HomeMy WebLinkAboutItem 3b: Five (5) Year Lease with Chamber of Commerce for Property at 388 West Huntington Drive Of Atte
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°A��Y°t� STAFF REPORT
Development Services Department
DATE: November 15, 2011
TO: Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director5W-
By: Jerry Schwartz, Economic Development Manager
SUBJECT: CONSIDERATION OF A FIVE (5) YEAR LEASE WITH THE ARCADIA
CHAMBER OF COMMERCE FOR CITY-OWNED PROPERTY AT 388
WEST HUNTINGTON DRIVE
Recommendation: Approve
BACKGROUND
The current five (5) year lease with the Arcadia Chamber of Commerce for the City-
owned property at 388 West Huntington Drive was approved on November 21, 2006.
This lease began on December 3, 2006 and expires on December 3, 2011. The lease
rate was $400 per month or $4,800 per year, cancelable upon twelve (12) month written
notice. Staff is recommending the renewal of the five (5) year lease with the same
terms.
DISCUSSON
The City of Arcadia owns the triangular shaped property at 388 West Huntington Drive,
which is adjacent to Methodist Hospital. The Arcadia Chamber of Commerce has
leased the property and the 1,900 square foot building since 1966. The current five-
year lease expires on December 3, 2011. The proposed new lease (attached) is also
for a five-year period, or until December 3, 2016. It can be cancelled at any time
without cause with twelve (12) months written notice to the Chamber.
The monthly rent, currently at $400, is proposed to continue at the same rate. This is
estimated to be approximately 10% to 15% of the possible monthly market rent for the
property assuming a minimum monthly rate of $1.75 per square foot. In return for this
reduced rent, the Chamber provides a number of general services that benefit the
Arcadia business community and community at large pursuant to an annual agreement
for which the City and Redevelopment Agency also contribute a total of $62,000 to the
Chamber. Additionally, the Chamber makes the building available to community groups
at no charge.
The lease provides that the Chamber maintain the interior of the building, including the
HVAC system. The City maintains the exterior, including the structure itself, landscaped
areas, parking lot surface, exterior lighting, and roof.
One change that was made as part of the last five year lease will be maintained with
this lease. While the Chamber does make the building available to Arcadia-based
businesses, civic, charitable, and community organizations for purposes of conducting
their activities and furthering the goals and functions of the Lessee, there are times
when usage had become excessive and disruptive to the Chamber functions. Thus, this
lease again contains language in Section 6 that provides that the Chamber shall make
the facilities available a maximum of ten (10) times per month (at no charge), but no
more than two (2) meetings per month per organization. Additionally, the Chamber may
establish reasonable hours and regulations for usage of the premises so as not to
disrupt the operation of the Chamber. Also since the building is a City-owned facility, no
political activities may be conducted there. This would not exclude candidate forums,
but would prohibit candidates from using the building for meetings, fundraisers, press
conferences, etc.
FISCAL IMPACT
The City will generate $400 per month in lease revenue ($4,800 per year), although this
would not be a net amount as the City does incur expenses to maintain the exterior of
the building.
RECOMMENDATION
Approve the five (5) year lease with the Arcadia Chamber of Commerce for City-owned
property at 388 West Huntington Drive.
Approved:
Donald Penman, City Manager
Arcadia Chamber Lease Agreement
November 15, 2011
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