Lease Bid Package
The John G. and Marie Stella Kenedy Memorial Foundation Ranch is seeking bids to lease the exclusive hunting and grazing rights on approximately 40,000 acres in the Jaboncillos Division beginning March 1, 2019. Located roughly sixty miles south of Corpus Christi along US Highway 77, the acreage consists of the following pastures: Telefon, East Jaboncillos, Ramirez and Magote. Bidders may bid on all the pastures or some of the pastures. Individual pastures will not be divided for lease purposes. KMF anticipates that all of the acreage will be leased to one lessee, or the acreage will be divided into two separate leases, at most. The Lease term will be for three years; however, the Kenedy Memorial Foundation will consider extended terms up to ten years total for bids that propose permanent lodging facilities on the Ranch. The Kenedy Memorial Foundation is looking for a longterm relationship with a Lessee who shares in the Foundation’s wildlife conservation and habitat enhancement philosophy. The deadline to submit bids is September 29, 2017.
Please note the section below regarding other land uses that occur on the available acreage in addition to hunting and grazing, including wind energy projects and oil and gas exploration and production. Like other large South Texas Ranches, the Kenedy Memorial Foundation has a history of managing these mixed uses of the land. The selected Lessee(s) will have uninterrupted hunting and grazing in the pastures during the lease, subject to the lease terms.
The acreage for lease is part of the historic Kenedy Ranch that honors the significant role that the Kenedy family played in the development and preservation of South Texas. The available pastures are part of the 235,000 acres of the Kenedy Ranch that is owned by the Kenedy Memorial Foundation, a 501 (c)(3) non-profit corporation established by Sarita Kenedy East in memory of her father, John Gregory Kenedy, Sr. (son of Mifflin Kenedy) and her mother, Marie Stella Turcotte Kenedy.
The Kenedy Ranch’s origins date back to the mid-to-late 19th Century. At the time, Sarita Kenedy East’s grandfather, Mifflin Kenedy, embarked on business ventures that led to investment in land in what was known as the “Wild Horse Desert,” located between the Nueces River and the Rio Grande/Mexican Border. For the next 100 years the Kenedy name would be significantly involved in every aspect of the economic development of South Texas – ranching, railroads, land development, and oil. The Kenedy Memorial Foundation’s Ranch was recently named number 55 in the top 100 of America’s largest landowners by The 2016 Land Report.
Conservation and enhancement of wildlife habitat were priorities of Sarita Kenedy East and remain priorities of the Kenedy Memorial Foundation. The Kenedy Memorial Foundation Ranch is a past recipient of Texas Parks and Wildlife Department’s prestigious Outstanding Lone Star Land Steward Award in recognition of outstanding efforts in the conservation and enhancement of wildlife habitat in Texas. The Kenedy Memorial Foundation implements an on-going wildlife habitat improvement program (discussed below in Section #5 under Lease Agreement) with its hunting Lessees that helps perpetuate the Ranch’s wildlife resources.
Beyond Ranching preservation and development, the Kenedy Memorial Foundation has a deep history of philanthropy consistent with the wishes of Sarita Kenedy East. The revenue from lease(s) awarded through this bidding process and other Ranch operations help support the Kenedy Memorial Foundation’s charitable giving to Catholic entities and non-profits across Texas, predominately in South Texas.
The Jaboncillos Division fronts US Highway 77, approximately 15 miles south of Sarita and 60 miles south of Corpus Christi. From Ranch gates on US Highway 77, the available acreage spans approximately 5 to 15 miles east into the Kenedy Memorial Foundation Ranch. With approximately 172,000 acres, the Jaboncillos Division is the Kenedy Memorial Foundation’s largest land division. The maps below show the location of the available acreage.
A Google Earth file of the available acreage can be downloaded here: Google Earth Map
Once Google Earth is downloaded, double click the .kmz map file you downloaded previously. This should now open in Google Earth.
