Title
Introduction of Ordinance Approving the Lease Building 397 Located at 1690 Orion Street at Alameda Point (in the Enterprise Zone), with Astra Space, Inc., a Delaware C-Corporation for a Two-Year Lease with Three One-Year Extension Options. [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: Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Lease with Astra Space, Inc., a Delaware Corporation, for a Two-Year Lease with Three One-Year Renewal Options for Building 397 Located at 1690 Orion Street at Alameda Point
BACKGROUND
Astra Space, Inc. (Astra Space), formerly Ventions, LLC, is a San Francisco-based aerospace research and design firm with a ten-year history of developing aerospace technology in partnership with NASA. Ventions, LLC was founded in 2005 and reincorporated as Astra Space, Inc. in September 2016. Astra Space designs, tests, manufactures, and operates next-generation launch services that will enable a new generation of global communications, earth observation, precision weather monitoring, navigation, and surveillance capabilities.
Astra Space approached the City about leasing Building 397 because the design and layout of the building will accommodate Astra Space’s needs to test, research and develop aerospace technology and equipment. The building was formerly used by the Navy for much larger engine tests; Astra’s technology is new and smaller. This type of use is consistent with the City’s long-term vision for the Enterprise District and will not interfere with the timing of new development in this area. Astra Space currently occupies Building 397 under a license with the City as of November 22, 2016. This license will terminate once the commencement date for this lease begins (estimated March 1, 2017).
DISCUSSION
Building 397 is located at 1690 Orion Street in the Enterprise District of Alameda Point. Unlike previous Enterprise District leases, staff is not recommending the mutual termination provision be included in the lease because the Astra lease is for a short-term and because the Astra use is consistent with the goals for the District. However, this does not necessarily mean that the City must agree to a renewal of this lease with Astra once the short-term lease expires. The Enterprise District is envisioned to be a jobs-generating, corporate headquarter, for commercial development at Alameda Point. Staff hopes Astra will use its short-term lease in Building 397 to consider expanding its innovative operations or be a catalyst for other similar companies. The City was using Building 397 as storage, but Astra funded moving and clearing of City storage to allow Astra Space to use and revitalize the building.
The proposed lease is for two years with three one-year options to renew. The monthly base rent will begin at $12,134.50 per month. The new lease agreement contains the standard insurance, indemnity, assignment and termination clauses the City of Alameda requires in all its leases and is summarized below.
The following summarizes the major business terms of the lease agreement:
|
Terms |
Building 397 |
|
Square Footage |
17,335 |
|
Uses |
Rocket engine testing, research and development, office |
|
Length of Term |
2 years |
|
Renewals |
Term may be renewed for one year increments but is not to exceed three renewal options total |
|
Security Deposit |
$24,269 |
|
Prepaid Rent |
$110,667 |
|
Monthly Base Rent |
$ 12,135 - $12,499 |
|
1-12 |
$12,135 |
|
13-24 |
$12,499 |
FINANCIAL IMPACT
The monies from the leases 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 (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 a lease and authorize the City Manager to execute documents necessary to implement the terms of a lease with Astra Space, Inc., a Delaware Corporation, for a two-year lease with three one-year renewal options for Building 397 located at 1690 Orion 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