Item Coversheet
Item #4.

Staff Report 023-20

TO:

Mayor and City Council




FROM:

Eric Holmes, City Manager




DATE:

2/24/2020








SUBJECT


Agricultural lease renewal for the Vancouver Lake Lowlands with Firestone Pacific Foods LLC
Key Points
  • Firestone Pacific Foods, LLC (FPF), has leased this property from the City of Vancouver since 2000.
  • Several changes have occurred since their current 25-year lease was approved in 2007 (Exhibit A) thus necessitating an updated lease reflecting actual operations.
  • A portion of this property is included in a “Vancouver Lake Wetlands Restoration Project” that occurred in 2004 where the City of Vancouver entered into a Site Specific Agreement with Ducks Unlimited, Inc. until 2029.  This agreement restricts the uses of certain portions of this property to certain specific agricultural activities for the purpose of benefiting migratory waterfowl.
  • FPF has been an exceptional steward of the land and completed cost maintenance in Area C over the past lease period. 
  • City Council is being asked to approve a 10-year lease renewal to continue leasing the property for both berry and grass/grain crops.

Strategic Plan Alignment
N/A
Present Situation

In 1994, with Council authorization, the City of Vancouver acquired 140 acres of the Dugan Estate, located within the southeast portion of the Vancouver Lake Lowlands. The City’s acquisition followed Clark County’s purchase of the remaining balance of the Dugan Estate and the neighboring Cenex property. Until 2000, the City and County portions of the property were managed through separate lease agreements with Erickson Farms.

In 1999, the Parks and Recreation Department negotiated directly with Erickson Farms and FPF for a new lease package of the properties which would provide more emphasis on long term maintenance, improving wildlife habitat, and revenue generation. 

Since then, the property has undergone significant changes and is need of being updated as follows:  

  1. The current lease (Exhibit A) is between Vancouver-Clark Parks and Recreation Department (VCPRD) & FPF, however, VCPRD is no longer in existence.
  2. There was a land swap between the City of Vancouver and FPF in 2014.
  3. FPF has expanded its berry crops in Area B.
  4. Area C has been transformed into land that can now be cultivated, due to the intense and costly maintenance FPF has performed on this property. Since select areas of Area C can now be utilized for agricultural crops, even with the high risk of flooding, the proposed lease no longer allows FPF to perform maintenance in lieu of monetary compensation. 

 

The City proposed to manage the property as one ownership, yet divide it into three management areas (Area A, Area B, and Area C), with Area A being low risk of flooding and Area C being at a high risk of flooding annually, thus limiting what can be done with this area. 

FPF has agreed to $250/acre for berry production in Area A, and $175/acre for berry production in Area B. At this time, and into the future, the City will no longer pay FPF for the maintenance work of Area C, nor will FPF make any rental payment on this portion of land due to the high risk of flooding and mix of uses. 

Area C includes property managed by various agencies and partners. A majority of the area consists of property that is managed under the Wetland Reserve Program (WRP) as habitat and a food source for migratory waterfowl. The WRP is a voluntary program offering landowners the opportunity to protect, restore, and enhance wetlands on their property. The area includes a series of engineered wetlands and ponds as well as approximately 90 acres that is utilized by the City of Vancouver’s Engineering Department for the application and spreading of “Agriproduct.”  Agriproduct is derived from the treatment of food solids from Frito Lay and Great Western Malting and has been classified as a fertilizer that is spread annually. 


Advantage(s)
  1. All maintenance of this property will be the sole responsibility of the lessee.
  2. By having the property cultivated and leased it provides a presence protecting it from prohibited uses and encroachments.
  3. FPF will continue to allow the City of Vancouver Solid Waste Department to spread Agriproduct on a portion of Area C, thus saving the City the cost of finding other ways to manage this product.
  4. This property is limited to being used for agricultural purposes as well as critical wildlife habitat.
  5. The City will receive annual revenue for this lease.

Disadvantage(s)
  1. The property will have limited public access while it is leased.
  2. The lease has the inclusion of termination language, which requires the Lessor to reasonably compensate the Lessee if it becomes necessary to terminate the agreement without cause prior to the harvesting of a crop older than four years old. After a crop is four years old, no compensation is required. Neither party anticipates this becoming an issue.

Budget Impact

The lease includes annual revenue of $17,950 to the general fund.


Prior Council Review
None. 
Action Requested

Authorize the City Manager to execute the Real Property Lease Agreement with Firestone Pacific Foods, LLC, and authorize any subsequent legal action necessary to enforce the terms of the same.

 

Jeremy Kanooth, Park Developer, 487-8320

 


ATTACHMENTS:
Description
Exhibit A - Existing lease from 2007
Real Property Lease Agreement with map of property