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HomeMy WebLinkAboutStaff Report 226-07City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:MAY 14, 2007 CMR: 226:07 SUBJECT:LEASE AMENDMENT TO RELOCATE FROM 1003 ELWELL COURT TO 1005 ELWELL COURT AND TO EXTEND THE TERM FOR 1005 AND 1007 ELWELL COURT TO 2013 RECOMMENDATION Staff recommends that Council authorize the City Manager to execute the attached Amendment No. 5 to the lease with McCandless Limited for 1005 and 1007 Elwell Court. The amendment will relocate from the 1003 Elwell Court premises to 1005 Elwell Court and extend the term for both the 1005 and 1007 premises until August 31, 2013, with two consecutive options to extend the term, for two years each. BACKGROUND On July 13, 1998, the City entered into a 10-year lease with McCandless Limited for 9,202 square feet of office space at 1007 Elwell Court. The purpose of the lease was to provide space ’for the relocation of Utilities Engineering staff to address over-crowded conditions in the Civic Center. On March 10, 2003, Council approved Amendment No. 1 to the lease, authorizing a 2.5- year lease of an additional 5,692 square feet of space at 1003 Elwell Court to house additional staff required for the fiber to the home (FTTH), the dark fiber, and base map updating projects. On March 16, 2005, the City Manager executed Amendment No. 2, which extended the term for the space at 1003 for an additional six months. On September 19, 2005, Council approved Ame~ndment No. 3 extending the term for 1003 Elwell Court for an additional year. On June 5, 2006, Council approved Amendment No. 4 to extend the term of the lease for 1003 Elwell Court for 23 months to coincide with the term of the lease for 1007 Elwell Court. Terms for both 1003 and 1007 Elwell Court are set to expire on August 31, 2008. DISCUSSION The lease term for 1003 Elwell Court was originally limited to 2.5 years to coincide with the decision on whether to proceed with the FTTH project. Although the FTTH project was discontinued, the telecommunications staff remained at the same level due to increased dark fiber business activity, and therefore the lease was extended several times. The extensions were limited in duration because staff proposed to return the Utilities Engineering staff to a City- owned facility, if and when the City constructed a new police facility. The space needs for the Utilities staff continue. The 1003 Elwell Court space now includes the customer service staff CMR:226:07 Page 1 of 2 formerly located at 285 Hamilton in addition to office space for field inspectors and their equipment, a library for Utilities system documentation and plan review, engineering training stations, and conference rooms. Staff is now recommending vacating the 1003 premises and relocating staff to the 1005 premises. The 1005 premises contains 1,300 additional square feet to accommodate the relocation and it will give the owner the ability to lease 1001 and 1003 Elwell Court to the same client. The owner will connect the two spaces internally and provide all of the cubicles and office furniture at no cost to the City. Staff is recommending the additional 5-year term and two 2-year options to provide time to assess the feasibility of building an additional building at the Municipal Service Center to house Utilities staff. Except for the extended term, the relocated space and a provision for construction of two new wall openings at the landlord’s cost, all other terms and conditions of the original lease remain the same. RESOURCE IMPACT The current monthly rent and common area charges will increase by $1,727 due to the increase in square footage for 1005 Elwell Court. The annual cost for the first year of the extended lease will be $498,995, an annual increase of $20,724 over current costs. The cost for the lease and any costs associated with the move from 1003 to 1005 premises will be paid from the existing Electric, Gas, Water and Waste Water Fund budgets. POLICY IMPLICATIONS The recommendation is consistent with existing City policies and supports the Utilities Strategic Plan. ENVIRONMENTAL REVIEW The leasing of existing office space involving no expansion of use is exempt from California Environmental Quality Act review pursuant to CEQA Guideline Section 15301. PREPARED BY: DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: WILLIAM W. FELLMAN Manager, Real Property LO trative Services City Manager ATTACHMENTS Attachment A: Fifth Amendment to Standard Industrial Lease CMR:226:07 Page 2 of 2 ATTACHMENT A THIS FIFTH AMENDMENT TO STANDARD INDUSTRIAL LEASE (hereinafter "Fifth Amendment") is made this ___ day of 2007 (the "Effective Date"), by and between McCANDLESS LIMITED, LLC, a California limited liability company (formerly McCandless Limited, a California limited partnership) ("Landlord") and THE CITY OF PALO ALTO, a California municipal corporation ("Tenant"). RECITALS This Fifth Amendment is made with reference to the following facts: A. Tenant currently leases from Landlord approximately nine thousand two hundred two (9,202) square feet of space located at 1007 Elwell Court, Palo Alto, California (the "1007 Premises") and