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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JULY 6, 2009 <br />TITLE: <br />DOWNTOWN OFFICE LEASE <br />~~.~.-- <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />^ As Recommended <br />^ As Amended <br />^ Ordinance on 15t Reading <br />^ Ordinance on 2"d Reading <br />^ Implementing Resolution <br />^ Set Public Hearing For_ <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and the Clerk of the Council to execute the <br />lease agreement with Fiesta Marketplace Partners #1, subject to non- <br />substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />The Downtown office has been located at 305 East Fourth Street since <br />February 2001. The current lease agreement covers 5,850 square feet and <br />expires on July 31, 2009. With the initiation of the Downtown Community <br />Management District, the new management corporation, Downtown Inc., will <br />occupy separate office space from City staff, thus resulting in the need <br />for less space for Downtown Police staff and parking meter operations. <br />The new lease covers 3,950 square feet. <br />The property owner, Fiesta Marketplace Partners #1, has agreed to a one- <br />year lease with two one-year extensions. A two percent annual increase <br />will be added to the rent upon exercising each of the one-year lease <br />options. The new rent is $5,865 monthly, or $1.50 per square foot, and <br />is a full-service gross lease with a stipulation that the City pay a <br />portion of the utilities that exceed the base year figure established <br />during the first year of the lease. Fiesta Marketplace Partners #1 will <br />be making all of the necessary improvements to accommodate the office <br />operational needs. According to the 2009 office market report for Orange <br />County by Voit Commercial, this lease rate falls within the average lease <br />rate for similar buildings. <br />25H-1 <br />