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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: 4P 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.