approximately five thousand six hundred ninety two (5,692) square feet located at 1003 Elwell Court, Palo Alto, California (the "1003 Premises") pursuant to that certain lease dated as of July 31, 1998, that certain Amendment to Standard Industrial Lease dated as of April 1, 2003 and that certain Second Amendment to Standard Industrial Lease dated as of March 16, 2005 and that certain Third Amendment to Standard Industrial Lease dated as of September 20, 2005 and that certain Fourth Amendment to Standard Industrial Lease dated as of June 6, 2006 (the "Lease"). The 1007 Premises and the 1003 Premises are located in a building commonly known as 1001-1007 Elwell Court, Palo Alto, California (the "Project"). The term of the Lease respecting both the 1003 Premises and the 1007 Premises exlSires August 31, 2008. B. Tenant wishes to retain the 1007 Premises but to relocate from the 1003 Premises into the approximately six thousand nine hundred and fifty-five square foot (6,955) space located at 1005 Elwell Court, Palo Alto, as shown on Exhibit A attached hereto (the °’1005 Premises"), which is contiguous with the 1007 Premises..Tenant also desires to extend the term for both the 1005 Premises and the 1007 Premises until August 31,2013 along with two consecutive options to extend the term, in each case for a period of two years. C. Landlord is willing to so amend the Lease subject to the terms and conditions set forth in this Fifth Amendment. ACCORDINGLY, in consideration of the above Recitals and the mutual covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows: 1.Conditions Precedent. This Fifth Amendment is subject to the satisfaction of the condition precedent set forth in this Paragraph 1 by no later than June 30, 2008, which condition precedent shall be deemed to be for the benefit of both Landlord and Tenant and which may be amended or waived only by a subsequent written agreement executed by both Landlord and Tenant. In the event the following condition precedent is not satisfied in a timely mamaer, this Fifth Amendment shall be null and void and of no force and effect without notice or further documentation. -1- 1.1 This Fifth Amendment must be approved by the Palo Alto City Council at no cost to Landlord. 2.Term. The term of the Lease respecting the 1003 Premises shall terminate on the date Tenant vacates the 1003 Premises and takes possession of the 1005 Premises. The term of the Lease respecting the 1005 Premises shall commence upon the date Tenant takes possession of the 1005 Premises (the 1005 Commencement Date"). The term for both the 1007 Premises and the 1005 Premises shall expire on August 31, 2013. The period from the 1005 Commencement Date until August 3 l, 2013 shall be hereinafter referred to as the" fourth extended term". 3.Basic Rent and Common Area Charges. Commencing on the 1005 Commencement Date, Tenant shall continue to pay basic rent for the 1005 Premises, as such monthly basic rent is described in Paragraphs 4 (a) and 5 of the Lease for the 1003 Premises, in the amount of Eight Thousand Nine Hundred Fifty-Four and 56/100 Dollars ($8,954.56) per month. Pursuant to Paragraph 32 of the Lease, basic rent shall not be adjusted for any measurement of the 1003 Premises. Tenant shall continue to pay basic rent for the 1007 Premises in the manner described in the Lease. In addition, Tenant shall continue to pay common area charges in the manner described in paragraph 16 the Lease, as amended. Tenant’s percentage share of common area charges shall continue to be 28.44 % respecting the 1007 Premises and shall increase from 17.58% for the 1003 Premises to 21.48% for the 1005 Premises as of the 1005 Commencement Date. 4.Adjustments to Monthly, Basic Rent. The monthly basic rent provided for in paragraph 3 above shall be adjusted periodically and the monthly basic rent for each period shall be as set forth below: Period 1005 Premises 1007 Premises Total Basic Rent 1005 Commence- Date - 8/31/07 9/1/07 - 8/31/08 9/1/08 - 8/31/09 $8,954.56 / mo. $8,954.56 / mo. $9,041.50 / mo. $27,393.52 / mo. $28,215.33 / mo. $11,962.60 / mo. $36,348.08 / mo. $37,169.89 / mo. $21,004.10 / mo. 9/1/09 - 8/31/10 9/1/10 - 8/31/11 $9,389.25 / mo. $9,737.00 / mo. $12,422.70 / mo. $12,882.80 / mo. $21,811.95/mo. $22,619.80 / mo. 9/1/11 -8/31/12 9/1/12 - 8/31/13 $10,084.75 / mo. $10,432.50 / mo. $13,342.90 / mo. $13,803.00 / mo. $23,427.65 / mo. $24,235.50 / mo. 5.Security_ Deposit. Landlord currently holds a cash security deposit provided by Tenant attributable to the 1003 Premises in the amount of Seven Thousand One Hundred Fifteen Dollars ($7,115.00) and no further deposit shall be required. -2- 6.No Tenant Improvement Allowance. Tenant shall not be entitled to a tenant improvement allowance for the 1005 Premises. Landlord has made no promise and is not obligated to modify, alter or renovate the 1005 Premises. Tenant has determined that the 1005 Premises are suitable for Tenant’s use. Tenant accepts the 1005 Premises and the fixtures, furniture and equipment ("FF&E") contained therein, as described in Exhibit B attached hereto, in its present "as-is" state and condition and acknowledges that the 1005 Premises and the FF&E are in good and tenantable condition and are fit for Tenant’s business purposes. Although the FF&E shall be available at no additional charge for Tenant’s exclusive use during the term of the Lease and any extension thereof, Tenant acknowledges that the FF&E are the property of Landlord and shall remain on the Premises at the expiration or sooner termination of the Lease. Notwithstanding the above, Landlord shall, at Landlord’s expense, cut and frame two openings in the demising wall that separates the 1005 Premises from the 1007 Premises at locations in the wall mutually acceptable to both Landlord and Tenant. 