TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Justin Clifton, Assistant City Manager
PREPARED BY: Kristen M. Crane, Assistant City Manager
SUBJECT:
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First Amendment to the Temporary License Agreement with Juniper Trails, LLC for Use of Property at Murrieta Equestrian Center
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RECOMMENDATION
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Approve the First Amendment to the Temporary License Agreement with Juniper Trails, LLC for use of a portion of the property at the Murrieta Equestrian Center;
Amend the Fiscal Year 2024/25 Operating Budget; and
Authorize the Mayor to execute the First Amendment to the Temporary License Agreement.
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PRIOR ACTION/VOTE
On August 18, 2009, the City Council adopted Resolution No. 09-2358, 1) Approving a Purchase and Sale Agreement for the acquisition of the Murrieta Stud Ranch for the sum of $2,339,100; 2) Directing staff to open and enter into escrow; 3) Authorizing the City Manager to execute associated documents related to its purchase; and 4) Approving the Memorandum of Understanding with Pasha Investments, LLC for the management of the property for one-year after close of escrow (Vote: 5-0).
On May 16, 2017, the City Council approved a license agreement with JACC & Co. to operate a 2.3-acre portion of the Murrieta Equestrian Park (Vote: 5-0).
CITY COUNCIL GOAL
Coordinate and deliver responsive, effective community services.
BACKGROUND
In 2009, the City purchased the former Murrieta Stud Farm to meet the needs of the equestrian community in Murrieta. An equestrian facility has been identified as a need within the Parks Master Plan completed around that time. The overall property is 20.59 acres. In the initial years under City ownership, the property was used for hosting equestrian activities and private events. In more recent years, the property generally functions as a passive park that equestrian enthusiasts can use, along with limited use for Police Department training activities and as a location for archery instruction as part of the City’s Recreation Program. There are several structures on the property which are in varying need of repair. A concept plan was completed in 2017 for the build-out of the property as an equestrian center for recreational use. However, the City did not have funding to proceed with implementation, which was estimated to cost $10 million at that time. Another challenging dynamic is that the site is not connected to the water or sewer system and will have to be annexed into both the Metropolitan Water District and Western Municipal Water District in order to be connected for those services.
In 2015, staff issued an informal Request for Proposals to solicit an Operator for a 2.3-acre portion of the Equestrian Park. Only one proposal was submitted. The City entered into an agreement with that individual (Reata Ranch), which then opted to terminate their agreement with the City in 2017.
In March 2017, there was another Request for Proposals process through which one proposal was received. The City entered a Temporary License Agreement with that entity, JACC & Co., now operating as Juniper Trails LLC (Operator). The original term of the Temporary License Agreement was three years, with five additional one-year renewals. The base rent in 2017 was $550 per month, with a 3% escalator annually in May, plus a cost for electricity. Water is provided via a well. There are no sewer services, and the Operator is responsible for all other utilities and services, including trash and portable restrooms. Presently, the monthly rent is $740, plus $65 for a proportional share of electricity.
In March 2024, the City informed the Operator that for the final year of the Agreement, it proposed a month-to-month arrangement, during which the parties would work together to review the monthly rent amount.
Determining the fair market value for the Temporary License Agreement is difficult to calculate. There are a few examples of municipal-owned equestrian facilities that are leased to private entities for operation. Recognizing the unique nature of this facility and the limited interest the City has previously experienced for the operation of the facility by an outside entity, staff has had ongoing discussions with the Operator about their operations and the potential for increasing the rent.
Attachment 1 includes a First Amendment to the Temporary License Agreement for consideration of the City Council. The basic terms are as follows:
• One-year extension to May 2, 2026, with the City having the right to renew the term for five additional one-year periods;
• Base rent amount increases effective February 2025, to $1,800 per month, with a 3% escalator increase annually in May; and
• Additional $65 charge per month for electricity, with a 3% escalator increase annually in May.
All other provisions of the original Temporary License Agreement will remain unchanged.
Under the Temporary License Agreement, the Operator is able to use two spaces within the adjacent barn for storage. The operator also owns all of the pipe corral fencing and other improvements.
By approving this First Amendment to the Temporary License Agreement, the City Council recognizes that the Operator, which is a nonprofit organization, will be operating a service that provides a public benefit, including:
• Riding instruction programs for about 65 students per week;
• Partnerships with local charter schools to offer lessons as part of their physical education program;
• Participation in the City’s Community Services Department Recreation Program to offer classes to the public; and
• Maintaining the equestrian character of this area of the community and providing an opportunity for the public to connect with that facet of Murrieta’s history who might not otherwise be able to due to lack of ownership of a horse.
Additionally, Juniper Trails is interested in/willing to offer public open house-type events to connect the community with the City’s equestrian history. The Operator is also interested in offering a therapeutic riding program.
Juniper Trails has scaled back private boarding services. Most of the horses that now reside at Juniper Trails are considered “lesson horses” because they either belong to students or are horses that are used for the lesson program. Boarding services are very labor intensive and expensive to operate, whereas the lesson horses are cared for by the students.
The additional income to the City from the increased rent will generally be used toward upkeep and maintenance costs associated with the overall Equestrian Center property, which includes tree trimming, bee removal, and pest remediation.
FISCAL IMPACT
If the City Council approves the First Amendment to the Temporary License Agreement, additional revenues of $1,060 per month will be realized. Staff recommends an amendment to the Fiscal Year 2024/25 Operating budget to increase the Community Services District Fund Lease/Rental Account 1715162-44462 by $5,300 for the remainder of the fiscal year and approximately $12,720 annually thereafter. This amount will be used toward maintenance costs for the overall property.
ATTACHMENTS
1. First Amendment to Temporary License Agreement
2. Map of Equestrian Center