Half Full, Half Empty
LADWP approaches commercial leases in Bishop
The Los Department of Water and Power (LADWP) is unleashing new language for leases on the Eastside, a seismic change in the way things have been done for the past 80 years. Leases for ranchers in Inyo County were approved by LADWP Board of Commissioners in October; now the attention has turned to commercial leases.
The leases are being brought in line with the Los Angeles City Charter. This would include putting leases out to competitive bid when they expire. There are one-time lease transfers – a lease can be transferred only once, and that party cannot transfer the lease again. There’s also a family transfer clause. A lease can be transferred from one family member to another.
A lease holder will be allowed automatic renewal of a lease in accordance with the Charles Brown Act, which requires the City of Los Angeles grant existing tenants a first right of refusal on renewals and sales of properties.
“If I own a business on a DWP lease and want to sell it, the person buying couldn’t sell it again?” asked Bishop City Councilman Joe Pecsi.
“Correct,” Aqueduct Manager James Yannotta replied.
“That’s not a very good incentive to sell my business,” Pecsi said.
Bishop Mayor Laura Smith asked, if the leases are now being brought up to city charter, did that mean leases up until now were done wrong. Yannotta said, “That was an oversight and things should have been done differently.”
Councilwoman Karen Schwartz asked Yannotta to explain the process for the possible divestiture of properties on parcels currently used for commercial purposes.
He said it’s a lengthy process but if the parcel in question does not serve as an “operational need” of LADWP, and complies with the Charles Brown Act, then it could be considered for sale. Operational needs are protection of the watershed or water collection. The water Goliath controls more than 300,000 acres in both Inyo and Mono counties or about 70 percent of all the private land.
Yannotta said property would be evaluated on an individual basis to determine if it is viable to be released.
Pecsi asked if there is an operational need land on Main Street. Yannotta toed the party line by prefacing his answer that each parcel needs to be evaluated, but a parcel on Main Street that is far from water would be a good example of one that would be considered.
A lessee could purchase the land it now leases which would mean a higher selling price when the lessee, now land owner, wants to bow out. This could result in more investment. There is no talk about a lease to own arrangement at this time.
The lessees would not qualify for Bishop’s first-time home buyer program, according to Bishop City Administrator Jim Tatum.
LADWP has invited all 34 lease holders in the City of Bishop to a private meeting Tuesday, November 22, at 1 p.m. to discuss how to reconcile historic transfers in Inyo with competitive bidding requirements.
Tatum said he and the City of Bishop have been facilitating talks between commercial lease holders and LADWP. “(Main Street) Business owners don’t have the representation the ranchers have with the Cattlemen’s Association,” Tatum told The Sheet.
Tatum said the lessees are obviously concerned. “This is a substantial change from how things have worked for the last 60 to 80 years.”
Not much land has sold on Main Street in the last 60-80 years which raises questions over property value and if it will be compared to Los Angeles or Owens Valley prices. Pecsi said that’s the fear; how will they assess the property.
Yannotta has said to this paper and to the Bishop City Council that evaluations and assessments of the property will be consistent with local prices.
