TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Christopher Cash, Public Works Director
1. Subject
title
Lease Agreement between the City of Orange and Orange Children and Parents Together.
body
2. Summary
This ten-year Lease Agreement, with two five-year extensions, between the City and Orange Children and Parents Together is for the use of the City facility at 392 South Hewes Street (El Modena Library) to operate a Head Start Preschool Program.
3. Recommended Action
recommendation
Approve the ten-year Lease Agreement, with two five-year extensions, between the City and Orange Children and Parents Together; and authorize the Mayor and City Clerk to execute on behalf of the City.
end
4. Fiscal Impact
The Lease Agreement stipulates that Orange Children and Parents Together pays an annual rent of $16,000 for the first two years of the contract, which will go into revenue account 150.0000.44210.00000, OC Head Start Building Maintenance Fund. Under the Lease Agreement, there will be biannual increases of $1,000 over the subsequent ten years, for a total of $180,000 in revenue lease payments over that period.
5. Strategic Plan Goals
Goal 3: Enhance and promote quality of life in the community.
b: Deliver high quality and safe recreational, social, environmental, educational, and cultural services.
Goal 3: Enhance and promote quality of life in the community.
e: Develop and strengthen collaborative partnerships to enhance and promote quality of life programs, projects, and services.
6. Discussion and Background
In 1977, with the use of Federal Grant funds, the County of Orange and the City of Orange jointly constructed the facility located immediately adjacent to the El Modena Branch Library at 392 South Hewes Street, with the sole intention of operating a Head Start Preschool Program. The primary purpose of the Head Start Preschool Program is to provide quality, preschool instruction to children of low-income families.
Orange Children and Parents Together (OCPT), a nonprofit organization, has been operating the Head Start Preschool Programs in the City of Orange since 1967. OCPT operates six Head Start and State preschool programs at various Child Development Centers in the City of Orange, including this facility on Hewes. OCPT works closely with numerous community agencies to provide comprehensive multidisciplinary programs and services to meet the needs of Orange children and families.
The management of City real property and facilities falls within the purview of the Public Works Department. Hence, OCPT has been working and coordinating with staff to draft a new Lease Agreement to replace the one that expired in December 2023. This new Lease Agreement has a ten-year term that ends in December 2033, with two five-year extensions to renew. In addition to agreeing to accept the leased property in its current state, OCPT will also undertake to maintain the leased property.
Moreover, the Lease Agreement sets forth lease payments that remain below the fair market value for properties of similar size and capacity as a reflection of the City's recognition and support of OCPT's significant public service commitment. OCPT provides an invaluable service to the community by offering a no-cost preschool childhood development program to children from low-income families. This initiative promotes educational equity and provides programs that directly benefit underprivileged sections of our community. The reduced lease cost is our collective commitment to social responsibility and an investment in the future of our city’s youth.
As it stands, OCPT’s current lease rate is set at $1,500 per month, payable in ten installments annually. In the newly negotiated Lease Agreement between the City and OCPT, both parties agreed that the lease rate would be adjusted to $1,600 per month. This new rate, still below market value, will be applicable for the first two years with a structured plan for biannual increases of $1,000 thereafter. The total ten-year lease payment from OCPT to the City is $180,000.
Finally, the updated Lease Agreement also includes specific provisions to ensure that OCPT maintains its focus on the public purpose mission of operating the Head Start Preschool Program. These provisions are essential to confirm that OCPT continues to fulfill its vital role in serving the community.
7. ATTACHMENTS
• Lease Agreement