Title
Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Lease with Delphi Productions, Inc. a California Corporation, for a Ten-Year Lease with One Five-Year Renewal Option for Building 39 Located at 950 West Tower Street at Alameda Point. [In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.] [Requires Four Affirmative Votes] (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Lease with Delphi Productions, Inc. a California Corporation, for a Ten-Year Lease with One Five-Year Renewal Option for Building 39 Located at 950 West Tower Street at Alameda Point
BACKGROUND
Delphi Productions, Inc. (Delphi) is a California Corporation that provides comprehensive display solutions for trade shows, events, museums and retail environments throughout the world and has been a tenant at Alameda Point since 1998. Some of Delphi’s clients include, but are not limited to, Apple, Microsoft, Adobe, Intel, Cisco, and Pixar. In 2011, Delphi merged with General Graphics Exhibits (GGE) creating an organization with deeper expertise, broader capabilities and increased services for its customers. Delphi is one of the most significant companies in the San Francisco Bay Area exhibit and events scene, as well as in the industry at large.
Delphi’s current lease for Building 39 was executed on April 1, 2012 and will terminate once the commencement date for this new lease begins (estimated April 1, 2017).
DISCUSSION
Building 39 is located at 950 West Tower Street at Alameda Point and consists of approximately 106,000 square feet of rentable space. Building 39 also has additional land and parking area, which Exhibits 2 and 3 illustrate. Delphi intends to continue using Building 39 for the design, production, and sale of exhibition, trade show, and other event materials.
The proposed lease is for ten years with one five-year option to renew. Because Building 39 is in the State Lands Commission Tidelands Trust area, purchasing the building is not an option. Under the new lease the monthly base rent will begin at $55,120 per month. Delphi will also be required to provide a security deposit in the amount of $71,919. The new lease agreement contains the standard insurance, indemnity, assignment and termination clauses the City of Alameda requires in all its leases and is summarized below.
|
Terms |
Building 39 |
|
Square Footage |
106,000 |
|
Uses |
Design, sale, manufacture, and storage of exhibition materials and related administrative functions |
|
Length of Term |
120 months |
|
Renewals |
One (1) 5-year extension option |
|
Security Deposit |
$71,919 |
|
Capital Repair Credit |
Not to exceed $200,000 |
|
Monthly Base Rent |
$ 55,120.00 - $71,919.10 |
|
1-12 |
$55,120.00* |
|
13-24 |
$56,773.60 |
|
25-36 |
$58,476.81 |
|
37-48 |
$60,231.11 |
|
49-60 |
$62,038.05 |
|
61-72 |
$63,899.19 |
|
73-84 |
$65,816.17 |
|
85-96 |
$67,790.65 |
|
97-108 |
$69,824.37 |
|
109-120 |
$71,919.10 |
|
*subject to Capital Repair Credit in accordance with Section4.1 (b) of the lease |
FINANCIAL IMPACT
The monies from the leases will be deposited into the Base Reuse Lease Revenue Fund (Fund 858) and are limited to uses permitted under the Economic Development Conveyance Memorandum of Agreement with the United States Navy (Navy).
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.
RECOMMENDATION
Approve a Lease and Authorize the City Manager to Execute Documents Necessary to Implement the Terms of a Lease with Delphi Productions, Inc. a California Corporation, for a Ten-Year Lease with One Five-Year Renewal Option for Building 39 Located at 950 West Tower Street at Alameda Point.
Respectfully submitted,
Jennifer Ott, Base Reuse Director
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Premises
2. Land Area
3. Parking
4. Lease