REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
April 29, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
BEAHTA R. DAVIS, Director, Regional Parks Department
SUBJECT
Title
Subleasing of the Golf Course Facility at Prado Regional Park in Chino
End
RECOMMENDATION(S)
Recommendation
Approve one of the two following options regarding the subleasing of the Golf Course Facility at Prado Regional Park in Chino:
1. Amend and extend Revenue Sub-Lease Agreement No. 21-183 with El Prado Development, LLC for the Golf Course Facility at Prado Regional Park in Chino by taking the following actions (Option 1):
a. Find that approval of Amendment No. 2 to Sub-Lease Agreement No. 21-183 with El Prado Development, LLC, for the Golf Course Facility is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
b. Approve Amendment No. 2 to Revenue Sub-Lease Agreement No. 21-183 with El Prado Development, LLC, conditioned upon and not effective until written approval by the United States Army Corps of Engineers is received, to extend the term of by 22-years, for the new term of September 1, 2025, through August 31, 2047, add one five-year option to extend the term subject to the United States Army Corps of Engineers approval and extension of County Master Lease Agreement No. 23-627, update the maintenance and repair language, and adjust the fee schedule to reflect a minimum monthly fee of $11,000, to increase 4% annually beginning in month 13 of the new term, for approximately 314.21 acres of the County-leased Prado Regional Park, for the use and operation of a 36-hole Golf Course Facility, located at 6555 Pine Avenue in Chino, with no changes to the other terms and conditions of Revenue Sub-Lease Agreement No. 21-183, with minimum fees in the amount of $4,833,561, for a new total contract amount of $5,313,561 in minimum fees (Four votes required).
c. Direct the Real Estate Services Department to file the Notice of Exemption in accordance with the California Environmental Quality Act.
OR, IN THE ALTERNATIVE
2. Authorize the Director of the Real Estate Services Department to proceed with a competitive procurement of a sub-lease agreement for the Golf Course Facility at Prado Regional Park in Chino, pursuant to County Policy No. 12-05 (Option 2).
(Presenter: Terry W. Thompson, Director, 387-5000)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of either option, Amendment No. 2 (Amendment) to Revenue Sub-Lease Agreement No. 21-183 (Sub-Lease Agreement) or a competitive procurement of a sub-lease agreement, will not result in the use of additional Discretionary General Funding (Net County Cost). Under the Amendment, effective September 1, 2025, El Prado Development, LLC (Tenant) will pay the Regional Parks Department (Parks) a minimum monthly fee of $11,000, to increase 4% annually beginning in month 13 of the new term, determined by a Brokers Opinion of Value, and beginning in month 61 following September 1, 2025, additional rents of 3% of all taxable sales. Under Recommendation No. 1, the Tenant will also submit a $11,000 security deposit following the execution of the Amendment to secure compliance with lease terms. Adequate appropriation and revenue have been included in Parks’ 2024-25 budget and will be included in subsequent recommended budgets throughout the life of the Amendment.
BACKGROUND INFORMATION
Parks operates and maintains ten regional parks including Prado Regional Park (Park), located in the City of Chino, and provides for the rental of Park property through Board of Supervisors’ (Board) approved fees. The Park includes El Prado Golf Course (Golf Course) located at 6555 Pine Avenue in Chino (Property). The Property is owned by the United States Army Corps of Engineers (USACE) and is leased to the County pursuant to the Master Lease Agreement between USACE and the County (Master Lease Agreement No. 23-627). The current Sub-Lease Agreement for the Property with the Tenant expires on August 31, 2025. This item provides the Board two alternative options associated with the future sublease of the Property.
Approval of Option 1 will review Amendment No. 2 to the existing Sub-Lease Agreement under California Environmental Quality Act (CEQA) and make the necessary CEQA exemption finding, and will provide for an amendment to the Sub-Lease Agreement with the Tenant to extend the term for a period of September 1, 2025, through August 31, 2047, update the minimum fees, adjust the maintenance and repair language, and update standard lease agreement language for the operation of the Golf Course at the Park subject to USACE approval. The Amendment to the Sub-Lease Agreement is subject to the Master Lease Agreement between USACE and the County and is conditioned upon and not effective until the USACE gives written approval of the Amendment to the parties.
In the alternative, if the Board does not approve Option 1 with four votes, the Board may consider approving Option 2, which would authorize the Director (RESD) to proceed with a competitive procurement of a sublease agreement for the Property pursuant to County Policy No. 12-05.
On March 9, 2021 (Item No. 35), the Board approved the Sub-Lease Agreement between El Prado Golf Course, a California Limited Partnership, and the County for a term of five years for the Golf Course on the Property. The term of the Sub-Lease was month-to-month converting to a potential term from September 1, 2020, through August 31, 2025, upon USACE approval of a term extension to the Master Lease Agreement with the County.
