HomeMy WebLinkAbout28- Public Works FILE M. 15.06-051
CITY-OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: ROGER G. HARDGRAVE, Director Subject: AUTHORIZE EXECUTION OF A FIRST AMENDMEM
TO LEASE: 1505 North Waterman Avenue -
Dept: public Works/Engineering
ORIGINA, Lease with Option to Purchase - Ayala
Date: June 10, 1996
Synopsis of Previous Council action:
04/17/95 --- Authorization granted to obtain an appraisal for City-owned property
located at 1505 North Waterman Avenue in "as is" condition, and that
the matter be brought back to the Mayor and Council on 05/15/95.
05/17/95 --- Resolution No. 95-159 approved giving "Notice Inviting Competitive
Bids" for sale of 1505 North Waterman Avenue by 06/27/95.
06/27/95 --- No bids received.
02/19/96 --- Real Property Staff directed to prepare lease/option to purchase for
1505 North Waterman Avenue.
03/18/96 --- Resolution No. 96-65 authorizing execution of a Two Year Lease with
Option to Purchase (Ayala family).
Recommended motion:
1. Adopt Resolution
2. That the request by the Ayala family for the reimbursement of costs
incurred for construction plans and permit fees in the remodeling of
the old Gallo's Flowers building located at 1505 North Waterman Ave-
nue be rejected.
cc: Shauna Clark, City Administrator Signature
Barbara Pachon, Finance Director
James Penman, City Attorney
Contact person: Anne DeBolt Phone: 5328
Supporting data attached: Staff Report, Resolution, Map, Ward: 2
FUNDING REQUIREMENTS: Amount:
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTIM �
STAFF REPORT
A Lease with Option to Purchase was negotiated with the Ayala family and approved at
the 03/18/96 Council Meeting. The Agreement provided for the Ayala family to lease
the old Gallo's Flower and Gift Shop building located at 1505 North Waterman Avenue,
for $1,500 per month, with a two-year Option to Purchase the property for the amount
of $120,000.
At the time the Ayalas took over the property, it was very run-down due to negligence
by the prior tenant and by continued deferred maintenance on the part of the City..
The building was leased to the Ayalas in an "as is" condition, and they received
approximately 4 months free rent to effect the necessary repairs.
After conferring with Planning and Building Department staff, they began work on
repairing the property. As the Ayalas started the repairs they found areas with lots
of invisible damage - dry rot, termites, etc. , which areas they proceeded to repair
and replace as necessary. The Ayalas were notified that they needed a permit to do
these repairs. A permit was issued under the City's name as owner of the property so
they could continue the repair work.
Work was stopped again, and at this point, the Ayalas were told they needed to hire a
licensed contractor to do the work, as they would have to bring the building up to
current code by installing handicap restrooms, etc.
The Ayalas are now 3 months into the Lease and have not yet been able to open for
business. As they have already invested over $10,000 in repairs (see attached letter
and paid invoices) and have received an estimate of another $18,000 to complete the
necessary work, they request that the City extend their "free rent" for four more
months until December 1, 1996.
The Ayalas are also requesting that the City reimburse them for the cost of their
construction plans and permit fees. As this money has already been credited to the
General account, we feel that the extension of their free rent should compensate them
for these expenditures.
We recommend the extension of "free rent" until December 1, 1996, and further
recommend the rejection of the Ayala's request for reimbursement of their costs for
plans and fees.
06/10/96 2
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AGENCY
May 21, 1996 Auto•Home•Business•Income Tax Service•Notary Public
Dear Mr. Hardgrave:
We would like to request the following amendments to our lease agreement dated
March 20, 1996:
1. Monthly Rent: Additional four month grace period to start the $1,500.00 monthly
lease payment.
2. Construction Plans and Permit Fees: Reimbursement of fees paid for plans and
permits issued by the city.
