured with TDA Article (8) funds in case Prop C funds were successfully litigated and struck down by the courts. Staff is now negotiating with the LACTC to remove this provision from the loan agreement. Staff is concerned about over -committing TDA funds. Staff is working towards eliminating the LACTC-required collateral funding source using a source of collateral which is acceptable to the City. The LACTC is confident that Proposition C, key to the development of Santa Clarita's Rail Station as well as rail projects in LA County, will not be overturned by the California Supreme Court. To remain in accordance with the timetable established by the LACTC, the Commuter Rail Station site is scheduled to be operational by October 30, 1992. Due to time constraints to meet the anticipated time table, the lease agreement should be executed as soon as the environmental reports have been completed and the findings are concluded to be negative or can be mitigated. Commuter Rail Station Lease Agreement April 21, 1992 Page 4 RECOMMENDATION Direct the City Attorney to review the final toxic report and the lease agreement. Approve and sign the lease agreement at the time a negative toxic report can be provided. ATTACHMENTS 1. Map of Leased Area 2. Chronology of Council/Commission Action 3. Major Points of Lease Agreement 4. February 25, 1992 Letter from CALEPA 5. Financial Impact Summary 6. Land Acquisition Summary 7. March 10, 1992 Agenda Report without Attachments 8. PEA letter from City Attorney MS: gmm 4-21cr.agn Y 0 INITIAL LEASE AREA -WHITTAKER PROPERTY OPTION T 6.36 ACRES &gt CIO Tjiy q6�% 77,7 --' 57 ' V 'T OQ) M N/R\ro 8A naff� g�) Lf\j LFLA 0� T:.=m o. �I n.renxc nyi a �• �- c ty 1 c ,�, •r n r� : t ��■� qn � PROJECT AREA LIMITS WHITTAKER PROMPTY NOT A PART 10,30 AGREE ACCESS EASEMENT NOT A PART e o e e u 9 e Ss -� � �t• /� Qum Q� L �4C� C�O[�'� 1M4C�G3 ��La4�0a k.00eo L:4"c) "COMPANY. PRgPERTY C Qum Q� L �4C� C�O[�'� 1M4C�G3 ��La4�0a ATTACHMENT H UPDATED CHRONOLOGY OF EVENTS October 30, 1990 Station sites are to be identified by December 11, 1990 for council's review and approval. November 27, 1990 Council informed that a resolution and site application needed for receiving Station Transportation Capital Improvement (TCI) funds. February 11, 1991 Staff conducts'a Commuter Rail Station site forum. February 12, 1991 Request a recommendation from the Planning Commission for a Rail Station site. February 19, 1991 Staff informed the Planning Commission that Bermite was not feasible as a short-term site because the additional right-of-way was not purchased. In ranldng short-term rail site, the Planning Commission split; two preferred Gates; two preferred Glazer, and one preferred Drayton. Three of the Commissioners preferred Bermite as the long-term site, and two preferred Schmidt. Since that time, the LACTC has purchased right-of-way to the Bermite site. February 26, 1991 Council adopts Resolution No. 91-21 establishing the City's intention to construct a Commuter Rail Station by applying for funding. April 23, 1991 Council presented an outlined summary of agreement for the Bermite site. Staff directed to negotiate toward final agreement. June 11, 1991 Council receives the latest outline agreement; staff directed to work out final agreement. September 24, 1991 Council conceptually approves the proposed Mitigated Negative Declaration for the Bermite (Glazer) sites, approves the lease/purchase agreement. 4-21cr.agn ATTACEMENNT lI Page 2 October 22, 1991 Council approved MOU with I.ACTC for grading and construction platform. February 18, 1992 Planning Commission agrees not to approve; the proposed Commuter Rail site located on the Bermite property, the Negative Declaration or the Oak Tree Permit. February 25, 1992 Council directs staff to return all information submitted in their February 25, 1992 agenda report and staff presentation on this subject back to the March 3, 1992 Planning Commission for their review and consideration. March 3, 1992 Commission approves Bermite site Plot Plan, Negative Declaration and Resolution P92-08. March 10, 1992 Council approved Rail Station Plot Plan and Oak Tree Permit; adopts Resolution 92-47, certifies Negative Declaration; procures construction plans; signs Letter of Acceptance of Drainage Cut/Fill Slopes. 