Title
Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a 10-Year Lease with 651 West Tower Avenue, LLC., a California Limited Liability Company, for Building 91 Located at 651 West Tower Avenue 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 Ordinance Approving a Lease and Authorize the City Manager to Execute Documents Necessary to Implement the Terms of a 10-Year Lease with 651 West Tower Avenue, LLC., a California Limited Liability Company, for Building 91 Located at 651 West Tower Avenue at Alameda Point
BACKGROUND
651 West Tower Avenue, LLC was formed to create a space for food and beverage makers to come together in a shared large scale food manufacturing facility. Building 91 will be multi-tenanted, targeting artisan beverage and food incubators and producers. Local entrepreneurs and small companies will share resources and collaboratively grow their retail and wholesale businesses. The multi-tenanted premises will be used for light manufacturing, including food and beverage production, warehouse and distribution, training, and retail sales on-site.
The following is a list of prospective tenants at Building 91 under 651 West Tower Ave., LLC:
• California Craft Maltings - California’s first artisan malting facility
• Roast Coffee - Bay Area’s first urban flour mill
• The Granary - artisanal, small batch specialty coffee roaster
•
Ultimately, 651 West Tower Ave., LLC wants to make Building 91 a food and beverage destination. It will be open to public for tours and will be a space to host community events, cooking classes, food trucks/markets, urban homesteading workshops, and conferences in the future.
DISCUSSION
Building 91 consists of approximately 40,800 square feet of rentable space on land consisting of 2.2 acres as depicted in Exhibit 1.
Staff believes 651 West Tower Avenue, LLC will bring much needed food services to Alameda Point and will be an amenity to existing and future tenants. Consistent with the City’s asset management policy, the encouragement and attraction of cluster industries is a desired City goal. The project for Building 91 delivers a clustering of food and beverage makers and serves as an incubator for slow food manufacturing.
The current rent for Building 91 is $3,819.00 per month. The proposed 10-year lease with 651 West Tower Ave, LLC for Building 91 requires payment of $18,360.00 monthly for year one and $18,910.80 for year two. The lease contains the standard insurance, indemnity, assignment and termination clauses the City of Alameda requires in all its leases. The following provides a monthly rent schedule for Building 91 for the term of the lease:
|
Months |
Rent/SF |
Monthly |
|
1-12 |
$0.45 |
$18,360.00* |
|
13-24 |
$0.46 |
$18,910.80 |
|
25-36 |
$0.48 |
$19,478.12 |
|
37-48 |
$0.49 |
$20,062.47 |
|
49-60 |
$0.51 |
$20,664.34 |
|
61-72 |
$0.52 |
$21,284.27 |
|
73-84 |
$0.54 |
$21,922.80 |
|
85-96 |
$0.56 |
$22,652.58 |
|
97-108 |
$0.57 |
$23,332.16 |
|
109-120 |
$0.59 |
$23,955.64 |
|
|
|
*Subject to Capital Repair Credit in accordance with Section 4.1(b) in the attached lease agreement (Exhibit 2). |
Building 91 has a current option to purchase for $3.0 million. The option can be exercised upon the completion of a subdivision parcel map. Staff is working on the creation of the subdivision maps and will be presenting them to the Planning Board and City Council next year.
FINANCIAL IMPACT
The monies from the new lease will be deposited into the Base Reuse Fund lease revenue account 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
This action has 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 651 West Tower LLC, a California limited liability company, for Building 91 located at 651 West Tower Avenue 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. Building 91 Lease
3. Proposed Use for Building 91