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HomeMy WebLinkAbout1999-08-02 City Council (25)PAL C ty Manager’s Repor 3 TO:HONORABLE CITY COUNCIL FROMi DATE: CITY MANAGER AUGUST 2, 1999 DEPARTMENT: CMR: 313:99 ADMINISTRATIVE SERVICES SUBJECT:AMENDMENT TO SUBLEASE WITH FOOTHILL/DEANZA COMMUNITY COLLEGE DISTRICT TO PROVIDE FOR PAINTING OF FACILITY AT CUBBERLEY COMMUNITY CENTER, 4000 MIDDLEFIELD ROAD ~COMMENDATION Staff recommends that Council approve the attached Amendment No. 1 to the Lease between the City of Palo Alto and Foothill/DeAnza Community College District (Foothill) at the Cubberley Community Center (Cubberley). The amendment provides for a one-time reduction in rent of up to a maximum $128,000 in exchange for exterior and interior painting. BACKGROUND On November 14, 1997, the City and Foothill entered into a five year lease for six wings at Cubberley . The terms of the lease require Foothill to pay a monthly rental which is ingressed annually according to the Consumer Price Index (CP!). The current monthly rent is $58,701. The lease requires that the City will be responsible for roof repair, exterior painting and painting of interior ceiling tiles damaged by roof leaks. DISCUSSION The former Cubberley school site was in extremely poor condition when the City took on the maintenance responsibilities, and the annual City’s resources for maintenance (both physical and financial) have been limited, so that roof repairs and replacements have taken nearly nine years to complete. Several ceiling-til~s were water stained before the roofs were repaired. Exterior painting at the entire Cubberley site ig--currently in various stages of completion, and no new work is scheduled for the next fiscal year. Foothill has proposed to CMR:313:99 Page 1 of 3 paint the exterior of the wing~ it leases including the pavilion and the gymnasiums and tl-t~ interior ceilings in those rooms that were water damaged in exchange for a reduction in rent that would be equal to the cost of the painting project. (See Attachment A) The estimated cost of the painting is $128,000. This proposal has the advantage of providing for the much- needed painting in a timely fashion and also enabling Foothill to coordinate the painting around its own class schedules. Foothill has agreed to use a licensed painting contractor and to use the approved color scheme. The Foothill letter also requested the City install lighting in the parking lot. Staff proposes to address this issue as part of the 1999-2000 budget process,. ALTERNATIVES TO STAFF RECOMMENDATION If Council chooses not to allow for the rent reduction, the painting of the Foothill’s leased facility would be undertaken by the City when the priority for painting is attained and the resources were available. RESOURCE IMPACT Foothill’s rent for Fiscal Year 1999-2000 is $704,412. Approval of the attached=~endment to the City’s sublease with Foothill to provide the rent reduction will result in a decrease in revenues for.fiscal year 1999-2000 of up {o a maximum of$128,000. This is a one-time loss of revenue. Since revenues are not appropriated in the same manner as expenditures, no Budget Amendment Ordinance is required at this time. POLICY IMPLICATIONS Minor improvements in exchange for a reduction in rent have been approved by Council in the past, the most recent being the Golf Course Restaurant. ENVIRONMENTAL REVIEW Painting the exterior and interior of the subleased premises is exempt fi’om the provisions of the California Environmental Quality Act (CEQA), pursuant to Section 15301 of the CEQA guidelines. ATTACHMENTS Attachment A: Attachment B: June 16, 1999 letter from Foothill College Amendment 1 to Foothill Sublease PREPARED BY:William W. Fellman,_Manager, Real Property CMR:313:99 Page 2 of 3 DEPARTMENT HEAD APPROVAL: CARL YEATS Director,Services CITY MANAGER APPROVAL: EMIL½~HARRISON Assistant City Manager Foothill/DeAnza College Facilities Management CMR:313:99 Page 3 of 3 ATTACHI~fENT A FOOTHILL COLLEGE -: 4000 Middlefield Road [] Suite I ¯ Palo Alto, CA ¯ 94303-4739 Middlefield Campus Phone:(650) 424-8600 FAX:(650) 493-7492 www.foothill.