Title
Adoption of Resolution Approving a Third Amendment to a Sublease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Third Amendment to a Sublease with SBA 2012 TC Assets, a Delaware Limited Liability Company, to Include Two Additional Five-Year Terms With an Annual 3% Consumer Price Index (CPI) Increase for Use of a Portion of Building 624 Located at 625 West Ranger 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: Jill Keimach, City Manager
Re: Adoption of Resolution Approving a Third Amendment to a Sublease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Third Amendment to a Sublease with SBA 2012 TC Assets, a Delaware Limited Liability Company, to Include Two Additional Five-Year Terms With an Annual 3% CPI Increase for Use of a Portion of Building 624 Located at 625 West Ranger Avenue at Alameda Point.
BACKGROUND
SBA 2012 TC Assets (TC Assets) has been a Subtenant at Alameda Point since October 1, 2000 and specializes in wireless and cellular service. TC Assets intends to continue using a small portion of the Building 624 for the installation and maintenance of cell towers and related equipment.
TC Assets is currently under a second amendment to their sublease agreement for use of Building 624 dated June 2016. The term of that second sublease will expire September 30, 2021 and the first additional term under this third amendment will commence October 1, 2021. Although the current sublease will expire in 2021, this third amendment is being done in advance because leases with cellular carriers require 5-year increments; because of this reason, it is preferable for cell tower companies to have terms in place in advance.
DISCUSSION
Depicted on Exhibit 1, the portion of Building 624 that TC Assets currently utilizes is approximately 1,741 square feet. TC Assets intends to continue using this small portion of the building for the installation and maintenance of cell towers and related equipment.
This proposed third amendment will amend the current agreement to include two additional five year terms. The first additional term will commence on October 1, 2021 and the final term will provide term until October 1, 2030. Starting October 1, 2021 the monthly base rents under this third amendment will be $5,334.10 per month for year one, $5,494.12 per month for year two, $5,658.94 per month for year three, $5,828.71 per month for year four, $6,003.57 per month for year five, $6,183.68 per month for year six, $6,369.19 per month for year seven, $6,560.27 per month for year eight, $6,757.08 per month for year nine, and $6,959.79 per month for year ten. TC Assets has provided an earnest money deposit in the amount of $100. The amended sublease 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 |
625 West Ranger Avenue (B. 624) |
|
Square Footage |
1,741.50 |
|
Uses |
Installation and maintenance of cell towers and related equipment |
|
Length of Renewal Terms |
Two additional 5 year renewals |
|
Monthly Base Rent |
$5,334.10 - $6,959.79 |
|
10/1/2021 |
$5,334.10 |
|
10/1/2022 |
$5,494.12 |
|
10/1/2023 |
$5,658.94 |
|
10/1/2024 |
$5,828.71 |
|
10/1/2025 |
$6,003.57 |
|
10/1/2026 |
$6,183.68 |
|
10/1/2027 |
$6,369.19 |
|
10/1/2028 |
$6,560.27 |
|
10/1/2029 |
$6,757.08 |
|
10/1/2030 |
$6,959.79 |
FINANCIAL IMPACT
The monies from the lease 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 is permitted pursuant to Alameda Municipal Code section 2-64, regarding leases to telecommunications companies.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines sections 15183 (projects consistent with General Plan and Zoning), 15061(b)(3) (general rule, no significant effect on the environment), and 15301 (existing facilities), each as a separate and independent basis.
RECOMMENDATION
Approve a Resolution for a Third Amendment to a Sublease and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a Third Amendment to a Sublease with SBA 2012 TC Assets, a Delaware Limited Liability Company, to Include Two Additional Five-Year Terms With an Annual 3% CPI Increase for Use of a Portion of Building 624 Located at 625 West Ranger Avenue at Alameda Point
Respectfully submitted,
Jennifer Ott, Base Reuse and Transportation Planning Director
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Edwin Gato, Acting Finance Director
Exhibits:
1. Aerial Map of Premises
2. Premises
3. Third Amendment to Sublease
4. Second Amendment to Sublease
5. First Amendment to Sublease
6. Sublease Agreement