4-21cr.agn ATTACHMENT III Brief Outline of Lease Agreement Points • Initial Term of the Lease 3 years ♦ Lease Rate $1.00 per year ♦ Initial leasehold will be approximately 6.57 acres • Potential area of ultimate leasehold/purchase of site to be 10 acres. ♦ At City's option, the leasehold may be increased to the ultimate area of 10 acres. • The City may continue with the lease for up to two years with an option to purchase. ♦ The City has the option to purchase at any time. ♦ The lease rate for the continuing two years shall be an annual payment of 10 % of the appraised property value. ♦ At the City's option, the property may be purchased with a cash down payment. The provisions of the cash down payment are as follows: O 10% of the purchase price O Balance of purchase price shall be an unsecured promissory note. The note shall bear interest at 2% above the prime rate. O All principal and interest shall be due and payable in a lump sum two years on the anniversary of the close of escrow. ♦ A portion of the lease payments shall apply as a credit against the down payment. O If the City leases less than 8 acres, then 25 % of the lease payments shall apply. O If the City leases 8 acres or more, then 35% of the lease payments shall apply. ♦ The City may condemn the property. • The City shall have the right to sublease the City -leased property for ancillary services that are reasonably connected to the operation of a rail station and retain the proceeds from the sublease. ♦ Environmental Issue: Whittaker Corporation shall be responsible for all existing environmental conditions and will indemnify City with respect thereto. The City will be responsible for subsequent environmental problems unless such problems are caused by Whittaker Corporation. 4-21cr.agn ?TAPE OT CAMORHIA. ENVIRONMENTAL PROTECTION AOENCY ATTACHMENT. IY rDEPAFtI MENT OF TOXIC WWTANM CoMROL e (REOPON 3) 1406 N. "M FERNANW 9OULEVAR0. SUfre Wo BUIMAW CA 91M4 416) 567.300p February 25, 1992 City Council City of Santa clarita 23920 Valencia Blvd. Suite 300 Santa Clarita, CA 91355 Dear COuncilmembers: STATUS REPORT ON WHITTMR CORPORATION, BERHITE DIVISION PROPERTY As requested by a member of your staff on February lo, 19920 this report is intended to summarize the status of the above -referenced property with regard to the formal closure of the hazardous waste management units. As during the fcourse yofhbusiness, the Berdmiteamanlacilityrin subject to the Federal Resource Conservation and Recovery Act (RCRA) and. the analogous California law, the Hazardous Waste control Act (HWCA). These laws and the implementing regulations require, among other things, that a facility which closes must follow an approved closure plan which describes how hazardous waste will bo removed and how the hazardous waste management units will be decontaminated during the closure procedures.* Unless adequate decontamination is achieved, restrictions would be placed on the use of some portions of the property. The enclosed reports prepared by this office for the U.S. Environmental Protection Agency should provide you with the necessary background and detail regarding the closures. Please read the July 1989 report and then the January 1992 report. We would like to emphasize the following points: The closure plan addresses the 14"RCRA-regulated" units which Whittaker listed with the EPA in the early 1980s. So far, we have accepted closure for 9 units: 6 portable storage shacks, 2 storage buildings and 1 wastewater treatment unit. Whittaker has performed additional closurs work at three open burning/open detonation (OB/OD) areas and.has re -submitted closure certifications for them. We have ' tentatively decided to accept. the