~da.edu June 16,1999 Bill Fellman Manager, Real Property City of Palo Alto 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Dear Bill: This letter is a follow up to our recent discussions regarding the difficulty I have exl~rienced in the trying to get resolution to some old issues that need attention here at-the Cubberley Community Center. I appreciate you stepping in and trying to expedite -resolution. As you are aware, the exterior of our buildings are in serious need of paint as well as some interior ceilings, According to our lease agreement, the interior is our responsibility except when lack of exterior maintenance results in damage to th_e interior. The City_re-roofed buildings a few at a time over the past several years. The ceilings that are badly stained are in rooms A5, A4, B 1, B4, BS, B6, C7, and J2. I have been working with John Schulze, our Director of Facilities/Operations for the Foothill - DeAnza Community College District. John estimates that the stained ceilings and the exteriors of our exclusive use wings, A, B, C, J, I, and P buildings could be painted for the approximate amount of $75,000.00 using " the City spec. colors you gave to me. We are willing to get this work done and deduct the amount from our monthly lease payments or have the City directly reimburse, whichever works best. The second issue of great concern to us is the inadequate lighting in the parking lots. As I men,ned inmy letter to Karen Smith dated December 14, 1998, "We consistently have ,students asking for escorts for fear of returning to their cars in the dark. This is an issue we have re-visited many time: s_with the City, in particular after the serial rapist attacked a women in front of our site a few years ago, and toxtate we are not aware of any progress on this." We serve approximately one thousand students per night and the parking lots are filled to capacity. Safety is the issue here. Again, I appreciate your efforts in bringing these issues to resolution and took forward to working with you to achieve this goal. Thanks again, Bill. Sandy Campus Coordinator Amount revised to $128,000 to reflect exterior painting of pavilion and gymnasiums. Foothill-De Anza Community College District ATTACHMENT B AMENDMENT NO. 1 TO SUBLEASE BETWEEN CITY OF PALO ALTO AND FOO;FHILL-DEANZA coMMUNITY COLLEGE DISTRICT This Amendment No. 1 Between the City of Palo: Alto and Foothill-DeAnza Community College District. (hereinafter referred to as the "Sublease"), is made and entered into this day of ,1999, by and between the CITY OF PALO ALTO, a California municipal corporation of_~e State of California, hereinafter referred to as "CITY," and FOOTHILL-DEANZA COMMUNITY COLLEGE DISTRICT, hereinafter referred to as "SUBTENANT." RECITALS WHEREAS, Sections V and VI of the Sublease require a monthly rent of $54,908, subject to automatic annual adjustments in proportion to changes in the ConsumerPrice Index; and WHEREAS, Section X of the Sublease requires CITY to be responsible for, among other items, roof repair, exterior painting and painting of interior ceiling tiles (when the result of a - leaking roof) of the subleased facility located at 4000 Middlefield Road, Palo Alto; and WHEREAS, CITY and SUBTENANT age-e that the exterior buildings and some interior ceilings (as the result of leaking roofs which have now been repaired ) are in serious need of paint and that CITY, due to the priority" of other projects, does not have the resources to complete ...... -the painting in a timely fashion; and WHEREAS, CITY and SUBTENANT a~ee it is appropriate that SUBTENANT complete the required painting, the documented cost of which would be credited against SUBTENANT’s required monthly rent. NOW, THEREFORE, in consideration of their mutual coven~iats, the parties hereto agee as follows: SECTION 1. Section V of the sublease is hereby amended to read as follows: "V. CONSIDERATION RENT (RL 7.0) NS As consideration for SUBTENANT’S use of the PREMISES in accordance with the terms and conditions of this SUBLEASE, SUBTENANT agees to pay to CITY forty-four thousand five hundred thirty-four dollars ($44,534.00/mo) per month for all exclusive use space and ten thousand three hundred and seventy-four dollars ($10,374.00/mo) per month for all part-time exclusive use space, for a total of fifty-four thousand nine hundred and eight dollars ($54,908.00/mo) per month due and payable in accordance with Clause VIII (RENT PAYMENT PROCEDURE). 990728 sdl 0032215 1 CITY agrees to alldw SUBTENANT a one-time credit up to a maximum of $128,000 against the re.quired monthly rent for the cost ofpaintifi~~he building exterior and interior ceiling tiles damaged due to a leaking roof. SUBTENANT agrees to use a licensed painting contractor and to use the color scheme approved by CITY’s Architectural Review Board. CITY agrees to apply the rent credit following completion of the painting and upon receipt by the Real Property Manager of appropriate documentation of actual painting cgsts. The work shall be completed and this credit shall expire and be of no further effect after August 3 I, 2000." SECTION 2. Except as herein modified, all other provisions o~’~nd exhibits to the Option shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment the day and year first above written. _ CITY OF PALO ALTO FOOTHILL-DEANZA COLLEGE DISTRICT ~ By: City Manager -""Its: -APPROVED AS TO FORM: COMMUNITY - Senior Assistant City Attorney APPROVED: ,, Assistant City Manager Director of Administrative Services Director of Public Works Manager, Real Property 990728 sdl 0032215