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HomeMy WebLinkAboutPD Police Department Annex LeaseCITY OF n Agenda Item No: 12 �r+r� Meeting Date: August 17, 2009 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Police Department Prepared by: David Starnes, Captain City Manager Approval: SUBJECT: LEASE BUILDING FOR POLICE DEPARTMENT ANNEX RESOLUTION OF THE SAN RAFAEL CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE WITH THE PROPERTY OWNER OF 1099 D ST., LLC, LOCATED AT 1099 D STREET, SAN RAFAEL FOR A FIVE (5) YEAR LEASE BEGINNING FEBRUARY 1, 2010 FOR $10,000 PER MONTH WITH A 3% INCREASE IN RENT EACH YEAR AFTER. RECOMMENDATION: Staff recommends that the City Council authorize the City Manager to execute a five (5) year lease, in a form to be approved by the City Attorney, with 1099 D St., LLC for a Police Department annex beginning February 1, 2010 for $10,000 per month with a 3% increase in rent each year after. BACKGROUND: The main building for the San Rafael Police Department is located on the bottom floor of 1400 Fifth Ave., San Rafael. The Police Department outgrew this space and in January 2001 leased office space located at 1210 Fifth Ave., San Rafael. The City of San Rafael signed into a lease agreement with First States Reality, located in Pennsylvania. The current monthly charge for the lease is $12,271.15 per month for 5,854 square feet. The lease agreement will expire on January 31, 2010. The Police Department is currently paying an additional $695.00 per month for janitorial services. The following work units, which consist of 28 authorized positions, are currently housed at the Police Annex located at 1210 Fifth Ave: Support Services Captain; Investigations Unit; Directed Patrol Unit; Mental Health Unit; Community Policing Unit; Training Unit; Personnel; Youth Services Bureau; Regulatory Officer; and Volunteers. Due to the declining condition of the current annex building and the impending lease expiration date of January 31, 2010, department staff initiated a search for new quarters for the police annex. Staff recommends that the Police Department annex be located in close proximity to the main police station. This is because personnel need to continually travel back and forth from the main station to the annex to properly conduct business. FOR CITY CLERK ONLY File No.: Council Meeting: Disposition: SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pau: 2 OPTIONS: Staff researched multiple locations for new sites, as well as the current location. After analysis of available properties and negotiations with building owners, staff recommends the leasing of office space at 1099 D Street. This office space is the former location of the METS medical offices and is located directly across the street from the Police Department and City Hall. The space is located on the ground floor of a three story building, which houses a variety of professional offices. The space is in a "shell" condition and is comprised of 5,270 square feet. There is an additional 800 square feet that is located on the second floor for a total of 6,070 square feet. The attached letter of intent outlines the key lease components. The property owner will build the interior to any specifications that the Police Department requires and will provide the architect to assist us with the design at the property owner's expense. The City of San Rafael would agree to a (5) year lease with 1099 D St., LLC, located in San Rafael, beginning on February 1, 2010 and two five (5) year options The rent for the entire square footage would be $10,000 per month with a 3% increase for each year thereafter. The property owner would give the City the first two months free of charge, for a savings of $20,000. The Police Department would be provided with 15 covered parking spaces in the garage and the use of an open visitor's parking lot adjacent to the building. Janitorial services would be included in the rent. Assistance with the lease negotiations was provided by the city's Redevelopment staff. Costs: The City of San Rafael is currently paying $12,271 per month for rent and $695 per month for janitorial services at the present police annex. This is an annual cost of $147,252 per year for rent and $8,340 for janitorial service for a total of $155,592 per year. The rent per square foot is currently $2.10. The cost for 1099 D Street would be $10,000 per month with no additional cost for janitorial service. The annual cost would be $120,000 per year with no cost for janitorial service for a total of $120,000 per year. The rent per square foot is $1.65 per square foot. The total savings per year would be $35,592, which does not include the additional $20,000 in the first two months of free rent in the first year. The cost to move to the above address would be approximately $14,745 for moving and $15,000 for IT setup. The total would be approximately $29,745. The cost would be offset by the $20,000 in the first two free months of rent, a savings of $695 per month in janitorial services and an additional savings in rent of $2,271 per month. Savings from current lease for Police Department Annex Although the representatives of the Philadelphia Corporation, which owns the current annex property have offered to lower the rent and make cosmetic improvements, the lease that offers the most savings to the City per year is 1099 D St. The savings would be $35,592 and also reflects the lowest cost per square feet at $1.65. 