6.1 Acknowledgement of Limitation of Agent’s Authority.: No person acting on behalf of Landlord is authorized to make, and by execution hereof Tenant acknowledges that no such person has made, any representation, warranty, guaranty or promise except as may be expressly set forth herein; and no agreement, statement, representation, guaranty or promise made by any such person which is not expressly contained herein shall be valid or binding on Landlord and Landlord’s agents, heirs, successors or assigns. The only representations or warranties outstanding with respect to the 1005 Premises, or Landlord, either express or implied by law, are expressly set forth herein. 6.2 Documentary Information: Tenant acknowledges that any and all documentary information, soil reports, environmental audits, site assessments, analyses or reports, insurance policies or other information of whatever type which Tenant has received or may receive from Landlord or Landlord’s agents is furnished on the express condition that Tenant shall make Tenant’s own independent verification of the accuracy and completeness of such information. Tenant agrees that Tenant shall not attempt to assert any liability upon Landlord or Landlord’s agents for furnishing such information and Tenant does hereby release Landlord and Landlord’s agents, heirs, successors and assigns from, and does hereby agree to indemnify, protect, defend and hold Landlord and Landlord’s agents, heirs, successors and assigns free and harmless from and against, any and all such claims or liability. 7.Use of Premises: Tenant shall use the 1005 Premises for general office and research and development purposes and for no other purpose without the express written consent of Landlord, which consent shall not be unreasonably withheld. 8.Warrant,/of Authority: Each signatory to this Fifth Amendment represents that he or she possesses full authority to exercise this Fourth Amendment and to bind the entity on whose behalf such signatory is signing. 9.Brokers. Each party represents that it has not had any dealings with any real estate broker, finder or other person with respect to this Fifth Amendment, and that there are no leasing comrnissions to be paid by Landlord or Tenant in connection with this transaction. Each party hereto shall hold harmless the other party from all damages, loss or liability resulting from any claims that may be asserted against the other pa~,rty by any broker, finder or other person with whom such party has dealt, or purportedly has dealt, in connection with this transaction. 10. First Option to Extend Term. Landlord grants to Tenant the option to extend the term for one period of two (2) years (the "fifth extended term") under all the provisions of this Lease except for the amount of the monthly basic rent. The basic rent for the fifth extended term shall be adjusted to the greater of (i) the market rate or (ii) the basic rent charged for the last lease year of the prior term, provided that in no event shall the basic rent for the fifth extended term be less than the basic rent in effect at the expiration of the fourth extended term. In addition, the monthly basic rent as so adjusted shall be increased annually by five cents ($0.05) per square foot.,. This option is further subject to the following terms and conditions: (a) Tenant must deliver its irrevocable written notice of Tenant’s exercise of this option to Landlord not less than six (6) lease months, nor more than twelve (12) lease months, prior to the expiration of the fourth term. (b) The parties shall have thirty (30) days from the date Landlord receives Tenant’s notice of exercise in which to agree on the amount constituting the basic rent. If Landlord and Tenant agree on the amount of basic rent, they shall immediately execute an amendment to this Lease setting forth the expiration date of the fifth extended term and the amount of the basic rent to be paid by Tenant during the fifth extended term, including the annual adjustment period. If Landlord or Tenant are unable to agree on the amount of basic rent within such time period, then, at the request of either party, the market rate shall be determined by appraisal in the following manner: (1) within thirty (30) days of the request for such appraisal, Landlord and Tenant shall each select a licensed real estate broker with not less than five (5) years experience in the business of commercial leasing of property of the same type and use, and in the same geographic area, as the Premises; (ii) within