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HomeMy WebLinkAboutItem No. 04 - Lease Extension Agreement - Vanir Tower Building, Inc. Staff Report City of San Bernardino Request for Council Action Date: May 20, 2020 To: Honorable Mayor and City Council Members From: Teri Ledoux, City Manager By:Kris Jensen, Director of Public Works Subject: Lease Extension Agreement - Vanir Tower Building, Inc. Recommendation It is recommended that the Mayor and City Council of the City of San Bernardino adopt Resolution 2020-105 authorizing the City Manager to execute Amendment No. 2 ("Second Amendment") to the Lease with Vanir Tower Building, Inc., at 290 North D Street, San Bernardino, California, extending the Lease Agreement through June 30, 2021. Background On November 21, 2016 the Mayor and City Council approved Resolution 2016-240 directing the City Manager to execute a Lease Agreement for office space at Vanir Tower, Inc. (290 North D Street, San Bernardino, California - APN 0134-311-42-0000) to house City staff. The agreement was amended on March 6, 2017 by Resolution 2017-039, resetting the lease period to commence on April 15, 2017 for a two year period with the option of two six-month extension periods. On April 3, 2019, the Mayor and City Council authorized the City Manager to exercise both of the six-month extension options, extending the Lease Agreement term through April 15, 2020. The original Lease Agreement and Amendment No. 1 to the Lease Agreement are included as attachments to this report. Discussion The office space leased by the City at the Vanir Tower on the third and eighth floors are currently occupied by the Offices of the Mayor, City Council, City Attorney, City Manager, City Treasurer, Finance and Human Resource Departments. The ground level SB Direct Call Center staff. 2020. While staff has been working with Vanir Tower owners to negotiate a new multi- year lease agreement, those negotiations were unable to be completed prior to the lease term expiration. The proposed amendment will extend the term of the Lease Agreement through June 30, 2021, and incorporate minor adjustments to true-up the the agreement will remain in effect. Page 1 6678 By approving this lease extension, the City will have the opportunity to continue occupying the existing office space without incurring additional costs associated with relocating City personnel. Staff will continue to evaluate the City's office space needs and present the Mayor and City Council with a longer term option prior to the expiration of this extended lease term. 2020-2025 Key Strategic Targets and Goals Approval of the proposed amendment aligns with Key Target No. 1.c: Create a framework for spending decisions. Extending the lease through June 30, 2021, provides cost stability related to the lease for budgeting purposes through FY 2020/21. Fiscal Impact No additional fiscal impact to the City in FY 2019/20. The adjusted monthly lease payment of $46,131.44 will be effective July 1, 2020. This is a modest increase of less than 2% from the current year. Funding for this lease payment will be incorporated in proposed FY 2020/21 Operating Budgets in Account No. 001-090-0053-5171. Conclusion It is recommended that the Mayor and City Council of the City of San Bernardino adopt Resolution 2020-105 authorizing the City Manager to execute Amendment No. 2 er Building, Inc., at 290 North D Street, San Bernardino, California, extending the Lease Agreement through June 30, 2021. Attachments Attachment 1 Resolution No 2020-105; Exhibit "A" - Amendment No. 2 (Second Attachment 2 Resolution No. 2016-240 - Original Lease Agreement Attachment 3 Resolution No. 2017-039 - Amendment No. 1 to Lease Agreement Ward: 1 Synopsis of Previous Council Actions: 11/21/2016 Resolution 2016-240 of the Mayor and Common Council of the City of San Bernardino was adopted, authorizing the City Manager to execute a Lease Agreement between the City of San Bernardino and Vanir Tower Building Incorporated for the Lease of Office Space. (#4737) 3/06/2017 Resolution No. 2017-039 of the Mayor and City Council of the City of San Bernardino was adopted, directing the City Manager to execute the Amendment Number One to the Lease with Vanir Tower Inc. 4/03/2019 The Mayor and City Council authorized the City Manager to execute two, six month lease extensions to the lease agreement Page 2 6678 between Vanir Tower Building, Inc., and the City of San Bernardino extending the Lease agreement through April 15, 2020. Page 3 RESOLUTION NO. 2020-105 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT NO. 2 ("SECOND