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LINDEN BRANCH LIBRARY PREMISE LEASE AGREEMENT
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RECOMMENDATION
It is recommended the City Council adopt a motion authorizing the City Manager to: execute a three year Commercial Property Lease Agreement (Attachment A) with Magnasco Investments, renewing the commercial space occupied by the Linden Branch Library, and to take appropriate actions to carry out the purpose and intent of the motion.
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SUMMARY
Pursuant to an agreement with San Joaquin County, the City of Stockton provides library services to eight different branch locations throughout the County. One of the branches is in Linden, where a commercial space has been leased since 2004 at 19059 E. Highway 26. The building is owned by Magnasco Investments, and managed by Peter Boysen Realty.
This new lease agreement will commence September 1, 2015, continue for an Initial Term of three years, and expire August 31, 2018. Monthly lease payments during the Initial Term will increase to $2,250 from the current $2,100. The Lease agreement provides for a Renewal Term of an additional three years with a 7% increase in cost, for a future monthly lease payment of $2,400. As this is a county library branch, all costs associated with the operation of the facility, including rent, are paid with funds received from San Joaquin County.
DISCUSSION
Background
The current site has been occupied by the Linden Branch under two agreements since 2004. The most recent lease began in 2009, and expires August 31, 2015. The property meets current community needs for library services and enjoys support from an active group, the Friends of the Linden Library.
Being an unincorporated area, Linden has no governmental facilities in which a library can be suitably housed. A commercial space continues to be a viable option for serving the community. The property is easily accessible on a main thoroughfare that bisects the town of Linden and has ample parking for library users
Present Situation
The cost of the current lease is $2,100 per month. Under the new lease agreement, rent will be $2,250 per month from September 1, 2015 through August 31, 2018. In accordance with the agreement for library services between San Joaquin County and the City of Stockton, the City will continue as Lessee, with rent, utilities and up to $1,000 each year for repairs being paid using County Library funds.
At the end of the initial three year term, the Agreement provides the parties to a Renewal Term of an additional three years. If the City and the Lessor elect to exercise the Renewal Term, the lease payments will increase 7% to $2,400 per month from September 1, 2018, through August 31, 2021.
FINANCIAL SUMMARY
Pursuant to an agreement between the City of Stockton and San Joaquin County, the County provides the City with financial resources to operate and manage library branches throughout the County. The premise lease for the Linden library is paid for with the contract proceeds the City receives from San Joaquin County.
The increase in lease costs for the Linden library will result in an expenditure increase to the 041 Library Fund, however no impact will occur to the City General Fund as County funds pay for the Linden Branch. The existing receipts from San Joaquin County are sufficient to accommodate the ten months of increased lease payments for the 2015-16 fiscal year. Sufficient appropriation is available in the Library Fund Linden Branch account number 041-3547-580 as the 2015-16 lease increase was anticipated in the 2015-16 budget.
Attachment A: Lease Agreement