Introduction of Ordinance Approving and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of the Lease with Complete Coach Works, a California Corporation, for a Lease for Two Years and Nine Months in a Portion of Building 24 Located at 2301 Monarch Street at Alameda Point. (Base Reuse 819099)
Introduction of ordinance, approving and authorizing the city manager to execute documents necessary to implement the terms of the lease with complete coach works. The California Corporation for a lease for two years and nine months and a portion of building 24 located at 2301 Monarch Street at Alameda Point. I'm sorry when you start the report, would you just briefly before beginning the report, can you just talk quickly about what we discussed today about presenting to council? Sure. At the at the budget. Sure. Thank you. Okay. Good evening, mayor spencer and city council members. I'm than that mchunu in the community development department slash base for use. And so I discussed. With the city manager. This afternoon based on some conversations. That he's had with several with the mayor and some council members. About figuring out how we how we approach. Our leasing and making sure that our leases are on market and how we establish rates and things like that. And so. We decided that as part of our Open House during the budget session, that we. Would. Address the that concern and give you a broader picture of our leasing activities, specifically at Alameda Point. But as many of you know, we do leasing on tidelands and cell towers and. Throughout the city so that we'll talk about that at that meeting. So what you have in front of you tonight is. A lease renewal for a. Complete coach. Works. And there have been a couple of questions that came in. During the course of the. After the the publishing of. The agenda. So I'm going to try to hit some of them. So that everybody has the same information. So American bus repair has been a tenant in Building 24 since 1997, originally under the name City Car Star, Garage Car Star and May. Of 2000. The city approved the assignment of the lease. To. American Best Repair. In June of 2012. American best repair in the city entered into. A lease that was assigned to. Complete coach works. In January of 2014. At that time. At that time. When. Complete Coach Works took over, they took. Over in December of 2013, we gave them a one. Year. Extension that the lease was set to expire. In six months and they were. Really. Nervous about that and they hadn't realized that they only had. Six months. So we said. The long term plan for this building is that. We're going to have one tenant here and we. Think it's. Going to be Rockwall Winery. So you have one year. And so we worked with. Rockwall and complete work Coats Works. Cushman Wakefield, our broker. Took complete coach works all over the East Bay looking at different properties. To try to get them geared up and. Ready to move out. And toward the end of that one year, Rockwall Winery wasn't ready to to expand until we gave. So we're here. Again with that with an extension. For three years. We talked to Rockwall Winery and said, you know, we can't have these. Starts and stops. We need to have a. Longer term approach to our leasing. And even. Three years is a short period. Of time. So Rockwall said, You know, this is well within our planning. We get it. So three. Years is. Within the horizon of our operations and it should. Be within complete. Coach works. I want to say that it is not the desire to have the painting facility as a long term tenant. There and our spirits, our spirits. Alley. But we had a bird in the hand using the building for what it was designed to do. And so. We thought it was really just in not not. Uprooting a company for the sake of uprooting. But to. Be more proactive and keeping them there and then to keep our eyes open and trying to attract a long. Term tenant. That is in keeping with our vision. Of developing the spirits and, and. Distilleries and breweries and all of those. People over there and. Food. Eventually, knock on wood, I have with. Me. Ted Anderson from Cushman. Wakefield, and he's going to try to just. Briefly talk a little. Bit about this lease in specific about. The rent rate and what we think about when we set the. Rates. But we're. Going to do a broader discussion. In our Open House session. That evening, Madam Mayor. Council members. Staff. So I was kind of the architect behind this opus. So hopefully I'm in a position to be able to answer the questions that you may have as it relates to how we came upon the deal terms. So if you want me to just kind of start answering my own question, I'll kind of give you the thought process. So as Ninette said, we gave these folks. A one year extension renewal. At that time, we also, you know, recalibrated their rental rate and, you know, moved it substantially up to, you know, a standard that we felt was more commiserate with market on this most recent increase. Or rather on this most recent renewal. We've also built in some additional increases, but they're 3% from where we. Established that new basis a year ago. When you look at it in terms of a rental rate on the 15,000 square feet, I think it comes in a little bit over $0.70, which, you know, skews maybe a little bit high compared to what we've seen elsewhere. But you have to take into consideration they've got about a 23,000 exclusive yard area that in this Bay Area of ours is is very, very valuable because land is scarce. So we've tried. To monetize, you know, that asset to the property in conjunction with what. We felt was a reasonable lease rate for. The 15,000 square feet that they occupy. And then also put a little bit of a spiff in place because of the unique nature of the building, its improvements and its utility to their end use, because this operation isn't going to move anywhere cheaply. So I think it's a tenant that we will be able to have as. The city's advocate. For as long as we see fit, because I don't think they're likely to move. Thank you. Council members questions. Nebraska. Thank you and thank you, Mr. Henderson. And also Ms.. Marcano. And I was at least one of the councilmembers who raised the question in some correspondence with Ms.. McConaughey that I thought this was an unusual and I would say, undesirable juxtaposition of uses that we wouldn't normally see a winery next door to a company that paints busses . And I was also concerned with the painting aspect of the proximity of this building to the bay, and in the event of any spillage or leakage of what the environmental implications would be. I do understand that this was a hangar where this sort of operation took place during the Navy years. But as I also pointed out, we're still doing cleanup from operations that took place during the the Navy years. On the other hand, I, I miss McConaughey gave me an excellent detailed explanation, actually, several of them. She kept coming back. And I do understand the bird in the hand argument that we are making lease revenue off of this. There are environmental safeguards in place. And if you read the lease, there is you know, it's very specifically spelled out. So this is, as I understand it, a short term lease. You've upped the the the rental rate. And so the the city is benefiting from this. And I and I know that you're also going to be out there looking around and shopping for more desirable tenants for this location. And I have to think that an upcoming agenda item is this update on our site, a development at Alameda Point. And I think as those kinds of businesses that are being proposed get up and running, it'll just make our area even more attractive to potential renters and buyers for the properties. So that's. Certainly our hope and. Charge. I know it is. So anyway, I think the team and for all the good information you provided me. Thank you so much. Thank you, guys. We have a motion. Both. Second counsel comments. I would like to thank complete coach works for continuing to do business in Alameda. I'm confident that they are being environmentally safe and practicing good work work habits, following the appropriate protocols to protect the environment. And I do commend them for continuing to do business here. And with that said, all those in favor. I oppose motion carries unanimously. Thank you very much. Next agenda item six see. Status report on site development at Alameda Point.