Title
Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of Lease with Wonky Kitchen LLC for Ten Years in Building 44 Located at 2400 Monarch Street at Alameda Point. [Requires four affirmative votes] (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Introduce an Ordinance Approving a Ten-Year Lease with Wonky Kitchen LLC in Building 44 Located at 2400 Monarch Street at Alameda Point
BACKGROUND
In August 2012, the City of Alameda entered into a one-year lease agreement with Wonky and Wonky Kitchen LLC for Building 119. Wonky Kitchen produces dried kale which is packaged and sold in a variety of markets and groceries catering to organic, “green” consumers. Co-located with Wonky and Wonky Kitchen LLC in Building 119 is Oaktown Jerk, which sells locally produced beef jerky products, also to higher end markets and grocery stores. Although Wonky Kitchen amended its lease several times, the original term expired in December 2015. Because Building 119 is located in the Site A development footprint, the City could not offer a renewal.
DISCUSSION
The City solicited proposals for potential tenants in Building 44, which is located along Spirit’s Alley. After reviewing the six proposals, City staff determined that Wonky Kitchen had submitted the most competitive proposal because it provided the most financial benefits to the City. Wonky Kitchen matched the City’s rent request and proposed the lowest rent credit. In addition to the strength of the business and financial proposal, staff felt it was a bonus to be able to relocate and retain an existing business displaced by new development. Oaktown Jerk has yet to decide if it will continue using Wonky’s facilities.
Building 44 is an approximately 5,073-square-foot building located on Spirit’s Alley (Exhibit 1). In addition to its food production, Wonky Kitchen will be making its commercial kitchen available to local food trucks. The food trucks will on occasion sell their products on-site to allow for additional food options for Spirit’s Alley patrons. A small enclosed area will house some of the trucks using the kitchen services.
The building was under Navy control until recently, so there are many improvements needed to bring the building up to occupancy standards. The proposed lease includes a capital repair credit of an amount not-to-exceed $27,384.
The following summarizes the major business terms of the lease agreement (Exhibit 2):
|
Terms |
Building 44 |
|
Square Footage |
5,073 |
|
Uses |
Commercial kitchen, food production, providing food services and packaging |
|
Length of Term |
10 years |
|
Extension Options |
None |
|
Purchase Option |
None |
|
Monthly Base Rent |
$2,282 - $3,123 |
This lease transaction does not include an option to purchase.
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
Approval of an Ordinance Approving a Ten-Year Lease with Wonky Kitchen LLC in Building 44 Located at 2400 Monarch Street at Alameda Point.
Respectfully submitted,
Jennifer Ott, Base Reuse Director
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Leased Premises
2. Final Lease