HomeMy WebLinkAboutPD Police Department Annex LeaseCITY OF n Agenda Item No: 12
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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