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File #: 2016-2989 (10 minutes)   
Type: Regular Agenda Item
Body: City Council
On agenda: 7/5/2016
Title: Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Three-Year Lease with Kai Concepts, LLC, a California limited liability company, for Building 168, Suite 300, located at 1651 Viking Street. [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 - Diagram of Leasehold Area, 2. Exhibit 2 - Lease, 3. Ordinance

Title

 

Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Three-Year Lease with Kai Concepts, LLC, a California limited liability company, for Building 168, Suite 300, located at 1651 Viking Street. [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 Three Year Lease with Kai Concepts, LLC, a California limited liability company, for Building 168, Suite 300, located at 1651 Viking Street

 

BACKGROUND

 

Kai Concepts is the home of the Kiteboat Project, where a team of marine architects, sailors, and software developers are building and testing kites for large-scale propulsion in waterborne transportation.  To date, kite propulsion has primarily been used for kitesurfing and in single-person traction kiting. In small-scale kiting, the force of the kite can be controlled by an individual holding on to the kite directly, but as the kite gets larger, harnessing its power becomes more difficult. The Kiteboat Project's mission is to design a purpose-built vessel that is specifically designed to harness kite power and to advance kite design and kite controls to the point that power-assisted or autonomously controlled kites can be used by a broad audience.

 

Kai Concepts, LLC has occupied Building 168 since May 8, 2013. Kai Concepts’ lease was amended by a First Amendment dated September 16, 2013 and further amended by a Second Amendment dated May 28, 2014 (collectively, the "2013 Lease"). The 2013 Lease Extension Term expired on May 15, 2015 and Kai Concepts, LLC has since occupied Building 168 on a month-to-month basis until the terms for a new lease could be finalized.  It is the intent of both Kai Concepts, LLC and the City that the 2013 Lease be terminated except for certain indemnification obligations.

 

DISCUSSION

 

This action requires City Council approval pursuant to City Charter Section 3-10.  The affirmative vote of 4 members of Council are required for approval.  The portion of Building 168, located at 1651 Viking Street, Suite 300, is 28,636 square feet and the adjacent land is approximately 17,270 square feet. 

 

The premises may only be used by the tenant for research and development related to the kite-powered craft which involves designing, building, and testing.

 

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

 

Terms

Building 168

Square Footage

28,636

Uses

Research and development related to kite powered craft which involved design, build and testing

Length of Term

3 Years

Extension Options

None

Monthly Base Rent

$11,852.00-$12,573.79

 

Building 168 is located in the Enterprise District at Alameda Point.  Kai Concepts is essentially a creative leasing option of a bay located in the Maritime Administration (MARAD) warehouse (MARAD reduced its square footage and currently occupies two bays and the adjacent yard).  All leases in the Enterprise District are short term to allow the City flexibility to develop the site.  Kai had originally requested a shorter term lease, but because of the need for repeated amendments to add term to the lease in the past, the City asked for a three year lease with a termination provision favorable to Kai. 

The tenant has provided a $44,728 security deposit. In addition, the tenant will comply with all other leasing requirements including providing insurance that is satisfactory to the City.

 

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 introduction of Ordinance for the lease agreement for three years with Kai Concepts, LLC in Building 168, Suite 300, which is located at 1651 Viking Street.

 

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