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HomeMy WebLinkAbout2018-04-24; City Council; ; Authorize the release of a Request for Proposals for leasing the Hawthorne PropertyProperty, at such time it is definitively determined that the Property will not be used for the city's MOC, the city is required to sell the Property within a reasonable, fiduciarily responsible timeframe, and the sale proceeds must be returned to the CFD No. 1 fund account. City staff anticipates returning with a separate, competitive RFP for the sale of the Property once the city determines it is the appropriate time to sell the property. The Property has a General Plan Land Use designation of Planned Industrial (Pl) and a Zoning designation of Planned Industrial (P-M), which allows for light industrial and manufacturing uses and corporate business or office uses that do not cater directly to the public. Additionally, the zoning ordinance has been recently amended to allow for auto repair uses within the P-M Zone subject to approval of a minor conditional use permit. Lastly, the property is located outside the coastal zone. Fiscal Analysis The city will seek to negotiate a fair market rent for the Hawthorne property, which is anticipated to be approximately $0.95 per square foot per month ($4,750 per month; $57,000 per year) for the 5,000 square foot building. However, the property's 1.5 acres of paved parking area, as well as the recent approval allowing for auto repair uses, makes the site advantageous for uses such as auto storage and auto repair, which could increase lease rates to as high as $12,000 per month, or $144,000 per year. All rental revenue received is required to be deposited into the CFD No. 1 fund account. In addition to the lease revenue, the lease could generate additional sales tax and will generate possessory interest revenue for the city. Next Steps Staff will release the RFP and evaluate proposals received. Following review and analysis of the proposal(s), staff will recommend to the City Council the selection of a tenant with whom to exclusively negotiate a short term three to five year lease agreement. If authorization to exclusively negotiate a lease agreement is approved by the City Council, staff will subsequently return to the City Council for approval of a lease agreement with the selected respondent. Environmental Evaluation (CEQA) This action is categorically exempt from the California Environmental Quality Act pursuant to CEQA Guidelines section 15301 (leasing of existing public structures or facilities). Exhibits 1.City Council Resolution. April 24, 2018 Item #3 Page 2 of 14 RESOLUTION NO. 2018-054 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AUTHORIZING THE RELEASE OF A REQUEST FOR PROPOSALS FOR LEASING THE PROPERTY LOCATED AT 2065 CAMINO VIDA ROBLE, COMMONLY KNOWN AS THE HAWTHORNE PROPERTY WHEREAS, the city desires to issue a Request for Proposals for a short-term lease of the Hawthorne Property; and WHEREAS, the city is recommending that the terms of the RFP include a first right of refusal option to purchase the property. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: \\ \\ \\ 1. The above recitations are true and correct. 2. City staff is hereby authorized to release a RFP, attached hereto as Attachment A, for leasing the property located at 2065 Camino Vida Roble, commonly known as the Hawthorne Property. 3. City staff is directed to evaluate proposals received. Following review and analysis of the proposal(s), staff will recommend to the City Council the selection of a tenant to exclusively negotiate a short-term, three to five year lease agreement. If authorization to exclusively negotiate a lease agreement is approved by the City Council, staff will subsequently return to the City Council for approval of a lease agreement with the selected respondent. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 24th day of April 2018, by the following vote, to wit: AYES: NOES: ABSENT: K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. None. M. Hall. N, Mayor Pro Tern (SEAL) ( ( City of Carlsbad California REQUEST FOR PROPOSALS For Lease of City-Owned Real Estate Located at 2065 Camino Vida Roble Responses Due by: [DA~], [DATE], 2018 at 4:00 p.m. PST SEND TO: City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Curtis M. Jackson, Real Estate Manager The City of Carlsbad encourages the participation of minority and women-owned businesses April 24, 2018 Item #3 Page 5 of 14 Attachment A Table of Contents Section Page I. INTRODUCTION 1 II. BACKGROUND AND PROPERTY DESCRIPTION 1 Background 1 The Subject Property 1 Site