HomeMy WebLinkAboutItem 09 - Authorization to Negotiate, Execute, and Modify Agreements for Parking Fund Lease Spaces Department Name: Public Works
Cost Center: 5101
For Agenda of: August 18, 2020
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Gaven Hussey, Parking Services Manager
SUBJECT: AUTHORIZATION TO NEGOTIATE, EXECUTE, AND MODIFY
AGREEMENTS FOR PARKING FUND LEASE SPACES
RECOMMENDATION
Adopt a Resolution (attachment A) authorizing the City Manager to negotiate and execute new
commercial lease agreements and/or modify existing lease agreements with tenants of property
located at 860 Pacific Street Suites 101 through 105.
DISCUSSION
Background - Parking Services Program Managed Commercial Lease Spaces
The City’s Parking Services Program manages five commercial lease spaces located on the
Pacific Street side of the Marsh Street parking structure. The commercial properties, listed
below, typically provide consistent cash flow for the Parking Fund.
a) 860 Pacific Street, Suites 101 & 102 – Vacant
b) 860 Pacific Street, Suite 103 – Arroyo View Financial, Inc.
c) 860 Pacific Street, Suites 104 & 105 – San Luis Obispo Bicycle Coalition
Supplemental Budget Adoption Addressed Tenants’ COVID-19 Fiscal Impacts
With the adoption of the 2020-21 Supplemental Budget, the City recognized that the economic
downturn from the COVID-19 pandemic has created a significant and undue burden on
businesses in the City of San Luis Obispo. As detailed in the 2020-21 Supplemental Budget, the
Parking Services Program incorporated an extensive work program intended to reinvigorate the
local economy by incentivizing businesses and employees to return to business operations once
the current restrictions due to COVID-19 are relaxed or lifted completely. The 2020-21
Supplemental Budget identifies an incentive in which the City waives monthly lease payments
for the commercial spaces managed by Parking Services, located at 860 Pacific Street for a
period of six-months. Once this six -month period is complete, monthly lease payments will
resume at the rate identified in the respective lease agreements.
Staff recommends that the City Council authorize the City Manager to negotiate and execute new
lease agreements and/or modify existing lease agreements with the tenants of the Parking
Services Program located at 860 Pacific Street Suites 101 through 105. Attachment A is a
Resolution setting forth this authority. Staff anticipates that such new and/or modified leases will
include a term reflecting the six-month rent waiver discussed above.
Item 9
Packet Page 125
This process will allow staff to respond to the Council’s Economic Recovery goal and support
local businesses recovery from COVID-19.
The following lease agreement changes are also anticipated:
1. The tenant that occupied 860 Pacific Street Suites 101 and 102 gave notice to the City
that they would not be pursuing an extension to their lease agreement and would vacate
the suites at the end of June 2020. The current tenant of Suite 103, Arroyo View
Financial, has contacted the City and expressed interest in entering into a lease agreement
for Suites 101 and 102.
2. The lease agreement with Arroyo View Financial, for 860 Pacific Street Suite 103 is
eligible for a second and final five-year extension in October 2020 and the tenant has
indicated interest in extending the lease.
3. The lease agreement with San Luis Obispo Bicycle Coalition, for 860 Pacific Street
Suites 104 and 105 expired in August 2019 after the final three-year extension term
ended. The tenant is currently on a month-to-month lease and has been in contact with the
City regarding executing a new lease agreement.
a. As the market stabilizes, the City will perform a market assessment and at the
conclusion of the term of leases to ensure that the City is recovering costs based
on the latest lease market data.
CONCURRENCE
The San Luis Obispo Bicycle Coalition and Arroyo View Financial both concur with the
recommendation to enter into new lease agreements and/or modify current lease agreements.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this
report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: FY2021
Funding Identified: Yes
Fiscal Analysis:
Parking Fund Lease Spaces Monthly Rent Annualized Amount
Revenues
860 Pacific Street, Suite 101 & 102 $600 $7,200
860 Pacific Street, Suite 103 $315 $3,780
860 Pacific Street, Suite 104 & 105 $340 $4,080
Total $1,255 $15,060
Item 9
Packet Page 126
At full capacity, the Parking Fund collects $1,255 in revenue each month from the commercial
properties located on Pacific Street. The impacts to the Parking Fund for providing rent relief and
vacancies have been modeled and built into the FY 2020-21 Supplemental Budget approved by
Council.
ALTERNATIVES
Deny request to authorize City Manager to negotiate and execute new lease agreements and/or
modify existing lease agreements. Staff does not recommend this alternative because the
Parking Fund is obligated to maintain current agreements for all properties owned by the City.
Attachments:
a - Draft Resolution
Item 9
Packet Page 127
R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO
NEGOTIATE, EXECUTE, AND MODIFY COMMERCIAL LEASE
AGREEMENTS FOR PARKING FUND LEASE SPACES
WHEREAS, the Parking Fund manages commercial lease spaces located 860 Pacific
Street Suites 101, 102, 103, 104, and 105; and
WHEREAS, the Parking Fund has an obligation to maintain current agreements for all
properties owned by the City; and
WHEREAS, the COVID-19 pandemic has resulted in economic uncertainties for
businesses including lease spaces managed by the City’s Parking Fund; and
WHEREAS, the Parking Fund’s 2020-21 Supplemental Budget incorporated an extensive
work program intended to support the local economy by incentivizing businesses to return to
normal operations; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Execution of Documents. The Council hereby authorizes the City Manager
to negotiate, execute, and modify commercial lease agreements for properties located at 860
Pacific Street Suites 101 through 105 with terms not to exceed three years.
Item 9
Packet Page 128
Resolution No. _____ (2020 Series) Page 2
R ______
SECTION 2. Environmental Determination. The California Environmental Quality Act
does not apply because the action does not constitute a “Project” under CEQA Guidelines Sec.
15378.
Upon motion of Council Member _______________, seconded by Council Member
_______________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, on _____________________.
____________________________________
Teresa Purrington
City Clerk
Item 9
Packet Page 129
BLANK PAGE
This page is intended to be blank so that you can print double-sided.
Item 9
Packet Page 130