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RESOLUTION NO. 2017-180 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE TENANT LEASE-GROSS BETWEEN THE CITY OF CHULA VISTA AND SOUTH BAY COMMUNITY SERVICES
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
In June 2012 the City entered into a five year lease with South Bay Community Services (South Bay) for a City owned office building located at 430 F Street (the Ken Lee Building). South Bay exercised its option for an additional five years in June 2017 and has further expressed a desire amend the lease to extend the term beyond five years and allow them the option to construct an additional building on site. Such an Amendment of the Lease requires Council action.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act State Guidelines.
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Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the State CEQA Guidelines. Thus, no further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
In June 2012 the City entered into a five year lease with South Bay Community Services (South Bay) for a City owned office building located at 430 F Street (the Ken Lee Building). South Bay exercised its option for an additional five years in June 2017 and has expressed a desire to design, deliver, and construct a modular building facility upon the Premises which will consist of a 2-story office building and all of its component structures, improvements, installations, parts, and materials (collectively, the “Facility”). Due to the large capital expenditure involved South Bay has requested the term of their lease be extended. The extension proposed here is to amend the original term and provide for two additional 15 year options giving the lease the ability to run until 2052. At the conclusion of the lease or upon early termination South Bay will be required to remove the building and restore the premises. As a result of the City entering into a long term lease full maintenance responsibility for the property and improvements will become the responsibility of the tenant.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The actions proposed in this agenda support the Economic Vitality goals of the City.
CURRENT YEAR FISCAL IMPACT
There will be no impact in the current fiscal year as South Bay will continue making lease payments as provided for in the existing and amended lease.
ONGOING FISCAL IMPACT
This action will have no fiscal impact in the near term as the both the current and proposed amended lease would remain in effect for five more years. The amendment proposed here will allow the lease to continue for an additional 30 years of rent that adjust with the cost of living yearly.
ATTACHMENTS
Lease Amendment
Staff Contact: Rick Ryals, real Property Manager