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HomeMy WebLinkAbout1998-10-13; City Council; 14884; Lease Agreement 6351 Yarrow Drive53 B % % . . p 2 1 x s 0 CITY OF CARLSBAD - AGENDA BILL AB# /u,s@f m: APPROVE LEASE AGREEMENT WITH MTG . 1 O/l 3/98 PALOMAR 910 ASSOCIATES FOR SUITE C, 6351 YARROW DRIVE FOR PURCHASING DEPT. PW WAREHOUSE RECOMMENDED ACTION: Lp s CITY All-Y. Adopt Resolution No. 98 * .$?Y which authorizes the Mayor to execute the lease agreement between the City of Carlsbad and Palomar 910 Associates Ltd. ITEM EXPLANATION: The Purchasing Department currently leases Suite C at 6351 Yarrow Drive for the City’s warehouse and record storage requirements. The leased space consists of approximately 5,760 square feet and is required until the Public Works Operations Facility is constructed at the Safety Center. This project is currently in the planning process but is not scheduled for construction until the year 2000. The lease originated on October 1, 1989. Facilities Management staff renegotiated the lease in 1991 at a reduced rate because of the depressed market conditions at that time. The reduced rate, which resulted in a savings of $13,140 over the term to the City, was extended for the succeeding term which ended on September 30, 1998. However, since the market conditions have improved considerably, the landlord has increased the rental rate from $53 per square foot to $59 per square foot in 1999, and $61 and $.63 per square foot in 2000 and 2001 respectively. Staff confirms these rates compare very favorably with other unimproved warehouse space available in the industrial park. FISCAL IMPACT: The cost of the previous lease was $3,050 per month or $36,000 annually. The cost for year one in the new lease is $3,398 per month or $40,776 annually. The cost for years two and three is $3,514 and $3,629 per month respectively. Funds are included in the Purchasing Department Budget for this purpose. EXHIBITS: 1. Resolution No. 98- 33Y 2. Lease Agreement 1 RESOLUTION NO. 98-334 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF 3 CARLSBAD, CALIFORNIA, APPROVING AN EXTENSION OF THE EXISTING LEASE WITH PALOMAR 910 ASSOCIATES, LTD FOR 4 SUITE e LOCATED AT 6351 YARROW DRIVE, CARLSBAD CALIFORNIA 5 WHEREAS, the City of Carlsbad, California has determined the need to provide 6 7 warehouse space for record and non-record storage; and 8 WHEREAS, Facilities Management staff has negotiated with the managing partner of the 9 property and secured a new three-year extension of the lease with an increase in rent from 10 $3,050 to $3,398 per month in year one to $3,514 and $3,629 per month in years two and three respectively; NOW, THEREFORE, BE IT RESOLVED, BY THE City Council of the City of Carlsbad as follows: I. That the above recitations are true and correct. 2. That the modification to the Lease Agreement between the City of Carlsbad and Palomar 910 Associates, Ltd attached hereto as Exhibit 2 is hereby approved. 3. That the Mayor is hereby authorized to sign the lease modification on behalf of the 11 12 13 14 15 16 17 18 II City. 19 II PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad at its 1 20 21 regular meeting held on the 13th day of October , 1998, by the following vote, to wit: AYES: Council Members Lewis, Finnila, Nygaard and Kulchin 22 23 24 25 NOES: None ABSENT: Council Member Hall ATTEST: ALETHA L. RAUTENKkANZ, City Clerk) (SEW EXHIBIT 2 PALOMAR 910 ASSOCIATES, LTD. 1859 Camiaito Brh P. 0. Box 1064 LaJoUa,CA92@38 Phone: (619) 454-8841 Fax: (619) 454-8842 February 17,1998 City of Carl&ad Community Services 405 Oak Ave. Carkbad, CA 92008 Re: Proposed lease extension - Suite C, 6351 Yarrow Drive, Carl&ad, CA 92009 Am Mr. Chuck Walden Facilities Superintendent Dear Mr. Walden: Per your request, I am hereby submitting for your approval a proposal to extmd your existing lease at the above re&renced premises for a three year period, said extension to &m&ate September 30,200l. Your current lease is dated May 2,1989. (It superceded your original lease dated July 13,1983.) This 1989 lease has been amended by letter agreements dated September 26,199l and September 28,199X Your current leax agreement is scheduled to temninate September 30,1998. It provides fix a monthly industrial gross rental rate of $3,050.00 per month I hold a securi@ deposit of $3,050.00. The lease also provides that Lessee and Lessor each have the right to terminate the lease by giving one hundred eighty (180) days prior written notice to the other party. Your leased &pace is approximately 120’~ 48’ (5,760 sq. it. in area) and has a 22’ clear span ceiling. You have a 10’ x 20’ double truck door with dock high loading; you also have a concrete ramp which simplifies bading tirn or to small trucks or vans. You have leased this space from me for 18 years. I very much wish to continue our business relationship fbr the foreseeable future. Accordingly, I am of&ring you a proposal whi& I believe is priced well below the current Carlsbad market for similar properties. I hereby propose the fbllowing modification to your lease: a. The term&&ion date shall be extended until September 30,200l. b. The monthly rental rate for this extension period shall be as fbllows: October 1,1998 thru September 30,1999 $3,398.00 October 1,1999 thru September 30,200O $3,514.00 October 1,2OOO thru September 30,200l $3,629.00 cTYcRLo7.sAM Proposed lease mod, City of CarIsbad February 17,1998 c. All other terms and conditions of the lease s&ill remain unchanged. If this proposed extension is acceptable to you, you may implement it by returning to me a copy properly signed by the City of CarIsbad. This offer is good until March 31,1998, at which time it may be changed or revoked without hrtk notice. Please advise me iftbis date does not provide you with s&Xc&t time to make your decision OMAR 910 ASSOCIATES, LTD., Lessor Eli PerIman GeneralPartner AGREED CITY OF CARLSBAD. Lessee cTYcRL437.sAM October 23,1998 Palomar 910 Associates, Ltd. P.O. Box 1064 La Jolla, CA 92038 ATTENTION: MR. ELI PERLMAN, GENERAL PARTNER Enclosed please find a certified copy of the signed lease extension for Suite C, 6351 Yarrow Drive, Carlsbad, California. Also enclosed for your records is a copy of Carlsbad City Council Resolution No. 98-334 which was adopted by the City Council on October 13, 1998, approving the lease extension with your company. If you have any questions regarding the lease or the extension, please call Chuck Walden, at (760) 434-2992. I understand there was some concern about receiving the signed extension. Please accept my apologies for the delay - the Clerk’s Office was hit hard by the flu. hDv KATHLEEN D. SHOUP Sr. Office Specialist 1200 Carlsbad Village Drive * Carlsbad. California 92008-1989 - (760) 434-2808 @