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File #: 2016-2395   
Type: Regular Agenda Item
Body: City Council
On agenda: 1/5/2016
Title: Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Four Year Lease with Five Three-Year Extension Options and Right of First Negotiation to Purchase with Google Inc. for Building 400A Located at 1190 West Tower Avenue 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)
Attachments: 1. Exhibit 1 - Leased Premises, 2. Exhibit 2 - FInal Lease, 3. Ordinance - Google

Title

Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Four Year Lease with Five Three-Year Extension Options and Right of First Negotiation to Purchase with Google Inc. for Building 400A Located at 1190 West Tower Avenue 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: Elizabeth D. Warmerdam, Interim City Manager

 

Re: Introduction of an Ordinance Approving the Lease Agreement for Four Years with Five - Three-Year Extension Options and Right of First Negotiation to Purchase with Google Inc. in Building 400A Located at 1190 W. Tower Avenue at Alameda Point

 

 

BACKGROUND

 

In 2006, the City of Alameda entered into a lease agreement for Building 19 with Makani Power, a "start-up" company researching and developing new wind power technologies, including an airborne wind turbine.  The Makani Airborne Wind Turbine is a tethered wing that generates power by flying in large circles where the wind is stronger and more consistent.  It eliminates 90% of the material used in conventional wind turbines, and can access winds both at higher altitudes and above deep waters offshore - resources that are currently untapped.  Their goal is the utility-scale deployment of airborne turbines in offshore wind farms.  In 2013, Makani Power was acquired by Google and in March 2014, the City approved a six-year lease with five consecutive three-year options with Google for Buildings 19 and 11 (Original Lease).  This lease included a right of first offer (ROFO) to lease Buildings 400, 400A and 12.  Google is accepting the offer for building 400A as specified in their Original Lease.  The term of the Building 400A lease runs concurrent with Google’s Original Lease and will expire in 2020 in the same year as the original lease expiration. 

 

DISCUSSION

 

The following summarizes the major business terms of the lease agreement:

 

Terms

Building 400A

Square Footage

64,500

Uses

General Office, Engineering, Research & Development and Manufacturing

Length of Term

4 Years

Extension Options

Five Options for Periods of Three Years Each

Monthly Base Rent

$26,160-$34,008

Right of First Negotiation for Purchase

For Building 400A

 

As in the Original Lease, the lease for Building 400A includes a Right of First Offer (ROFO) to lease Buildings 12 and 400. Prior to marketing these spaces, the City agrees to offer Google the opportunity to lease them at market terms.  This right is only applicable to Google and cannot be exercised by any subtenant or Assignee.  Also included in this lease, as in the Original Lease, is the Right of First Negotiation to Purchase.  If the City creates legal parcels, and then elects to sell to a "non-governmental third party buyer" (but not a master developer or as part of a larger multi-parcel or portfolio sale) then Google shall first be offered the opportunity to purchase the parcels.  The City would provide Google with price and terms, then the parties will enter in to 90-day exclusive negotiation period.  The City is not obligated to sell under this provision, but it is obligated to offer the property and negotiate with Google first if it does elect to sell.  Price will be based on the market and remaining fair-share costs.  If a purchase and sale agreement is negotiated, it will be subject to ratification by a further ordinance to be adopted by the City Council at that time.  The City Council would have no obligation to approve the purchase and sale agreement.

 

Attracting jobs to Alameda Point (resulting in the incremental replacement of the thousands of jobs and economic base lost when the Navy decommissioned the former Naval Air Station) is one of the top priorities of all of the community planning documents previously prepared for the property.  The growth of Google continues to create an exciting opportunity to cultivate a long-term relationship with a major, growing global employer.  It also raises awareness in the greater Bay Area community of Alameda Point’s potential as a unique and competitive location for jobs.  Staff and its leasing agents hope to leverage the Google expansion to attract other employment uses or corporate campus developers to Alameda Point.

 

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).

 

MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE

 

This action does not affect the Alameda Municipal Code.

 

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 introduction of Ordinance for the lease agreement for four years with five three-year extension options and right of first negotiation to purchase with Google Inc. in Building 400A located at 1190 W. 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.                     Leased Premises

2.                     Final Lease