As you know, we have been scrutinized by the city planning department and city
inspectors have cited a series of pre-existing deficiencies that require reconstruction and
the hiring of licensed contractors. These unforeseeable circumstances have turned our
repair project into a major construction effort for which we had no budget.
Our original plan and proposal was that we were going to make repairs to the existing
building ourselves, but now we have to hire expensive contractors to reconstruct several
structures. We have already spent $9,600.00 in repairs and have gotten an estimate of
$18,000.00 from the contractor for material and labor to complete the project as noted on
the plans. We are willing to cover the above expenses but we need your help to start up
our business as we will have very little working capital left after completion of the repairs
and construction work.
Please consider the above changes to our agreement and inform us of your decision as
soon as possible.
We also want to take this opportunity to thank you and to thank Ms. Anne DeBolt for your
assistance in the processing of the plans and permits.
Sincerely,
Maria . Ayala Sa v
or Aya a
Frank E. Halstead
11819 E.Valley Boulevard•El Monte,California 91733 3554 Adams Street•Riverside,California 92504
Tel:(818)448-0908 •Fax:(818)448-1018 Tel:(909)343-3150•Fax:(909)343-3159
JUNE 10, 1996
AYALA EXPENSES - REMODELING AND REPAIR OF 1505 NORTH WATERMAN AVENUE
CURRENT TOTAL EXPENDITURES AND MOTA & SONS CONSTRUCTION CONTRACT & SPECIFICATIONS:
PLAN COSTS - FEES $ 160.00
INSURANCE - SECURITY 964. 18
LABOR 915.00
MATERIALS 9,950.02
SUBTOTAL (TO DATE) : $11,989.20
MOTA & SONS CONSTRUCTION $18,000.00
ESTIMATED COSTS TO COMPLETE: $29,989.20
(ACTUAL INVOICES ARE AVAILABLE IN REAL PROPERTY SECTION)
MOTA Fs SONS GOISI89MUGTION
GENERAL CONTRACTORS
Lic. #523628
921 N Alameda Ave.
Azusa, CA 91702
CONTRACT & SPECIFICATIONS
Rosemead Insurance Agency
1505 N. Waterman
San Bernardino, Ca. 92404
We propose to furnish all material and labor to accomplish the following:
Relathe and restucco north and south walls
Repair framing on south wall and supporting posts
Build closet for air conditioning unit
Build partition wall for access hallway
Build water heater closet
Build supporting wall and over span ceiling in northeast room
Build platform in ceiling for air conditioning unit
Repair existing electrical problems and run new electrical wiring
for air conditioning units and new wall
Install a 4 ton and 3 1/2 ton air conditioning units
Install water heater
Install three shampoo basins
Run gas line from meter for A/C units and new water heater
Run new drain lines for shampoo basins
Run new water lines to water heater and to shampoo basins
Drywall, tape and texture all new walls and existing uncovered
walls
Install five doors
Replace all flooring in hallway, bathroom and new salon
Paint exterior and interior of building
We propose to finish all material and labor to accomplish the previous for
the amount of $18, 000.00 (eighteen thousand) payable upon completion
of project.
The entire job is scheduled to take approximately six to eight weeks.
Mota & Sons agrees to forfeit $50.00 per day after the eighth week if the
project takes longer to complete. This time guarantee does not cover acts
beyond our control such as bad weather.
MOTA & S NS CONSTRUCTION
Ismael Mota
FIRST AMENDMENT TO LEASE
ROSEMEAD INSURANCE AGENCY (AYALA FAMILY LEASE) - 1505 NORTH WATERMAN AVENUE
1 THIS FIRST AMENDMENT TO LEASE is made and entered into at San
2 Bernardino, California, this day of , 1996,
3 by and between the CITY OF SAN BERNARDINO, a municipal corporation, herein-
4 after called "City", and SALVADOR AYALA, SALVADOR AYALA, JR. , MARIA C.