Map 1 Adjacent Uses 1 Zoning & Development Requirements 2 Ill. SELECTION PROCESS 3 Selection Process 3 Submittal Requirements 3 Procedure/Schedule 4 Questions 5 Site Tours 5 Selection Criteria 5 Offer to Exclusively Negotiate 5 IV. SPECIAL CONDITIONS 6 Reservations 6 Public Record 6 Right to Cancel 6 Additional Information 6 Conflict of Interest 6 Change of Ownership 6 Scope Changes 6 Proprietary Information 7 Responsive Materials Ownership 7 Best Value Selection 7 Lease Award 7 V. COMPLIANCE WITH PREVAILING WAGE LAWS 7 VI. CONCLUSION 8 Conclusion 8 April 24, 2018 Item #3 Page 6 of 14 I. INTRODUCTION The City of Carlsbad issues this Request for Proposals (RFP} for the short-term lease of real property located at 2065 Camino Vida Roble in the City of Carlsbad, County of San Diego, State of California (Property). The city is soliciting proposals from an individual or entity interested (hereinafter referred to as "Respondent") in leasing the Property. The purpose of this RFP is to explain the requirements and procedures for the submission of formal proposals from parties interested in the lease of the Property. II. BACKGROUND AND PROPERTY DESCRIPTION Background The City of Carlsbad occupies approximately 39 square miles of rolling hills, beaches, and bluffs along the northern coast of San Diego County. Carlsbad is located approximately 35 miles north of San Diego and roughly 90 miles south of Los Angeles. The Property is located at the southwest corner of Camino Vida Roble and Las Palmas Drive, at 2065 Camino Vida Roble. The city is interested in entering into a short-term three to five year lease agreement that could also include a Right of First Offer (ROFO) to purchase the Property with a business entity that will fulfill the city's vision ,of strengthening the city's already strong and diverse economy, and reinforce its position as an employment hub in north San Diego County. The Property The Property, identified as APN 213-061-28, consists of 3.08 gross acres, and is currently developed with a freestanding 5,000 square foot concrete block building comprised of 1,100 square feet of office space and 3,900 square feet for truck bays. Approximately 1.5 acres of the 3.08 acre Property is a fully paved (concrete and asphalt) parking lot that is significantly larger than necessary to satisfy the parking requirements of the 5,000 square foot building, and much of the parking area could be utilized for uses such as auto storage, subject to zoning regulations. The Property is secured by a wrought iron fence and includes a gated entrance off Camino Vida Roble. Additionally, the Property is constrained by a 200-foot-wide SDG&E easement traversing the south-western portion of the property. The initial lease of the Property will not include a .61 acre upper parking lot area (APN: 213-061-27 and 28}, which is leased to an adjacent tenant (Mira Costa Community College) through 2020; however, the Property may include access and/or use of the upper parking lot at the end of the adjacent tenant's lease term, and any subsequent sale of the Property will include a portion of the upper parking lot. Vehicular access to the upper parking lot is not currently available through the Property. 1 April 24, 2018 Item #3 Page 7 of 14 The Property will be leased in an "as is" "where is" condition. Prospective Respondent(s) will be required to undertake their own independent inspection and investigation of the Property. Any improvements to the Property made by a prospective tenant must be in accordance with all applicable Federal, State and city building laws & requirements. The city anticipates selling the property in the future at a yet to be determined date. The sale of the Property will be subject to a competitive RFP process at that time, and will be sold at no less than Fair Market Value. As such, the city is interested in all prospective Respondents identifying their interest in Acquiring the Property at that time subject to a ROFO within their lease agreement with the city. Site Map For an aerial view of the parcel(s}, please see the attached Site map. Adjacent Uses The Property is located off Palomar Airport Road in the heart of Carlsbad, also known as the Palomar Airport Business Park. The Property is directly west of a city-owned property currently leased to Mira Costa Community College, and is surrounded on the east and north by open-space. Additionally, the Property is less than one-mile south of McClellan-Palomar Airport. This opportunity is unique and exciting for many reasons: 1) The Property is located within easy access to Interstate 5, Palomar Airport Road, and El Camino Real. 2) The Property is located less than a mile from McClellan-Palomar Airport. 