CC SR 20200317 06 - Hatano Farms Status Report
CITY COUNCIL MEETING DATE: 03/17/2020
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA DESCRIPTION:
Consideration and possible action to receive a report on the Hatano Farm lease
agreement at Upper Point Vicente.
RECOMMENDED COUNCIL ACTION:
(1) Receive and file a report on the history and status of the Hatano Farm lease
agreement at Upper Point Vicente; and,
(2) Provide direction to Staff regarding the possible future termination of this
agreement and future use of this site.
FISCAL IMPACT: The City receives $100 per year from the current operator of the
Hatano Farm at Upper Point Vicente.
Amount Budgeted: $100
Additional Appropriation: N/A
Account Number(s): 101-300-5180-3602
(General Fund – PVIC/Rent & Leases)
ORIGINATED BY: Kit Fox, AICP, Interim Deputy City Manager
REVIEWED BY: Same as above
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Aerial photo of Hatano Farm lease area (page A-1)
B. 2006 Hatano Farm lease agreement (page B-1)
C. December 4, 2012 City Council agenda report (page C-1)
D. May 20, 2014 City Council agenda report (page D-1)
E. July 2, 2014 letter to James Hatano (page E-1)
EXECUTIVE SUMMARY:
For many years, the late James Hatano farmed a 5½-acre plot near City Hall at Upper
Point Vicente (UPV) on land that was formerly owned by the federal government and
was transferred to the City in the 1970s via the Federal Lands to Parks Program.
Mr. Hatano most recently farmed the lot under a lease that expired in 2011. In 2012, the
City Council explored the possibility of “converting” the farm site so that it would be
consistent with the National Park Service’s interpretation of a Program of Utilization
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(POU), which outlines uses and restrictions for the site. Ultimately, the City Council
decided in 2014 to allow the farm to continue operating, on a month-to-month basis,
indefinitely. Staff has identified other potential future uses for the farm site that may be
more consistent with the POU. As such, Staff seeks direction from the City Council to
explore these other uses, which would require termination of the current lease
agreement for the existing farm at UPV.
BACKGROUND AND DISCUSSION:
History and Status of the Hatano Farm at UPV
James Hatano historically farmed portions of the Upper Point Vicente (UPV) property for
many years, through a series of formal and informal agreements with the City
(Attachment A). Prior to the City’s acquisition of the property in 1976, Mr. Hatano’s
lease at UPV was with the U.S. Army. On May 16, 2006, the City entered into a five-
year lease agreement with Mr. Hatano under which he continued to pay $100 per year
for the use of a ±5½-acre portion of the UPV property (Attachment B).
The City’s lease agreement with Mr. Hatano expired on March 31, 2011. Although
expired, the City continued to receive annual rent payments for the use of UPV.
However, any request to transfer or re-assign the expired lease required City approval.
In summer 2012, Staff was contacted by Mr. Hatano’s daughter, Dorothy Scheid, who
expressed interest in extending the lease at UPV and re-assigning it to Mr. Hatano’s
long-time foreman, Martín Martinez. Staff met with Mrs. Scheid, Mr. and Mrs. Hatano
and Mr. Martinez on September 12, 2012 to discuss the process of formalizing this
request. Mr. Hatano subsequently submitted a written request on October 1, 2012,
followed by supplemental requests from Mr. Martinez to Staff and the City Manager on
November 5, 2012.
On December 4, 2012, the City Council considered reassigning and extending the lease
in light of three significant policy issues (Attachment C):
1) Consistency with the Program of Utilization (POU);
2) Consistency with the Rancho Palos Verdes General Plan and the Palos Verdes
Nature Preserve; and,
3) The form and content of any future lease agreement, including the consideration
of alternate vendor(s), compensation and historical continuity.
Consistency with the POU posed the most intractable of these issues because the
National Park Service (NPS) insisted that “[agriculture] is not a public park and
recreation use and is not allowed on lands conveyed through the Federal Lands to
Parks Program.” Staff spent the next 18 months exploring the possibility of an NPS
“conversion” for the farm site that would allow it to remain and operate at UPV.
