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APPROVE LEASE AMENDMENT WITH BUTTERFIELD + CO. CPAs AT 501 WEST WEBER AVENUE
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RECOMMENDATION
It is recommended that the City Council adopt a resolution:
1) Approving a Lease Amendment to the lease with Butterfield + Co. CPAs, Inc. for office space in the Waterfront Towers (501 West Weber Avenue); and
2) Authorizing the City Manager, or his designee, to take all the necessary and appropriate actions to carry out the purpose and intent of this resolution.
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Summary
The City purchased the Waterfront Office Towers at 501 and 509 West Weber Avenue in January 2018, to serve as the City’s future City Hall. The City currently acts as landlord to several tenants with leases in the 501 West Weber Avenue building; Butterfield + Co. CPAs, Inc. (Butterfield CPAs) is one such tenant leasing office space on the fourth floor. Butterfield CPAs desires to extend its current lease an additional eighteen months through June 30, 2020.
DISCUSSION
Background
In January 2018, the City of Stockton acquired the two Waterfront Office Tower buildings at 501 and 509 West Weber Avenue to serve as the future home of City Hall. A number of tenants occupy both buildings. One of these tenants is Butterfield CPAs, which currently leases 4,468 s.f. of office space on the fourth floor of 501 West Weber Avenue from the City (Attachment A - Current Lease). The current lease with Butterfield CPAs expires on December 31, 2018.
Present Situation
Butterfield CPAs wishes to extend its lease with the City that’s set to expire in December 2018, for an eighteen-month period through June 30, 2020. Either party will have the ability to terminate the lease on two specific dates, June 30, 2019, and December 31, 2019, with three months advance written notice. These termination dates were at the request of the tenant to prevent it from having to relocate during peak tax season. It also allows the City to terminate the lease should significant progress be made on its plans to relocate to the Waterfront Towers.
All other terms and conditions of the lease will remain unchanged, including the monthly base rent of $6,702, or $1.50 per s.f., which is market rate for office space of this type in Stockton ranging from $1.10 to $2.00 per s.f.
PUBLIC NOTICE
As required, a “Notice of Intent to Grant or Lease Real Property Interest” in accordance with the provisions of Article V, Section 510, of the Charter of the City of Stockton was advertised in The Record on November 20, 2018.
FINANCIAL SUMMARY
Approval of the Lease Amendment would increase City revenue by $6,702 per month or $80,424 for the 2019 calendar year ($6,702 monthly rent differential x 12 months). Funds will be deposited into the Property Rental account, No. 010-0160-362.10-00.
Attachment A - Current Lease