Torrance council asks staff to research safeguards for long-term ground leases

During general discussion the council considered whether the city should embed safeguards in code to prevent long-term ground leases from being set well below market value.

Councilmember Metucci proposed that long-term ground leases be set “within at least the top 90 of the market value” to protect public assets and prevent decades-long underperforming leases. He said the proposal would help protect future councils from poor outcomes and capture fair value for city-owned property.

City Attorney Patrick Sullivan cautioned that a rigid percentage could hamstring future councils’ negotiation flexibility and said staff would need to research how other cities handle similar policies. Danny Santano of the city manager’s office confirmed staff currently use property valuations and, at times, external vendors and noted many factors beyond a single market percentage influence lease terms.

Councilmembers agreed that the issue requires careful study rather than immediate code change. The council directed staff to research best practices and bring findings to the Finance and Government Operations Committee for discussion; that committee and the full council would later decide whether to pursue code changes or a land-management policy.

Mayor George Chen and several councilmembers emphasized the need to protect public assets while avoiding unintended consequences from an overly prescriptive rule. Councilmembers indicated unanimous concurrence to proceed with staff research and committee review.