On May 23, 2023 (Item No. 72), the Board approved Amendment No.1 to reflect a change of ownership from El Prado Golf Couse, a California Limited Partnership to the Tenant.
On July 11, 2023 (Item No. 37), the Board approved 25-year Master Lease Agreement No.23-627 with the USACE for the Park, commencing and retroactive to May 1, 2023, through April 30, 2048.
The Board approved Resolution No. 25-53 on February 11, 2025 (Item No. 37), providing the authority for RESD to use an Alternate Procedure through the use of County Policy No. 12-05, and to use Government Code section 25536(a), which empowers the Board, by a four-fifths vote of the Board, to sub-lease all or any part of County-owned, leased, or managed property devoted to or held for ultimate use for airport, vehicle parking, fairground, beach, park, amusement, recreation, or employee cafeteria purposes, or industrial or commercial development incidental thereto, for the purpose of sole source negotiations and direct subleasing of the Park property. The Resolution also authorized the Director RESD to proceed with a competitive procurement of a sublease agreement for the Property if an amendment to Agreement No. 21-183 or a new sublease is not approved by the Board by April 29, 2025.
The project to approve this Amendment was reviewed pursuant to the CEQA and determined to be categorically exempt under Section 15301 - Existing Facilities (Class 1) because there is no possibility that amending the Sub-Lease Agreement of the subject Property will have a significant effect on the environment.
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Summary of Lease Terms |
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Lessee: |
El Prado Development, LLC (Frank Lizarraga, Managing Member) |
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Location: |
6555 Pine Avenue, Chino, CA 91708 |
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Size: |
36-hole golf course facility situated on approximately 314.21 acres of improved land |
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Term: |
The five-year term of the Sub-Lease from September 1, 2020, and ending on August 31, 2025, is extended for an additional twenty-two (22) years, for the period of September 1, 2025, through August 31, 2047 |
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Contingency: |
Amendment to Revenue Sub-Lease Agreement with Tenant, is conditioned upon and not effective until written approval by the USACE is received |
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Options: |
One five-year option to extend the term subject to USACE approval and extension of the County’s Master Lease Agreement with USACE, but in no event shall the term extend past the term of the Master Lease Agreement with USACE |
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Improvements: |
Lessee shall not make any improvements or alterations to the Property without County’s and USACE’s prior written consent |
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Custodial: |
Provided by Lessee |
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Maintenance: |
Provided by Lessee; beginning month 37 of the new term, Lessee shall provide an annual Capital Improvement Fund for maintenance and repairs of $100,000 and increase 5% annually each year that follows |
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Utilities: |
County has no obligation to furnish the Property with any electricity, gas, water, trash, or any other utilities; Lessee shall obtain the County’s prior written approval if the Lessee desires to connect, maintain, repair, upgrade, remove or replace existing utility equipment |
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Insurance: |
The Certificate of Liability Insurance, as required by the Sub-Lease, is on file with RESD |
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Holdover: |
Month-to-month basis for a maximum of six months upon the same provisions of the Sub-Lease Agreement, minimum monthly fee shall increase 150%, immediately in effect prior to the initiation of holdover |
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Right to Terminate: |
The County may terminate the Sub-Lease Agreement only for cause prior to the 20th year of the Sub-Lease Agreement following September 1, 2025; beginning in the 21st year following September 1, 2025, either party may terminate the Sub-Lease Agreement for any reason with 180 days’ notice |
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Parking: |
Sufficient for Lessee needs, included in original Sub-Lease Agreement tenant improvements |
PROCUREMENT
Government Code Section 25536 allows the Board, by a four-fifths vote, to sub-lease County-leased or managed property devoted to or held for ultimate use for park, fairground, amusement or recreation purposes without complying with the provisions of Government Code Section 25520 et seq., relating to the sale or lease of County property. This sublease Amendment is allowed per County Policy No. 12-05, Paragraph 2 - Authority and Responsibility to Act and Paragraph 3 - Exceptions to Policy.
County Policy No. 12-05 calls for the use of competitive procedures in leasing Park real party, unless an Exception to Policy or Alternative Procedure is approved by the Board.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant, and John Tubbs II, Deputies County Counsel, 387-5455) on April 28, 2025; Regional Parks (Beahta Davis, Director, 387-2340) on April 23, 2025; Purchasing (Dylan Newton, Buyer III, 387-3377) on April 23, 2025; Finance (Elias Duenas, 387-4052, and Eduardo Mora, 387-4376, Administrative Analysts) on April 23, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on April 24, 2025
(LB: 453-5227)