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HomeMy WebLinkAboutAgenda Statement 1982/06/01 Item 6 COUNCIL AGENDA STATEMENT Item 6 ITEM TI Meeting Date 6/1/82 . Resolution /tj 8'S/ Approving lease agreements between the City of Chula Vista and the County of San Diego for the rental of real property SUBMITTE~ BY: Assistant City Manager (4/5ths Vote: Yes No ) The City Council requested, and the County Board of Supervisors has tentatively approved, the transfer f title of the County Health Building and old Court Building back to the City. In consideration for quit-claiming the property to the City, County staff has prepared two separate lease agreements relating to the transaction. The first lease agreement provides fora 50 ear rent-free lease for the Health Building, and the second agreement provides for a 50 yea rent-free lease for approximately 250 square feet of area in the old Court Building for district offices for the Supervisor of District One. The lease agreements have been app oved by County Counsel and the City Attorney and therefore it is my RECOMMEN TION: That the City Council adopt resolution. BOARDS/C MISSIONS RECOMMENDATION: N.A, DISCUSSIOIN: Both buil ings and property will be quit-claimed to the City in consideration for the rent- free leas s to the County for the continued occupancy of the Health Building by the Health Departmen and rent-free occupancy of approximately 250 square feet in the old Court Building by the Supervisor of District One. The terms and conditions of the two leases essentially incorporate the intent of both the City Council and the Board of Supervisors. ~~Ihile our original discussions did not contemplate rent-free space in the old Court Building for the First District Supervisor, as consid ration for returning the properties to the City, this additional rent-free space has been roposed by the County and vre believe it is appropriate to provide this space. Both leas agreements provide for a maximum 50 year term, with the City providing full interior nd exterior maintenance of the old Court Building, but only exterior maintenance of the He lth Building. The City will be responsible for providing landscape maintenance around both buildings. Section 7 of the Health Building lease agreement provides for the use of th t building rent-free so long as it is used for office and medical space for the County's Department of Health Services. Since the City cannot technically execute a lease as Lessor until title is vested in the City, the effective date of these lease agreements will be the date that the County records the quit-claim deed now being processed. Official approval of the lease agreements and authoriza ion to quit-claim the property is tentatively scheduled for Board consideration on June 15, 1982. FINANCIAL IMPACT: The old Court Building contains approximately 4500 square feet of space, inc u ing that area to be provided to the First District Supervisor on a rent-free basis. About 420 square feet will be available for lease to State and Federal legislative repre- sentative for their district offices at a yet-to-be-determined per square foot rent. It is estima ed a rental figure of approximately 70~ per square foot per month, including janitorial service and utilities can be derived through leasing of the premises as con- templated, On this basis (4200 x .70), it would generate an annual rent of $35,280, with continued Form A-11$ (Rev. 11/79) Page 2, Item No. Meeting Date 6/1/82 janitorial service and utilities estimated at approximately $8,400, leaving a net income of approximately $26,000 per year. The net income available to the City does not take into account amortization of costs the City will experience in remodeling the old Court Building and no precise amount for this purpose has been calculated since the final configuration to meet the needs and requirements of the various legislative representatives has not been determined. It would appear reasonable, however, to assume that remodeling costs probably can be recovered during the first full year. I would assume, of course, that remodeling and other associated costs in making the building ready for occupancy did not exceed about $26,000. ERA:mab