certification for two of the units, but feel that additional soil sampling must be done at the<remaining OB/OD unit. ATTACHMENT IV Page 2 City council of Santa clarite February 25, 1992 Page 'a Whittaker continues to perform additional closure work including the extraction of groundwater and solvent vapors from the soil near the location of one former surface impoundment (pond) and groundwater monitoring at -both of the surface impoundment areas. -none Of Based on the January 16, 1992 Initial Study, it appears that e management units ewere tlocated cwithinuthee sitezOfathe waste proposed commuter rail station. Three of the closed portable storage units were approximately 1/4 -mils from the station area. These have since been removed. other hazardous waste management units are even further south and have been closed and/or removed except for the two -impoundment areas and the "Burn Area." Also, an area used for paint storage and an old lead azide sump and drainage area were sampled and do not appear to. pose a threat. These are approximately 50o and 800 feet southeast of the railroad tracks. . This facility is the subject of enforcement activity and we are continuing negotiations matter administrativelywith Whittaker to settle the the details . At this tine,.we cannot disclose of thes. S Inother� however, the With the technical *field work we have reprocess Of complying 4uired. Finally, the Department is in possession of a 1979 -map -of the facility, submitted by_Whittaker as part of their closure Plan* which shows numerous small -production facilitiss.on the Property. At this time, we have no information It these areas do or do not present any -environmental or -public health threat. We believe they were removed/demolished in early 1987 by the company without agency oversight. the real We believe that they may be subject to environmeestate laws covering disclosure and therefore an ntal assessment Of that may be required. These should also be considered in the up -coming EIR for the development project. Our Site Mitigation Branch has in place a mechanism, the Preliminary Endangerment Assessment, (PEA), for dealing with these sort of issues. Usually, a city or county would require this of an applicant, or the applicant can perform the PEA voluntarily. _ ATTACHMENT IV Page 3 City council of Santa Clarita February 25, 1992 Page ,I If If You. have any questions, please contact Alan Sorsher at 818-567-3119 or Allan Plaza at 818-567-3101. Sincerely, Dennis A. Dickerson Regional Administrator enclosures cct Mr. Ed Huller Vice President Whittaker Corporation 10880 Wilshire Blvd. Los Angeles, CA 90024-4163 Mr. Steve.Koyasako Department of Toxic Substances Control P.O. Box 806 Sacramento, CA 95812-0806 Mr, Mukul Agarval Site Mitigation Branch Region 3, Burbank Funding Report Summary Excluding Land Acquisition COSTS $3,900,000 Construction 600,000 Financing Cost 1,000,000 2 Year Lease Cost 5 500 000 a-21magn igmm $2,500,000 1,200,000 500,000 1.300.000 5 500 000 ATTACBMENT V Prop A Loan TCI SB300 Prop C Reserves ATTACIII E= VI' Land Acquisition Summary Initial Lease Area Estimated Land Value $17.00 per square foot Rental payments FY 92-93 FY 93-94 FY 94-95 Rental payments increase to 10% FY 95-96 FY 96-97 6.7 acres $5.0 million $1.00 $1.00 $1.00 of the appraised property value $500,000 annual installment $500,000 annual installment Purchase option may be exercised beginning the third year of the lease agreement or the term of the lease may be extended two additional years. Cash down payment is 10 % of the purchase price less lease credits. Lease credit for 6.7 acres amounts to $125,000 per year ($250,000 for 2 years). Balance of the purchase price shall be evidenced by an unsecured promissory note and bear the interest at 2 % above prime rate, due and payable in a lump sum on the second anniversary of the close of escrow. The following are examples of two options for purchase of the property: Option A 3 year initial lease 2 year extended lease Principal (after down