City tries to reassure nonprofits in leasing policy talks

Hermosa Beach is considering revisions to the way it leases city-owned properties, creating concern among local civic groups, that rely on the spaces to hold meetings and events, that they might someday be forced out.

The City Council heard Tuesday evening from Parks and Rec commissioners Robert Rosenfeld and Lauren Pizer-Mains, who were part of a commission subcommittee that began examining the policy nearly a year-and-a-half ago. Tuesday’s meeting produced no official decision, but instead offered guidance to city staff as they crafted policies for approval at a future meeting.

Also guiding the council’s thoughts were a room full of Boy Scouts and representatives of nonprofit groups with decades of history in the city, who said that raising rents on city facilities to commercial rates would make it difficult for them to stay. That reaction was based in part on a one-page memo Rosenfeld and Pizer-Mains provided, summarizing some of their findings. The memo stated that rates for city-owned facilities ought to be determined “in light of rates for the commercial rental/leasing of comparable facilities in the area.”

But in answering questions about the policy, they said that their ideas had been misinterpreted, and noted that the memo also included language asking the city to develop a scaling factor to apply to nonprofits.

“There is nothing in our thinking of allowing seniors, Boy Scouts or orphans to be put out on the street,” Rosenfeld said.

Rather, the commissioners said that their goal was to modernize the city’s approach to how it let out its facilities. Their research showed them that the city lacked a uniform method for addressing who got to access which facility when, and for how much. Changes, they said, could allow more groups access, and maximize the use of city property.

According to staff, the city currently leases 11 different facilities to eight different nonprofit groups. These include the Community Center, the Clark Building, and the classrooms at South Park. But the spaces and the terms of access vary considerably.

For example, later Tuesday night, the city approved an extension of a lease of the Rotary Building on Valley Drive to the Hermosa Beach Rotary Club for the traditional rate of $1 per year. The lease technically expired Aug. 1 of last year, and the council’s action extended it through July 31. The neighboring Kiwanis facility has a lease with similarly generous terms that has traditionally been renewed in 25-year stretches. Both groups deeded their property to the city more than six decades ago, and are responsible for taxes and maintenance.

Councilmember Jeff Duclos said that the leases were a reflection of “different times,” when cities did not think as carefully about facilities access and budget impacts. But, urged on by various nonprofits who stressed their contributions to Hermosa’s civic life, he and other council members also seemed hesitant to demand that facilities be doled out solely on the basis of a cost-benefit analysis.

Steve Peterson, the president of the Rotary Club, said that Hermosa is one of few Rotary clubs to meet in its own building. He acknowledged that other Rotary groups in the area pay a fee to meet at a hotel or restaurant. But moving the meetings, he said, might dampen the group’s spirit.

“Would Rotary exist without the building? I don’t know. We’re a small group. Maybe people will say, ‘I don’t know any more…’” Peterson mused. (Rotary rents out the building to Boy Scout Troop 860, which uses it for meetings and storing books and camping gear; Scouts and their parents worry that, if Rotary Club or a new tenant were charged higher rates, those would likely be passed on, and that the Scouts could not afford it.)

But council members seemed to struggle to differentiate between supporting established groups and avoiding a situation in which the city was “gifting public funds,” such as in the case of a group that uses a below-market rent from the city to make money for itself.

Part of the difficulty is that the demand for city facilities is not perfectly understood. The commission subcommittee was able to assemble good data for the Community Center, but its information about other spaces is not as good. Public Works Commissioner David Grethen pointed out that the business-minded approach of optimizing city properties doesn’t necessarily make sense if groups are not currently being denied spots.

“Do we even know how much demand is out there? If that’s the case, all this talk about fairness and access is kind of a moot point,” Grethen said.

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