The URL can be used to link to this page

Home My WebLink About2001-02-13; City Council; 16045; Lease Agreement Palomar 910 Associates LTDwp > !? 2 a . . g 2 J G 5 8 AB# lb045 MTG. d -,j-@! DEPT. ED CITY OF CARLSBAD - AGENDA BILL TITLE. ii&OVAL OF LEASE AGREEMENT BETWEEN THE CITY OF CARLSBAD AND PALOMAR 910 ASSOCIATES LTD FOR 6351Ymow DRIVE CITY MGRa RECOMMENDED ACTION: Approve Resolution No.dm\- c3 y authorizing the Mayor to execute the lease agreement for 6351 Yarrow Drive, Suite C, between the City of Carlsbad and Palomar 910 Associates LTD. ITEM EXPLANATION: Since 1983, the City of Carlsbad has leased 5,760 square feet of warehouse space at6351 Yarrow Drive, Suite C from Palomar 910 Associates LTD. for warehouse and record storage. Since the original contract was executed, Palomar Associates has extended the lease agreement three times with the current lease due to expire on September 30,200l. The Lessor has recently asked the City if there will be a continuing need to lease the facility, and if so, they have proposed to extend the agreement for a fourth time. In early 2003, construction of the City’s new Public Works Center should be complete. As a part of that project, space will be allocated to accommodate the City’s storage needs. Until space at the new Public Works Center is available, the City will continue to need a storage facility. The proposed lease agreement extension will provide storage space for the City through September 2003. However, the lease can be terminated earlier with 180 days notice to the Lessor. Staff is recommending that the City Council execute the 2 year lease extension. FISCAL IMPACT: The City currently rents the Yarrow Drive facility for $3629 or $0.63 per square foot. The new proposed extension would increase the current rate by 4% to approximately $0.66 per square foot or $3774.00 per month beginning on October 1, 2001. The final year of the extension (October 1,2002 through September 30, 2003) the rent would adjust upward by 4% to $3925 per month or $0.68 per square foot. The total cost of a two year extension would be $92,388. Staff has evaluated similar space in Carlsbad and determined that the proposed rent and adjustment is consistent with market lease rates for the area. Since the current lease does not expire until September 2001, funding for the lease extension will be accomplished through the normal budgeting process for 2001-2002 and 2002-2003. EXHIBITS: 1. Resolution No ===a of the City of Carlsbad, California, authorizing the Mayor to execute the lease agreement between the City of Carlsbad and Palomar 910 Associates LTD. 2. Letter from Palomar 910 Associates LTD. dated December 1,200O 3. Proposed Lease Extension dated December 8,200O. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2001- 34 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE MAYOR TO EXECUTE A LEASE AGREEMENT EXTENSION WITH PALOMAR 910 ASSOCIATES LTD FOR 6351 YARROW DRIVE SUITE C. WHEREAS, the City Council of the City of Carlsbad has determined that it is in the best interest of the City to continue leasing space at 6351 Yarrow Drive, Suite C, through September 30,2003, and WHEREAS, the City Council has further determined that it accepts the terms of the lease presented by Palomar 910 Associates LTD. for the two year term. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. 2. That the above recitations are true and correct. That the Mayor is authorized to execute the lease agreement extension for 635 1 Yarrow Drive, Suite C. Ill II/ l/f Ill Ill Ill /I/ Ill Ill Ill Ill If! /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council on the 13th day of February 2000, by the following vote to wit: AYES: Council Members Lewis, Kulchin, Finnila, Nygaard and Hal NOES: None ABSENT: None Mayor City Clerk WJW PALOMAR 910 ASSOCIATES, LTD. 1859 Caminito Brisa P. 0. Box 1064 La Jolla, CA 92038 Phone: (619) 454-8841 Fax: (619) 454-8842 December 1,200O City of Carlsbad Economic Development Department 1635 Faraday Ave. Carlsbad, CA 92008 Re: Lease Extension Agreement dated 2/17/98; Suite C, 635 1 Yarrow Drive, Carlsbad, CA 92009 Attn: Ms. Cynthia Haas, Director Dear Ms. Haas: I am writing to ask if you wish me to prepare a proposal to you for the extension of our lease at 6351 Yarrow Drive, Suite C, Carlsbad, CA 92009. Unless extended, this lease will terminate on September 30,2001, just ten months from now. In the past, it has taken almost this much time to negotiate and obtain Council approval for desired lease extensions. You have been a tenant at this site for twenty years. We have had what I consider to be a mutually beneficial business relationship. I would like to continue it. Please advise me if and when you think it appropriate for me to present you with a proposal for another extension. Your cooperation in this matter will be appreciated. Sincerely, 10 ASSOCIATES, LTD., Lessor Eli Perl&an General Partner cc: Mrs. Ruth Fletcher, Purchasing Agent CTYCRLl l.SAh4 PALOMAR 910 ASSOCIATES, LTD. 1859 Caminito Brisa P. 0. Box 1064 La Jolla, CA 92038 Phone: (619) 454-8841 Far: (619) 454-8842 December 8,200O City of Carlsbad Economic Development Department 1635 Faraday Ave. Carlsbad, CA 92008 Re: Proposed Extension to Lease Extension Agreement dated 2/17/98; Suite C, 635 1 Yarrow Drive, Carlsbad, CA 92009 Attn: Mrs. Cyntbia Haas, Director Dear Mrs. J&as: The purpose of this letter is for me to propose to you a 2 year extension to our current Lease Extension Agreement dated February 17, 1998, as was discussed with you during our telephone conversation earlier today. This proposal includes the 6 month cancellation provision which has been part of our agreement since 199 1. Our current lease is dated May 2, 1989. It superseded your original lease dated June 25, 1980. This 1989 lease has been amended by letter agreements dated September 26, 1991, September 28, 1995, and most recently February 17, 1998. This most recent agreement is scheduled to terminate September 30,200l. It currently provides for a monthly industrial gross rental rate of $3,629.00 per month. I hold a security deposit of $3,050.00. Our agreement 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 space is approximately 120’ x 48’ (5,760 sq. ft. 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 loading from or to small trucks or vans. We have had what I consider to be a mutually beneficial business relationship over the past 20 years, and I am pleased to have the opportunity to extend that relationship even further. I therefore propose the following modification to our lease, which I believe is at a rate well below the current Carlsbad market for similar properties: a. The termination date shall be extended 2 years until September 30, 2003. b. The monthly rental rate for this extension period shall be as follows: October 1,200 1 thru September 30,2002 $3,774.00 October 1,2002 thru September 30,2003 $3,925.00 cTYcRL12.sAM pg2 Proposed lease mod, City of Carlsbad December 8,200O c. All other terms and conditions of the lease shall 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 Carlsbad. This offer is good until March 3 1,200 1, at which time it may be changed or revoked without further notice. Please advise me if this date does not provide you with sufficient time to make your decision. Sincerely, PALOMAR 910 ASSOCIATES, LTD., Lessor &a@- Eli Perhnan General Partner Date February 20, 2001 by CLAUDE i. LEAIS, Mayor cc: Mrs. Ruth Fletcher, Purchasing Agent APPROVED AS r0 FORIIII: ROW&BAu,CW-“‘Y CTYCRLlP.SAM