HomeMy WebLinkAbout12 Amend lease - 73520 Fred Waring DrSTAFF REPORT
CITY OF PALM DESERT
DEVELOPMENT SERVICES — ECONOMIC DEVELOPMENT
MEETING DATE:
PREPARED BY:
REQUEST:
Recommendation
November 18, 2021
Martin Alvarez, Development Services Director
Authorization to execute an amendment to the existing lease with
Riverside County for the City -owned property located at 73520 Fred
Waring Drive (APN 622-250-018) for use by the Riverside County
Sheriff's Department.
Authorize the City Manager and City Attorney to finalize and execute an
amendment to the existing lease with Riverside County for the City -owned
property located at 73520 Fred Waring Drive (APN 622-250-018) for use
by the Riverside County Sheriff's Department.
The Facility
The Sheriff Substation is located within the Civic Center Complex and adjacent to City
Hall. The building consists of a 25,393 square foot (sf) building that is occupied by the
Riverside County Sheriff's Department. The building houses a dispatch center
(approximately 10,000 sf) that serves the eastern valley (Riverside to Blythe), a Sheriff
substation, an investigative unit (9,000 sf), and a training facility (6,000 sf) along with
kitchens, locker rooms, and other storage with an elevator. The building does not share
demising walls with City Hall and has a secured parking lot located east of the building.
The entrance to the building is controlled and requires background clearance. Certain
City staff have passed the background evaluation and may enter the building with
permission. The HVAC system is a mixture of City -built HVAC units, and specialized
HVAC units which was installed by the County above the dispatch center to offer
additional cooling for their electronics. The County also installed a backup diesel
generator. Currently the City provides both the custodial and maintenance of the facility
at an average annual cost of approximately $71,000/annum.
Lease Amendment
At its September 30, 2021, City Council meeting, staff presented the proposed lease
terms from Riverside County for the use of the City owned facility located within the
Civic Center complex at 73520 Fred Waring (current Sheriff substation).
November 18, 2021 - Staff Report
Sheriff Substation Lease Amendment
Page 2 of 3
Based on the City's market study of lease rates and analysis of its existing leases within
the Civic Center complex, staff presented a lease rate of $1.84/square foot (sqft) to
Riverside County. On September 30, 2021, staff presented the City Council with the
Riverside County's counterproposal of $1.39/sgft.
After extensive communications and negotiations, staff is recommending the following
lease terms to the amendment and finalize the lease with Riverside County for the
existing Sheriff substation.
• Term — 5 Years, with (1) 5 Year Option — Starting January 1, 2022
• Monthly Rent - $1.64/sqft (25,393 sqft.) - $41,644.52/Annually $499,734.24
• Annual CPI adjustment — 2% minimum, no greater than 6%, based on annual
Riverside County CPI Index
• Custodial Service — Provided by City of Palm Desert (8 hour/day, 5 days a week)
— Cost $69,000 annually
• Maintenance of Building — By City (HVAC, equipment, and miscellaneous
services) — Estimated Annual Cost $100K
• Utilities — Paid by Riverside County
• Termination Lessee may terminate lease with 6-month notice
• Tenant Improvements (One-time)
o Replace stained ceiling tiles throughout the leased premises
o Reroute HVAC condensate lines outside or into drains (this will be
addressed with routine maintenance)
o Replace broken vertical blinds in one office
o Install thermostat controls throughout the leased premises
o Maintain existing data room air conditioning unit
o Estimated Cost - $30K
Proposed lea
2022
2023
2024
2025
2026
Discussion
Monthly
Sf
Annually
Est. Costs/yr
NOI
$41,644.52
25,393
$499,734.24
$111,708
$388,026
$42,477.41
25,393
$509,728.92
$113,942
$395,786
$43,325.96
25,393
$519,923.50
$116,221
$403,702
$44,193.50
25,393
$530,321.97
$118,545
$411,776
$45,077.37
25,393
$540,928.41
$120,916
$420,304
Staff has worked with Riverside County staff to come up with an agreed upon and fair
lease term, lease rate and lease conditions. The $1.64/sqft is comparable and
consistent for other non-profit leases in Civic Center Parkview Building. In addition, staff
believes that there is benefit to having a Sheriff's Department presence in the Civic
Center complex. Staff recommends approval of the lease amendment as presented on
the attached agreement.
