HomeMy WebLinkAboutItem 10c - Arcadia Chamber of Commerce Lease Agreement
DATE: November 16, 2021
TO: Honorable Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director
By: Tim Schwehr, Economic Development Manager
SUBJECT: LEASE AGREEMENT WITH THE ARCADIA CHAMBER OF COMMERCE
FOR A FIVE-YEAR TERM FOR THE CITY-OWNED PROPERTY AT 388
WEST HUNTINGTON DRIVE
Recommendation: Approve
SUMMARY
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 1, 2016, and
expires on December 3, 2021. The current lease rate is $400 per month, or $4,800 per
year, cancelable upon 12 months written notice. It is recommended that the City Council
approve, authorize, and direct the City Manager to execute a Lease Agreement for
another five (5) year period starting at $400 per month for the first year, and adjusted
annually each subsequent year to match the change in the U.S. Department of Labor
Consumer Price Index (“CPI”) for Los Angeles-Long Beach-Orange Co. region over the
prior calendar year.
BACKGROUND
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 on the property, since 1966. The
current lease rate of $400 per month has been in effect since 2001 with the same basic
terms. The current five-year lease expires on December 3, 2021.
DISCUSSION
The proposed new lease is for a five-year period, starting on December 1, 2021, and
extending through November 31, 2026. It can be cancelled at any time without cause
with 12 months written notice to the Chamber. 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. The monthly rent has been static at $400 per month for many years.
Lease Agreement - Chamber of Commerce
November 16, 2021
Page 2 of 3
This year, the rent is proposed to remain at $400 per month for the first year of the
agreement, and then adjusted on December 1st of each subsequent year to match the
change in the U.S. Department of Labor Consumer Price Index (“CPI”) for Los Angeles-
Long Beach-Orange Co. region over the prior calendar year. The current $400 rent is
estimated to be approximately 10%-15% of the possible monthly market rent for the
property, assuming a monthly rate of $2.00 per square foot for office space, which is a
common average in the area. The proposed CPI escalator is the same that is attributed
to the financial contribution by the City to the Chamber, which is discussed below. A
copy of the proposed Lease Agreement is attached to this staff report as Attachment
“A”.
The City also makes a financial contribution to the Chamber as part of an annual
Chamber Services Agreement, which for Fiscal Year 2021-22 totals $84,848. This
annual financial contribution is adjusted yearly based on the same regional CPI metric
proposed for the new lease agreement. In return for the reduced rent and annual
financial contribution, the Chamber provides an assortment of beneficial services to the
Arcadia business community and community at large. A specific list of services provided
by the Chamber to the City is included in the Chamber Agreement for Services for
Fiscal Year 2021-22, included as Attachment “B”. By maintaining the current below
market rent, the City continues its existing financial support of the Chamber and their
important work done in support of the business community.
The terms of the rent and the financial contribution have been discussed with the
Chamber Director, Karen MacNair.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the
environment. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
If the lease is continued under the proposed terms, the City will generate $400 per
month in lease revenue ($4,800 per year), adjusted annually to correspond to changes
in regional CPI over the prior calendar year. While this is well below the market value of
the property, the subsidy to the Chamber of Commerce enables the Chamber to
continue their important work in support of the business community as described above
and in Attachment “B”.
Lease Agreement - Chamber of Commerce
November 16, 2021
Page 3 of 3
RECOMMENDATION
It is recommended that the City Council It is recommended that the City Council
determine that this action is exempt under the California Environmental Quality Act
(“CEQA”); and approve, authorize and direct the City Manager to execute a Lease
Agreement with the Arcadia Chamber of Commerce for a five-year term for the City-
owned property at 388 West Huntington Drive.
Attachment “A” – Proposed Chamber Lease Agreement for 2021-26
Attachment “B” – Agreement for Services for Fiscal Year 2021-22
Attachment "A"
GOC-/
AGREEMENT FOR SERVICES BY AND BETWEEN THE
CITY OF ARCADIA AND ARCADIA CHAMBER OF COMMERCE
FOR FISCAL YEAR 2021-22
This Agreement for Services ("Agreement") is entered into this — day of June,
2021 by and between the Arcadia Chamber of Commerce ("Chamber"), a not-for-profit
organization, and the City of Arcadia ("City"), a municipal corporation and charter city.
