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Proposed Hacienda Lease Mods are Perplexing, Ineffectual

Readers will recall that at its last meeting a couple of weeks ago, the Town Council was to consider leasing a substantial portion of the Hacienda to Wedgewood Weddings for it to provide full-service wedding services in exchange for a lease that essentially would eliminate the majority of the Town’s annual operating losses and very slightly offset the continued capital improvement/replacement costs. Our story on that proposal is here.

At that meeting, the Town Council directed staff to revise certain portions of its proposed lease agreement, articulating specific concern about the lengthy proposed duration (10 years with two 5-year options) and the ability for Wedgewood to transfer/assign the lease to another entity with few restrictions or criteria to ensure any subsequent assignee would be a suitable cultural fit for the town and the property. They also acknowledged the very short notice provided to the public and directed staff to conduct outreach to over 100 neighboring properties to provide them a reasonable opportunity to provide their input.

Staff’s proposed revisions being reviewed at the council’s June 23 meeting strike us as going in the wrong direction, seemingly disfavoring the Town and containing rather empty and toothless provisions that are nothing more than lip service to the council’s direction.

One would rightly presume that when a 10-year lease and two 5-year options (solely at Wedgewood’s discretion) are considered too long for a new and unproven relationship, a revision would contain a shorter initial duration and some form of renegotiation or mutual decision on extensions. However, the proposed revision doesn’t shorten the durations at all, and the Town’s authority for the extensions is limited to confirmation Wedgewood has been complying with the terms of the initial agreement. Essentially meaningless.

Worse, in exchange for essentially nothing we can see, the Town is now offering to refund 3 years’ worth of Wedgewood’s promised $40,000/year capital improvement contributions ($120,000 total) if an extension doesn’t take place.

Insofar as transferring or assigning the lease, we agree it makes sense for the Town to ensure that any potential assignee is financially secure enough to continue making all payments as contemplated under the original lease and that a successor is a good cultural and service-level fit for the proposed use of the property. Inexplicably, the revised terms account for neither of those and instead contain a totally toothless provision that essentially – and merely - requires a successor affirm that the Hacienda and Moraga are special places. Really?

Anticipating concern for the amount of noise emanating from the venue, staff has included a couple of “rules” related to sound levels. Curiously, those rules state what the noise levels and event ending times should be rather than what they must be – a crucial difference in nomenclature and legal enforceability.

On the positive side, staff remembered to include Wedgewood’s required $253,000 initial capital investment in the revised lease (a provision entirely left out of the lease the council was asked to approve two weeks ago).

It’s unclear to us whether staff is demonstrating functional naiveté by having negotiated backwards or if staff and the council are simply waving their hands to appear they’re responding to community concern. What is clear, however, is that the significant cost of Town Manager, Parks & Rec Director and Town Attorney resources involved in negotiating and revising the agreement have pretty much failed at moving the needle in the right direction.

Residents ought to be concerned that the appeal of $20,000 per month (the largest deal the Town has ever seen) is overshadowing the need for a definitive Hacienda strategy, sufficient community engagement and consideration of their concerns and interests, and the attention to detail required for such a long-term relationship.


Nextdoor discussion is here

Link to Town Council page with email address 2/3 down is here


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