Title
Introduction of an Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a 10-Year Lease with Matson Navigation Company, Inc., a Hawaii Corporation, for Building 167 Located at 1500 Ferry Point at Alameda Point. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Introduction of an Ordinance Approving a Lease and Authorize the City Manager to Execute Documents Necessary to Implement the Terms of a 10-Year Lease with Matson Navigation Company, Inc., a Hawaii Corporation, for Building 167 Located at 1500 Ferry Point at Alameda Point
BACKGROUND
Matson Navigation Company’s (Matson) transportation business spans the globe from Shanghai to Savannah. Their services encompass everything from providing a vital lifeline for the economies of Hawaii, Alaska, Guam, Micronesia and the South Pacific to delivering a wide range of multi-modal services throughout North America.
Matson has been a subtenant of West Coast Novelty in Building 23 under a sublease dated June 30, 2006. When West Coast Novelty vacated Building 23 in June 2015, Matson decided to relocate to Building 167 and expand within the maritime portion of the Alameda Point Enterprise District. Matson will be using Building 167 to store parts for the repair of its worldwide fleet of ships; this will not be a distribution center. Matson will also have access to Pier 1 three days a month.
As a maritime shipping company, Matson’s use of the property is consistent with the City’s long-term vision for this area and is an ideal fit within the Tidelands Trust area at Alameda Point. They are also compatible with the other transportation-related tenants at Alameda Point. By locating in Alameda, Matson is capitalizing on our proximity to the ports and other ground transportation hubs. Matson also may house existing Alameda Point tenants, who do shipwork and are currently in Site A.
DISCUSSION
With approximately 53,785 square feet of rentable space, as described above, Building 167’s intended uses are warehouse and light mechanical repairs and fabrication of ship repair parts and equipment. The following is a yearly breakdown for the month-to-month rent for Building 167:
|
Months |
Rent/SF |
Monthly |
|
1-12 |
$0.54 |
$29,043.90 |
|
13-24 |
$0.56 |
$29,915.22 |
|
25-36 |
$0.57 |
$30,812.67 |
|
37-48 |
$0.59 |
$31,737.53 |
|
49-60 |
$0.61 |
$32,689.16 |
|
61-72 |
$0.63 |
$33,669.84 |
|
73-84 |
$0.65 |
$34,769.93 |
|
85-96 |
$0.66 |
$35,720.33 |
|
97-108 |
$0.68 |
$36,791.94 |
|
109-120 |
$0.70 |
$37,895.70 |
FINANCIAL IMPACT
The monies from the new lease will be deposited into the Base Reuse Special Revenue Fund and are limited to uses permitted under the Economic Development Conveyance Memorandum of Agreement with the United States Navy.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
There is no impact on the Municipal Code.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15301(c) (Existing Facilities).
RECOMMENDATION
Approve an ordinance authorizing the City Manager to execute documents necessary to implement the terms of a 10-year lease with Matson Navigation Company, Inc., a Hawaii corporation, for Building 167 located at 1500 Ferry Point at Alameda Point.
Respectfully submitted,
Jennifer Ott, Chief Operating Officer - Alameda Point
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Diagram of Leasehold Area
2. Lease