However, by May 20, 2014, Staff presented its findings to the City Council that the
conversion was financially infeasible (Attachment D). The City Council subsequently
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directed Staff to allow Mr. Hatano to continue to operate the farm indefinitely under the
terms of the expired lease agreement (Attachment E).
Mr. Hatano passed away in early 2015, and Mr. Martinez has con tinued to pay the
annual $100 rent (in biannual installments) and farm the UPV property. The rent is
currently paid up through March 31, 2020, with the next installment due on or before
April 1, 2020. Mr. Martinez grows cut flowers, vegetables and fruit, including large
stands of opuntia cactus grown for their flesh (nopales) and fruit (prickly pears).
Potential Future Termination of the Lease Agreement and Use of Farm Site at UPV
The City’s General Plan Land Use Element includes Goal No. 7 (p. L-7):
Existing agricultural uses within the City shall be allowed so long as they
are in concert with the environmental objectives stated elsewhere in the
General Plan.
In furtherance of this goal, the General Plan includes Land Use Policy No. 29 (p. L-9):
Encourage preservation of agricultural activities.
Finally, the discussion of agricultural uses in Urban Activity Areas (p. L-24) notes:
There is one farm is located on a leased portion of City-owned Alta
Vicente Reserve, which could be maintained as a visual accent without
placing a major limitation on the uses that share the site.
With respect to the Palos Verdes Nature Preserve, since 2006 the City has designated
the portion of UPV containing the Hatano Farm as a part of the Preserve in both the
Natural Communities Conservation Plan/Habitat Conservation Plan (NCCP/HCP) and
the related Public Use Master Plan (PUMP). The PUMP supports continued agricultural
use at UPV only until such time as the existing lease expire s, Mr. Hatano retires or
habitat restoration of the site becomes possible. The Palos Verdes Peninsula Land
Conservancy (PVPLC) has no immediate or near-term plans to restore former habitat at
the farm site. As such, allowing the farm to remain is consistent with the NCCP/HCP or
the PUMP.
NPS has previously mentioned that the execution of a concession agreement (as
opposed to a lease agreement) might be consistent with the POU for UPV. Under such
as agreement, the proposed use would need to be under the City’s control, but with a
concessionaire handling day-to-day operations on the City’s behalf. The
appropriateness of any kind of concession agreement for agricultural use would need to
be reviewed by NPS. In the past, alternate agricultural uses of the property considered
have included the following (the NPS has not opined on the appropriateness of any of
these possible future uses):
Community garden
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Native plant nursery for the City’s nature preserve and/or the revegetation of the
fuel modification areas owned by the City
“Kitchen garden” for Terranea Resort
As described above, the City receives $100 per year for the right to farm at UPV, a
nominal amount that is far below market rent for a ±5½-acre site. This was justified in
furtherance of Mr. Hatano’s longstanding use of the property and the historic value to
the community of maintaining the tradition of the Japanese American “truck farm” on the
Peninsula. In 2012, Staff estimated that the annual market-rate rent for coastal
agricultural land would be roughly $2,200 to $3,500 per acre, which equate d to $12,100
to $19,250 per year for the ±5½-acre site.
The Hatano Farm at UPV is the last vestige of the Japanese American “truck farms” that
once dominated the Palos Verdes Peninsula, particularly before World War II. With
Mr. Hatano’s passing and Mr. Martinez’s assumption of operational control in 2015,
there is no longer a direct Hatano family connection to this historic land-use practice at
UPV. If the lease agreement with Mr. Martinez is eventually terminated, Staff believes
that it would be appropriate to commemorate the Hatano family’s history on t he site in
some fashion. The lease agreement allows either party to terminate at any time with 30
days’ notice, and obligates Mr. Martinez to remove all equipment and person al property
from the site.
CONCLUSION:
In conclusion, Staff seeks direction from the City Council about the possible future use
of the farm site at UPV, including whether and/or when the City should begin the
process to terminate the existing lease agreement. Removal of the current farm would
be consistent with NPS’s position that it is not a permitted use under the POU. There
may be similar, non-commercial agricultural uses that the City might propose for the
property, but these would still be subject to NPS review and approval. The City Council
will need to consider what the terms and compensation would be for any future use of
this portion of the UPV property. Finally, Staff recommends commemorating the Hatano
family elsewhere on the UPV property in the event that the farm is removed or replaced .
