Title
Introduction of Ordinance Approving a Lease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a 3 Year Lease with No Extension Options with Williams-Sonoma, Inc. a Delaware Corporation, for Building 169, Suite 102 Located at 1680 Viking Street, 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: 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 Lease with Williams-Sonoma, Inc. a Delaware Corporation, for a Three-Year Lease with No Extension Options of Building 169, Suite 102 Located at 1680 Viking Street, Alameda Point
BACKGROUND
Williams-Sonoma, Inc. (Williams-Sonoma) is a Delaware C-corporation operating numerous retail stores under a portfolio of brands that includes Williams-Sonoma, Williams-Sonoma Home, Pottery Barn, Pottery Barn Kids, PBTeen, West Elm, Mark and Graham, and Rejuvenation.
Williams-Sonoma currently occupies Building 169, Suite 102 under a license with the City as of May 12, 2016, and is currently under the first amendment to that License which allows them to occupy the premises through April 30, 2017. This License will terminate once the commencement date for this lease begins (estimated May 1, 2017).
DISCUSSION
Williams-Sonoma was founded in 1956 in Sonoma, CA and is a multi-channel specialty retailer of high quality home products. Today Williams-Sonoma is one of the largest e-commerce retailers and operates retail stores in multiple countries including the United States, Canada, Puerto Rico, Australia, and the United Kingdom just to name a few. Williams-Sonoma approached the City about leasing Building 169, Suite 102 because the building fits their needs to operate a retail outlet store.
Building 169 is located at 1680 Viking Street at Alameda Point. Williams-Sonoma will occupy Suite 102 of Building 169, which is approximately 43,555 square feet of rentable space. They intend to use Building 169 as a retail outlet store to sell products from all company owned retailers. Bringing a retail outlet store to Alameda Point will attract more people to shop in Alameda and will generate sales tax revenue. Future Site A Tenants will also benefit from a retail outlet store operating at Alameda Point.
The proposed lease is for three years with no options to renew. The monthly base rent will begin at $21,677.50 per month. Although Williams-Sonoma is unable to provide sales information to the public, they did estimate that this store had a monthly average of ten thousand visitors, which resulted in approximately two thousand, five hundred transactions 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.
Building 169 is located in the Site B: Enterprise District. The three year term does not impede development of Site A nor does staff believe it will conflict with any development of Site B. The lease is short term and consistent with the City’s Asset Management Policy as it is a sales tax generator.
The following summarizes the major business terms of the lease agreement:
|
Terms |
Building 169 |
|
Square Footage |
43,355 |
|
Uses |
Retail sale, at full price and/or discount, of products for home furnishing and embellishment. |
|
Length of Term |
36 months |
|
Extension Options |
None |
|
Security Deposit |
$21,677.50 |
|
Capital Repair Credit |
An amount not to exceed $30,000 |
|
Monthly Base Rent |
|
|
1-12 |
$21,677.50 |
|
13-24 |
$21,677.50 |
|
25-36 |
$21,677.50 |
FINANCIAL IMPACT
The monies from the lease will be deposited into the Base Reuse Special Revenue Fund (Fund 858) and are limited to uses permitted under the Economic Development Conveyance Memorandum of Agreement with the United States Navy (Navy). Any sales tax generated from retail outlet store will be deposited into the General Fund.
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 Williams-Sonoma, Inc. a Delaware Corporation, for a three-year lease with no extension options of Building 169, Suite 102 Located at 1680 Viking Street, 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. Aerial Map of Premises
2. Leased Premises
3. Parking Areas
4. Final Lease