III. Agreement
The Site is approximately 2.1 acres and is located on a portion of SCE's Malibu Substation located in the City of Agoura Hills.3 The use of the Site for operation of a parking lot and office facility, is consistent with its primary utility use as a site for above-ground sub-transmission lines and substation. SCE acquired this land from Associated Southern Investment Company in February of 1963.4 The Site currently generates no OOR. Under the proposed lease with Silagi Trust, the 2.1 acres will generate an expected base revenue of $21,954 in Years 1-10, $23,052 in Years 11-20, $24,205 in Years 21-30, $25,415 in Years 31-40 and $26,686 in Years 41-50. Thus, revenue from the proposed lease represents substantial OOR for the benefit of SCE's ratepayers.
The Agreement grants Silagi Trust the option to lease the Site for the development and operation of a parking lot and office facility. The initial term of the lease is fifty (50) years, beginning on the date Silagi Trust exercises the option. Silagi Trust can renew the lease for three additional five (5) year terms. If the Commission grants this Application, a lease will be created upon Silagi Trust's exercise of the option.
Under the Agreement, Silagi Trust will pay annual base rent starting at $21,954 in Years 1-10 and escalating to $26,686 in Years 41-50. The base rent shall be further adjusted upon exercise of each renewal option based on the then current fair rental value of the Site, excluding the value of Silagi Trust's improvements.
The Agreement provides that Silagi Trust's activities must not interfere with the operation of the electrical sub-transmission facilities that cross the property located on the Site. Silagi Trust is not allowed to use or store hazardous substances, explosives or flammable materials on the Site. Any equipment used by Silagi Trust on or adjacent to the Site will be used and operated to maintain a minimum clearance of seventeen (17) feet from all overhead electrical conductors. Additionally, SCE requires Silagi Trust to maintain a minimum ten (10) foot radius around all steel and wood poles. There are no transmission towers on the property that are at least sixteen (16) feet wide and capable of supporting a gross load of forty (40) tons on a three-axle vehicle. SCE also has the right to approve construction plans and specifications and the ability to review the selection of a general contractor for the development project.
SCE retains the right and authority to enter the Site at any and all reasonable times to inspect the Site. SCE also has the right to impose temporary restrictions on Silagi Trust's right to enter, occupy and use the Site to allow SCE to perform work, if necessary, on electrical facilities located on the Site. SCE also retains the right to take all or part of the leasehold by eminent domain or inverse condemnation.
Silagi Trust is responsible for all personal property taxes, as well as other general or special assessments or fees levied against the Site or the improvements thereon. Silagi Trust is also responsible for obtaining all permits and approvals for construction and any zone changes or use permits required for the operation of a parking lot and office facility from any agency having jurisdiction. Silagi Trust must also maintain appropriate comprehensive general liability insurance, comprehensive auto liability insurance, and workers' compensation insurance. Silagi Trust further agrees to indemnify SCE against all liability for damages or injury to persons on the Site except to the extent caused by SCE's negligent or willful misconduct.
3 Site description: The Site is the northern 2.1 acre portion of SCE's Malibu Substation property which is bounded on the west by an office development project owned by the Silagi Trust, on the north by a residential lot held as open space, on the east by Kanan Road, and on the south by Canwood Street. 4 The book value of the 2.1 acre site is $8,608.74.
