ALJ/KJB/hl2 Mailed 9/8/2003
Decision 03-09-006 September 4, 2003
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) for Authority to Lease Available Land on two Sites located on the Gould-Mesa Transmission Right of Way to Park Edison. |
Application 03-04-029 (Filed April 25, 2003) |
DECISION GRANTING APPROVAL
UNDER PUBLIC UTILITIES CODE SECTION 851
FOR A LEASE OF UTILITY PROPERTY
We grant the Application of Southern California Edison Company (SCE) for authority to lease available land under Pub. Util. Code § 851.1 The SCE property consists of a 3.0 acre site located on a portion of SCE's Gould-Mesa transmission right of way in the City of Rosemead (Site 1); and a 2.5 acre site also located in the Gould-Mesa right of way in Rosemead (Site 2). Site 1 and Site 2 (collectively, Sites) are adjacent to one another. The Sites are part of the Gould-Mesa 220-kilovolt system and include, among others, Commission jurisdictional facilities. Lease 1 and Lease 2 (collectively, Leases) are sought to permit Park Edison, LLC (Park Edison or Lessee)2 to develop and operate an industrial office complex on Site 1 and a self-storage facility on Site 2.
Background
Site 1 is subject to an Option Agreement (Option) between SCE and Park Edison dated May 20, 2002. Under the terms of the Option, upon approval by the Commission, SCE and Park Edison will enter into a lease of Site 1 (Lease 1). Pursuant to the terms of Lease 1, Park Edison will lease Site 1 from SCE for development and operation of an industrial office complex for an initial term of 45 years, with two additional 10-year renewal terms. The annual base rent rises throughout the initial term of Lease 1 as follows:
Year 1 $ 25,000
Year 2 $ 50,000
Year 3 $ 75,000
Year 4 $ 80,000
Years 5-7 $ 90,000
Years 8-10 $ 95,000
Years 11-13 $ 100,000
Years 14-17 $ 110,000
Years 18-20 $ 115,000
In the twenty-first, thirty-first and forty-first years of the Lease term and upon exercise of any renewal option, base rent will be adjusted to fair rental value, excluding the value of Park Edison's improvements, but not less than the base rent in the immediately prior year nor more than the base rent in the immediately prior year compounded annually at 3% per year for 10 years.
Site 2 is subject to an Option Agreement (Option) between SCE and Park Edison dated June 17, 2002. Under the terms of the Option, upon approval by the Commission, SCE and Park Edison will enter into a lease of Site 2 (Lease 2).
Pursuant to the terms of Lease 2, Park Edison will lease Site 2 from SCE for development and operation of a self-storage facility for an initial term of 45 years, with two additional 10-year renewal terms. The annual base rent rises throughout the initial term of the Lease as follows:
Year 1 $ 50,000
Year 2 $ 100,000
Years 3-7 $ 150,000
Years 8-12 $ 165,000
Years 13-17 $ 181,500
Years 18-20 $ 199,650
In the twenty-first, thirty-first and forty-first years of the Lease term and upon exercise of any renewal option, base rent will be adjusted to fair rental value, excluding the value of Park Edison's improvements, but not less than the base rent in the immediately prior year nor more than the base rent in the immediately prior year compounded annually at 3% per year for 10 years.
Both Leases provide that Park Edison's activities must not interfere with the operation of the electric facilities on and adjacent to the Sites. To that end, Park Edison is forbidden to use or store hazardous substances, explosives or flammable materials on the Sites. Further, any equipment used by Park Edison on or adjacent to a Site must maintain at all times a clearance of at least 17 feet from all overhead electrical conductors. Park Edison must maintain a minimum radius of 50 feet around all tower legs and 10 feet around all poles and anchors and provide access roads to a Site that are at least 16 feet wide and capable of supporting a gross load of 40 tons on a three-axle vehicle.
SCE retains various rights under the Leases including the rights to:
· Enter the Site at any and all reasonable times to inspect the property;
· Impose temporary restrictions on Park Edison's right to enter, occupy and use the site in order to perform necessary work on the electrical facilities located on the Site; and
· Take back all or part of the leasehold by eminent domain or inverse condemnation.
Park Edison is also required to:
· Pay all personal property taxes, general or special assessments, or other fees levied against a Site or the improvements to be constructed thereon;
· Obtain all permits and approvals for construction and any zoning changes or use permits required for operation of its business on a Site;
· Maintain appropriate comprehensive general liability, auto liability and worker's compensation insurance; and
· Indemnify SCE against all liability for damages or injury to persons on a Site except to the extent caused by SCE's negligent or willful misconduct.