November 18, 2021 - Staff Report
Sheriff Substation Lease Amendment
Page 3of3
Fiscal Analysis
The annual net lease revenue will range between $388K - $420K per year and over the
life of the first five-year option, the lease will generate $2,019,304.
LEGAL REVIEW DEPT. REVIEW FINANCIAL ASSISTANT
REVIEW CITY MANAGER
RH
Robert W.
Hargreaves
City Attorney
M artu ' A(nra.reez
14/1919u
Martin Alvarez
Director of
Economic
Development
Janet M. Moore
Director of
Finance
L. Todd Hileman, City Manager: L. Todd H-LLevusuA,
Attachment: Riverside County Lease Amendment
Exhibit A and B
Site Map
CITY COUNCILyTION
APPROVED DENIED
RECEIVED OTHER
.Andy Firestine
Andy Firestine
Assistant City
Manager
MEETING DATE I 1 I ? 7.t) '2-t
AYES:* ifliKigbh ithAli NiOrt hde, Quirrt-ant114 Kellq
NOES: NI °he,
ABSENT: Non e
ABSTAIN: None
VERIFIED BY: N► WI- I S rS
Original on File with City Clerk's Office
EXHIBIT "A"
CUSTODIAL LEVEL OF CLEANING STANDARDS
Page 1 of 3
I. GENERAL
HOUSEKEEPING,
PRIVATE OFFICES,
LOBBIES AND
LOUNGES
1. Empty wastebaskets
2. Clean and service
cigarette urns, sweep
entrances
3. Dust furniture as needed
in first impressions areas
4. Clean and sanitize drinking
fountains
EVERY
DAILY OTHER WEEKLY
DAY
X
X
X
X
MONTHLY QUARTERLY
SEMI -
ANNUAL
ANNUAL
5. Spot clean reception lobby
glass, including front door
6. Low dust horizontal
surfaces, including sills,
ledges, molding, and shelves
X
X
7. Clean countertops
X
8. Remove dust and cobwebs
from ceiling areas
9. Wash wastebaskets as
needed
X
X
10. Spot clean wall surfaces
X
11. Clean entire wall surfaces
X
II. FLOORS AND
CARPET
1. Spot vacuum
X
2. Detail vacuum
3. Inspect for minor spots
and remove
X
X
4. Deep restoration
extraction
X
III. FLOORS, RESILIENT
_AND HARD SUFACES
1. Dust mop
2. Spot mop
3. Damp mop
4. High speed burnishing
(resilient tile)
X
X
X
X
5. Strip and refinish resilient
tile with 3 coats of sealer
and 5 coats of finish
6. Clean and polish
baseboards
X
X
7. Hard tile (machine scrub)
X
IV. WASHROOMS,
EMPLOYEE & PUBLIC
LOUNGES
1. Clean, sanitize and polish
porcelain fixtures including
sinks, toilet, urinals, and
showers
2. Clean and sanitize all flush
rings, drain and over -flow
outlets
3. Clean and polish all
chrome fittings
EXHIBIT "A"
CUSTODIAL LEVEL OF CLEANING STANDARDS
Page 2 of 3
EVERY SEMI- ANNUAL
DAILY OTHER WEEKLY MONTHLY QUARTERLY ANNUAL
DAY
4. Clean and sanitize toilet
seats X
5. Clean and polish mirrors
6. Empty all containers and
disposal units, insert liners
7. Clean and sanitize exterior
of all containers
8. Dust metal partitions
9. Dust/clean lounge
furniture
10. Remove spots, stains,
splashes from wall area
adjustments
11. Remove fingerprints
from doors, frames, light
switches, handles, push
plates, etc.
