HomeMy WebLinkAbout0281.095TO:
FROM:
DATE:
SUBJECT:
REOUEST
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City of Palo Alto
City Manager's Report
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTY.ENT: FINANCE
,mNE8, 1995 CMR:181:9S
SUBLEASE TERMS AND RENTAL RATE STRUCTURE FOR
THEELEVL~EXTENDEDDAYCAP£S~
This is fill informational report and DO Cooneil action is required,
EXWITIVE SUMMARY
The Lease: and C<Jvenanl Not to Develop with Palo Abo Unified School District (PAUSD)
provides thaI PAlJ'SD provide spa<:e fa< befOre-and afWr-school child care programs 01
eleven ekmentary school sites. Rental rdtes for the extended day ewe sites were established
by staff and approved by Council in January 1990 (CMR: 114:Q). Currently, there are "fa<-'
profit" providers at two of tile eleven sites, the Children's Creative LeamiDg Center at the
4.lOO square foot NIXon site, and Redwood Enrichment Center at the 960 square foot
Fairmeadow site. The other two provi<l= are Palo Aho Community CbiId Care (PACCC)
at eight sites, and PAUSD at the Inana Briones site (se<: AppendL~ A).
The Lease: and C<Jvenan! Not 10 De>'eklp pr",ideg that tile City pay fOr one space at each of
these eleven schools, The City pays PAUSD approximately 534,000 annually per site. The
providers reitnbune the CiIJ approximately SS,OOO annually per site, except for the N'IXOO
site, which pays an annual rent of512,219.72 because of the large 4,300 square foot space
it is provided The Nixon site is operated by ODe oflhe for-profit providers, which is paying
approximately half of what the other providers pay ($2~isquare foo!!month). because the
original provider of this program was using only half of the 4,300 square foot space it had
been allocated, The current pr",'kIer has expanded the program an.! is now utilizing the IotaI
4.300 square feet ofaUocated space, However,ilie rent has not yet been increased to the
.,'erage cost per square fooIilial 1he other providers pay, whkh is one 0( 1he issues staff
CMR:281:9S
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wants 10 pursuc:. The approxi'llak av""'ge rental role of SAO/per square iOot'month for the
cIbcr eleven exIen<Ied d1ty ca. ... programs remains significantly 1 ... than !he curren! marie!
rates for day care space ill the Cubberle)l ~tcr, which is currently S 1.49!square k>otlmoot1 ..
In the pas!, eaclI of1hese provi<Iets has been granted subleases for one-year terms, They are
now re<jOO5ting five-year sublease terms, 10 allow se<:urity for making Ioog-\erm plans aOO
improvements and 10 pursue grant fund'mg and loans for program and building
improvements.
Prior 10 retumlng 1D Council with a recommendation on lease tenn. ... <taJf would like 10 wor!<
with an four ;>roviden in !he nexI few months 10 assess the following:
" Appropriateness of a differential rate stru<-'\ure for nonprofit ver>u< for-profit
prO\iders.
° Provisions whick prohibit !he provider from seDing or assigning !he lease, wbiclJ
enable the CiIy's Child Care Coonfmarur \0 foINw !he Request for Proposals (RFP)
po!i<:y and procedun: for selecting a new provider,
" Terms which pnl\ide for an annual review by !he CiIy's auld Care Cooramator to
, ensure lhat!he provider is meeting !he!ern1s ofChe provisioos for providing extended
day care services.
<> Provisioos for cancellation or termination of the lease by either party, with
appropriale prior writlAm notice.
Staffintends \0 extend each CUIreI!I sublease on I mooth-to-mooth basis, pend'mg assessment
of Ihe<e issues, and will return. \0 Council with a Tccommcndation.
PREPARED BY: Manha E. Mill .... Financial Analy ..
DEPARTMENT HEAD APPROV AI.:
CITY MAl'IAGER APPROVAL:
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fROVIJn;Bl
mE
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Addison
Dvvenec
EiCatme\o
Escondido
Hays
Hoover
Ohlooe
Pa\oV.,.Je
fAl.lSll
1uana Briones
TOTAL
SQ.E'L
1,080
960
960
1,010
960
960
960
960
960
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APPENDIX A
AIlIlSJ.!AL
BENI
$ S,013S6
$ 4,873.56
$ 4,113.56
$ S,OI3.96
S 4,813.56
$ 4,173.56
$ 4,813.56
S 4,873.56
54,173.56
qm PREN'S CRMINE TURNING CENTER
NIXon 4,300 $12,219.72
RFDWfX)f) EN1UCHMrNT CENTER
Fairmeadow 960 $ 4,873.56
OlliTISQ,IT ,
!MONTH
$.39 (I)
$.42
$.42
$.39 (I)
S.42
S.42
$.42
s.n
$.42
$.24
5.42
(I) The cosl!sq.ftJmonth is sli~tly less b Addiso. onJ Escondido because oC!be additional
120 sq=e feel at tbese sileS.