1099 D Street is also the closest of the buildings staff investigated as possible new sites, to the main office of the Police Department and City Hall and there are more parking spaces available for employees. The Police Department would also be able to design the office space to best suit its short term needs. For the past seven years, the city has been involved in assessing critical facility needs. The City of San Rafael, through the Group IV studies and the Critical Facilities Committee, has identified a long term solution to addressing the need for upgraded public safety facilities in the downtown area. FISCAL IMPACT: The City of San Rafael would sign into a five (5) year lease with 1099 D St., LLC for a Police Department Annex office beginning February 1, 2010 for $10,000 per month with a 3% increase in rent each year after. ACTION REQUIRED: Adopt the resolution authorizing the City Manager to execute a (5) year lease, in a form to be approved by the City Attorney, with 1099 D St., LLC for a Police Department annex office beginning February 1, 2010 for $10,000 per month with a 3% increase in rent each year after. Attachments: (1) (1) Letter of Intent from Keegan & Coppin Company (2) Resolution RESOLUTION NO. RESOLUTION OF THE SAN RAFAEL CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE WITH THE PROPERTY OWNER OF 1099 D ST., LLC, LOCATED AT 1099 D STREET, SAN RAFAEL FOR A FIVE (5) YEAR LEASE BEGINNING FEBRUARY 1, 2010 FOR $10,000.00 PER MONTH WITH A 3% INCREASE IN RENT EACH YEAR AFTER. Whereas, the City of San Rafael currently has a lease with Gramercy Realty for a 5854 square foot Police Department annex $12,271.15 per month that will expire on January 31, 2010; and Whereas, the City of San Rafael has a verbal agreement with 1099 D St., LLC, for a 6070 square foot Police Department annex beginning February 1, 2010 for $10,000 per month with a 3% increase in rent each year after; and Whereas, the City of San Rafael has a verbal agreement with 1099 D St., LLC, would give the City the first two months free of charge for a savings of $20,000 ; and Whereas, 1099 D St., LLC will build the interior of the Police Department annex to the City's specifications, and will provide an architect to assist the City with the design at no cost to the City. NOW, THEREFORE BE IT RESOLVED, that the City Council hereby authorizes the City Manager to execute a five (5) year lease, in a form to be approved by the City Attorney, with 1099 D St., LLC for a Police Department annex beginning February 1, 2010 for $10,000.00 per month with a 3% increase in rent each year after. I, Esther Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael City Council meeting held on the 17th day of August, 2009 by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Esther Beirne, City Clerk 42> KEE AN & CGPPIN C'OMP,4NY, INC. �'' ONCOR 101 Larkspur Landing Circle, Larkspur, CA 94939-1746 o (415) 461-1010 + Fax (415) 925-2310 Website: www.KeeganCoppin.com a E -Mail: TBanks@KeeganCoppin.com July 22, 2009 John Nunez City of San Rafael, Police Department VIA EMAIL: i nunez(iilsrpd.org Re: Letter of Intent to Lease Office Space at 1099 D Street, San Rafael Dear Mr. Nunez: On behalf of the Landlord, I would like to thank you for your continued interest in the property. The Lease will be drafted pursuant to the following terms and conditions currently agreed to between parties, unless otherwise amended: Tenant: City of San Rafael, Police Department — AGREED Property: 1099 D Street San Rafael, CA 94901 — AGREED Premises: Two (2) suites, including first floor office space consisting of approximately 5,270 rentable square feet, commonly known as Suite 100, and second floor office space consisting of approximately 800 rentable square feet, commonly known as Suite 205. — AGREED Use: General/Administrative Office — AGREED Type of Lease: Full Service. Landlord shall be solely responsible for PG&E and janitorial/trash removal services. — AGREED Initial Tenn: Five (5) years and two (2) months — AGREED Commencement: February 1, 2010—AGREED Rent: Months 1-2: Free (February — March, 2010) Months 3-14: $10,000.00 per month Months 15-62: Annual 3% fixed escalations, commencing February 1, 2011, for the remainder of the term. — AGREED Operating Expenses: Tenant shall 'be responsible for its proportionate share of increases in building operating expenses, including but not limited to property taxes, property insurance costs, and common area maintenance costs, above a 2010 Base Year. — AGREED Security Deposit: Prepaid Rent: None — AGREED None — AGREED Offices in San Francisco Northbay Cities: Santa Rosa, Petaluma, Napa, & Larkspur Tenant Improvements: Suite 100: Landlord, at Landlord's sole cost, shall provide a turn -key office build -out relative to a mutually agreeable floor plan, including but not limited to: • installing private offices, conference rooms, and open work areas; • painting the Premises; • installing new carpet throughout the Premises; • replacing/repairing any stained or broken ceiling tiles. Tenant shall first meet with Landlord's architect to create a workable floor plan, which shall then be approved by Landlord. Suite 205: Landlord, at Landlord's sole cost, shall professionally clean the carpet and touch-up paint the interior walls. — AGREED Building Systems: Landlord shall provide the building systems, including HVAC, electrical, and plumbing systems in good working condition. Tenant shall be responsible for all telephone, data, and Internet wiring at Tenant's sole cost, — AGREED Parking: Tenant shall be entitled fifteen (15) designated parking stalls in the on- site parking lot, and first-come, first-served visitor parking per building standard parking. — AGREED Signage: Landlord, at Landlord's sole cost, shall provide Tenant with standard building signage, including lobby directory and door plaque signage. — AGREED Insurance: Landlord shall retain a copy of Tenant's comprehensive general liability insurance policy (minimum $1,000,000 per occurrence, $3,000,000 aggregate) naming Landlord as additional insured. — AGREED Options to Renew: Tenant shall have two (2), five (5) year options to extend this Lease. Rent for the extended period shall be at 95% of the then existing Fair Market Rent, further defined in the Lease. — AGREED Contingency: This Lease shall be contingent upon Landlord's successful termination of the current Lease encumbering Suite 100. — AGREED Brokerage: Keegan & Coppin Co., Inc. represents both Tenant and Landlord, and shall receive a commission pursuant to the Leasing Agreement between Landlord and Broker. — AGREED Non-binding: This proposal shall in no way bind either party. It is designed as a medium for negotiation only. Only a fully executed Lease shall bind parties to obligations provided within. I look forward to hearing from you regarding this counter proposal. Sincerely, Theo Banks Agent