City of La Habra v. Pellerin

BROWN (G.), J.

Appellants, City of La Habra, a municipal corporation and La Habra Civic Center Authority, a nonprofit corporation, petitioned in the superior court for a writ of mandate requiring the respondent as Mayor of the City of La Habra, to sign a lease in behalf of the city with the petitioner, La Habra Civic Center Authority.

The matter is before us on a stipulated set of facts. In substance, the city proposes to lease police and fire station buildings from the Authority for a period of 20 years at an agreed reasonable rental, at the end of which time the title to the entire property passes to the city. All steps short of the mayor’s signature have been secured to formalize the lease.

The La Habra Civic Center Authority was formed in 1961 for the sole purpose of handling this transaction. None of its officers or directors are a part of the officialdom of the city. The Authority will dissolve at the end of the 20-year period when the city becomes the absolute owner of the . property. A portion of the lands upon which the buildings are to be erected is to be transferred by the city to the Authority for the sum of $112,000. The remaining property for the buildings is to be leased by the city to the Authority for $375 per month. The lease provides that the city shall pay the Authority a monthly

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rental of $6,248.33 for the premises and improvements to be erected thereon. It is agreed that all of the figures named above are fair and reasonable.

To finance the facilities the Authority proposes to issue $798,000 in bonds and pay off the indebtedness on the bonds from the lease rentals obtained from the city, payable through a bank. The Authority does not intend to handle any other business and will receive no profits.

It is further agreed that the ordinary revenue and income of the city for each year during the term of the lease will exceed the annual liability of the city, including all the city’s liability under the lease; also there will be sufficient money each year during the term of the lease from the ordinary income and revenue of the city to pay all the expenses to operate the city and to pay the amounts dues under the lease.