Title
Introduction of Ordinance Authorizing the City Manager or Designee to Execute a Third Amendment to the License with Amber Kinetics, Inc., a California Corporation, for the Unimproved Lot Located at 641 West Red Line Avenue in Alameda to Extend the Term for 12 Months and Provide for One 12-Month Extension Option. (Community Development 819099)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
This action will introduce an ordinance authorizing a third amendment to the license with Amber Kinetics, Inc. (Amber Kinetics) for use of the unimproved, approximately 10,000 square foot lot, located at 641 West Red Line Avenue, , as a test site for electrical systems storage. The third amendment extends the term of the license for an additional twelve (12) months and provides for one 12-month extension option, subject to approval of the City Manager. The monthly rent of $3,600 remains unchanged during months 1-12 of the extended term. The monthly rent increases to $3,800 if the option to extend the term for an additional 12-months is exercised and approved.
BACKGROUND
Amber Kinetics is a manufacturer of energy storage technologies with a mission to accelerate the world to safer, more cost-effective, and environmentally sustainable solutions for storing energy. In 2014, the City of Alameda (City) and Amber Kinetics entered into a license agreement for use of the unimproved lot located at 641 West Red Line Avenue for electrical systems storage.
The License agreement with Amber Kinetics, dated April 1, 2014, provided for a twenty-four (24) month term with a base monthly rent of $1,000. The expiration date of the License term was April 14, 2016. In January 2016, the First Amendment to the License Agreement was executed, extending the term of the agreement for an additional twenty-four (24) months and increasing the base monthly rent to $2,200. The expiration date of the amended term was May 4, 2018. On April 17, 2018, the Second Amendment to the License Agreement was executed. This amendment extended the term of the agreement for an additional twenty-four (24) months, with term expiration date on May 4, 2020, and increased base monthly rent of $3,600.
DISCUSSION
Amber Kinetics uses the unimproved lot located at 641 West Red Line Avenue as a test site for electrical storage systems, including two below-ground precast vaults and a surface shed to house electrical and communications equipment. This proposed license amendment with Amber Kinetics extends the term of the license for an additional twelve (12) months and provides for one 12-month extension option, subject to the City Manager’s approval.
The following table summarizes the major business terms of the license agreement:
|
Terms |
Unimproved Lot Located at 641 West Red Line Avenue |
|
Square Footage |
10,000 |
|
Uses |
Test site for electrical storage systems including construction of two (2) 8’ x 8’ x 10’ (L x W x H) precast concrete vaults and surface shed to house electrical and communications equipment. |
|
Third Amendment Term Ext. |
12 months |
|
Extension Options |
One 12-month extension option |
|
Monthly Base Rent |
|
|
Months 1 - 12 |
$3,600.00 |
|
12-Month Extension Option |
$3,800.00 |
ALTERNATIVES
• Introduce an ordinance approving the license amendment with Amber Kinetics, Inc.
• Direct staff to renegotiate amendment terms. Under this alternative, staff would continue to negotiate terms with Amber Kinetics, Inc. based on City Council direction.
• Direct staff to seek other prospective tenants. If Amber Kinetics, Inc. is not the preferred tenant, staff would market the property to other prospective tenants.
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 does not affect the Alameda Municipal Code.
SURPLUS LANDS ACT
The property is exempt from the Surplus Lands Act because the term of the extension is only twelve months, and the short term nature of the extension term does not constitute a disposition. While the extension amendment includes one (1) twelve month extension option, this option is subject to the discretionary approval of the City Manager or designee.
ENVIRONMENTAL REVIEW
Approval of this license amendment is exempt from review under the California Environmental Quality Act Section 153 (not a project); and Section 15061(b)(3) (no significant environmental impact).
CLIMATE IMPACTS
This action has no anticipated climate impacts. It should be noted that if Amber Kinetics’ technology is proved viable and can be scaled up for commercial application, it will have a beneficial impact on climate change as it will be a greener and more efficient way to store energy.
RECOMMENDATION
Introduce an Ordinance authorizing the City Manager or designee to execute a third amendment to the license with Amber Kinetics, Inc., a California corporation, for the approximately 10,000 square foot unimproved lot located at 641 West Red Line Avenue in Alameda to extend the term for 12 months and provide for one 12-month extension option, subject to the City Manager’s approval.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of a third amendment to the license with Amber Kinetics, Inc.
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Nanette Mocanu, Asst. Community Development Director
Financial Impact section reviewed,
Nancy Bronstein, Interim Finance Director/Human Resources Director
Exhibits:
1. License Agreement
2. First Amendment
3. Second Amendment
4. Third Amendment
cc: Eric Levitt, City Manager