REPORT TO THE CITY COUNCIL
September 11, 2014
FROM: BRUCE RUDD, City Manager
BY: RENENA SMITH, Assistant City Manager
SUBJECT
Title
Actions pertaining to the Lease Agreement between the City of Fresno and CH2MHill to lease space in Building A at the Municipal Service Center (MSC)
1. Adopt a finding of a Categorical Exemption pursuant to Class 1 of the California Environmental Quality Act (CEQA) Guideline Section 15301 (Existing Facilities) for lease
2. Approve Lease Agreement between the City of Fresno and CH2MHill to lease space in Building A at the Municipal Service Center (MSC) and authorize the City Manager to execute the agreement subject to City Attorney approval
Body
RECOMMENDATION
Staff recommends that the City Council:
1. Adopt a finding of a Categorical Exemption pursuant to Class 1 of the California Environmental Quality Act (CEQA) Guideline Section 15301 (Existing Facilities) for lease.
2. Approve Lease Agreement between the City of Fresno and CH2MHill to lease Building A at the Municipal Service Center (MSC) and authorize the City Manager to execute the agreement subject to City Attorney approval.
EXECUTIVE SUMMARY
The City owns the MSC which currently has a vacancy in Building A. CH2MHill and the Water Division desire to co-locate to improve the efficiency of planning and design related to the Water Capital Improvement Plan (CIP). Once construction of the projects is underway, CH2MHill and the Water Division staff will continue to co-locate on the construction site. MSC Building A has 7,250 square feet of leasable space. The tenant will pay $9,787.50 or $1.35 per square foot per month for the space. This price includes up to 60 parking stalls, utilities and security. The building is being leased "as is" making the tenant responsible for improvements and digital connections.
BACKGROUND
The Department of Public Utilities Water Division has retained the expert services of CH2MHill to provide project management consulting and oversight of their CIP. The scope of the services requires that CH2MHill and the Water Division staff routinely collaborate to ensure that the projects are meeting regulatory compliance and budget constraints. To effectively execute this level of collaboration it is vital that the employees co-locate through planning, design and construction phases. The initial planning and design phase will be completed in traditional office space. Once construction ensues, in approximately 18 months the parties will relocate together in trailers at the site.
The City of Fresno has office space available at the MSC in Building A that can be used to co-locate the tenant through the planning and design phase. The current lease terms include the following:
· Effective October 1, 2014.
· Lease is for the 7,250 square feet of Building A, a 10,000 square foot office building.
· Tenant accepts Premises "as is", in its existing physical condition with all faults, without warranty by City or any duty obligation on the part of City to maintain the Premises.
· This Lease shall continue from month to month commencing on the effective date, until terminated upon thirty (30) days' notice from either party.
· Rent for the term of this lease will be $9,787.50 ($1.35 per square foot) per month payable by the tenant in advance.
· The City shall provide utilities, common space security and parking for up to 60 stalls. Tenant assumes all responsibility for its protection of Tenant, its employees, agents and invitees and property from acts of third parties.
· Tenant will agree to City's standard indemnification and carry applicable insurance.
ENVIRONMENTAL FINDING
Staff has performed a preliminary environmental assessment of this project and has determined that it falls within the Class 1 Categorical Exemptions as set forth in the CEQA Guidelines Section 15301 as this amendment is to lease an existing building and will involve negligible expansion of the existing use. Furthermore, none of the exceptions to the Categorical Exemptions set forth in CEQA Guidelines Section 15300.2 apply to this project.
LOCAL PREFERENCE
Local preference is not applicable because this is not a contract for goods, services, or public work of improvement.
FISCAL IMPACT
This lease does not negatively impact the General Fund. CH2MHill will pay the City of Fresno $9,787.50 ($1.35 per square foot) per month to lease space in MSC Building A. The lease amount includes up to 60 parking stalls, utilities and security. Proceeds will be used for maintenance at the MSC and updating the Emergency Operations Center.
Attachment: Lease Agreement