payment) + interest (2 % over prime) due in two years after close of escrow Down payment Less two years lease credits Actual Down Payment Due: Principal + interest (2 % above prime rate) due in two years after close of escrow amount due: * City must incur indebtedness Repayment of loan over a 5 -year term 4-21cr.agn $500,000 250,000 $250,000 $5,116,220.00* $1.12 million $1.40 million ATTACHMENT VI Page 2 Option B After the initial three year lease, the City would purchase the property at the termination of the initial lease term. Payment $5 million City must incur indebtedness $3.0 million Repayment of loan over a 5 year term $3.7 million Option C The City acquires outside financing through its Public Financing Authority and repays the debt over a longer term and possible lower interest rate 4-21cr.agn AGENDA REPORT 11 City Manager Approval Item to be presented b UNFINISHED BUSINESS DATE: March 10, 1992 SUBJECT: COMMUTER RAIL STATION - BERMITE SITE DEPARTMENT: Public Works BACKGROUND This commuter rail project has an active Council/Commission history extending back approximately one year (see Attachment I). The following three paragraphs summarize its most recent history. On February 18, 1992 the Planning Commission heard staff's presentation on the proposed Rail Station Plot Plan, Oak Tree Permit and Draft Mitigated Negative Declaration for the Bermite site to the Planning Commission. The Planning Commission took action "not to approve the plot plan" and raised several concerns regarding environmental issues, lease agreement issues and the value of the rail station to the community. The City Council at their February 25, 1992 meeting directed staff to return all information submitted in their agenda report and staff presentations on this subject back to the Planning Commission for their review and consideration. At the March 3, 1992 Planning Commission meeting; staff with its new report, and representatives from other agencies addressed unanswered concerns raised by the Commission at their February 18, 1992 meeting. After reading and hearing staff's report, the Planning Commission approved the Plot Plan, adopted the Negative Declaration and adopted Resolution P92-08. At tonight's meeting, staff is prepared to give a report similar to the one presented at the March 3,.1992 Commission meeting. The topics listed below are to give the Council background and update any changes between tonight and the March 3, 1992 Commission meeting. Adopted: 3 -!o - 9U APPROVED aoena,ium:� Commuter Rail Station - Bermite Site March 10, 1992 Page 2 ENVMONMENTAL Attachment II of this report responds to the Planning Commission's concerns expressed at their February 18, 1992 meeting. Staff is in the process of conducting independent environmental toxins and geological studies for the site. On site work was completed March 3, 1992 and is now being analyzed. Staff expects this to be complete within two weeks. Geological analysis may commence after the toxics are complete. The City Attorney concurs with staff that the environmental testing and research must be completed before the lease agreement with the Whittaker Corporation can be executed by the City. Most recently, the attorneys for Whittaker and the City have agreed to indeminification language in the lease for the rail site. CALEPA, Department of Toxic Substance Control (DTSC) has submitted a letter (February 25, 1992) (see Attachment III) and has given testimony to both the Council and Commission which, when summarized, states that there are 14 toxic sites at the Bermite location. However, none are on the parcel of land being considered for the Rail Station. While no hazardous matter is known to be on the property, DTSC requests that a Preliminary Endangerment Assessment (PEA) be prepared for their approval. Staff believes that when the environmental Phase One is complete (March 1992) it will have the necessary information to submit the PEA to the DTSC which can then certify the Rail Station site as not having