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HomeMy WebLinkAbout600 North Arrowhead �0.NAR0�'�FI F� e Staff Report City of San Bernardino Request for Council Action Date: February 21, 2017 To: Honorable Mayor and City Council Members From: Mark Scott, City Manager /"��✓ By: Dan Webster Subject: Lease Agreement for 600 North Arrowhead Avenue Building Recommendation Adopt a Resolution of the Mayor and City Council of the City of San Bernardino Directing the City Manager to Execute a Lease Agreement Between the City of San Bernardino and Arrowhead Professional Center, LP for the Lease of Office Space in the 600 North Arrowhead Avenue Building. Background To address the urgent need to relocate City staff from City Hall, which has been determined to be seismically unsafe, staff selected three buildings: Vanir Tower 290 North D Street (APN -0134-311-42-000); 215 North D Street (APN — 0135-201-30- 0000) and 600 North Arrowhead Avenue (APN- 0135-022-01 ,02,03-0000). On November 21, 2016, the City Council approved the leases for Vanir Tower and the 215 "D" Building. The lease for 600 North Arrowhead Avenue is now ready for Council approval. The 600 North Arrowhead Avenue Building will be occupied by staff from: Community Development Department; Public Works Department; Parks and Recreation Department and the Business Registration Division. The 3rd floor of the Building will house the Community Development Department counter which processes building and development permits for the City. The Parks and Recreation administrative offices will also be located on the 3`d floor with that Department's public counter located adjacent to the Community Development Department counter. Additionally, the Business Registration Division will share the Community Development Department counter providing easy access for the public needing services and to pay fees. The Public Works Engineering and Administrative staff will be located on the 2nd and 3`d floors of the Building. The 3`d Floor will also be staffed with City security personnel. The structural engineering firm utilized by the City has inspected the structure to assure there are no life safety issues. The space in the building is available for the short term lease needs of the City. The suites that are proposed to be utilized by the City staff were previously occupied by the San Bernardino Employment Training Agency staff. Many of the offices are furnished and ready for occupation which will reduce moving costs. If the City opted not to execute this lease, the City would incur the cost of removing and relocating the furniture from the offices. The tenant improvements for the 3`d floor are estimated to be $50,000 and include demolition of existing walls to allow installation of a public counter and creation of a waiting area for the public. The City will design and contract for the tenant improvements. The Owner has consented in writing to the planned changes to the building. The Information Technology staff has inspected the building and has confirmed that it can be connected to the City's Data Center network with leased fiber optic lines. The rental rate for the space ($1.45./square foot) is a competitive rate for a short term lease in the area near to City Hall for a building that meets City needs. Upon approval of the lease agreement by the City Council, the Information Technology staff can immediately begin the process of connecting the suites in the building to the City Data Center network. Additionally, City staff will commence the contract tenant improvements. Financial Impact: The City shall pay $35,500.00 per month for the first eighteen (18) months of three (3) year and six (6) month lease. The City shall pay $36,920.00 per month for the second twelve (12) months of the lease and $38,397.00 for the third twelve (12) month period of the lease. The tenant improvements (see above) for these suites are estimated to be $50,000. Funds have been appropriated in the amount of $1,600,000 in the FY 2016-17 Budget for the relocation of staff into suitable space. Future fiscal year budgets will include the lease costs. Attachments Attachment 1: Resolution; Exhibit A: Lease Agreement, Attachment 1 — Floor Plans Wards: All Synopsis of Previous Council Actions: November 21, 2016- Resolution 2016-239: To Execute a Lease Agreement between the City of San Bernardino and 215 D Street Building, LLC for the Lease of Office Space. November 21, 2016- Resolution 2016-240: To Execute a Lease Agreement between the City of San Bernardino and Vanir Tower Building, Inc. for the Lease of Office Space.