RECITALS
A. The City and the Chamber have long cooperated concerning issues and projects of
mutual interest to the Arcadia civic and business community.
B. The Chamber has in the past provided, and desires and intends to provide in the
City's fiscal year ("fiscal year") 2021-2022, various services to the City, as
described hereinafter.
C. For many years, the City has, pursuant to a certain lease entered into by the City and
the Chamber (the "Lease"), provided to the Chamber at a below market lease rate
the full use of a certain City-owned building at 388 West Huntington Drive, Arcadia
Leased Premises"), in support and recognition of the Chamber's ongoing services
to the City, and the Lease extends through December 2, 2021 .
D. The City desires and intends to make payment to the Chamber in the amount of
84,848 for certain business and economic development, marketing, civic promotion,
and similar services to be provided by the Chamber to the City during Fiscal Year
2021-2022, as set forth in Exhibit "A" attached hereto (the "Services").
E. The Chamber desires and intends to provide the Services to the City in consideration
for the City's payments and appropriation of funds as described herein.
Attachment "B"
AGREEMENT
Now, therefore, the City and the Chamber do hereby agree that the foregoing Recitals
are true and correct and are incorporated into this Agreement, and made a part thereof
as if fully set forth herein, and further agree as follows:
A. Responsibilities of the Chamber
1. The Chamber is and shall serve as an independent organization entirely
separate from the City, and shall operate under its own bylaws as a
membership organization serving the interests of business in the greater
Arcadia area. For purposes of this Agreement, the Chamber is and in
all respects shall be deemed to be an independent contractor.
2. The Chamber shall provide to the City during Fiscal Year 2021-2022 the
Services set forth in Exhibit"A" attached hereto and incorporated herein by
reference.
3. The Chamber shall submit to the City a written progress report in December
of 2021 , and again in May of 2022 describing in reasonable detail the
Chamber's performance and provision of the Services under this Agreement
for the period July 1, 2021 through the date of said reports.
B. Responsibilities of the City
1. In consideration of the provision of the Services by the Chamber to the City
during Fiscal Year 2021-2022, the City shall make (1 ) payment to the
Chamber of the sum of eighty-four thousand eight-hundred forty-eight dollars
84,848), payable in equal quarterly installments, the first of which is due
on or before July 1, 2021 (the "Payment for Services") and each subsequent
payment due on or before the first date of the quarterly month.
C. Review and Inspection of Chamber Records
1 . On or before September 30, 2021, the Chamber shall provide to the City a
complete and accurate financial statement of the Chamber for Fiscal Year
2020-2021 (i.e., ending June 30, 2021).
2. The City and its representatives shall have the right to review and/or audit the
records of the Chamber to verify that the Chamber is providing the Services
and making reasonable and appropriate expenditures from the Payment for
Services in furtherance of providing the Services. For this purpose, the
Chamber shall make available to the City and its representatives all records of
the Chamber to allow the accomplishment of review and audit during normal
business hours of the City, upon reasonable demand by the City.
D. Amendment
1. This Agreement may be amended by mutual written consent of the parties.
E. Termination
1. This Agreement shall be deemed to commence on July 1, 2021 and shall
extend through June 30, 2022 (the "Term"). This Agreement may be
terminated earlier by either party giving the other party written notice of
termination; provided that such notice of termination shall be given at least 180
days prior to the effective date of termination and shall be transmitted by email,
facsimile, U.S. mail, or personal delivery to the person or persons occupying
the indicated position(s) of the other party signing this Agreement. The rights,
duties, and responsibilities of the City and the Chamber shall continue for the
period between the Notice of Termination and the effective date of termination.
Any portion of the Payment for Services due and owing to the Chamber
following such notice of termination shall be prorated to cover only the period
up to the effective date of termination, and any portion of the Payment for
Services already made to the Chamber for the remainder of the period
following the effective date of termination shall be prorated and promptly
refunded to the City by the Chamber to cover the period following the effective
date of termination. Notwithstanding any provision of this Agreement to the
contrary, Section C of this Agreement entitled, "Review and Inspection of
Chamber Records" shall survive the Term and any termination of this
Agreement.
