REPORT TO THE CITY COUNCIL
FROM: BRIAN BARR, Director
General Services Department
ANDREW JANZ, City Attorney
City Attorney’s Office
BY: DESIREE NARANJO, Property Specialist II
General Services Department
SUBJECT
Title
Approve the first amendment to the lease agreement between the City of Fresno and Tutelian Holdings I, LLC, a California limited liability company to expand the office space by 928 square feet, for $20,602 annually, with an annual increase averaging 2.5%, plus the proportionate share of the building and operating costs estimated at $10,580 annually
Body
RECOMMENDATION
Staff recommends Council approve the first amendment to the lease agreement between the City of Fresno and Tutelian Holdings I, LLC, a California limited liability company to expand office space by 928 square feet, for $20,602 annually, with an annual increase averaging 2.5%, plus the proportionate share of the building and operating costs estimated at $10,580 annually.
EXECUTIVE SUMMARY
The City Attorney’s Office was awarded a Worker’s Right Enforcement grant that requires: two attorneys, two investigators, a paralegal, and a legal secretary. The City Attorney’s Office has outgrown the original leased space at 2440 Tulare Street and needs to expand the current space, to accommodate additional staffing needs.
City Attorney’s Office has negotiated an amendment with Tutelian Holdings I, LLC for an additional 928 square feet of office space located at 2440 Tulare Street, Suite 115 in Fresno. The original term of the lease is set to end on October 31, 2033, and will not be affected by this amendment. The proposed negotiated rent for the additional space in the first year is $1,717 per month with annual increases averaging 2.5% annually. In addition to the monthly rent due, the City of Fresno will also pay an additional 1.08% of building and operating costs, estimated at $10,580 annually
BACKGROUND
The City Attorney’s Office provides the City of Fresno with advice to the Council and all City Officers on all matters of the law pertaining to their offices. Services range from: transactional work on economic development projects, large scale financings, contracts, land use, personnel, litigation, responses to Public Record Act Requests, and code enforcement services.
As adopted in the FY2025 budget and position authorization, the City Attorney’s Office is adding: two full time attorneys, two investigators, one paralegal, and one legal secretary due to the awarded Worker’s Right Enforcement grant. While increasing its capacity to address the City’s legal needs, the City Attorney’s Office has outgrown the original leased space at 2440 Tulare Street and needs to expand the current space to accommodate added staffing. Staff has identified suitable office space at the existing building at 2440 Tulare Street. This addition will add 928 square feet to the original lease, now totaling 7,427 square feet of office space with an effective term through October 31, 2033. The rate for the addition is $1.85 square foot which is equal to the original lease schedule.
In addition to the monthly rent due, the City of Fresno will pay an additional 1.08% of building and operating costs, estimated at $10,580 annually, for a total of 8.62% in building and operating costs, estimated at $84,668 annually. The City’s share of building and operating costs is a calculated percentage of leased office space, to the total rentable square footage of the building.
The total annual base rent, including parking, is $182,238 with annual increases averaging 2.5%, plus the proportionate share of the building and operating costs estimated at $84,668 annually.
This amendment has been reviewed and approved by the City Attorney’s Office as to form.
ENVIRONMENTAL FINDING
Staff previously determined this project was exempt under Section 15301/Class 1 (Existing Facilities) of CEQA Guidelines as it involves no alteration of existing facilities, with no expansion of use. Furthermore, staff has determined that none of the exceptions to Categorical Exemptions set forth in CEQA Guidelines, Section 15300.2, apply to this project.
LOCAL PREFERENCE
Local preference was not considered because this action does not include a bid or award of a contract.
FISCAL IMPACT
The lease payments for the original leased space have been included in the adopted FY2025 budget. The City Attorney’s Office will use funds from their non-PERS accounts to cover the additional rent. Funding for future years will be included in the appropriate fiscal year’s budget subject to Council approval.
Attachments:
First Amendment to Lease Agreement
Original Lease Agreement