5 AYALA, MARIA E. AYALA, FRANK HALSTEAD, BLANCA 0. LOPEZ and CARLOS E. LOPEZ,
6 dba ROSEMEAD INSURANCE AGENCY, hereinafter called "Lessee".
7 W I T N E S S E T H:
8 WHEREAS, City and Lessee entered into a Lease Agreement with
9 Option to Purchase on March 20, 1996, granting to Lessee the use of the
10 City-owned property located at 1505 North Waterman Avenue, San Bernardino;
11 and
12 WHEREAS, City and Lessee desire to amend said Lease to provide for
13 an extension of free rent to and including November 30, 1996;
14 NOW, THEREFORE, it is mutually agreed between the parties as
15 follows:
16 1. Paragraph 4 of that Lease Agreement between the parties here-
17 to dated March 20, 1996, is hereby amended to read:
18 114. Lease Payments/Option to Purchase. Lessee agrees to
19 pay, and Lessor agrees to accept as lease payments for said Premises, a
20 monthly rental of One Thousand Five Hundred Dollars ($1,500) . Said total
21 monthly rental is to be paid on or before the first day of each month, made
22 payable to the Lessor, and sent to:
23 City of San Bernardino
Real Property Section
24 300 North "D" Street, 3rd Floor
25 San Bernardino, CA 92418
26 The Lease payments of One Thousand Five Hundred Dollars ($1,500) per month
27 shall not commence until the first day of December, 1996. Each month, Five
28 Hundred Dollars ($500) of the total monthly lease payment of One Thousand
15.06-051
06/10/96 1
LEASE AMENDMENT: ROSEMEAD INSURANCE AGENCY (AYALA FAMILY LEASE)
1505 NORTH WATERMAN AVENUE
1 Five Hundred Dollars ($1,500) shall be set aside to be credited towards the
2 down payment for the purchase of said Premises. Said Five Hundred Dollars
3 ($500) credit shall extend to the end of the two (2) year Option to Purchase
4 the Premises, with a maximum total credit of Eight Thousand Dollars ($8,000)
5 accruing towards the purchase of said Premises. In the event Lessee does
6 not exercise said Option to Purchase the Premises within the two year option
7 period, the Eight Thousand Dollars ($8,000) shall be considered a portion of
8 the Lease payments and shall not accrue to the benefit of the Lessee. In
9 the event the Lessee does exercise the Option to Purchase, the Five Thousand
10 Dollar ($5,000) deposit made at the commencement of the Lease shall also be
11 credited to the purchase of the Premises as long as all lease payments are
12 current and the Lessee is in good standing with the Lessor. If the Lessee
13 does not exercise said Option to Purchase, the Five Thousand Dollar ($5,000)
14 shall be considered a security deposit for the Lease and shall not be re-
15 funded, but may be used by Lessee for regular lease payments at the end of
16 the two (2) year option term."
17 3. All other terms, conditions and covenants of said Lease shall
18 remain the same and be in full force and effect.
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15.06-051
06/10/96 2
LEASE AMENDMENT: ROSEMEAD INSURANCE AGENCY (AYALA FAMILY LEASE)
1505 NORTH WATERMAN AVENUE
IN WITNESS WHEREOF, the parties hereto have executed this First
2 Amendment to Lease on the date first hereinabove written.
3
4 LESSOR: CITY OF SAN BERNARDINO
5
6 DATED:
TOM MINOR, Mayor
7
8 ATTEST:
9
10
RACHEL CLARK, City Clerk
11
12
13 LESSEE: ROSEMEAD INSURANCE AGENCY
14
15 DATED:
SALVADOR AYALA, JR.
16
17
18 SALVADOR AYALA MARIA C. AYALA
19
MARIA E. AYALA FRANK HALSTEAD
20
21
BLANCA 0. LOPEZ CARLOS E. LOPEZ
22
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Approved as to form
25 and legal content:
26 JAMES F. PENMAN
City Attorney
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15.06-051
06/10/96 -� 3