fifteen days of their appointment, such two real estate brokers shall select a third real estate broker similarly qualified; (iii) within thirty (30) days from the appointment of the third broker, the three brokers so selected shall, acting as a board of arbitrators, then appraise the Premises and determine the amount of the market rate, basing their determination on using standard procedures and tests normally employed in making such appraisals and applying the factors included within the definition of market rate set forth in subparagraph (c) below. The decision of the majority of said brokers shall be final and binding upon the parties hereto. If a majority of the brokers are unable to agree on the market rate within the stipulated period of time, the three appraisals shall be added together and their total divided by three; the resulting quotient shall be the market rate. If, however, the low appraisal and/or the high appraisal are/is more than 15% lower and/or higher than the middle appraisal, the low appraisal and/or the high appraisal, as the case may be, shall be disregarded, if only one appraisal is disregarded, the remaining two appraisals shall be added together and their total divided by two and the resulting quotient shall be the market rate. If both the low appraisal and the high appraisal are disregarded as stated in this paragraph, the middle appraisal shall be the market rate. if a party does not appoint a broker within the required time period, the broker appointed by the other party shall be the sole broker and shall determine the market rate. If the two brokers appointed by the parties are unable to agree on the third broker, either of the parties to the lease, by giving ten (10) days’ notice to the other party, can apply to the then county real estate board of the county in which the Premises are located, or to the -4- presiding judge of the superior court of that county, for the selection of a third broker who meets the qualifications stated in this paragraph. Each party shall pay the expenses and charges of the broker appointed by it and the parties shall pay the expenses and charges of the third broker in equal shares. Basic rent for the first lease year of the fifth extended term shall be equal to the greater of the market rate as determined hereunder or basic rent charged for the last lease year of the prior term. When the basic rent has been so determined, Landlord and Tenant shall immediately execute an amendment to this lease stating the revised basic rent and adjustment provision for the fifth extended term. (c) As used herein, the "market rate" shall be the monthly rent (triple net) then obtained for leases of comparable terms for premises in the Project and/or projects within the City of Palo Alto of similar type, identity, quality and location as the Project. (d) The monthly basic rent for the fifth extended term, determined as provided above, shall be increased annually, commencing on the first day of the thirteenth month of the fifth extended term, by five cents ($0.05) per square foot . (e) The extension rights herein described are personal to the original Tenant and may not be exercised by or for the benefit of any assignee or subtenant of the original Tenant. Tenant shall not assign or otherwise transfer this option or any interest therein and any attempt to do so shall render this option null and void. Tenant shall have no right to extend this term beyond the fifth extended term, except as provided below in paragraph 11 of this Fifth Amendment to Lease. If Tenant is in default under this lease at the date of delivery of Tenant’s notice of exercise to Landlord, then such notice shall be of no effect and this Lease shall expire at the end of the fourth extended term; if Tenant is in default under this Lease at the last day of the fourth extended term, then Landlord may in its sole discretion elect to have Tenant’s exercise of this option be of no effect, in which case this Lease shall expire at the end of the fourth extended term. (f) Tenant shall have no right to exercise the option to renew the term of this lease (i) during the time commencing from the date Landlord gives to Tenant a notice of default pursuant to Paragraph 20 of the Lease and continuing until the noncompliance alleged in said notice of default is cured, or (ii) during the period of time commencing on the day after a monetary obligation to Landlord is due from Tenant and unpaid (without any necessity for notice thereof to Tenant) and continuing until the obligation is paid, or (iii) in the event that Landlord has given to Tenant two (2) or more notices of default under Paragraph 20 of the Lease whether or not the defaults are cured, during the twenty four (24) month period of time immediately prior to the time that Tenant attempts to exercise the option to renew the lease, or (iv) if Tenant has committed any non-curable breach, or is otherwise in default of any of the terms, covenants or conditions of the Lease. The period of time within which the option to renew must be exercised shall not be renewed or enlarged by reason of Tenant’s inability to exercise the option because of the provision of this Paragraph 10(f). (g) All right of Tenant to exercise the option to renew the term hereof described in this Paragraph 10 shall terminate without notice and be of no further force or effect, notwithstanding Tenant’s due and timely exercise of the option, if, during the fourth extended term of this lease, (i) Tenant fails to pay Landlord a monetary obligation of Tenant for -5- a period of thirty (30) days after such obligation becomes due (without any necessity of Landlord to give notice thereof to Tenant), or (ii) Eandlord gives to Tenant three (3) or more notices of default under Paragraph 20 of the Lease whether or not the defaults are cured during the fourth extended term, or (iii) Tenant has committed any non-curable breach. 