Rancho Palos Verdes City Council
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SEPTEMBER 7, 2004 NEW LEASE WITH DOUG HATANO FOR ANNIE’S SHORELINE PARK STAND AT ABALONE COVE SEPTEMBER 7, 2004 NEW LEASE WITH DOUG HATANO FOR ANNIE’S SHORELINE PARK STAND AT ABALONE COVE

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

FROM: ASSISTANT CITY MANAGER

DATE: SEPTEMBER 7, 2004

SUBJECT: NEW LEASE WITH DOUG HATANO FOR ANNIE’S SHORELINE PARK STAND AT ABALONE COVE

RECOMMENDATION

1) Approve the new lease with Doug Hatano for Annie’s Stand at Abalone Cove Shoreline Park; and 2) Authorize the Mayor and City Clerk to execute the lease agreement.

INTRODUCTION

Annie’s Stand at Abalone Cove Shoreline Park has been closed since mid-2002. In June 2004, Douglas Hatano contacted staff about the possibility of re-opening the stand to resume selling fresh flowers and produce. Douglas Hatano is the son of James Hatano, who is the last Japanese-American commercial farmer still in business on the Peninsula (see attached Peninsula News article). Staff suggested that Mr. Hatano prepare a written proposal, which could then be presented to the City Council for consideration. The attached proposal is the subject of tonight’s agenda item.

BACKGROUND

Japanese-American families have farmed on the southern slopes of the Palos Verdes Peninsula since the early 1900’s. As the Peninsula began to develop rapidly in the 1950’s and 1960’s, several of the families operated roadside stands along Palos Verdes Drive South, selling their fresh produce and flowers to passing motorists. James Ishibashi and his family operated Annie’s Stand, named after his wife, at Abalone Cove Shoreline Park from 1978 until 2002. The earliest lease found in the City’s records was executed on May 30, 1978 between Los Angeles County and Mr. Ishibashi shortly after the County acquired the property as a public park. The lease was renewed on September 3, 1981 for an initial term of two years and then converted to a month-to-month arrangement thereafter. In 1983, the City entered into an agreement with the County to operate and maintain the Abalone Cove property. On January 10, 1984, the City sent a letter to Mr. Ishibashi indicating that the terms of the County lease would continue to remain in effect under the City’s management. In 1988, the City assumed ownership of the property from the County.

James Ishibashi passed away in early 2002 at the age of 83. Although his daughter, Yvonne Yamashita, continued to pay the monthly rental fees to the City, she only operated the stand intermittently in the months following her father’s death. In June 2002, staff contacted Ms. Yamashita about the status of the lease. At that time, Ms. Yamashita indicated that she is interested in entering into a new lease with the City and continuing to operate the produce stand at Abalone Cove. On July 16, 2002, the City Council authorized staff to approve a new lease agreement with Yvonne Yamashita for the continued operation of the stand. However, Ms. Yamashita never executed the new lease agreement and finally notified the City in August 2002 that she was no longer interested in operating the stand. Annie’s Stand has remained vacant since that time.

Following the closure of the stand, staff asked the Los Serenos de Point Vicente docent organization if it would be interested in converting the stand into an interpretive display and bus turn out area to use in conjunction with the many school tours of the tide pools that it members conduct at Abalone Cove each year. While the Docent Board was not interested in this idea, it did express an interest in moving the stand to the Point Vicente Interpretive Center and integrating it into the plans for an Outdoor History Museum on this site. Based on this request, future use of the property was been put on hold, pending a decision on the grant application for the Outdoor History Museum, which was submitted to the state in January 2004.

Nevertheless, over the last two years, staff has been contacted from time to time by individuals interested in leasing the site from the City for a variety of commercial uses. Proposals have ranged from selling orchid plants and artwork to converting the site into a South African-style tea garden. Staff has discouraged these inquiries because, with the exception of Annie’s Stand, the City has not permitted commercial businesses to operate in its public parks. Staff considers Annie’s Stand to be a unique situation for several reasons. It was a pre-existing use on the property when it was acquired from the County in 1978. It was also the last remaining produce stand in the community still operated by one of the original Japanese-American families. And finally, unlike other commercial businesses, its continued existence was consistent with the policy of the General Plan to "encourage continued operation of existing produce and flower stands" (General Plan Page 100).

