HomeMy WebLinkAbout2018-08-28; City Council; ; Authorization for city staff to negotiate a lease agreement with the Bob Baker Auto Group for the property located at 2065 Camino Vida Roble, commonly known as the HawthoCAReview .RK._
~ CITY COUNCIL
~ Staff Report
Meeting Date
To:
From:
Staff Contact:
Subject
August 28, 2018
Mayor and City Council
Scott Chadwick, City Manager
Curtis M. Jackson, Real Estate Manager
Curtis.jackson@carlsbadca.gov or 760-434-2836
Authorization for city staff to negotiate a lease agreement with the Bob
Baker Auto Group for the property located at 2065 Camino Vida Roble,
commonly known as the Hawthorne Property.
Recommended Action
Adopt a Resolution authorizing city staff to negotiate a lease agreement with the Bob Baker
Auto Group for the property located at 2065 Camino Vida Roble, commonly known as the
Hawthorne Property.
Executive Summary
In October 2017, the City Council approved the Real Estate Strategic Plan, which included the
Hawthorne Property (Property) and recommended that the city issue a competitive Request for
Proposals (RFP) for the short-term lease (three-to-five years) that included a right of first offer
to acquire the Property when the city subsequently initiates the sale of the Property. Consistent
with the Real Estate Strategic Plan, in April 2018, the City Council authorized the release of an
RFP for the lease of the Property. In response to the RFP the city received five proposals and
city staff is recommending that City Council authorize city staff to negotiate a lease agreement
with the Bob Baker Auto Group for the Hawthorne Property.
Discussion
The Property 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. 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.
In October 2017, the City Council approved the Real Estate Strategic Plan which recommended
that the city issue a competitive RFP for the short-term lease (three-to-five years) that included a
right of first offer to acquire the Property when the city subsequently initiates the sale of the
Property. Consistent with the Real Estate Strategic Plan, on April 24, 2018, City Council
authorized the release of an RFP for the lease of the Property by Resolution No. 2018-054
August 28, 2018 Item #7 Page 1 of 15
(Exhibit 2). The city received five formal proposals which were evaluated by an internal selection
committee. The selection committee ranked each respondent in accordance with the criteria
detailed in the RFP and subsequently invited the top three cumulative scored respondents for a
selection interview. The three top ranked respondents were:
Bob Baker Auto Group
Toyota of Carlsbad
Fix Auto Collision Centers
Pursuant to the selection interviews, the selection committee is recommending Bob Baker as the
prospective tenant. Bob Baker desires to occupy the Property to relocate their non-customer
facing repair capacity and utilize the exterior pad for new vehicle storage. The proposed auto
repair and auto storage uses would require issuance of a minor conditional use permit by the City
Planner.
City staff is recommending that the City Council authorize city staff to negotiate a three-to-five
year lease agreement with Bob Baker. The lease would include a right of first offer when the city
subsequently initiates the sale of the Property. Staff will return to City Council for approval of a
lease once negotiations are completed.
Fiscal Analysis
Once a lease agreement is approved the city will generate monthly revenue at market rate for
the City of Carlsbad's CFD No. 1 fund. The lease rate will be disclosed at the time of lease
approval.
Next Steps
City staff and Bob Baker will commence negotiations on a lease agreement and return to City
Council for approval of a lease agreement.
Environmental Evaluation (CEQA)
This action is categorically exempt from the California Environmental Quality Act pursuant to
CEQA Guidelines section 15301, leasing of existing public or private structures or facilities.
Public Notification
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to the meeting date and time.
Exhibits
1. City Council Resolution.
2. Request for Proposals, dated June 12, 2018.
August 28, 2018 Item #7 Page 2 of 15
RESOLUTION NO. 2018-162
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA AUTHORIZING CITY STAFF TO NEGOTIATE A LEASE
AGREEMENT WITH THE BOB BAKER AUTO GROUP FOR THE
PROPERTY LOCATED AT 2065 CAMINO VIDA ROBLE, COMMONLY
KNOWN AS THE HAWTHORNE PROPERTY
Exhibit 1
WHEREAS, On October 17, 2017, the City Council approved the Real Estate
Strategic Plan by Resolution No. 2017-200; and
WHEREAS, the Real Estate Strategic Plan recommended that the city issue a
competitive Request For Proposals for the short-term lease of the Hawthorne Property which
included a right of first offer to acquire the property when the city subsequently initiates the sale
of the property; and
WHEREAS, on April 24, 2018, the City Council authorized the release of a RFP for
the lease of the Hawthorne Property by Resolution No. 2018-054; and
WHEREAS, on June 12, 2018, the city received five formal proposals which were
evaluated and scored by an internal selection committee; and
WHEREAS, the selection committee scored each proposal using criteria including:
Respondent's vision and plan for the property, experience and ability to perform, and financial
benefit to city; and
WHEREAS, Bob Baker Auto Group, Toyota of Carlsbad, and Fix It Collision Centers
ranked as the top three proposals and were invited for a selection interview; and
WHEREAS, based on the final cumulative scores, the selection committee is
recommending The Bob Baker Auto Group as the prospective tenant.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
California, as follows:
August 28, 2018 Item #7 Page 3 of 15
1. That the above recitations are true and correct.
2. That City of Carlsbad Real Estate Manager is authorized to negotiate a lease agreement
with the Bob Baker Auto Group for the property located at 2065 Camino Vide Roble, commonly
known as the Hawthorne Property.