The pastures of the Jaboncillos division are home to vegetation that includes dense oak mottes, coastal prairies, mesquite woodlands, wetlands, mud flats, and sand dunes. Soil classification throughout most of this division is sandy. Range condition varies with the different habitat types and rainfall. Vegetation is diverse throughout the division, with fields of seacoast and big bluestem, paspalums, Indian grass, cord grasses, salt grass, yucca, mesquite, huisache, running live oak (scrub oak), and live oak trees.
The sheer size of the Jaboncillos Division affords the co-existence of simultaneous yet non-interfering land uses, including hunting, cattle grazing, oil and gas exploration and production, and wind energy development. A wind farm with 118 operating wind turbines is located immediately east of the Ramirez and Magote Pastures. An additional wind farm is likely to be constructed in early 2018 in the East Jaboncillos Pasture and extending on adjacent acreage within a naked-eye’s view west, south, and southeast of the East Jaboncillos Pasture. The Ramirez and Magote Pastures are available to lease for hunting and grazing with a condition that the Kenedy Memorial Foundation can terminate acreage from a lease with six months advance notice to the lessee in order to allow wind energy projects to be developed on the Ramirez and Magote Pastures. As of the date of this packet, the potential lease termination arrangement for wind development covering the Ramirez and Magote Pastures is set to expire July 11, 2020. The same potential lease termination arrangement has been in place since 2012, and since then, the lease tenant has enjoyed uninterrupted hunting and cattle grazing in the Ramirez and Magote pastures.
The KMF Ranch is some of the most sought after hunting in South Texas. The KMF Ranch offers a distinctive ecosystem that provides habitat for birds, small mammals, and large game animals. The sweeping array of topography and habitat offered by the Kenedy Foundation Ranch is rooted in the expansive terrain and has the fortunate result for sportsmen of attracting an abundant variety of game that may be hunted, including but not limited to:
- White-tailed deer
- Wild turkeys
- Feral hogs
- Bobwhite quail
- Mourning doves
Lessees have the ability, with KMF approval, to construct camp facilities in the leased acreage. A small (< 900 square foot), modest camp building is located just south of the Telefon Pasture. There are no other lodging facilities on the available acreage. Water wells are located throughout the available acreage. Electricity is available at the modest camp building just south of the Telefon Pasture. The maps below show the location of pasture boundaries, water wells, Ranch gates, and access roads in these pastures.
The Kenedy Memorial Foundation is looking for a long-term relationship with a Lessee who shares in the Foundation’s wildlife conservation and habitat enhancement philosophy. While three year proposals are acceptable, the Kenedy Memorial Foundation encourages proposals that involve construction of permanent lease facilities on the acreage. Section #1 under Lease Agreement below discusses possible lease term concepts.
All hunting and fishing activities permitted under the lease(s) will be governed by a written agreement with the Kenedy Memorial Foundation. The following terms and guidelines are provided to assist in determining an appropriate offer for the property.
- The lease term(s) shall be for a period of 3 years from March 1, 2019 to February 28, 2022. The Kenedy Memorial Foundation will consider total lease term(s) up to ten years (March 1, 2019 to February 28, 2029) if the Lessee and KMF agree that by March 1, 2022 the Lessee will construct permanent lodge facilities in the leased acreage that will be completed by March 1, 2023. The Lessee would select the location with KMF approval subject to provisions of Section #13 below. Bidders must specify value of lodge facilities to be constructed.
- Rent shall be paid in advance non-refundable installments, equal to one-half the annual base rental. The first rental payment is due upon execution of the lease and will be applied to the first six months of the lease. The second rental payment is due on the first day of the lease and will be applied to the last six months of the lease. Rent will be adjusted every five years based on preceding five year’s CPI for any lease terms greater than three years.
- The premises are leased exclusively for year round, non-commercial hunting and grazing purposes. Commercial hunting, night hunting, and day hunts are strictly prohibited.
