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Home My WebLink About09- Economic Development Agency DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY REQUEST FOR COMMISSION/COUNCIL ACTION From: KENNETH J. HENDERSON Subject: MEXICAN CONSULATE Executive Director RELOCATION AND LEASE Date: May 11, 1994 Synopsls of Previous Commission/Council/Committee Action(s): In February and May 1993, the Community Development Commission took actions approving conceptually the relocation of the Mexican Consulate to Agency-owned property at 532 North "D" Street. Recommended Motion(s), (Community Development Commission) MOTION: That the Community Development Commission consider appropriating $325,000 in bond proceeds to finance the code-required Improvements and tenant improvements related to the relocation of the Mexican Consulate to Agency-owned property at 532 North "D" Street. Admin strator KENN H J. HEN ERSON Executive Director Contact Person(s): Kenneth J. Henderson/Stafford W Parker Phone: 5081 Project Area(s): Central City North Ward(s): One (1) Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $325,000 Source: Bond Proceeds Budget Authority: Requested ------- ----------------------- ------------------------------------------------------------------------------------------------------------ Commissfon/CO until Notes, KJH:SWP:mexcons.cdc(dle) COMMISSION MEETING AGENDA Meeting Date: 0511 611994 Agenda Item Number: DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY STAFF REPORT MEXICAN CONSULATE RELOCATION AND LEASE The purpose of this staff report is to summarize the Issues and seek Commission direction relating to a pending and proposed lease with the Mexican Consulate at the 532 North "D" Street building owned by the Agency. The Mexican Consulate is presently located at 588 West 6th Street. Its lease expires September 20, 1994 and the organization occupies approximately 2,000 square feet of space in a one-story building. Its monthly lease payment is $1,575 (or 792 per square foot) plus gas, electric, water and trash services and janitorial services. The Consulate has Indicated they have a need for more space. BACKGROUND On January 20, 1993, former Mayor Holcomb wrote the attached letter of proposal to the Mexican Consulate reaffirming a proposal to the Mexican Consulate to rent 532 North "D" Street, a 4,300 square foot building, for 906 a square foot for a five-year term. The Mexican Consulate accepted the terms of the proposal via a memorandum dated May 27, 1993 and stated a desire to finalize the agreement so it could terminate Its lease at 588 West 6th Street. The Commission took actions in February and May of 1993 providing conceptual approval for the proposed relocation of the Mexican Consulate. An architect was hired and the drawings are 95% complete. The architect has met with Consulate officials and various City Departments to determine the required parking lot lighting, parking lot Improvements and other site improvements. Only the civil drawings for the parking lot work need to be complete. Upon the occurrence of this, a permit could be pulled for construction to begin within approximately two to four weeks. OUTSTANDING ISSUES 1. Expiration of Current Lease: Previously, there was a concern about the unexpired lease of the Consulate. This may not be a problem now because necessary work on the 532 "D" Street building would be complete about the time of the lease expiration. Staff is unaware of any plans for the Consulate to prepay Its lease In the event of a move-out before Its expiration. 2. Payment of Cost and Maintenance: Future funds for this purpose would have to be Identified and earmarked. 3. Tenant Improvement Costs: The construction costs associated with upgrading the 532 North "D" Street building to required City development standards and in harmony with Title 24 and ADA Handicapped accessibility codes, are well above the earlier target set by Mayor Holcomb in conjunction with the original proposal to the Consulate. This Is probably due to the $251,350 (77%) necessary to bring the building in compliance with the City development and building codes. The remaining $73,650 (23%) Is devoted to tenant improvements. At this time, the estimated construction cost is $325,000. The majority of the work is needed to bring the building into compliance with current codes to enable occupancy by any tenants. The general cost breakdown is as follows: KJH:SWP:mexcons.cdc(dle) COMMISSION MEETING AGENDA Meeting Date: 05/16/1994 Agenda Item Number: 9 DEVELOPMENT DEPARTMENT/EDA STAFF REPORT Mexican Consulate Relocation and Lease May 11, 1994 Page 2 MAJOR CONSTRUCTION ITEMS A. Parking lot work: New paving, landscaping and Irrigations .............. $188,950 B. New roof ............................................................................................. 7,000 C. New Air-conditioning units .................................................................. 23,000 D. Handicapped toilets and ramps .......................................................... 16,400 E. Fire sprinklers ..................................................................................... 16.000 Sub-total ...........$251,350 F. Tenant improvements........................................................................... 73.65 Grand Total .....$325,000 FINANCIAL ANALYSIS The income received from the Mexican Consulate would be as follows: - Gross rent of 900 per square foot X 4,300 square feet = $ 3,870 - Monthly rent of $3,870 X 12 months (gross annual rent) _ $46,440 - Janitorial expenses, etc. at $2.00 per square foot per year = $10,320 - Gross rent of $46,440 minus $10,320 janitorial = $32,120 expenses (Net income yearly) AMORTIZATION OF QONSTRUCTION COSTS The Agency required payment of $325,000 in construction costs would be offset by the anticipated $32,120 in net income per year. Based on this, it would require a minimum of ten (10) years to recapture the Agency's $325,000 investment. CONCLUSION The above narrative summarizes both the status and projected financial outlay for the subject project. Essentially staff estimates it would cost the Agency $325,000 to relocate the Mexican Consulate into 532 North "D" Street as the sole occupant. RECOMMENDATION It is recommended the Community Development Commission discuss the subject issue and provide staff direction regarding whether or not it wishes staff to proceed with finalization of lease conditions and the construction of tenants improvement and necessary code requirements. Staff recommends adoption of the form motion. KENNETH J. H NDERSON, Executive Director Development Department ----------------------------------------------------------------------------------------------°- ----------------- KJH:SWP:mexcons.cdc(dle) COMMISSION MEETING AGENDA Meeting Date: 05/16/19941/�'� Agenda Item Number: / .p��Y�NAkL'hOn e . - C I T Y O F 5an Bernardino �t. O F F I C E O F T H E M A Y 0 R W . R . ' B O B " H O L C O M B M A Y O R January 20, 1993 Ms. Columba M. Calvo Vargas, Mexican Consul MEXICAN CONSULATE 588 West Sixth Street San Bernardino, California 92401 RE: 532 NORTH "D" STREET PROPERTY Dear Ms. Calvo Vargas: This letter is to confirm our proposal to lease the building at 532 North "D" Street to the Government of Mexico for use as a Consulate building for a lease rate of $0.90 gross for five years. We will build the necessary tenant improvements described previously and will also provide janitorial service and maintenance for the building and parking lot. The building is approximately 4,300 square feet in size. The importance of the Consulate and its services for the residents of San Bernardino make it critical that this relocation be carried out quickly and smoothly. We will do all that we can toward this end and can have the improvements in place within ninety (90) days of signing a lease. While any contract of this nature requires formal acceptance and approval by the City Council, I am confident of their favorable action on this matter. Please contact Mr. Timothy Steinhaus, Agency Administrator of the Economic Development Agency, if any clarification is needed regarding the proposed lease. He can be reached at (909) 384-5081 . Sincerely, MAYOR W. R. "BOB" HOLCOMB City of San Bernardino WRH:JBH:dle:a0032 .ltr PRIDE IN PROGR 0 0 N O R T H D S T R E E T S A N B E R N A R D I N 0 C . A SS 9 C A L I F O R N I A 9 0 1 8 - 0 0 0 1 7 1 4 / ] ] 4 - ] 1 ] ]