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ADOPT A RESOLUTION APPROVING AN EARLY TERMINATION AGREEMENT AND AMENDMENT TO LEASES WITH FAMILY RESOURCE AND REFERRAL CENTER AT 509 WEST WEBER AVENUE
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RECOMMENDATION
It is recommended that the City Council adopt a resolution:
1. Approving an Early Termination Agreement and Amendment to Leases with Family Resource and Referral Center for office space in the Waterfront Towers (509 West Weber Avenue).
2. Appropriating $585,761 for the Lease Termination Fee from the General Fund Contingency.
3. Authorizing the City Manager, or 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 located 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 509 West Weber Avenue building; Family Resource and Referral Center (FRRC), a local non-profit, is one such. The City and FRRC desire to amend the expiration dates to the Lease term for the space occupied by FRRC to now expire on December 31, 2021. FRRC has also requested financial support in the amount of $585,761 from the City in order to continue to provide services while it relocates to a new site (referred to as the Lease Termination Fee).
DISCUSSION
Background
In January 2018, the City of Stockton acquired the two Waterfront Office Tower buildings located at 501 and 509 West Weber Avenue to serve as the future home of City Hall. All the leases associated with the building were included as part of the purchase and assumed by the City. A non-profit organization, Family Resource and Referral Center, currently leases office space on the first, second, third, and fourth floors of 509 West Weber Avenue from the City (Attachment A).
FRRC, a local non-profit, has supported the Stockton community for more than 27 years by providing advocacy, information, training, and direct services to enhance childcare, child development, and family well-being in Stockton and San Joaquin County. Staff works with parents, care providers, businesses, and community leaders to promote quality services for children and their families. FRRC provides childcare referrals to all parents in San Joaquin County, administers childcare and nutritional resources, and conducts workshops in effective practices of child rearing, childcare, and child safety. The Center also staffs the County-wide 211 service, which is a free and confidential service to County residents available 24 hours a day, 7 days a week, to find assistance with housing, healthcare, counseling, food, legal services and more.
Present Situation
The City and FRRC wish to reduce the Lease term for office space at 509 W. Weber Avenue which is currently occupied by FRRC to allow for the construction start of new City Hall. In order for FRRC to vacate the space by December 31, 2021 (nine months prior to its original termination date of September 30, 2022), it has requested financial support from the City in the amount of $585,761 to assist with moving expenses, additional staffing, IT support to maintain the 211 services during its move, and a buyout of the remainder of the lease. FRRC has experienced a significant increase in volume of work due to the COVID-19 pandemic. Additional assistance is required to continue to maintain the high volume of 211 service calls, childcare support and COVID-related community support without interruption while relocating its office.
The Early Termination Agreement & Amendment to Leases (Attached as Exhibit 1 to the Resolution) stipulates that in the event FRRC fails to vacate the premises by December 31, 2021, its rent shall be increased to 150% of the base rent, calculated on a monthly basis.
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 May 27, 2021.
FINANCIAL SUMMARY
The General Fund Contingency will be used to fund the $585,761 Lease Termination Fee due to FRRC upon compliance with the terms of the Early Termination Agreement & Amendment to Leases. A budget amendment will be needed to move budget from the General Fund Contingency account 0010-000-670008-100-000-10-00-000-000- to the General Fund Economic Development Waterfront Office Tower operating expense account.
Attachment A - FRRC Leases with Amendments