AMENDMENT") TO THE LEASE AGREEMENT WITH VANIR TOWER BUILDING, INC., AT 290 NORTH D STREET, SAN BERNARDINO, CALIFORNIA, EXTENDING THE LEASE AGREEMENT THROUGH JUNE 30, 2021 WHEREAS, the City of San Bernardino and Vanir Tower Building, Inc. entered into a ffice space at the Vanir Tower property on February 8, 2017; and WHEREAS, the Agreement was amended on March 6, 2017 by Resolution 2017-039, resetting the lease period to commence on April 15, 2017 for a two year period with the option of two six-month extension periods; and WHEREAS, current lease agreement term, including all term extensions, expired on April 15, 2020; and WHEREAS, the City continues to occupy the office space originally leased as a holdover tenant, and wishes to extend the Agreement through June 30, 2021. BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The above recitals are true and correct and are incorporated herein by this reference. SECTION 2. The City Manager is hereby authorized to execute Amendment No. 2 e Agreement between the City of San Bernardino and Vanir SECTION 3. The City Manager is hereby authorized to execute any other such documents as may be necessary to effectuate the intention of this Resolution SECTION 4. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. SECTION 5. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable. SECTION 6. Effective Date. This Resolution shall become effective immediately. APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the Acting City Clerk this ___ day of __________ 2020. John Valdivia, Mayor City of San Bernardino Attest: Genoveva Rocha, CMC, Acting City Clerk Approved as to form: Sonia Carvalho, City Attorney CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Genoveva Rocha, CMC, Acting City Clerk, hereby certify that the attached is a true copy of Resolution No. 2020-___, adopted at a regular meeting held on the ___ day of _______ 2020 by the following vote: Council Members: AYES NAYS ABSTAIN ABSENT SANCHEZ _____ _____ _______ _______ IBARRA _____ _____ _______ _______ FIGUEROA _____ _____ _______ _______ SHORETT _____ _____ _______ _______ NICKEL _____ _____ _______ _______ RICHARD _____ _____ _______ _______ MULVIHILL _____ _____ _______ _______ WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2020. Genoveva Rocha, CMC, Acting City Clerk AMENDMENT NUMBER TWO TO THE LEASE AGREEMENT BETWEEN THE CITY OF SAN BERNARDINOANDVANIR TOWER BUILDING, INC. This Amendment Number Two Second Amendment of San Bernardino, a charter city organized under the laws of the State of California (hereinafter the , and Vanir Tower Building, Inc. ( as of May 20, 2020. WHEREAS, City and Landlord entered into a Lease Agreement dated February 8, 2017 Bernardino, CA 92401, as further set out therein; and WHEREAS, City and Landlord entered into Amendment Number One to the Lease Agreement Between the City of San Bernardino and Vanir Tower Building, Inc., on March 6, rstwo six-month extension options available to it under the Lease Agreement, as amended; and WHEREAS City continues to occupy the space leased pursuant to the Lease Agreement as a holdover tenant; and WHEREAS, the Parties now desire to extend the term of the Lease Agreement, as amended, through June 30, 2021. NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, the Parties agree as follows: 1. Term. The term of the Lease Agreement, as amended, is extended through June 30, 2021. 2. Monthly Rent. The monthly rent from July 1, 2020 through June 30, 2021 shall be Forty Six Thousand One Hundred Thirty One Dollars and Forty Four Cents ($46,131.44). The monthly rent for the holdover term shall remain as stated in the Lease Agreement, as amended by the First Amendment. 3. Square Footage. The Premises shall remain the same, however, references to the square footage of the leased premises being approximately 23,716 square feet of useable space shall be replaced with 24,538 square feet of rentable space. 4. Effect on Other Provisions. All other provisions of the Lease Agreement, as amended by the First Amendment, shall remain in full force and effect. SIGNATURES ON FOLLOWING PAGE SIGNATURE PAGE TO AMENDMENT NUMBER TWO TO THE LEASE AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND VANIR TOWER BUILDING, INC. IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed the day and year first above written. CITY LANDLORD __________________________ __________________________ Teri Ledoux, City Manager Dorene C. Dominguez, President ATTEST: ___________________________ __________________________ Genoveva Rocha, Acting City Clerk \[***Insert name***\], Secretary