ALTERNATIVES:
In addition to the Staff recommendations, the following alternative actions are available
for the City Council’s consideration:
1. Direct Staff to allow the Hatano Farm to continue to operate indefinitely
under the terms described in the letter dated July 2, 2014.
2. Provide other direction to Staff regarding the future disposition of the farm
site at UPV.
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Hatano Farm Aerial PhotoA-1
lEASE AGREEMENT BETWEEN
THE CITY OF RANCHO PALOS VERDES AND JAMES HATANO
AUTHORIZING THE lEASE OF CITY PROPERTY
AT POINT VICEN"rE PARK/CIVIC CENTER
FOR AGRICULTURAL PURPOSES
THIS LEASE AGREEMENT ("Lease"),is made and executed as of the
<1'6 day of May ,2006,by and between the City of Rancho Palos
Verdes,a municipal corporation of the State of California,hereinafter called "City"
and Mr.James Hatano,hereinafter called "Lessee,"who agree as follows:
1)City shall lease approximately 5.5 acres,more or less,of City land at the
Point Vicente Park/Civic Center property located at 30940 Hawthorne
Boulevard,hereinafter called "Premises,"as delineated and shown in the
·cross-hatched area on the plan designated as Exhibit "A"attached hereto
and incorporated by reference herein.
2)The term of the lease is for 60 months,commencing on April 1,2006,and
ending on March 31,2011.
3)The annual rental payment shall be $100.00 per year,payable in advance.
Payment shall be made to the City of Rancho Palos Verdes.
4)Lessee shall neither transfer nor assign this lease or any property being
leased from City without prior permission in writing from the City Manager
of the City.
5)Lessee accepts the Premises in its present state and condition and waives
any and all demand upon City for alteration,repair,or improvement
thereof.No new structures of any kind shall be placed on the site,and no
existing structures shall be altered (except normal repairs and
maintenance),expanded or moved on the property without prior written
consent of the City Manager of the City.All such structures and/or
personal property installed or placed on the Premises by Lessee shall be
removed by Lessee prior to the termination of this Agreement,and in the
event of the failure to do so,title thereto shall vest in City or shall become
the property of City upon the termination of this Agreement.
6)Use of Premises shall be limited to agricultural or horticultural purposes
only,excluding the grazing of livestock.No person shall be permitted to
reside on the Premises.
7)Lessee shall have the right to harvest,gather,and remove any crops he
plants or grows on the Premises.
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B-1
Lease Agreement wit~~;~es Hatano:Point Vicente/Civic ~~:]l.~r Property
Page 2 of 4
8)Lessee shall assume the risk of loss,damage or destruction due to theft,
fire and casualty of any and all fixtures and personal property belonging to
Lessee that are installed or placed on the Premises.
9)Lessee shall not display advertising signs or other matter at the Premises.
10)City may inspect Premises at any time and for any purpose.
11)Lessee agrees to defend,indemnify and hold harmless City,its officers,
agents and employees from any and all claims for loss,damages,injury or
death to persons or damage to or loss of property,including attorney's
fees and court costs,arising out of the use of the Premises by Lessee,or
by his employees,guests and visitors.
12)Lessee shall obtain and keep in full force and effect during the term of this
Agreement workers'compensation insurance,in accordance with the
requirements of the California Labor Code and any other applicable laws,
and a policy of general liability insurance.In addition,Lessee shall obtain
and keep in full force and effect insurance in an amount sufficient to cover
all equipment,inventory and other personal property of Lessee that is kept
on the Premises in accordance with the provisions of this Agreement.All
such insurance policies shall be issued by insurance companies admitted
to do business in the State of California.The policy of liability insurance
shall:(a)name City and its officers,agents and employees as additional
insureds;(b)shall insure and protect City and its officers,agents,and
employees from and against any and all liability arising out of or
connected with the use by the Lessee of the Premises;(c)shall provide a
combined single limit for the liability covered in the amount of $500,000;
and (d) be noncancellable without thirty days prior written notice thereof to
City.Lessee shall file with the City Clerk either certified copies of said
policies or a certificate of insurance for each of the required policies
executed by the company issuing the policy certifying that the policy is in
force and providing the following information with respect to said policy:
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a.
b.
c.
d.
e.