F. California Law
1. This Agreement shall be governed by the laws of the State of California.
SIGNATURES ON NEXT PAGE]
In witness whereof, the Parties have executed this Agreement as of the date first set
forth herein above.
CHAMBER: CITY:
17;7 ident Dominic Lazzarett.
A adia Chamber of Commerce City Manager
1)GL (617,
APPROVED AS TO FORM:
hief Executive Officer
Arca" Chamber of Commerce
alAZ (t'`'
City All rney
ATTEST:
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11
City Clerk
EXHIBIT "A"
SERVICES PROVIDED BY ARCADIA THE CHAMBER OF COMMERCE
TO THE CITY OF ARCADIA
Fiscal Year 2021-2022
The Chamber shall provide the following services to the City:
Public Relations
A. Maintain regular office hours with qualified personnel.
B. Provide accurate and timely information and market the City and business
areas to hundreds of residents and business people who walk-in, phone,
write, e-mail, or fax the Chamber each month.
C. Prepare and maintain the monthly community calendar of civic group events.
D. Provide information on Arcadia to realtors and commercial brokers to
assist with business recruitment, business retention, and new commercial
development.
E. Prepare and make available a civic directory which lists all civic, cultural,
social, educational, and business groups, addresses, meeting dates, etc.
F. Through the Board and Committee structure (e.g., Ambassador Meetings,
Chamber Board Meetings), and Chamber functions (e.g., Business Mixers,
Networking Breakfasts, Community & Connection Meetings, Citizen of the
Year, State of the City), and other various legislative gatherings and forums,
bring civic leaders and City/Agency staff together with business people and
citizens every month. The format of these events shall be adjusted, as
needed, in response to the ongoing COVID-19 public health emergency.
G. Maintain social media network to promote Chamber, City, and business
activities and news, including Chamber web site with calendar, Facebook,
Twitter, and any new effective technologies.
II. Business Development
A. Organize and host business expos and virtual job fairs to market Chamber
business member products and services to each other and to the community.
The City will be provided free and prominent space at these events.
B. Prepare and print (approximately every third year) a City Map, including
economic and civic information on Arcadia; provide as many copies to the
city and Fire & Police Departments as needed.
C. Prepare and print the "Business Directory"; provide copy to all Arcadia
businesses, and to residents; provide as many copies to the City as
needed.
D. Conduct special community and business forums, e.g., Trash/Recycling pick-
up events, or assist City to inform the community of meetings, e.g.,
community workshops on large development projects, proposed city
measures, initiatives and propositions, transportation concerns, including
Gold Line/Metro, etc.
E. Assist the City during emergencies, by providing a liaison at Emergency
Operations Center; coordinate with the City EOC & Red Cross and
Emergency Centers throughout the City in the event of earthquake or
disaster; working with Chamber Emergency Business Preparedness plan
for emergencies.
F. Provide ambassadors to existing and new businesses throughout the year
to monitor concerns, assist in resolving problems with the Chamber or the
City, meet other Arcadia businesses (e.g., monthly networking /
orientation / breakfasts).
G. Work actively on business recruitment, expansion and retention efforts
throughout the City.
H. Organize and publicize seminars and training sessions for merchants and
business members under SBA, SCORE, SGVEP, Foothill Workforce
Investment Board, Women at Work, and other governmental and educational
programs.
I. Continue to work with Downtown Arcadia Improvement Association on the
downtown community benefits district, district marketing efforts, and events.
J. As needed or requested by the City, conduct membership survey on general
business topics, e.g., parking, ride-share, recycling, signage, etc. to inform
the City of business concerns
K. Work with other business areas on Live Oak Avenue, Duarte Road, Baldwin
Avenue, Foothill Boulevard, and other sectors to initiate regular events and
marketing.
L. Continue to develop new media marketing opportunities for business
members through the Chamber.
III. Government/Legislative
A. Through the monthly Community Connection meetings, provide business
information to Chamber members and serve as a forum for City, County,
State and Federal interrelationships and dialogue.
B. Review and recommend proposed business legislation and concerns to
City.
C. Organize and hold the annual "State of the City" event each year. The format
of this event shall be adjusted, as needed, in response to the COVID-19
public health emergency.