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HomeMy WebLinkAboutAgenda Report - May 20, 2020 H-02þ{ -2AGENDA ITEM Crrv op Loor C oulcrr C o rtrpruNr cATr oN AGENDA TITLE:Receive Direction Regarding Lease of City Property Located at 111 North Stockton Street TM MEETING DATE: PREPARED BY: May 20,2020 Public Works Director RECOMMENDED ACTION Receive direction regarding lease of City property located at111 South Stockton Street. BACKGROUND INFORMATION: On February 5,2020, Council authorized Staff to solicit proposals for a long term lease agreement for the City owned buildings located at 100 East Pine Street and 125 North Stockton Street (the address reflected in the February 5, 2020 statf report for the North Stockton Street facility was represented incorrectly. The correct address is 111 North Stockton Street). Staff recommended Council authorize the solicitation of proposals from interested parties because the current lease for 100 East Pine Street (Lodi Adopt-A-Child) expires on May 28,2020; and the lease for 111 North Stockton Street (CrossFit Lodi) is operating under a month-to-month term rental agreement. Due to the COVID-19 pandemic, Staff has been forced to reprioritize workload which has resulted in a significant delay for issuing the request for proposals and it is unknown at this time when the request will be issued. By law, the lease with Lodi AdoptA-Child will convert to a month-to-month term upon its expiration, to allow time for Staff to conduct the public solicitation for proposals. A recent turn of events has facilitated this request for direction from the Council. The owner of CrossFit Lodi had previously notified the City of its cessation of tenancy effective April 30, 2020 (Exhibit A). On May 1 1,2020, CrossFit Lodi submitted a letter withdrawing its notice of termination and advised the Public Works Director they now intend to continue occupying the building and maintain the lease (Exhibit B) because it has a prospective buyer for the business at this location. Concurrently, the Community Partnership for Families of San Joaquin has been looking for building space because their lease at 1 18 North Church Street is set to expire at the end of May. After receiving notice that CrossFit Lodiwas ceasing tenancy as of April 30,2020, the City approached Community Partnership for Families to see if this location would work as an interim solution. They advised Staff they are also interested in occupying this property during a tour of the building on May 5,2020. Considering the City now has two different entities interested in the same City property; and the desire to best serve the immediate needs of both interested parties, Staff is looking for Council direction on how to proceed. The following options are brought forth for Council consideration: 1) Maintain the existing course of action set forth by Council on February 5,2020. This option will provide an opportunity for a comprehensive list of interested parties to compete for the opportunity to conduct operations at either 1 I 1 North Stockton Street or 100 East Pine Street. As APPROVED: WP\COUNCIL\2020\CC_Receive Direction Regärding City Property 11 1 North Stockton St.doc City Manager 511312020 Receive Direction Regarding Lease of City Property Located at 1.1 I North Stockton Sheet May 20,2020 Page 2 with any month{o-month lease, it is not known how long CrossFit Lodi, or subsequent business entity, will be occupying the space so rent revenue is not guaranteed in this case. 2) Reconsiderthe "bundling" of both locations (111 North Stockton Street and 100 East Pine Street) and authorize Staff to solicit proposals from only the parties currently interested in the 1 1 1 North Stockton Street property. Since the solicitation is focused on only two parties, the process will take substantially less staff time and coordination, remain somewhat competitive, and provide an accelerated path toward building occupancy. The award would be based on overall community benefit. Since the determination of community benefit is subjective in nature, Staff proposes the formation of a small committee including the Public Works Director, lnterim Parks Recreation and Cultural Services Director, and the Business Development Manager, to review the proposals and make a subsequent recommendation to Council. lt is anticipated that if Option No. 2 is approved, Staff could return to Council to authorize the City Manager to execute a lease agreement by the July 1 5,2020 Council meeting. 3) Take Council action to "assign" the lease agreement to either of the two interested parties at the current monthly lease rate of $1,825 per month and establish a term of one year. lf this option is approved, Staff could return to Council to authorize the City Manager to execute a lease agreement on June 3,2020. This process also allows a reasonable timeline for Option No. 1 to be executed. lt is anticipated that Staff will be able to conduct the public process required in Option No. 1 over the next year. Staff acknowledges this decision will be difficult; however, in light of this unique situation that has arisen during an unprecedented time, Council input and ultimate direction is necessary. FISCAL IMPACT: Option No. 1 is the most inclusive option and the loss of rental revenue is not anticipated if the prospective CrossFit Lodi business transaction is completed. Option No. 2 and Option No. 3 will preserve rental revenues but will require the implementation of a less open and competitive process for awarding the lease. FUNDING AVAILABLE: Not applicabte Charles E. Swimley, Jr Public Works Director CES/CES/tc WP\COUNCIL\2020\Cc_Recieve Direct¡on Regarding C¡ty Property l j1 North Stockton St.doc 5113t2020 Receive Information Regarding Lease of City Property Located at 111 North Stockton Street May 20, 2020 Item H-2 The City of Lodi Public Works Timeline •February 5, 2020 –Council authorizes RFP for 100 E. Pine St. and 111 North Stockton Street •Letter dated March 30, 2020 –CrossFit Lodi notices City of cessation of tenancy at 111 North Stockton Street effective April 30, 2020 •April 28, 2020 –City advises Community Partnership for Families of potential interim solution location (their lease expires May 31, 2020 at Church Street location) •May 5, 2020 –Community Partnership for Families confirms interest in location after building tour •Letter dated May 11, 2020 –Lodi CrossFit advises City of intent to maintain lease Options for Consideration •Option No. 1 –Maintain the existing course of action set forth by Council on February 5, 2020. –Return to Council in 6-12 months after public RFP process –CrossFit Lodi intends to maintain the current lease •Option No. 2 –Solicit proposals from only CrossFit Lodi and Community Partnership –Internal selection committee recommendation based on community benefit –July 15th target for Council approval •Option No. 3 –Assign lease agreement to either CrossFit Lodi or Community Partnership –June 3rd target for Council approval Questions?