3} Carlsbad has a close proximity to the major markets of San Diego (35 miles south), Orange County (30 miles north) and Los Angeles (90 miles north). 4) A large, quality work force, and nearby universities and colleges; 5) Some of the finest weather and recreational amenities in the country, including miles of beautiful beaches, a variety of parks and golf courses and cultural and historical facilities. Zoning & General Plan General Plan: The Property has a General Plan land use designation of Planned Industrial (Pl}. Zoning: The Property is zoned Planned Industrial (P-M}, which allows for light industrial and manufacturing uses and corporate business or office uses that do not cater directly to the public. The city's zoning ordinance has recently been amended to allow for auto 2 April 24, 2018 Item #3 Page 8 of 14 repair within the P-M Zone subject to approval of a minor conditional use permit. Lastly, the property is located outside the coastal zone. Development Impact Fees Remodeling or expansion of the Property may be subject to impact fees. For more information, please contact Jeremy Riddle, Development Services Manager, at (760) 602-2785. Carlsbad Municipal Code: http://www.gcode.us/codes/carlsbad/. Carlsbad Master Fee Schedule: http://www.carlsbadca.gov/services/depts/finance/fees/schedule.asp Ill. SELECTION PROCESS Respondent selection is anticipated to occur through the process outlined herein, the described selection criteria, and submittal requirements. Selection Process The city is seeking proposals, including qualifications, from individuals and/or entities with the experience and the financial capacity to lease, improve, and operate a business on Property. The city will entertain proposals that maximize the city's property asset, which include, but are not limited to: the type of use proposed which compliments other uses in the Palomar Airport Business Park; the type of improvements to be made to the Property; the amount of rent to be paid; and the term of the lease. Submittal Requirements Respondents shall provide the city with five (5) sets of the information requested below, with the exception of the Financial Capacity materials, of which two (2) copies are to be submitted under separate cover on a confidential basis. 1) A statement that the signatory is authorized to submit the proposal on behalf of each listed member of Respondent's team; 2) A statement that the proposal will remain in effect for a minimum of 180 days from the date of submittal and may be extended at the mutual agreement of both the city and Respondent; 3) Leasing Team Entity and Qualifications: A description of the type of entity that will lease and improve the Property (e.g. corporation, LLC, joint venture, etc.) 3 April 24, 2018 Item #3 Page 9 of 14 and a list of other owners of interest that may provide equity to the ownership entity and the estimated percentage of ownership of each. a. Legal name and principal officers of each member of the Respondent's team. b. Description of each principals previous relevant experience in leasing similar property and operating a similar use, and obtaining financing commitments, detailing financing source, amounts committed, etc.; 4) Project Description: Describe the use and tenant improvements proposed for the Subject Property. If improvements are proposed, indicate the estimated tenant improvement budget. 5) Schedule: Respondents will provide a development schedule, from authorization to negotiate through certificate of occupancy. If alternate financial structures are proposed, please include schedule(s) specific to the alternate type(s) of financing being proposed. Proposals must also include an estimated certificate of occupancy date. 6) Financial Capacity: provided on a confidential basis, to the extent allowed by law. 7) Proposed rental rate. If rent credits or a below-market rental rate are proposed to offset the cost of tenant improvements in whole or in part, prevailing wage requirements under California Labor Code section 1720 et seq. may apply. (Please refer to Section V. below.) Procedure/Schedule The procedure for selection is as follows: 1) Proposals shall be submitted to the City no later than 4:00 p.m. on [DAY], [DATE], 2018. Proposals and/or modifications received subsequent to the hour and date specified will not be considered; 2) Following timely receipt, submissions will be reviewed by staff within 30-days of the submittal date; 3) The most desirable and qualified Respondent(s) may be invited for an interview and