- Lessee shall at all times maintain sufficient records of cattle to reflect the number of animal units located within each grazing unit on the Leased acreage. Lessee shall furnish monthly written reports to the Kenedy Memorial Foundation indicating the number of animal units within each grazing unit on the Leased acreage. In no event shall the number of animal units exceed one (1) animal unit per 50 acres in the Leased Premises unless otherwise approved in writing by the Kenedy Memorial Foundation. Drought data and range conditions are continuously monitored on the Ranch to determine appropriate stocking limits. Grazing lessees are provided advance notice of any stocking limit changes necessary to prevent over-grazing of the land. Animal units shall be determined as follows:
- Bulls 18 months or older count as 1.25 animal units.
- Cows with or without a calf are counted as 1.00 animal units.
- Steers, bulls, and heifers weighing 500 pounds or less are counted as 0.5 animal units.
- Steers, bulls, and heifers weighing over 500 pounds and less than 18 months are counted as .75 animal units.
- Horses are counted as 1.5 animal units.
- Access to the leased acreage will be via US Highway 77 through the East Turcotte Gate. Access will be limited to those individuals designated on an access roster by the Lessee and approved by the KMF. The Access Roster shall contain the names of individuals (i.e., Members) granted continuous unescorted access on the premises and granted hunting rights by the Lessee. If the entire 40,000 acres is under one lease, the 7 THIS PACKAGE IS AN INVITATION TO BID – April 1, 2017 The John G. and Marie Stella Kenedy Memorial Foundation reserves the right to accept or reject any and all bids Access Roster for that lease shall be limited to ten individuals (not including guests) and pro-rated if the leased acreage is less than 40,000 acres. All individuals approved for access on the KMF Ranch are required to complete KMF release documentation prior to access on the KMF Ranch, whether by land or air.
- The Kenedy Memorial Foundation will provide gate guards for the East Turcotte Gate. The Lessee will be responsible for a pro-rata share of reimbursement of these gate guards, which will be reduced when thirdparties, such as oil and gas and wind energy companies, use these gates and participate in reimbursement of gate guard expenses. Currently, there are third parties that participate in gate guard expenses.
- The Lessee and Lessee’s agents, employees, contractors, guests shall comply with all relevant laws, rules, and regulations set forth by federal, state, and local regulatory agencies, Kenedy Memorial Foundation Ranch rules, and from time to time ranch management policies set by the Kenedy Memorial Foundation. Violation may result in termination of the lease.
- The Lessee shall conduct annual wildlife census counts and implement all wildlife harvest quotas set annually for the leased premises. The Jaboncillos Division (and all of the Kenedy Memorial Foundation Ranch) is under the Level III Managed Lands Deer Permit (MLDP) program, which extends the usual hunting season for whitetail deer using Texas Parks and Wildlife MLDP permits. The Lessee shall be required to make annual wildlife habitat improvement expenditures ($0.50/acre) on the leased premises, which will aid the propagation of future wildlife and shall be approved by the Kenedy Memorial Foundation.
- The Kenedy Memorial Foundation reserves the right for all uses of the leased premises which do not unreasonably conflict with Lessee’s hunting, recreational, and grazing rights. The Kenedy Memorial Foundation reserves the right to grant mineral, oil, and gas leases, easements, wind energy development leases/easements, and right of ways across the leased premises. The Kenedy Memorial Foundation reserves the right to terminate portions or all of the leased premises with six month advance notice to the Lessee for purposes of allowing third-parties to develop wind energy projects and the transmission and distribution of the electricity generated by these projects, as well as for purposes of granting grazing rights solely to a Kenedy Memorial Foundation cattle affiliate. The Kenedy Memorial Foundation will not remove acreage from the lease to convey hunting rights to a third party other than the Lessee, nor for any acreage that the Lessee has constructed a permanent lodge facility valued at $100,000 or more.