SITE DESCRIPTION

The existing approximately 300 square foot stand is situated adjacent to Palos Verdes Drive South between the intersection of Seacove Drive and the entrance to the upper parking lot at Abalone Cove Shoreline Park (see attached Exhibit "A" to Draft Lease Agreement). A large tree shades the open wooden structure and has a freestanding two-sided sign located immediately to one side of the structure. The stand has its own access from the circular driveway on Palos Verdes Drive South is right turn in and out only onto the southern barrel of the divided arterial roadway, although U-turns are permitted at Seacove Drive and at the entrance to Wayfarer’s Chapel. The stand, driveway and unmarked parking area are fenced off from the remainder of the park site and the driveway entrances can be chained off at night.

DISCUSSION

Douglas Hatano was born and raised on the Peninsula. He farmed along side his father James from 1979 to 1984. He subsequently moved to the California central coast and continued to farm in Arroyo Grande from 1984 to 1991. He and his wife Shirley are interested in relocating back to the Peninsula to be closer to their family. Douglas Hatano has submitted a proposal to the City to lease Annie’s Stand and use it to sell fresh flowers and produce grown by local farmers, including but not limited to Hatano Farms (see further discussion below). He would like to modify the name of the business to "Annie’s by Hatano Farms" to maintain the historical identity of the stand, while acknowledging the new ownership.

Initially, Mr. Hatano is proposing to operate the stand four days a week, Thursday through Sunday. The hours of operation would vary on holidays and/or by season. In addition, operation of the stand would be dictated by weather conditions and harvest time of particular crops. Mr. Hatano would also like the flexibility to increase the operating schedule based on consumer demand. The City had not previously specified any hours of operation to the Ishibashi family. Staff has no objection to this request and would simply suggest limiting the hours of operation of the stand from 9:00 AM to dusk. In addition, staff would recommend that no significant structural changes be allowed to the stand. In addition to routine maintenance and repairs, Mr. Hatano has asked to add shutters to the front of the stand in order to secure it when the business is closed. Staff has no objection to this request, provided that the City Manager’s Office and the Building & Safety Division approve the final design. Any changes to the existing signage on the property would be subject to review and approval by the City’s Planning Department.

As mentioned previously, Douglas Hatano intends to grow a portion of the flowers and produce to be sold at the stand at Hatano Farms. Hatano Farms consists of two parcels, both located on City-owned property. James Hatano cultivates 5.5 acres at Upper Point Vicente Park and 8.5 acres at Lower Point Vicente Park. He has leased a portion of Upper Point Vicente Park since at least 1973, when it was still under control of the United States Army. He has leased land on Lower Point Vicente since 1982, when the City first took over the management of the property from the County. Both of Mr. Hatano’s leases with the City are up for renewal on March 31, 2006. Currently, his predominate crops are fresh flowers and prickly pear cactus.

Because staff had previously approached the Point Vicente Docents about the possibility of moving Annie’s Stand to the Point Vicente Interpretive Center, staff contacted Docent President Vic Quirarte to discuss the proposal lease the stand to Douglas Hatano. Mr. Quirarte indicated that the Docents were initially interested in moving the stand to Lower Point Vicente in order to preserve the structure for its local historic value. However, he indicated that the Docents would much prefer to see the stand re-opened at it current location, in keeping with the tradition of Japanese-American farming on the Peninsula.

CONCLUSION

Japanese-American farmers have a long history on the Palos Verdes Peninsula. Once the most predominant land use activity on the hill, development pressures have caused agriculture to diminish over the last few decades to the point where only a few acres remain under cultivation. Because publicly owned property has sheltered them from the private development pressures found elsewhere in the community, Abalone Cove and the parks at Point Vicente still retain the last remnants of this local heritage. Further, since its closure in 2002, the City has received many calls from residents expressing regret over the closure of the Annie’s Stand. It is apparent that this small family-run business was a cherished community institution. Entering into new lease with the Hatano family to re-open and operate the stand at Abalone Cove Shoreline Park would help to preserve the last remaining roadside produce stand in the City. Therefore, staff recommends support for this proposal.