11. Second Option to Extend Term.Landlord grants to Tenant the option to extend the term for one period of two (2) years (the "sixth extended term") under all the provisions of this Lease except for the amount of the monthly basic rent. The basic rent for the sixth extended term shall be adjusted to the greater of (i) the market rate or (ii) the basic rent charged for the last lease year of the prior term, provided that in no event shall the basic rent for the sixth extended term be less than the basic rent in effect at the expiration of the fifth extended term. In addition, the monthly basic rent as so adjusted shall be increased annually by five cents ($0.05) per square, foot,. This option is further subject to the following terms and conditions: (a) Tenant must deliver its irrevocable written notice of Tenant’s exercise of this option to Landlord not less than six (6) lease months, nor more than twelve (12) lease months, prior to the expiration of the fifth term. (b) The parties shall have thirty (30) days from the date Landlord receives Tenant’s notice of exercise in which to agree on the amount constituting the basic rent. If Landlord and Tenant agree on the amount of basic rent, they shall immediately execute an amendment to this Lease setting forth the expiration date of the sixth extended term and the amount of the basic rent to be paid by Tenant during the sixth extended term, including the mmual adjustment period. If Landlord or Tenant are unable to agree on the amount of basic rent within such time period, then, at the request of either party, the market rate shall be determined by appraisal in the following manner: (1) within thirty (30) days of the request for such appraisal, Landlord and Tenant shall each select a licensed real estate broker with not less than five (5) years experience in the business of commercial leasing of property of the same type and use, and in the same geographic area, as the Premises; (ii) within fifteen days of their appointment, such two real estate brokers shall select a third real estate broker similarly qualified; (iii) within thirty (30) days from the appointment of the third broker, the three brokers so selected shall, acting as a board of arbitrators, then appraise the Premises and determine the amount of the market rate, basing their determination on using standard procedures and tests normally employed in making such appraisals and applying the factors included within the definition of market rate set forth in subparagraph (c) below. The decision of the majority of said brokers shall be final and binding upon the parties hereto. If a majority of the brokers are unable to agree on the market rate within the stipulated period of time, the three appraisals shall be added together and their total divided by three; the resulting quotient shall be the market rate. If, however, the low appraisal and/or the high appraisal are/is more than 15% lower and/or higher than the middle appraisal, the low appraisal and/or the high appraisal, as the case may be, shall be disregarded. If only one appraisal is disregarded, the remaining two appraisals shall be added together and their total divided by two and the resulting quotient shall be the market rate. If both the low appraisal and the high appraisal are disregarded as stated in this paragraph, the middle appraisal shall be the market rate. If a party does not appoint a broker within the required time period, the broker appointed by the other party shall be the sole broker and shall determine the market rate. If the two brokers appointed by the parties are unable to agree on the third broker, either of the parties to the lease, by giving ten (10) days’ notice to the other party, can apply to -6- the then county real estate board of the county in which the Premises are located, or to the presiding judge of the superior court of that county, for the selection of a third broker who meets the qualifications stated in this paragraph. Each party shall pay the expenses and charges of the broker appointed by it and the parties shall pay the expenses and charges of the third broker in equal shares. Basic rent for the first lease year of the sixth extended term shall be equal to the greater of the market rate as determined hereunder or basic rent charged for the last lease year of the prior term. When the basic rent has been so determined, Landlord and Tenant shall immediately execute an