3. That staff will return to the City Council for approval of the negotiated lease agreement
once negotiations have been completed.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the
City of Carlsbad on the 28th day of August, 2018, by the following vote, to wit:
AYES:
NOES:
ABSENT:
K. Blackburn, M. Schumacher, C. Schumacher, M. Packard.
None.
M. Hall.
{11/f,( i /)'! I . _ __. 1.'I~
// I -
II I
KEITH BLACKBURN, Mayor Pro Tern
ATTEST:
\_hmoNbfviL /J6<-BARBARA ENGLESON, City Clerk
August 28, 2018 Item #7 Page 4 of 15
( City of
Carlsbad
Ca Ii for n i a
REQUEST FOR PROPOSALS
For
Lease of City-Owned Real Estate_
Located at
2065 Camino Vida Roble
Responses Due by:
Tuesday, June 12, 2018 at 4:~0 p.m. PST
SEND TO:
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attn: Curtis M. Jackson, Real Estate Manager
Exhibit 2
The City of Carlsbad encourages the participation of minority and women-owned businesses
August 28, 2018 Item #7 Page 5 of 15
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
August 28, 2018 Item #7 Page 6 of 15
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
August 28, 2018 Item #7 Page 7 of 15
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
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August 28, 2018 Item #7 Page 8 of 15
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.qcode.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.)
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August 28, 2018 Item #7 Page 9 of 15
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 Tuesday, June
12, 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
August 28, 2018 Item #7 Page 10 of 15
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.
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August 28, 2018 Item #7 Page 11 of 15
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
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August 28, 2018 Item #7 Page 12 of 15
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 workl 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)
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August 28, 2018 Item #7 Page 13 of 15
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
I 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., June 12, 2018.
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August 28, 2018 Item #7 Page 14 of 15
SITE PLAN
August 28, 2018 Item #7 Page 15 of 15
Hawthorne Property
Negotiate Lease Agreement
with Bob Baker Auto Group
Curtis M. Jackson, Real Estate Manager
Gary T. Barberio, Assistant City Manager
August 28, 2018
Recommendation: Adopt a Resolution authorizing city staff to negotiate a lease agreement with Bob Baker Auto Group for the property located at 2065 Camino Vida Roble, commonly known as the Hawthorne Property.
Property Information
•Property: 3.08 Acres
•Building: 5,000 square feet
•Paved Area: 1.5 Acres
CAMINO VIDE ROBLE
PROPERTY
Real Estate Strategic Plan
•City Council adopted in October 2017
•Framework for future real estate decision making
•Issue an RFP for a 3-5 year property lease
•right of first offer to purchase property
•separate RFP for the sale of the property
RFP Process
•City Council authorized release of RFP on April 24,2018
•RFP publically issued and available for 45 days
•Received five (5)proposals
RFP Process
•Proposals evaluated by a 5-member staff selection committee
–(C. Jackson, G. Barberio, A. Beanan, C. Marcella, T. Delcamp)
•5 proposals evaluated utilizing the RFP selection criteria
•Top three (3) respondents invited for an oral presentation/interview
RFP Process
•Based upon the oral interviews and the RFP site selection criteria evaluation, the selection committee is recommending:
–Bob Baker Auto Group as the potential tenant
Bob Baker Auto Group Carlsbad
•Operates four dealership sites in Car Country Carlsbad:
–Volkswagen Subaru
–Chrysler Jeep Dodge Ram
–Fiat Alfa Romeo
–Mazda
•In negotiations to purchase Hyundai dealership
•Leases/owns five offsite locations in Carlsbad for storing new cars
Proposed Uses of Property
•New vehicle storage
•Temporary relocation of customer vehicle repair during remodels
•Vehicle inventory pre-inspection, reconditioning and detail
•Vehicle maintenance/repair not accommodated in Car Country
•Parts inventory storage
•File storage
Next Steps
•Negotiate a lease agreement with Bob Baker Auto Group
–Includes a right of first offer to purchase property
–Performance standards and schedule for future improvements
•Return to City Council for approval of a lease agreement
•Bob Baker will apply for:
–Minor Conditional Use Permit (MCUP)for auto repair andstorage and a building permit for tenant improvements
RecommendationAdopt a Resolution authorizing city staff to negotiate a lease agreement with Bob Baker Auto Group for the property located at 2065 Camino Vida Roble, commonly known as the Hawthorne Property.
Property History
•Acquired in 2010 for $2,487,000 with CFD No. 1 Funds.
•Intended location for Maintenance and OperationsCenter (MOC).
•April 2016 property valued between $2,250,000 and$3,100,000.