County Extends Lease On Former Ag Preserve Land To Trio Of Dairymen

The county has extended its lease arrangements with a partnership involving three dairymen on two large properties in the former Chino Agricultural Preserve that will allow the dairy the three run to remain in operation at least until 2015.
In January 1992 the county used money available to it under the auspices of Proposition 70, which provides for the “acquisition, development, rehabilitation, protection, or restoration of park, wildlife, coastal, and natural lands in California including lands supporting unique or endangered plants or animals,” to purchase a 99.14-acre dairy with four single-family residences located at 8919 Merrill Avenue in Chino. The property was leased back to the seller until January 1994. The dairy then remained dormant until April 1995. On March 27, 1995, the county real estate division approved a 56-month lease for 10.9 acres of this 99.14 acre dairy with a termination date of November 30, 1999. The lease was subsequently amended to add 3.02 acres for a total of 13.92 acres.
On November 7, 1995, the board of supervisors approved a five-year lease agreement with a three, five and eight-year option to extend the term with Peter H. Bouma, Dana M. Bouma and Sam De Kruyf, who were doing business as  P&D Dairy (P&D), for the remaining 85.22 acres, including one single-family residence. The lease also contained a provision that allowed P&D to lease the other three single-family residences and the remaining 13.92 acres when the existing leases terminated. The residence at 9029 Merrill Avenue was added to the P&D lease on April 1, 1996 for additional rent of $500 per month and the residence at 9019 Merrill Avenue was added on December 20, 1996 for additional rent of $800 per month. The residence at 15102 Carpenter Avenue in Chino remains under a separate lease between the county and another tenant. On December 1, 1999, the 13.92 acres were added for a total of 99.14 acres and additional rent of $5,445 per month for a total monthly rent of $14,245. In the nearly eighteen years since the lease was originally approved, the board has approved three amendments to extend the term and add one two-year option.
Additionally, in January 1992, the county utilized Proposition 70 funds to purchase a 40.88-acre horse ranch located at 8961 Remington Avenue in Chino. The property was leased back to the seller for approximately three and a half years until June 30, 1995, after which the property remained vacant for several months. On April 22, 1997 the county board of supervisors approved an eight year, six-month lease, for 10.06 acres of the 40.88 acre horse ranch with Bouma,  Bouma and De Kruyf, under the auspices of  P & D Dairy for use as a heifer ranch.
The original term of the lease was from April 22, 1997 through October 31, 2005. In the sixteen years since the lease was originally approved, the board has approved two amendments to add 26.08 acres to the leased premises for a total of 36.14 acres, extend the term, and amend certain provisions of the lease.
On September 2012,  P & D provided the county with notice of its intent to exercise the final two-year options to extend the terms from November 2013 through October 31, 2015 on both the dairy and the heifer farm.
Accordingly,  David H. Slaughter, the director of real estate services for the county, has recommended that the county extend the leases. The board followed Slaughter’s recommendation.
“Because of the continuing depressed market conditions in the local dairy industry, the monthly rent will not be increased.” Slaughter said.
In his summary of the lease terms for the 99.19 acre dairy at 8919 Merrill Avenue, Slaughter said the county will charge P & D  $14,245 per month or $170,940 per year, which he said is “mid-range for comparable dairy land in the Chino area.”
With respect to the 36.14 acres at 8961 Remington Avenue being used as a heifer ranch, the county will charge P & D $4,660 monthly or $55,920 for the duration of the two-year lease extension.
Revenue from the leases will be deposited in the special revenue fund for properties acquired under the provisions of the California Wildlife, Coastal and Parkland Conservation Act of 1988 (Proposition 70).

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