San Mateo officials say an arrangement between the city and the Jockey Club, a horse racing betting facility, is not paying off and should be terminated.

In place since 2018, the arrangement is that the city gets 0.33% of wagers placed at the club in exchange for “ordinary and traditional municipal services” at no charge, according to a report prepared by staff. Those services have included police, fire, fire inspection, traffic control and sewer.

The arrangement was initially favorable to the city as betting revenue exceeded the cost of providing services, but that’s not longer the case, according to the report.

“[Betting] revenue has been on the decline, while the cost of providing city services has increased,” the report states, adding that the cost to provide services is expected to exceed revenue received in fiscal year 2019-20.

So staff is recommending the City Council officially end the arrangement with the club at its meeting Feb. 18.

“With the cost and revenue trends not expected to change over time, staff believes it is in the city’s best interest to terminate the [agreement],” the report states.

The agreement allows either party to terminate within 120 days written notice for any reason. According to the report, ending the agreement will forgo about $150,000 in revenue, but will allow the city to invoice the Jockey Club for all services provided starting in fiscal year 2020-21.

“This will allow the city to fully recover the cost of providing services,” according to the report.

The council on Tuesday will also continue discussing where to place a controversial Caltrain facility known as a set-out track.

A set-out track is a roughly 1,000-foot stretch of track adjacent to the main tracks used to store maintenance equipment and sometimes locomotives during emergencies. A set-out track previously sat behind Ana Furniture, but was displaced by the 25th Avenue grade separation project.

Caltrain wants to construct the set-out track between 10th and 14th avenues, roughly 50 feet from homes, and has insisted no other locations are feasible. San Mateo staff are also recommending that location as well as the construction of a wall there to limit impacts.

Concerned about noise in the middle of the night and declining property values, the neighborhood is ardently opposed to having the set-out track there, and has proposed various alternative locations for the facility, including between Fifth and Ninth avenues as well as just north of 25th Avenue behind industrial businesses.

Caltrain maintains those sites are infeasible and will offer a technical explanation as to why during the meeting.

During the meeting the council will also consider upping the base parking in-lieu fee from $26,311 per space to $50,000 per space. Developers whose projects don’t include the required amount of parking are given the option to pay parking in-lieu fees instead. The money is used to increase the availability of public parking in the city.

Finally, the council will consider a lease amendment that would have Galata Sweets and Bakeries LLC take over 390 First Ave., replacing Red Giant Coffee. The owner of Red Giant Coffee informed the city in January that it’s unable to remain open, according to a staff report.

The council meets for a study session for the set-out track 5:30 p.m. and the regular session meets at 7 p.m. Feb. 18, at City Hall, 330 W. 20th Ave.

(650) 344-5200 ext. 102

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