Diving into The Lakes deal




MOSTLY EMPTY—In exchange for allowing him to build an apartment complex on the backside of the property, Rick Caruso has agreed to buy The Lakes property from the City of Thousand Oaks for $2 million plus as much as $13 million in future payments. Caruso has leased the property for free from the city since 2004 and has an agreement in place through 2098. Acorn file photo

MOSTLY EMPTY—In exchange for allowing him to build an apartment complex on the backside of the property, Rick Caruso has agreed to buy The Lakes property from the City of Thousand Oaks for $2 million plus as much as $13 million in future payments. Caruso has leased the property for free from the city since 2004 and has an agreement in place through 2098. Acorn file photo

Ahead of Caruso’s Nov. 30 date with the Thousand Oaks City Council, city officials continued to defend the deal they struck with the Los Angeles-based developer to sell the publicly owned land beneath The Lakes shopping center for $2 million plus $13 million in future payments.

While planning commissioners were told the matter was not within their purview during a Nov. 15 hearing pertaining to Caruso’s related request to build apartments at the site, at least one commissioner wanted more information about how the two sides arrived at the sale price for the 7.5-acre parcel, which includes the parking lot in the back but not the pond and park in front.

The deal is contingent on Caruso, which currently leases the property, receiving approval from the council to build apartments at the site.

The City of Thousand Oaks obtained the land in question for around $6.7 million as part of a larger purchase in the early 1990s. Three months ago, the city agreed to pay Hillcrest Christian School $10 million for its 4-acre property less than two miles away.

Jaime Boscarino, the city’s finance chief, said city negotiators were bound by the terms of the original 2004 lease agreement, which included an option for Caruso to buy the property for $2 million or fair market value.

But the fair market value was significantly reduced, Boscarino said, because the city is required to value the parcel as unimproved land and subject to the limitations of the current ground lease, which caps any commercial development at 51,000 square feet.

Although the city has had the property appraised, staff declined to make the figures available before they’re released as part of a staff report that will be issued ahead of the Nov. 30 meeting.

Caruso, which plans on offering the apartments at market rate without any held aside for affordable housing, is also offering the city a “community benefit” fee of $79,365 per unit, or up to $13.1 million, to be paid over the course of 37 years.

The money would go into the city’s general fund, which the city can use at will, rather than a dedicated fund where the money could only be used for specific items.

“This will provide a guaranteed revenue source to the city in the long term,” Boscarino said.

Community benefits can vary. In addition to money, they could be parks, affordable housing or, in the case of a development at the former Timber School site, preservation of historic buildings.

Boscarino did not say how the per-unit figure was arrived at but said the city’s priority was renegotiating the existing lease, which has allowed Caruso to rent the property for free for the past 17 years.

Community benefit payments would be paid annually beginning at the start of the fourth year after the apartment building receives a certificate of occupancy. Payments would start at 1% of the total community benefit payment with the rate increasing every five years up to 5.31% in years 34 to 37.

Tuesday’s meeting begins at 6 p.m.