FISCAL IMPACT

The City’s records show that James Ishibashi leased the property for $275.00 per month, or $3,300 per year. By entering into new lease agreements with Douglas Hatano, the City will again receive General Fund revenue for the use of this property. Due to the City’s long-term relationship with the Hatano family and the fact that this is the last remaining flower and produce stand in the City, staff is not recommending an increase in rent. As required by state law, the Hatanos would be required to pay property taxes on the property directly to the Los Angeles County Tax Assessor. For reference, when James Ishibashi previously leased the property from the City, it was assessed at a rate of $277 per year.

Respectfully submitted:

Carolynn Petru

Assistant City Manager

Reviewed,

Les Evans

City Manager

Attachment:

Draft Lease Agreement for Produce Stand at Abalone Cove Shoreline Park

LEASE AGREEMENT BETWEEN

THE CITY OF RANCHO PALOS VERDES AND DOUGLAS HATANO

AUTHORIZING THE LEASE OF CITY PROPERTY

AT ABALONE COVE SHORELINE PARK

FOR A FRUIT, VEGETABLE AND FLOWER ROADSIDE STAND

THIS LEASE AGREEMENT ("Lease"), is made and executed as of the ___ day of ________________, 2002, by and between the City of Rancho Palos Verdes, a municipal corporation of the State of California, hereinafter called "City" and Mr. Douglas Hatano, hereinafter called "Lessee," who agree as follows:

  1. City shall lease a portion of the Abalone Cove Shoreline Park property, located at 5970 Palos Verdes Drive South, including the roadside produce stand, hereinafter called "Premises," that is depicted 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 January 1, 2005, and ending on December 31, 2009.
  3. The annual rental payment shall be $275.00 per month, 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 the existing structure shall not be altered (except normal repairs and maintenance), expanded or moved on the property without prior written consent of the City Manager of the City. Any alterations to the signage on the property shall be subject to review by the City’s Planning Department. Lessee shall remove any personal property installed or placed on the Premises 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 a roadside produce stand selling fruit, vegetables and flowers. Incidental retail sales of related items, such as greeting cards and giftware items, shall be limited to 15% of total sales. Hours of operation shall be limited to 9:00 AM to dusk each day that the stand is open. Lessee shall chain and lock the driveway entrances to the Premises parking area when the produce stand is closed and shall provide City with the lock combination or a copy of the key. No person shall be permitted to reside on the Premises.
  7. 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.
  8. Lessee shall not change or alter the existing advertising signs or add new signage on the Premises without prior permission in writing from the City Manager of the City. The City Manager may request review of any modified or new signage by the Planning, Building and Code Enforcement Department.

9) There is no water, gas, sewer or telephone service to the Premises and the existing electrical service may need to be upgraded. Any new utility service or upgrade of existing service to Premises shall be provided at the Lessee’s sole cost and expense, subject to the approval of City.

  1. City may inspect Premises at any time and for any purpose.
  2. 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/her employees, guests and visitors.
  3. 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 with a Best’s rating of at least A. 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:
    1. The policy number;
    2. The date upon which the policy will become effective and the date upon which it will expire;
    3. The names of the named insured and any additional insureds;

d. The subject of the insurance;

e. The type of coverage provided by the insurance;

    1. The amount or limit of coverage provided by the insurance;
    2. A description of all endorsements that form a part of the policy; and
    3. 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.
  1. 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.
  2. 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.
  3. 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.
  4. Any waiver by City of any breach of any one 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.
  5. If any of the provisions in this Agreement are unenforceable, the balance shall be enforced.
  6. 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.
  7. This Agreement shall be interpreted under the laws of the State of California.
  8. Either party may terminate this Agreement by giving the other party written notice at least thirty (30) days prior to the date when the termination is to become effective.
  9. Address for payments of rent and notices shall be sent to:

City: City of Rancho Palos Verdes

30940 Hawthorne Boulevard

Rancho Palos Verdes, California 90275

Attention: City Manager

Lessee: Mr. Douglas Hatano

c/o Ms. Mica Mullin

608 Camino de Encanto

Redondo Beach, California 90277

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written.

Dated: ________________ LESSEE

By: __________________________

Douglas Hatano

Date: _________________ CITY OF RANCHO PALOS VERDES:

By: ___________________________

Mayor

ATTEST:

By: _____________________

City Clerk