REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Kriss Casanova, Economic Development Manager
Subject:
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Approval of New Lease Agreement with Currents Outdoor, LLC for City-Owned Property at 10449 Adams Avenue
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Statement of Issue:
The City Council is asked to consider approval of a new lease agreement with Currents Outdoor, LLC for the operation of a wholesale nursery on City-owned property at 10449 Adams Avenue. The proposed lease establishes a five-year initial term with one optional five-year extension, sets fixed rent with annual increases, and allows for site improvements, including repairs, cleanup, and installation of a new irrigation system. The agreement also provides a minimum discount on plant purchases for City use and maintains the site’s longstanding wholesale nursery operations in accordance with its Conditional Use Permit (which limits the property to a wholesale nursery use). Currents Outdoor, LLC has executed the lease and is prepared to begin operations and site improvements upon lease commencement, pending City Council approval.
Financial Impact:
The lease will generate the following revenue:
• Base Rent - Year 1: $2,620 per month
• Annual Rent Increases: 2% per year
Revenue will be deposited into the General Fund (10000100.43075 - Land Lease Income).
Recommended Action:
recommendation
Approve and authorize the Mayor, City Clerk, and City Manager to execute the lease with Currents Outdoor, LLC.
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Alternative Action(s):
Do not approve the lease and provide alternative direction to staff.
Analysis:
The City-owned parcel at 10449 Adams Avenue has operated as a wholesale nursery since 1985 under a Conditional Use Permit. The property includes an access easement to an adjacent Southern California Edison (SCE) parcel, which is currently occupied by PoolMax, and is subject to SCE-imposed restrictions that limit permanent structures and certain land uses.
The prior tenant had been operating on a month-to-month basis and experienced financial challenges that resulted in unpaid rent and limited reinvestment in the site. After issuing a notice to vacate, the City began evaluating options to secure a new operator. The prior tenant, who had also leased the adjacent SCE parcel, coordinated with PoolMax to relocate product and equipment to that rear parcel, which SCE subsequently reassigned to PoolMax.
Staff initially engaged with Moon Valley Nursery; however, that opportunity did not move forward due to easement constraints associated with the adjacent SCE parcel.
Separately, PoolMax, a local design and construction firm with nearly 30 years of experience in Huntington Beach and coastal Orange County, expressed interest in leasing the property. PoolMax currently occupies the adjacent SCE parcel and created Currents Outdoor, LLC as a related entity to operate a wholesale nursery and plant-growing use on the site.
Public Works cleared and remediated the property, avoiding the need to provide a potential rent credit to a new tenant for those improvements.
Following Council direction, staff negotiated a lease with Currents Outdoor, LLC, which will continue the longstanding wholesale-only nursery use of the site. The tenant plans to invest in site improvements, including fence repairs and installation of a new irrigation system, and will introduce drought-tolerant and California-native plant inventory with a focus on sustainable practices.
Key Lease Terms and Public Benefits:
|
Term |
Details |
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Lease Term |
Five (5) years, with one optional five-year extension (by mutual agreement) |
|
Use |
Wholesale nursery only (no retail sales to the general public) |
|
Base Rent |
$2,620/month in Year 1, with 2% annual increases |
|
Rent Advance & Security Deposit |
Six (6) months’ rent prepaid plus one-month security deposit |
|
City Discount |
Minimum 20% off standard wholesale pricing for City plant and tree purchases |
|
Tenant Responsibilities |
Insurance, possessory interest tax, permits, licenses, and regulatory compliance |
The proposed lease secures a qualified tenant, restores active use of the property, and ensures private investment in a City-owned asset. It maintains consistency with the existing Conditional
Use Permit and provides public benefits including stable lease revenue, improved site conditions, and discounted plant materials for City projects. The proposed base rent reflects site constraints, including utility easements and restrictions on permanent structures, which limit the range of allowable uses and development intensity.
If the lease is not approved, the property may remain vacant. This would delay site improvements, defer revenue, and require ongoing City monitoring to deter unauthorized activities such as illegal dumping and trespassing.
The lease has been reviewed and approved as to form by the City Attorney and has been executed by Currents Outdoor, LLC. Council approval is now required to finalize the agreement and authorize commencement of operations.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the City's priority initiatives and projects.
For details, visit www.huntingtonbeachca.gov/strategicplan.
Attachment(s):
1. Lease Between the City of Huntington Beach and Currents Outdoor, LLC
2. Powerpoint Presentation