12. Refill all dispensers to
normal limits- soaps, tissue,
paper towels and seat covers X
13. Low dust horizontal
surfaces including sills,
molding, ledges, shelves, etc.
14. Spot clean metal
partitions
15. Wash and sanitize metal
partitions
16. High dust horizontal
surfaces including ledges,
shelves, pipes and vents
17. Dust diffuser outlets in
ceiling X
18. Sweep and clean debris
from floors
19. Damp mop all floor
surfaces
20. Machine scrub restroom X
V. REGULAR SERVICES
EXTERIOR WINDOWS
1. Clean exterior
2. Clean interior
EXHIBIT "A"
CUSTODIAL LEVEL OF CLEANING STANDARDS
SEMI -
EVERY ANNUAL
DAILY OTHER WEEKLY MONTHLY QUARTERLY
DAY
VI. ELEVATORS
1. Clean/polish interior
surfaces X
2. Clean/polish exterior
door X
3. Sweep, damp mop
and/or vacuum floor
surface X
4. Clean elevator tracks as
needed
VII. ENTRANCES
1. Sweep walkways X
2. Clean glass/doors X
3. Sweep patio, side, or
rear doors X
VIII. PARKING
1. Empty trash receptacles X
2. Sweep/clean lot
IX. PARKING
STRUCTURE
1. Empty trash receptacles X
2. Sweep/clean structure
3. Clean Elevators X
4. Clean stairwells
X. MISCELLANEOUS
5. Sweep Emergency
stairwells
6. Mop emergency
stairwells
3. Empty trash from
exterior break/picnic
areas
4. Wipe down exterior
furniture
5. Sweep and clean
smoking areas and ash
cans
6. Empty recycle bins
7. Dusting interior plants
Page 3 of 3
ANNUAL
EXHIBIT "B"
GENERAL GUIDELINES AND RESPONSE TIMES STANDARDS
General Guidelines:
A. The City will be responsible to review and deliver a diverse range of frequent, periodic, and
annual maintenance services or repairs as it deems necessary.
B. The City will conduct monthly or as needed site inspections to ensure the facility is within
acceptable standards.
C. The City and Sheriff's Department will coordinate service adjustments for facilities in a responsible
and appropriate manner.
D. The City will provide management oversight regarding contractual services related to regulatory -
compliance, mechanical, electrical, plumbing, and other building systems in accordance with
industry best practices and health / safety standards.
E. Preventive Maintenance (PM) may include a planned interval -based
surveillance/inspection methods of mechanical, electrical, plumbing, HVAC, building envelope and
other facility systems. PM's determine equipment wear and tear, lubrication, adjusting, cleaning,
replacing, tightening, testing of system components and equipment. This may include filters, fans,
motors, electrical contractors, heat exchangers, pumps, valves, bearings, boilers, electrical
distribution, generators, air conditioners, etc.
Response Times:
City staff will be available for emergencies and routine calls as follows:
A. Emergencies — response within one hour
• HVAC inoperable
• Roof Leaks
• No Water
• Broken outside door or windows
B. Routine — response within 48 hours
• Office lighting
• Ceiling tile (stained or wet)
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FIRST AMENDMENT TO LEASE
73-520 Fred Waring Drive
Palm Desert, California 92260
This FIRST AMENDMENT TO LEASE ("First Amendment"), dated as of
, is entered by and between the COUNTY OF RIVERSIDE, a
political subdivision of the State of California, ("County" or "Lessee"), and CITY OF
PALM DESERT, a California municipal corporation, ("City" or "Lessor"), sometimes
collectively referred to as the "Parties".
RECITALS
A. City and County, have entered into that certain Lease dated January 1,
2011, (the "Original Lease") pursuant to which County has agreed to lease from City a
portion of that certain building located at 73-520 Fred Waring Drive, Palm Desert,
California, 92260 ("Building") and as further defined in the Original Lease.
