Ordinance 3058CITY OF ALAMEDA ORDINANCE NO. 3058
New Series
APPROVING A LEASE AND AUTHORIZING THE CITY MANAGER TO
EXECUTE DOCUMENTS NECESSARY TO IMPLEMENT THE TERMS
OF THE LEASE WITH BAY SHIP AND YACHT CORPORATION FOR AN
INITIAL TERM OF 20 YEARS, WITH TWO 20 YEAR OPTIONS AND A 6
YEAR OPTION, FOR A TOTAL OF 66 YEARS, FOR THE TIDELAND
PROPERTY LOCATED AT 2900 MAIN #2100 AND SURROUNDING
AREA
WHEREAS, In 1984, the City of Alameda and Alameda Gateway, Ltd (AGL)
entered into the Tidelands lease as AGL owned property immediately adjacent to
the Tidelands parcel and in November 1993, AGL entered into a series of lease
agreements with Bay Ship and Yacht, Co. (BSY) on its property and subleased
portions of the Tidelands parcel; and
WHEREAS, In February 2000, the City and BSY entered into a
Nondisturbance and Attornment Agreement under which the City agreed of the
Tidelands Lease was terminated with AGL, the City would not disturb BSY’s
lease and it would assume the role of landlord for the Tidelands parcel; and
WHEREAS, In 2009, the lease between the City and AGL expired and the
City declined to renew the term on the ground of AGL’s nonperformance of
certain obligations, which was upheld in subsequent litigation and in April 2009,
the City commenced a direct landlord-tenant relationship with BSY ; and
WHEREAS, The AGL lease with BSY presently expires September 30, 2033
if all 5-year options to extend are exercised and if the term of the shiplift lease
expires before the expiration of the proposed City lease, BSY has an option to
terminate the City lease; and
WHEREAS, The City and BSY will be replacing the current lease governing
their landlord-tenant relationship with a new lease for the Tideland parcel; and
WHEREAS, The current AGL lease is a full service lease in which the City is
obligated to provide the same services that were to be provided by AGL; and
WHEREAS, The new lease is more consistent with other City leases, which
are triple-net. The new lease transfers all insurance obligations, tax obligations
(except for 50% of real property taxes) and most maintenance obligations; and
WHEREAS, Due to the split-ownership of the land underlying the Sawtooth
building, the City will maintain certain obligations with respect to the maintenance
and repair of the exterior and certain structural elements of that building; and
WHEREAS, BSY has the first right to negotiate for the remaining portions of
the Sawtooth building, should the premises be vacated by the current tenant,
other portions of the Tidelands parcel, and portions of Pier 5 that extend beyond
the Tidelands parcel; and
WHEREAS, The starting rent under the triple net will be $36,916 per month.
The rent will increase by 10% every five years, except in years 20 and 40. At
years 20, 40, and 60, there is a market rate adjustment based on an appraisal
process. The market rate adjustment in years 20 and 60 is capped at 15% of the
prior base year rent and has a floor of 90% of the prior base year rent. In year
40, the rent increase is the greater of the market rent or a 15% increase. At no
time will the rent go below the beginning rent of $38,486; and
WHEREAS, The City will share 50% of the taxes for the real property taxes
for the property which is the possessory interest, parcel and other real property
taxes and assessments. Business and personal property tax or other taxes on
goods, merchandise, trade fixtures, appliances, equipment, and furniture is the
responsibility of the tenant; and
WHEREAS, The City, as landlord, is responsible to ensure the site is usable
by the tenant and has adequate utilities and if service is interrupted for certain
reasons beyond tenant’s control, the City agrees to split the cost of providing
utilities to the site 50/50 with the tenant. The City’s contribution is capped at a
not to exceed 3 months of the current rent. The tenant will pay the remainder of
the cost; and
WHEREAS, The City is responsible for maintaining the shell of the Sawtooth
Building which includes the portion of the roof, interior demising wall and
foundation within the Tidelands parcel. BSY is required to work with AGL for
repairs on the portions of their leased premised on the adjacent property; and
WHEREAS, The tenant has requested a waiver of the security deposit due to
the extensive personal property and improvements on the premise and the lease
contains the standard insurance, indemnity, assignment and termination clauses
the City required in its leases and compliant with the Lease in Furtherance of
Conveyance (LIFOC).
NOW THEREFORE, BE IT ORDAINED by the City Council of the City of
Alameda that by four affirmative votes that:
Section 1. The City Manager of the City of Alameda or his designee is hereby
authorized to negotiate, execute, for and on behalf of the City of Alameda, a
lease with Bay Ship and Yacht Corporation for an initial term of 20 years, with
two 20 year options and a 6 year option, for a total of 66 years, for the Tideland
property located at 2900 Main #2100 and Surrounding Area, subject to such
technical or clarifying revisions as are reasonably determined necessary by the
City Manager and approved by the City Attorney, and the City Clerk is hereby
authorized and directed to attest to the same.
Section 2. If any section, subsection, sentence, clause or phrase of this
ordinance if, for any reason, held to be invalid or unconstitutional, such decision
shall not affect the validity or constitutionality of the remaining portions of this
ordinance. the City Council of the City of Alameda hereby declares that it would
have passed this ordinance, and each section, subsections, clause, or phrase
hereof, irrespective of the fact that any one or more sections, subsections,
sentences, clauses and phrases are declared to be invalid and unconstitutional.
Section 3. This ordinance shall be in full force and effect from and after the
expiration of thirty (30) days from the date of its final passage.
_____________________________
Presiding Officer of the City Council
Attest:
____________________
Lara Weisiger, City Clerk
* * * * * *
I, the undersigned, hereby certify that the foregoing Ordinance was duly
and regularly adopted and passed by Council of the City of Alameda in regular
meeting assembled on the 7th day of November, 2012, by the following vote to
wit:
AYES: Councilmembers Bonta, deHaan, Johnson, Tam and
Mayor Gilmore – 5.
NOES: None.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the
official seal of said City this 8th day of November, 2012.
______________________
Lara Weisiger, City Clerk
City of Alameda