The policy number;
The date upon which the policy will become effective and the
date upon which it will expire;
The names of the named insured and any additional
insureds;
The subject of the insurance;
The type of coverage provided by the insurance;
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B-2
,.\.......')c"'..........''y'
t ...t
Lease Agreement witrl"James Hatano:Point Vicente/Civic Getner Property
Page 30f4
f.The amount or limit of coverage provided by the insurance;
g.A description of all endorsements that form a part of the
policy;and
h.An endorsement stating that City and its officers,agents and
employees are named as additional insureds under the
liability policy.Lessee's authorized activities on the
premises shall be suspended during any period that Lessee
fails to maintain said policies in full force and effect.
13)Lessee agrees to comply with all applicable regulations of City and to
maintain the Premises in a clean and sanitary condition.Lessee shall be
responsible for insuring that the Premises will be protected against
'damage or destruction by fire or other causes.Lessee shall repair any
and all damage to the Premises arising out of Lessee's activities thereon.
Lessee shall provide and pay for all utilities required to conduct the
activities permitted by this Agreement.Lessee shall remove all equipment
and other personal property from the Premises upon the termination of
this Agreement and shall leave the Premises in the manner in which it was
found,ordinary wear and tear excepted,and damage or destruction not
caused by the use of the property by Lessee excepted.
14)Lessee agrees to pay before delinquency all lawful taxes,assessments,
fees or charges which at any time may be levied by the State,County,or
any tax or assessment-levying body upon the right of use acquired by this
Agreement,as well as all taxes,assessments,fees and charges on the
equipment used and merchandise sold in connection with the authorized
activities on the premises.
15)This Agreement contains the entire agreement between the parties
relating to the rights herein granted and the obligations herein assumed.
Any subsequent modification to this Agreement shall be in writing and
executed by both of the parties hereto.
16)Any waiver by City of any breach of anyone or more of the terms of this
Agreement shall not be construed as a waiver of any subsequent or other
breach of the same or of any other term thereof,nor shall failure on the
part of City to require exact,full,and complete compliance with any of the
terms of this Agreement be construed as in any manner as changing the
terms thereof or estopping City from the enforcement thereof.
17)If any of the provisions in this Agreement are unenforceable,the balance
shall be enforced.
647640 -3-
B-3
r"-'("'"
Lease Agreement witn""James Hatano:Point Vicente/Civic t;~n(er Property
Page 4 of4
18)In the event of any controversy or dispute regarding this Agreement or
breach thereof,the prevailing party shall be entitled to recover from the
losing party reasonable attorney's fees and court costs.
19)This Agreement shall be interpreted under the laws of the State of
California.
20)Either party may terminate this Agreement by giving the other party written
notice at least thirty days prior to the date when the termination is to
become effective.
21 )Address for payments of rent and notices shall be sent to:
City:
Lessee:
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes,California 90275
Attention:City Manager
Mr.James Hatano
1172 West 24th Street
San Pedro,California 90731
IN WITNESS WHEREOF,the parties hereto have executed this Lease as
of the day and year first above written.
Dated:_
Date:-------'---
ATTEST:
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LESSEE
CITY OF RANCHO PALOS VERDES:
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B-4
B-5
Attachment C
December 4, 2012, City Council Agenda Report
https://s3.amazonaws.com/media.legistar.com/rpv/MeetingDate-2012-12-
04/RPVCCA_CC_SR_2012_12_04_03_Agricultural_Use_At_Upper_Point_
Vicente.pdf
C-1
Attachment D
May 20, 2014, City Council Agenda Report
https://s3.amazonaws.com/media.legistar.com/rpv/MeetingDate-2014-05-
20/RPVCCA_CC_SR_2014_05_20_04_Agricultural_Use_Pt_Vicente_Park
.pdf
D-1
E-1