- The Lease rights may be subleased and assigned only with the prior written consent of the Kenedy Memorial Foundation and review and approval of a sublease agreement or any financial arrangement by the Kenedy Memorial Foundation. The Kenedy Memorial Foundation shall receive from the Lessee 33% of any amounts by which the base rental paid by the sublessee to the Lessee exceeds the base rental that the Lessee pays the Kenedy Memorial Foundation.
- Prior to any execution of a lease agreement, the Lessee will have an opportunity to inspect the condition of the leased premises. Lessee will accept the leased premises on an “AS IS” basis.
- The Lessee shall be responsible for the maintenance, repair, and replacement of all building (including the building described above under the Facilities section), fences, roads, water wells, windmills, and any other improvement covered by the lease or to be constructed during the lease in at least the state of appearance that existed at the start of the lease agreement or construction regardless of cause, reasonable wear and tear excepted. The Kenedy Memorial Foundation costs shares in fence replacement which shall not exceed five miles annually per lease.
- The Lessee shall obtain prior written authorization before placing, installing, or constructing any improvements or facilities on the leased premises. Any permanent improvements placed on the leased premises shall become the property of the Kenedy Memorial Foundation at lease end. 8 THIS PACKAGE IS AN INVITATION TO BID – April 1, 2017 The John G. and Marie Stella Kenedy Memorial Foundation reserves the right to accept or reject any and all bids
- The Lessee shall be responsible for reimbursement of all ad valorem taxes assessed against the leased premises and improvements leased to the Lessee, and for all improvements erected by the Lessee. (In 2016, Kenedy County taxes were $0.83 per acre for pastures in the Jaboncillos Division.)
- The Lessee will indemnify and release the KMF, its Directors, and employees. The Lessee shall maintain at its own expense commercial and general liability insurance with the following coverages: $1 million for combined single limit of liability for bodily injury and property damage; $2 million for each occurrence; and $2 million annual aggregate umbrella policy. The Lessee shall also have and maintain comprehensive automobile liability in a form acceptable to the KMF for all vehicles operated on the leased premises by the Lessee and employees, contractors, agents, and guests of the Lessee with the following coverages: $500,000 for bodily injury and property damage and $5,000 for personal injury protection. Workers’ compensation at statutory limits and employee liability insurance of $500,000 shall be maintained at all times. All contractors hired by the Lessee shall carry liability insurance of at least $500,000 for injury or death of persons and $500,000 for property damage. Lessee shall pay at its own expense for property insurance for all improvements leased to the Lessee and all improvements constructed by Lessee and subLessees in an amount sufficient and obligated to cover replacement costs. Insurance shall provide a waiver of subrogation of any claim against KMF and have KMF named additional insured. Lessee shall be required to provide proof of insurance to KMF.
- No ALL TERRAIN VEHICLES (ATVs) (i.e., quad/4-wheelers designed for 1) are allowed on the leased premises unless agreed upon in writing by the KMF and the lessee. UTILITY VEHICLES (UV) (i.e., more than 1 rider) used on the leased premises must have seat belts for all passengers and equipped with rollover protection. The Lessee shall insure the operation of the UVs under all applicable insurance policies, including but not limited to its general liability insurance.
- The Kenedy Memorial Foundation reserves the right to accept or reject any and all bids at its sole discretion.
Bidders are required to submit bids by September 29, 2017. Covers letters are acceptable with supplemental information, but the bid form must be fully completed and submitted to the Kenedy Memorial Foundation by September 29, 2017. Bidders are encouraged to provide as much detail as possible if proposing Ranch improvements during the lease term. Incomplete bids forms will not be accepted.
All bidders are required to submit a non-refundable $250 fee for each bid submitted. No bids will be accepted without this fee. The winning bidder(s) will receive $250 credit against the first rent payment. Bidders submitting fully-completed bid forms and the $250 fee will have the opportunity to inspect the acreage available for lease.