B. The Parties now desire to extend the Lease and alter minor terms to the
Original Lease as provided in this First Amendment to Lease (Amendment).
NOW THEREFORE, for good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. Lease Term and Option Period.
(a) Under Section 1.4 of the Original Lease, the first of two (2) five (5) year
options to renew the Lease is hereby exercised commencing on the
January 1, 2022 and expiring on December 31, 2026.
2. Monthly Rent. Section 1.5 of the Original Lease is hereby amended as
follows:
Page 1 of 6
Updated 08/2010
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(a) Commencing on January 1, 2022 the rent will be modified to
increase to $1.64 per square foot per month, subject to annual CPI rental increases
beginning on January 1, 2023.
3. Rent Increase. Section 3.2.2 of the Original Lease is hereby amended
as follows:
(a) The provision that "the CPI adjustment shall not be less than 2% nor
greater than 5%" shall be replaced with, "the CPI adjustment shall not be
less than 2% nor greater than 6%".
4. Maintenance, Repairs, Alterations and Common Area Services.
Section 5 of the Original Lease shall be amended to also include Exhibit "A" as
"Maintenance and Custodial Specifications" as attached hereto and by this Amendment
made a part hereof. Furthermore, County and City agree:
(a) The following minor maintenance and repair items shall be
completed by the City:
ii. Replace stained ceiling tiles throughout the lease premises.
iii. Reroute HVAC condensate lines outside, or into drains.
iv. Replace broken vertical blinds in one office.
v. Install thermostat controls throughout the leased premises.
vi. Maintain existing data room air conditioning unit.
5. Notice. Section 16 of the Original Lease is hereby amended to change
the address of Notice for the County:
Attn: Deputy Director of Real Estate
Facilities Management
3133 Mission Inn Ave.
Riverside, California 92507
Page 2 of 6
Updatcd 08/2010
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6. First Amendment to Prevail. The provisions of this First Amendment
shall prevail over any inconsistency of conflicting provisions of the Original Lease, as
hereby amended, and shall supplement the remaining provisions thereof.
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7. Miscellaneous. Except as amended or modified herein, all the terms of
6 the Original Lease shall remain in full force and effect and shall apply with the same
7 force and effect. Time is of the essence of this Amendment and the Lease and each
8 and all their respective provisions. Subject to the provisions of the Lease as to
9 assignment, the agreements, conditions, and provisions herein contained shall apply to
10 and bind the heirs, executors, administrators, successors and assigns of the parties
11 hereto. If any provisions of this Amendment or the Original Lease shall be determined
12 to be illegal or unenforceable, such determination shall not affect any other provision of
13 the Lease and all such other provisions shall remain in full force and effect. The
14 language in all parts of the Lease shall be construed according to is normal and usual
15 meaning and not strictly for or against either Lessor or Lessee.
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17 9. Effective Date. This First Amendment to Lease shall not be binding or
18 consummated until its full approval and execution by the Riverside County Board of
19 Supervisors and the City of Palm Desert City Council.
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22 (Signatures on the following page)
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Page 3 of 6
Updatcd 08/2010
1 IN WITNESS WHEREOF, the parties have executed this First Amendment as of the
2 date first written above.
3
4 LESSEE: LESSOR:
COUNTY OF RIVERSIDE, a political CITY OF PALM DESERT
5 subdivision of the State of California a California municipal corporation
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8 By: By:
9 Karen Spiegel, Chair Kathleen Kelly
Board of Supervisors Mayor
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ATTEST:
Kecia R. Harper
Clerk of the Board
By:
Deputy
APPROVED AS TO FORM:
Gregory P. Priamos
County Counsel
By:
Ryan Yabko
Deputy County Counsel
City of Palm Desert
City Attorney
Page 4 of 6
Updated 08/2010
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Exhibit A
"Maintenance and Custodial Specifications"
Page 5 of 6
Updatcd 08/2010
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Exhibit B
"General Guidelines $ Response Times"
Page 6 of 6
Updatcd 08/2010