AgdaPkt 2015-07-27 Joint SA and PFA

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7.1.D. - Page 2 The Redwood City commercial comparison lease prices range from $1.10 a square foot all the way to $4.50 a square foot depending on location, amenities and other factors. The State offered the "Fair Market Rent" for the premises of .75 cents per square foot, or $9,694 a month for the "usable space" within their building that they calculated. Through negotiations, we agreed on a three year lease with the ability to negotiate later on up to two one -year extensions. Per the State's Military Department policies, they are only allowed to enter into this length of lease. Additionally, we were able to negotiate that, instead of paying the monthly fee, the City complete facility and land improvements equal to the value of the lease. At a three year lease or 36 months at $9,694 a month, the value of improvements would equal $348,984. Exhibit C in the agreement lists the improvements that City staff agreed to complete over the course of 36 months if the lease is approved by Council. City staff was intentional that there would be public benefit as well. The improvements include: • Pave the 20,000 square foot dirt lot adjacent to the Armory building into a publicly used parking lot. This would improve general parking for Red Morton Park patrons. • Re -pave the motor pool lot behind the Armory. • Repair walkway and planters around the Armory to make it ADA compliant and to improve general aesthetics. • Improve landscape around the Armory. • Renovate 800 square feet of interior office space. • Paint interior and exterior of the Armory. If the agreement is approved by City Council, the Parks, Recreation and Community Services Department (PRCS) would use the facility for youth indoor soccer, basketball, volleyball, and fitness programs; as well as senior fitness, crafts, and cultural programs, and City patrons to Red Morton Park would benefit from improved parking facilities. ALTERNATIVES Council could choose not to enter into the lease agreement; or could request staff to negotiate alternative terms.