toxic substances on it. LEASE AGREEMENT Attachment IV lists the major points of the lease agreement between the City and the Whittaker Corporation. In summary, it is a five year agreement of which the fust three years the City pays $1.00 per year. In the remaining two years the City must make lease payments in the amount of 10% of the property's appraised value, this is estimated to be $500,000 each year. The City has the option to purchase at any time. The appraisal will be based on the current value of similar unimproved land. The major points of the lease have been agreed to by legal representatives of each party and finalization of the lease is now taking place. Staff plans to bring the final lease agreement to Council for execution after environmental reports have been complete and are negative or mitigated.. This is estimated to be their meeting of March 24, 1992 or April 14, 1992. Commuter Rail Station - Bermite Site March 10, 1992 Page 3 STATION COSTS The total estimated cost for the development of this rail site, less the cost of the land is $5.5 million (see Attachment v). The proposed funding for this will come from four sources; loan of Proposition A funds, Transit Capital Improvement CrCI) funds, SB300 funds and Proposition C Reserve funds. Because of litigation over the Prop C Transportation Sales Tax, the loan of Proposition A funds for future Proposition C must be secured with TDA Article (8) funds. If Prop C is successfully litigated by its opponents, TDA Article (8) funds would be used to repay the loan. This requires a five year commitment of 32% of the City's estimated $2.3 million annual TDA allocation. The LACTC is confident that Proposition C will not be overturned. COST BENEFIT Staff has conducted a cost comparison between rail and buses in providing alternative transportation modes to Los Angeles. Attachment VI summarizes the per passenger per day (roundtrip) cost between rail and buses on the operational and capital levels. Essentially, over five and ten year periods, it is less expensive for the City to provide a rail station than it is to purchase and maintain buses to transport the equivalent amount of passengers. The rail station has a more expensive initial capital cost, but has a much longer life cycle. Coaches on the other hand, have less expensive capital start up costs, but require replacement every 12 years and have higher operation and maintenance costs to the City. With rail, the City's fnancial•obligation is limited largely to the station's capital costs. with transit, the City's financial obligation is to the capital costs of the buses as well as their operations and maintenance. In conclusion, staff believes that the Bermite site is a viable one. The station would be multi -modal, serving not only as a rail station, but also as the City's main transit transfer station for its local bus service and what would be its only owned park -n -ride lot. Staff believes that the City should continue on its course to construct a multi -modal rail site within the City which will assist in alleviating current and future environmental aqd traffic concerns. RECOMMENDATION I. Approve the Rail Station Plot Plan and Oak Tree Permit. 2. Direct staff to proceed with procuring the construction plans in order to meet the LACTC's start schedule. 3. Direct the City Manager to siggn the Letter. of Acceptance of Drainage Cut/Fill Slopes. 4. Adopt Resolution 92-47 certifying proposed Negative Declaration 92-009 for the Commuter Rail Lease Agreement and associated site development plans. Commuter Rail Station - Bermite Site March 10, 1992 Page 4 ATTACHMENTS 1. Chronology of Council/Commission action. 2. Staff response to Planning Commission's February 20, 1992 comments. 