GUSTINE — The Gustine City Council is weighing the terms of a proposed lease with Depot Garage for the use of a portion of a city‑owned parcel behind the Gustine Museum, a move intended to generate revenue while preserving future options for the Gustine Historical Society.

The western section of Parcel 020‑044‑017, which sits behind the museum operated by the Historical Society, has been the subject of negotiations since late 2025. The council initially discussed the possibility of selling the property but ultimately directed staff on Nov. 4 to pursue a lease instead, citing the complexities and costs associated with a public‑agency land sale.

A draft agreement was prepared based on Depot Garage’s initial request and reviewed by the city attorney. The item was scheduled for approval on Dec. 2 but was pulled to allow the business additional time to submit a revised offer. That updated proposal arrived Jan. 5.

The offers have shifted over time. Depot Garage originally sought a 10‑year lease at $400 per month. The city countered with a five‑year term, a standard 5 percent annual rent increase, and repayment of back rent over five years. Depot’s latest offer proposes a two‑year lease at $300 per month with no annual escalation and no back‑rent repayment.

City staff also raised concerns about unpermitted improvements Depot Garage previously made on the site. Without permits, the city has no record of the work or whether it was completed by a licensed contractor. A building inspector reviewed the improvements and found the concrete and cover acceptable but determined the electrical work does not meet code. Staff is recommending that any lease require Depot Garage to hire a state‑licensed electrical contractor to rewire the area, obtain a city permit, and complete the work within a specified timeframe.

The Historical Society has expressed interest in potentially using the same portion of the property in the future, though no formal plan has been developed. Staff noted that a short‑term lease — no more than five years — would give the Society time to explore options for public‑benefit uses and present them to the council.

The council has full discretion to set the final lease terms. Staff is seeking direction on the length of the lease, the initial monthly rent, whether to include the city’s standard 5 percent annual rent increase, how to handle any back rent, and whether to credit Depot Garage for past improvements. Staff also recommends including standard provisions found in other city leases, such as insurance requirements, late‑fee penalties, and direct payment to the city without monthly invoicing.

A short‑term lease would provide a steady revenue stream with minimal maintenance costs, aligning with the city’s strategic goal of strengthening financial stability.

The council is expected to consider a resolution authorizing the city manager to finalize and execute a lease with Depot Garage based on the direction provided at the meeting on Jan. 20.