presentation of their proposal; and 4) Following review and analysis of the proposal(s), staff will recommend to the City Council the selection of a tenant with whom to exclusively negotiate a property lease agreement with. If authorization to negotiate is approved by City Council, a non-refundable deposit of $5,000 will be required for the right to negotiate exclusively with the city. 4 April 24, 2018 Item #3 Page 10 of 14 5) Upon agreement on negotiated lease terms, staff will return to the City Council for approval of a short-term lease agreement with the selected Respondent. Questions Any questions Respondent's may have pertaining to this RFP shall be addressed to the City's Real Estate Manager, Curtis M. Jackson, at Curtis.jackson@carlsbadca.gov. All questions must be in writing and no other officer, agent, or employee of the city is authorized to provide official answers. Site Tours Site Tours are not mandatory; however, interested Respondents should contact Curtis M. Jackson, Real Estate Manager, at curtis.jackson@carlsbadca.gov or 760-434-2836. Selection Criteria The focus of the selection process will be on the following issues: 1) Respondent's short-term and long-term vision and plan for the Property. 2) Financial benefit to the city. 3) Financial ability of the Respondent to lease the Property as evidenced by on- going relationships with financing sources and/or financial status. 4) Experience of the Respondent in the successful improvement and operation of a similar space and use. 5) Rental rate, description of tenant improvements and other applicable terms and conditions of a lease. 6) If applicable, demonstrated understanding of a similar use and experience in the operation thereof. 7) Litigation history. Offer to Exclusively Negotiate Upon selection of a Respondent, the city will negotiate a property lease agreement exclusively with the selected Respondent for a period of up to 60 days. By submitting a proposal and qualifications to the city, the prospective tenant is also agreeing that the city retains the right to modify or suspend all aspects of the selection and exclusive negotiating process and to waive any defects as to form or content of the offering or any responses that are received. Further, city shall have the right to reject any and all proposals. 5 April 24, 2018 Item #3 Page 11 of 14 IV. SPECIAL CONDITIONS Reservations This RFP does not commit the city to award a lease, to defray any costs incurred in the preparation of a proposal pursuant to this RFP, or to procure or contract for work. Public Record All proposals submitted in response to this RFP become the property of the city and are public records and, as such, may be subject to public review. Financial capacity statements, however, are provided on a confidential basis to the extent allowed by law. Right to Cancel The city reserves the right to revise or cancel, for any reason, in part or in its entirety, this RFP, including but not limited to: selection schedule, submittal date, and submittal requirements. If the city cancels or revises this RFP, all Respondents will be notified in writing by the city. Additional Information The city reserves the right to request additional information and/or clarification from any or all Respondents to this RFP. Conflict of Interest The Respondent, if selected, shall be required to file a Conflict of Interest Statement with the City Clerk in accordance with the requirements of the City of Carlsbad Conflict of Interest Code. Change of Ownership For the term of the lease proposed, Respondent is precluded from a change of ownership of more than twenty-five percent {25%) without the city's express written consent. The city reserves the right to withhold consent for any reason. Assignment, sublease, encumbrance or other transfers of the leasehold interest in the Property is expressly prohibited without prior written authorization from the city. Scope Changes All changes in proposal documents shall be through written addendum. Verbal information obtained otherwise will not be considered in the award process. Proposal 6 April 24, 2018 Item #3 Page 12 of 14 submittals must acknowledge all addenda. Proposals failing to do so may be considered as non-responsive by the city and eliminated from further consideration. Proprietary Information Any restrictions on the use of data contained within a proposal must be clearly stated in the proposal itself. Proprietary information submitted in response to this RFP will be handled in accordance with applicable city procurement regulations and the California Public Records Act. If you have proprietary