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COMPENSATION

Compensation and Estimated Property Owner’s Lease Payments
SNGS wants to make an Offer that is more than fair and equitable to all landowners whose property extends over the reservoir. This Offer actually exceeds the Appraisal of fair market rental dated June 1, 2007, made by the firm of Harold W. Bertholf, Inc., an appraisal, engineering, and geological company. It is the intent of SNGS to treat all landowners, including the City, on the same basis and without any price discrimination.

In order to encourage early signups and for other reasons discussed below, the SNGS Offer provides a limited time premium over the Appraisal in four very beneficial ways:

  1. Initial signing bonus of $1,000 per acre, but not less than $500 per parcel, which also includes payments for the two (2) years until the facility goes on line.
  2. The total minimum rental payments in the SNGS Offer are higher than the Appraisal; that is, $270,000 per year for five (5) years and $580,000 per year thereafter.
  3. The eight-year start-up period set forth in the Appraisal is eliminated, such that the percentage rent will kick-in when the facility goes on line instead of waiting for the ninth (9th) year as prescribed by the Appraisal. The importance of this is underlined by SNGS’ belief that the first full operating year at Florin could generate a total percentage rent of $704,000 ($2,607 per acre) vs. the minimum of $270,000 ($1,000 per acre) in the Offer.
  4. Parcels smaller than 0.5 acres (most residential parcels approximate 0.18 to 0.2 acres) will be treated as 0.5 acres, such that the signing bonus and the annual minimum rental for such parcels will be no less than $500.

    A copy of the lease agreement is available for review upon request.
On request, the SNGS leasing team will visit property owners to review project information and leasing materials. Should you wish to schedule a leasing appointment now, please contact the SNGS Leasing Coordinator, Dave Baker, at (916) 517-5646 or (916) 388-2088.
NOTE: SNGS reserves the right to withdraw the present Offer as to any storage rights SNGS must acquire by eminent domain proceedings. In that event, the premium will no longer apply and SNGS will propose the Appraisal (or an update thereof) as just compensation for any such rights. The limited duration of the Offer is intended not only to reward landowners for early signup but also to share with the landowners the savings to SNGS against the time and expense involved in the eminent domain process. SNGS is not now authorized to use the power of eminent domain. If necessary, it will petition to obtain such power from the California Public Utilities Commission as set forth in answer to Question 33 of the Community Q & A (Located as a download on the community outreach page).