Merced City Council, Aug. 4, 2014: An inconsiderable lease
Merced City Council, Aug. 4, 2014
Item #10 on Consent Calendar would authorize staff to prepare a lease to UC Merced and others for 5,951 square feet of office space in the Parcade office/parking complex next to City Hall for a dollar a year for 10 years.
There were some deferential questions from council members which were met by a steady stream of impenetrable, uninformative "presentation," which we have nicknamed "boosterbabble," from city and UC Merced staff. Mainly they were talking about the deep social need for installing UC and small business sponsored business "incubator" and "accelerator" and "UC administration" space, in one of the deadest commercial spacess on the downtown landscape: the Parcade.
We can't imagine many office sites in Merced less likely to inspire the young UC educated entrepreneur with a hot idea for an elf trap than a location, known primarily as a fine skateboard and mugger venue, which is around the corner from City Hall and across the street from a former fire station that has had more new facades than the city council has had new faces since former Councilwoman Dorothea Moore and her Goleta banker first sold the city on the idea of putting a brew pub in the old firehouse.
What we have here are two public agencies, a city and a public university, ostensibly creating some sort of atmosphere to encourage entrepreneurial enterprise primarily for UC Merced personnel. If at all successful, they will be creating a new generation of anti-tax, anti-spend, anti-intellectual, anti-government small business people--incubated debtors most of whom will be accelerating toward bankruptcy. It is an idea so stupid that it could only be funded publicly. It may not be any more complicated than making three office spaces in the wretchedly unsuccessful Parkcade appear full, perhaps cutting down on daytime vandalism. Although, somehow we imagine that UC Merced's constantly expanding bureaucracy will somehow hijack the administrative space for other purposes and gradually expand and swallow the incubator, the accelerator and those infant entrepreneurs smart enough to know who's buttering the bread. Some of them will emerge from this mentoring process slick grant hustlers for public agencies who will go right on mouthing the dead metaphors of economic development until the guilt money runs out.
Council Michael Belluomini, who pulled the item from the consent calendar so that it could be discussed in public at the meeting, after making his mandatory obsequities before UC Merced, small business and job creation, asked what the city was going to get for its $600,000 in lost rent.
Mayor Stan Thurston, adopting the superior tones of a litigator for a respondent seat of high learning, said "this is not a performance contract, it is a lease." Therefore, according to Stan the legal eagle, there doesn't really need to be much in the way of consideration like in a contract because it isn't a contract. Next, Councilman Josh Pedrozo spoke up in such haughty tones you would have thought his words were begowned in those special imperial shades of blue and gold reserved for UC administerators. What he said was basically a rerun of the old mysteriosum proximum argument made by the first chanceller of UC Merced, Carole Tomlinson-Keasey, "the Cowgirl Chancellor," which goes: We don't know why but people who live close to universities are smarter than other people.
The problem with the mayor's legal reasoning is that a lease is a contract: A contractual agreement by which one party conveys an estate in
property to another party, for a limited period, subject to various conditions, in exchange for something of value, but still retains ownership.-- http://legal-dictionary.thefreedictionary.com/lease
A lease or rental agreement is a legal contract between landlord and tenant, --http://www.landlordtenantlawfirms.com/resources/leases-and-rental-agreem...
A lease is a contractually binding agreement between two or more parties. In real estate, this contract is usually between a landlord, or property owner, and a tenant, person who rents the property. The lessee (tenant) agrees to pay the lessor (landlord) for use of a tangible asset (apartment, or property) for an amount of time agreed upon in the lease terms. -- http://landlords.about.com/od/Landlord101/a/What-Is-A-Lease.htm
A random search for a few minutes suggests that leases are contracts, regardless of the mayor's defense. But, the mayor would say, a lease is not a performance contract. Right. But if it is a lease contract without performance for a dollar a year, considering that just one month of rent on any one of the vacant offices of the Parcade would produce more money for the city than the full lease to UC and its subsidiary, then where is the adequate consideration for the lease?
Well, the city would say, it is a lease so we can write in any terms we want to.
We would suggest that according to Article XVI, Section 6 of the California Constitution, maybe the city is sort of giving UC a gift of public funds "or thing of value." (1)
But, smiles the mayor, it is not a gift. We get a dollar a year for five years, renewable for five more years if both parties agree.
But is this consideration, for commercial space, adequate? Beluoimini tried to ask the UC representative if he couldn't "give more definition" to the consideration part of the lease contract, but Thurston interrupted, telling Buluomini that was "inappropriate" and that he was "negotiating" with a person in public.
Nevertheless, the UC representatives said that "All I can say is that it is a work in progress." That doesn't look like a performance contract, but, then what is performance? The lessees say they are going to teach, instruct, mentor, advise and provide working space for entrepreneurs from UC and the local community who are trying to start businesses.
But, of course, they don't really have to do any of that according to the lease because if they were responsible for performing any of these services, that would be performance lease, or something, wouldn't it?
So, essentially, what the city is doing is giving $600,000 worth of commercial rental space downtown to UC Merced for just about as close to nothing as you can legally get.
So, rush right down to City Hall and get your dollar-a-year lease contracts for city office space. All they need for consideration is "a work in progress."
Plans for another bridge to Brooklyn? (Of course, you would have to go to the trouble to tour a few bridges during 10 years in city office space.)
Since Beluomini ended up voting for it (psssst -- don'cha dare actually vote against UC), we'll probably never know.
NOTE:
(1) Article XVI, Section 6 California Constitution (Prohibits gift of public funds)
SEC. 6. The Legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the State, or of any county, city and county, city, township or other political corporation or subdivision of the State now existing, or that may be hereafter established, in aid of or to any person, association, or corporation, whether municipal or otherwise, or to pledge the credit thereof, in any manner whatever, for the payment of the liabilities of any individual, association, municipal or other corporation whatever; nor shall it have power to make any gift or authorize the making of any gift, of any public money or thing of value to any individual, municipal or other corporation whatever;