amendment to this lease stating the revised basic rent and adjustment provision for the sixth extended term. (c) As used herein, the "market rate" shall be the monthly rent (triple net) then obtained for leases of comparable terms for premises in the Project and!or projects within the City of Palo Alto of similar type, identity, quality and location as the Proj ect.. (d) The monthly basic rent for the sixth extended term, determined as provided above, shall be increased annually, commencing on the first day of the thirteenth month of the sixth extended term, by by five cents ($0.05) per square foot (e) The extension rights herein described are personal to the original Tenant and may not be exercised by or for the benefit of any assignee or.subtenant of the original Tenant. Tenant shall not assign or otherwise transfer .this option or any interest therein and any attempt to do so shall render this option null and void. Tenant shall have no right to extend this term beyond the sixth extended term, except as provided below in paragraph 11 of this Fifth Amendment to Lease. If Tenant is in default under this Lease at the date of delivery of Tenant’s notice of exercise to Landlord, then such notice shall be of no effect and this lease shall expire at the end of the fifth extended term; if Tenant is in default under this Lease at the last day of the fifth extended term, then Landlord may in its sole discretion elect to have Tenant’s exercise of this option be of no effect, in which case this Lease shall expire at the end of the fifth extended term. (f) Tenant shall have no right to exercise the option to renew the term of this Lease (i) during the time commencing from the date Landlord gives to Tenant a notice of default pursuant to Paragraph 20 of the Lease and continuing until the noncompliance alleged in said notice of default is cured, or (ii) during the period of time commencing on the day after a monetary obligation to Landlord is due from Tenant and unpaid (without any necessity for notice thereof to Tenant) and continuing until the obligation is paid, or (iii) in the event that Landlord has given to Tenant two (2) or more notices of default under Paragraph 20 of the Lease whether or not the defaults are cured, during the twenty four (24) month period of time immediately prior to the time that Tenant attempts to exercise the option to renew the Lease, or (iv) if Tenant has committed any non-curable breach, or is otherwise in default of any of the terms, covenants or conditions of the Lease. The period of time within which the option to renew must be exercised shall not be renewed or enlarged by reason of Tenant’s inability to exercise the option because of the provision of this Paragraph 10(f). (g) All right of Tenant to exercise the option to renew the term hereof described in this Paragraph 11 shall terminate without notice and be of no further force or effect, notwithstanding Tenant’s due and timely exercise of the option, if, during the fifth -7- extended term of this Lease, (i) Tenant fails to pay Landlord a monetary obligation of Tenant for a period of thirty (30) days after such obligation becomes due (without any necessity of Landlord to give notice thereof to Tenant), or (ii) Landlord gives to Tenant three (3) or more notices of default under Paragraph 20 of the Lease whether or not the defaults are cured during the fifth extended term, or (iii) Tenant has committed any non-curable breach. 12: Restatement of Other Lease Terms. Except as specifically modified herein, all other terms, covenants and conditions of the Lease, including Tenant’s obligation to pay common area charges for both the 1005 Premises and the 1007 Premises, shall remain in full force and effect. 13. Capitalized Terms. Except as expressly provided in this Fifth Amendment, all capitalized terms used in this Fifth Amendment shall possess the same meaning ascribed to that term in the Lease. 14. Conflicts. In the event of any conflict between the Lease on the one hand and this Fifth Amendment on the other, the terms of this Fifth Amendment shall govern and control. 15. counterparts. Counterparts. This Fifth Amendment may be executed in identical IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amendment as of the Effective Date. LANDLORD:TENANT: McCANDLESS LIMITED, LLC a California limited liability company By: Sandra M. Sin~0ns, Manager THE CITY OF PALO ALTO, a California municipal corporation By: City Manager Approved as to form: By: By: Sr. Asst. City Attorney Director of Utilities By: Director of Administrative Services -8- EXHIBIT B FIXTURES, FURNITURE AND EQUIPMENT ("FF&E") INVENTORY LIST 1005 ELWELL COURT 36 office cubicles and cubicle chairs conference table with 12 black boardroom style chairs boardroom credenza refrigerator stacking chairs black bookcases in kitchen area metal storage cabinets with 5 shelves each small tables 19 black office task chairs 28 office chairs 3 blond 36" round tables (Magna Design) 7 blond 72"x30" office desks with return (Magna Design) 6 blond desks with hutch overhead and file Cabinet (Magna Design) 1 blond tear drop 36" table 1 10’ dark wood conference table 1 6’square table