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File #: 2014-930   
Type: Regular Agenda Item
Body: City Council
On agenda: 10/7/2014
Title: Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Negotiate and Execute Documents Necessary to Implement the Terms of a Lease with Steeltown Winery LLC for Ten Years with Two Additional Five-Year Options in a Portion of Building 43, Located at 2440 Monarch Street, Suite 100 at Alameda Point. (Base Reuse 819099)
Attachments: 1. Exhibit 1 - Diagram of Leasehold Area, 2. Exhibit 2 - Lease, 3. Ordinance - Steeltown Winery Lease
Title
Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Negotiate and Execute Documents Necessary to Implement the Terms of a Lease with Steeltown Winery LLC for Ten Years with Two Additional Five-Year Options in a Portion of Building 43, Located at 2440 Monarch Street, Suite 100 at Alameda Point.  (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Negotiate and Execute Documents Necessary to Implement the Terms of a Lease with Steeltown Winery LLC for Ten Years with Two Additional Five-Year Options in a Portion of Building 43, Located at 2440 Monarch Street, Suite 100 at Alameda Point
BACKGROUND
Steeltown Winery LLC (Steeltown) opened its first tasting room in Antioch, CA in May 2013, but has been making wine for over four years. In 2010, based on their shared knowledge of business and enthusiasm for wine managing member, Meredith Coghlan and winemaker, Tod Hickman, decided to pursue a partnership as winery owners. Both owners have military backgrounds, which drew them to Alameda Point. Building 43 Winery, as they will rebrand the company, will be an artisan winery and tasting room, located in the urban setting of Alameda Point.  It will be located across the street from Rock Wall Winery consistent with other adjacent wine and spirit uses, and the adaptive reuse and long-term vision for Alameda Point.
DISCUSSION
The portion of Building 43, located at 2440 Monarch Street, Suite 100, is approximately five thousand two hundred twenty (5,220) square feet.  The proposed lease with Steeltown is for ten years with two additional five-year options. As outlined in the lease, the sole purpose for which the premises may be used by the tenant is for bonded winery and tasting room.
The proposed monthly base rent for the premise ranges from $2,610 to $3,405 per month over the 10-year period.
Steeltown is entitled to a capital repair credit up to a maximum of $27,000 for the capital costs necessary for reuse as a winery and tasting room applied against the monthly base rent.  Capital repairs include ADA restroom work, egress requirement and ADA flatwork, and fire code, electrical and building code updates.  In addition to the monthly base rent, Steeltown will pay its share of common area maintenance costs, all costs for services, utilities and taxes for the premises, and comply with lease requirements for insurance.  The City holds a $2,610-security deposit.
FINANCIAL IMPACT
The funds for this lease will be deposited in the Base Reuse Fund 858 and are subject to the restrictions included in the Economic Development Conveyance between the United States Government and the City of Alameda.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guideline section 15301 (Existing Facilities).
RECOMMENDATION
Approve an ordinance authorizing the City Manager to execute documents necessary to implement the terms of a lease with Steeltown Winery LLC for ten years with two additional five- year options in a portion of Building 43 located at 2440 Monarch Street, Suite 100 at Alameda Point.
 
Respectfully submitted,
Jennifer Ott, Chief Operating Officer - Alameda Point
 
By,
Nanette Mocanu, Acting Assistant Community Development Director
 
Financial Impact section reviewed,
Juelle Ann Boyer, Interim Finance Director
 
Exhibits:  
1.      Diagram of Leasehold Area
2.      Lease