REPORT TO THE CITY COUNCIL
FROM: BRIAN BARR, Director
General Services Department
SUBJECT
Title
Actions related to the lease of the Fresno Water Tower located at 2444 Fresno Street between the City of Fresno and Downtown Development Group, LLC, DBA Frida Café (District 3):
1. Adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 of the California Environmental Quality Act (CEQA) Guidelines
2. Approve a Lease Agreement between the City of Fresno and Downtown Development Group, LLC, a California limited liability corporation, DBA Frida Café, to lease the Fresno Water Tower property located at 2444 Fresno Street for three years with options to extend for two additional one-year terms, starting at $9,252 in year one and increasing 3% annually, totaling $49,120.12 over five years in rent
Body
RECOMMENDATION
Staff recommends Council adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 of the California Environmental Quality Act (CEQA) Guidelines, and approve a Lease Agreement between the City of Fresno (City) and Downtown Development Group, LLC, a California limited liability corporation, DBA Frida Café, to lease the Fresno Water Tower property located at 2444 Fresno Street for three years with options to extend for two additional one-year terms, starting at $9,252 in year one and increasing 3% annually, totaling $49,120.12 over five years in rent
EXECUTIVE SUMMARY
The City owns the historic Fresno Water Tower (Water Tower) located at 2444 Fresno Street. The interior of the Water Tower includes a commercial space available for rent. The City is seeking to enter into a Lease Agreement with Downtown Development Group LLC DBA Frida Cafe (Frida Café) for the Water Tower property to be used as a coffee shop. The Lease Agreement provides for an initial term of three years with two one-year options to extend totaling $49,120.12 in rent over five years.
BACKGROUND
The City owns the historic Water Tower located at 2444 Fresno Street. Originally built in 1894 to supply water to the surrounding area until decommissioned in 1959. The structure was then added to the National Register of Historic Places in 1971.
The Water Tower interior was renovated in 2001 to serve as the Fresno County Visitor Center. In 2014, the Fresno Arts Council leased the interior for use as an art gallery. In 2022, the site was leased for use as a coffee shop. Since 2022, the City has invested more than $2 million in capital improvements to the property. This included a new perimeter security fence, ADA improvements to the restrooms and courtyard, repainted the exterior of the Water Tower, and upgraded the electrical service.
The City seeks to enter a new lease with Frida Café for three years with options to extend for two additional one-year terms for the purpose of the tenant operating a coffee shop.
The lease includes the exclusive use of 771 square feet of interior commercial space and non-exclusive use of the courtyard surrounding the Water Tower plus an onsite restroom facility. In addition, three parking stalls within 500 feet of the premises will be designated by the City for tenant’s staff and three metered parking stalls shall be designed as short-term parking.
The proposed lease rate is $1.00 per square foot with 3% increases each year throughout the term. The total rent in year one is $9,252 and the total rent over five years is $49,120.12.
Tenant improvements shall be permitted on the inside of the Water Tower only. The tenant is responsible for all tenant improvements, and all work shall be performed in accordance with Historic Preservation Ordinance.
The Lease Agreement has been reviewed and approved by the City Attorney’s Office as to form.
ENVIRONMENTAL FINDING
Under Section 15301/Class 1, the proposed project is exempt from CEQA requirements when the project consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. The key consideration is whether the project involves negligible or no expansion of use.
The project is exempt because the Fresno Water Tower was previously leased in 2022 through 2025 for the purposes of use as a coffee shop. The City is proposing to enter into a new agreement to continue leasing the property to Frida Cafe for the same purpose and permit minor interior alterations only necessary to support the use as a coffee shop. The minor interior alternations shall be performed in compliance with the City of Fresno Historical Preservation Ordinance and shall not cause a substantial adverse change in the significance of the Historic Resource. The project does not involve new construction, ground disturbance, or increased capacity beyond existing facilities and previously approved operations. Accordingly, the project will not have a significant impact on the environment, as it requires Frida Cafe to establish operations in the existing facilities.
None of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to the project. Furthermore, the lease agreement prohibits alterations to the exterior portion of the facilities, which the Fresno Water Tower is listed in the National Register of Historic Places, and as a result shall not cause substantial adverse change to the Historic Resource. Furthermore, the proposed project is not expected to have a significant effect on the environment. A categorical exemption, as noted above, has been prepared for the project and the area is not environmentally sensitive.
LOCAL PREFERENCE
Local preference is not applicable to the lease of real property.
FISCAL IMPACT
Revenue received will be deposited into the General Fund and be used to offset the cost to maintain the property.
Attachments:
Categorical Exemption
Lease Agreement
Levine Act Disclosure Statement