The City Council on Tuesday, Oct. 3, approved a lease change that lowered the rent paid Catalina Kid Ventures.
From now on, CKV will pay $1 a year. The new agreement will also eliminate the requirement that Kid Ventures repays utility bills to the city.
The vote was 3-0. Councilmember Lisa Lavelle was absent. Mayor Anni Marshall recused herself. She is on the CKV board.
Marshall described herself in a recent phone interview as chair of the board; the non-profit’s tax form described her as president of CKV.
During the meeting, City Manger David Maistros said staff took a hard look at the lease agreement.
Maistros said Catalina Kid Ventures really provides a critical need for childcare services in the city. Maistros said the lease had impacted Catalina Kid Venture’s revenue and made it difficult to continue to operate.
“So, we think that we can easily absorb that lease agreement,” Maistros said.
The proposed $1 lease agreement was similar to the city’s agreement with the mortuary or Catalina Tourism Authority or Catalina Island Health (the local hospital), according to Maistros.
“Would that be it or they’re still paying the the property tax?” asked Councilmember Mary Schickling.
Maistros said the city didn’t control that and his hope would be that based on the lease being $1 a year, it would no longer be considered an income-producing property for the city and therefore it should be tax exempt.
“That’s our argument,” Maistros said.
“I like that argument,” Schickling said.
Background
“Catalina Kid Ventures is a non-profit early childhood education center serving the residents and visitors of Avalon,” according to the non-profit’s 2021 IRS 990 form. (IRS 990s are public records, according to the Library off Congress Research Guides. The Islander obtained a copy by loging into the guidestar.org website.)
“The school accepts children ages 18 months to 6 years old,” according to CKV’s tax form.
In 2021, Catalina Kid Ventures reported total revenue of $213,870, according to the tax form. After expenses, Catalina Kid Ventures reported revenue of $1,559 that same year. Total expenses: $212,311.
“The 2018 lease agreement charges $1800 per month (a rate of $1 per square foot of interior space) as well as $650 per month for utilities,” according to the staff report by City Manager David Maistros.
“This amount deviates from the City’s standard lease rate of $325/sq.ft interior space and $1.25/sq.ft. exterior space, as CKV is a non-profit organization,” Maistros wrote.
“Upon further consideration of the lease agreement, Staff recognize the essential, public service CKV provides to the Avalon community as the only child-care service provider for children aged 18 months to 3 years,” Maistros wrote.
“The City has an established precedence of offering properties to non-profit or public service oriented institutions at an annual rate of $1,” Maistros wrote.
“At this time, Catalina Mortuary Services, Love Catalina Tourism Authority, Transportation Concepts, and the Catalina Island Medical Center all have $1 annual leases with the City,” Maistros wrote.
“City Staff propose amending the lease with CKV to reduce the annual rent to $1, eliminating the provision requiring the repayment of utilities, and honoring the other standards lease terms,” Maistros wrote. The fiscal impact of approving the lease change was “undetermined,” according to the report.