information, products or services, please identify them in your proposal. Responsive Materials Ownership All materials submitted regarding this RFP become the property of the city. Responses may be reviewed by any person after final selection has been made. The city has the right to use any or all system ideas presented in reply to this request, subject to the limitations outlined in proprietary information above. Disqualification of a Respondent does not eliminate this right. Best Value Selection The Respondent selected will be based on the best value option for the city. The city is under no obligation to award a lease to the Respondent offering the most advantageous financial position. Evaluation criteria expressed in the RFP shall be used in the proposal evaluation process. In evaluating proposals, the city may consider the qualifications of the Respondent and whether the proposals comply with the prescribed requirements. Lease Award The award of the lease will be in accordance with, but not limited to, the results of the city's evaluation. Final approval of selected Respondent and award of lease lies with the City of Carlsbad City Council. V. COMPLIANCE WITH PREVAILING WAGE LAWS The Lease will require the Respondent to acknowledge and agree that: (a) any construction, alteration, demolition, installation or repair work performed under the Lease constitutes "public work" under California Prevailing Wage Law, including Labor Code sections 1720 through 1815, et seq. (the "PWL"), and will obligate Respondent to cause such work to be performed as a "public work," including, but not limited to, the payment of applicable prevailing wages to the all persons or entities subject to the PWL; (b) Respondent shall cause all persons and/or entities performing "public work" under the Lease to comply with all applicable provisions of the PWL; (c) City is not responsible for Respondent's failure to comply with any applicable provisions of the PWL; (d) Respondent's alleged or actual violations of the PWL shall constitute an event of default under the Lease; and (e) 7 April 24, 2018 Item #3 Page 13 of 14 Respondent shall defend and indemnify city and its officers, employees, council members and agents from and against any and all claims, assessments, back-wages, penalties, change orders, suits, liability, judgments, damages, proceedings, orders, directives, costs, including reasonable attorneys' fees, arising from or relating to any actual or alleged violations of the PWL, or other application of laws, ordinances or regulations, by any person or entity, including but not limited to Lessee, performing construction, alteration, demolition, installation, repair and/or any other type of work contemplated under the Lease. VI. CONCLUSION Conclusion We appreciate your interest in the City of Carlsbad and look forward to your proposal and qualifications for a lease of the Property. Submittal packages should be addressed to: City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Curtis M. Jackson, Real Estate Manager Please return your response no later than 4:00 p.m., [DATE], 2018. 8 April 24, 2018 Item #3 Page 14 of 14 Authorize the release of a Request for Proposals (RFP) for leasing the Hawthorne Property •Property: 3.08 Acres •Building: 5,000 square feet •Paved Area: 1.5 Acres CAMINO VIDE ROBLE PROPERTY PROPERTY HISTORY •Acquired in 2010 for $2,487,000 with CFD No. 1 Funds. •Intended location for Maintenance and Operations Center (MOC). •April 2016 property valued between $2,250,000 and $3,100,000. Real Estate Strategic Plan •Adopted October 2017 •Framework for decision making •Specific actions presented to the Council for discussion and direction •Plan recommended issuance of a RFP for a short term lease (3-5 years), with a purchase option. RFP Framework •Requesting proposals from parties for a short-term lease that includes a Right of First Offer (ROFO)to purchase the property at a later date. •RFP calls for competitive proposals to lease the property,to include required capital improvements. •Anticipate lease rates of up to $12,000 per month. •All lease revenue deposited to the CFD No. 1 fund account. Next Steps •Release the RFP to lease the Property;open for a 45 day period. •Review proposals and return to City Council with a request to exclusively negotiate a lease agreement with the recommended respondent. •Negotiate lease and return to City Council for approval of a lease agreement. Recommendation •Adopt a Resolution authorizing the release of a Request for Proposals for leasing the property located at 2065 Camino Vide Roble, commonly known as the Hawthorne Property.