3. DTSC Letter of February 25, 1992 4. Lease AGreement Points 5. Cost/Revenue Summary 6. Cost Benefit Summary 7. February 18, 1992 Bermite Site Planning Commission Report on Plot Plan 8. Caltrans letter 9. Planning Chairman's February 20, 1992 comments to Mayor 10. Planning Chairman's February 25, 1992 comments to Mayor 11. Letter of Acceptance of Drainage Cut/Fill Slope 12. February 25, 1992 Council report ont he Negative Declaration 92-009 13. Resolution 92-47 certifying Negative Declaration 92-009 LAW OFFICES BunHE, WILLIAMS & SORENSEN 611 WEST SIXTM STREET. SUITE 2500 MARTIN J BURNS` ROBERT V. WADDEN JAMES T. BRADSHAW. JR.- FRANK M. WNITENE.O. l6 MARK C ALLEN. JR.- MARYANN LINK GOpONIND MARTIN L BURKE' TIMOTHY B. WOSNER CARL K. NEWTON' PITA J MUNSON A ROBERT FLANORICK' STEVEN J. DAWSON NORMAN E GMRT TERRY P. KAUFMANN EDWAWD M. FOX' STEPHEN R. ONSTOT DENNIS P. BURKE' JAIME ARWALO LELAND C. DOLLEN F. DANIELS CRAWFORD. ME NEIL F. VEAGEW JOHN E CAVANAUGH BRIAN A PIERIX' MARK D. HENSLEY CHARLES M. CALDERON' PETER O. TREMBLAY PETER M. THOMSON* GILBERT A TRUJILLO JERRY M. PATTERSON GREGORY P. PROMOS HAROLD A. BRIDGES' DAVID M. MCCARTNY CHERYL J. KANE' JOSEPH P. BUCHMAN RAYMOND J. FUENTES' GREGORY T. DION BARRY S. GLASER ANT 0. R CONDOTTI VIRGINIA R. PESOLA AUDREY HO S. PAUL BRUGUERA KAREN J SCHULOT B DEREK STRAATSMA JANET S. GARMS* DON G. KIRCHER PAUL C. ANDERSON MICHELE VAOO.IVERA BRENDA L DIEOERICHS SCOTT F. FIELD TIMOTHY V. R. GALLAGHER MARY MEWS GAYLE' JOHN J. WELSH RUFUS G YOUNG. JR. MARY JO SHELTOIFDUTCHER STEVEN KARLTON KOP JEFFREY KIGHTLINGER JUDITH A ENRIGHT EOVIN E MINASSIAN KATHRYN P. PETERSO JUDITH K ANDERSON THOMAS C WOOD TIMOTHY D. CREMIN LISA E KRMIITZ GREGORY G. 0. NIM G MCNALLY KENNETH D. RWELL M. LOIS SOBAK LAURIE E SHERWOOD PROFESSIONAL CORPORATION TA PROFCSSIONAL ASSOCIATION AOMRTED IN KAx5A5 6 WSSWRI OADMITTED IN KANSAS UO.ITT. w CALIFORNIA RANSASSA-, s NlssouRl 10.538.1 LOS ANGELES, CALIFORNIA 90017 12131 236-0600 T ELEC O P1 E R: 42131236-2700 HARRY C. WILLIAMS O91b 96n ROYAL M. SORENSEN 119.19831 March 30 1992 Jeff Kolin Deputy City Manager Department of Parks & Recreation City of Santa Clarita 23920 Valencia,Boulevard Santa Clarita, California 91355 Re: Whitaker Lease Dear Jeff: RECEIVED APR 0 1 1992 PUBLIC W'? -I% OCIAfIrTmuff CAY L -F L -4111A C"AITA ATTACHMENT VIII VENTURA COUNTY OFFICE 2310 PONDEROSA DRIVE SUITE 1 CAMARILLO. CALIFORNIA 93010 (8081 987-3668 ORANGE COUNTY OFFICE 3200 BRISTOL STREET SUITE BAD COSTA MESA. CALIFORNIA 92626 (TM) 515-5559 BURKE. WILLIAMS. SORENSEN 6 GRAM LIGMTON PLAZA 7300 COLLEGE BOULEVARD SUITE 220 OVERLAND PARK. KANSAS 66210 (913)339-6200 M..G. DWIGHT A NEWELL (213) 236-1230 WRITERS DIRECT DIAL OUR FILE NO. It appears that the Preliminary Environmental Assessment (PEA) and corresponding comments from the Department of Toxic Substances Control (DTSC) will not be completed prior to the expected signing of the Whittaker Rail Station Lease on April 21, 1992. Under these circumstances you have asked, from a legal perspective, whether or not the City should execute the proposed Lease with Whittaker. As you know the City hired ATEC to perform a Phase I Plus Environmental Report. In addition to conducting its own study, ATEC was supplied with copies of environmental reports delivered to the City by Whittaker. We have recently received the ATEC Report, but as of this date have not completed our review of the Report. We will address the ATEC Report in a separate communication. We anticipate that the PEA will, to some extent, confirm the results of -the ATEC Report. Jeff Kolin March 30, 1992 Page 2 It is our recommendation that the Lease provide that Whittaker will proceed to promptly complete the PEA Report and to perform any remedial work that may be recommended by.DTSC. The City should have the option to cancel the Lease in the event the City is not satisfied with the PEA Report, the DTSC's response, or the remedial action, (if any) undertaken by Whittaker. If the Lease contains these provisions, we do not believe the failure to obtain the PEA Report by April 21 should preclude.the City from executing the Lease. If you have any questions, please give me a call. Kindest regards, f ' Dennis P. Burke cc: George A. Caravalho, City Manager Carl K. Newton, Esq. 10536.1