Introduction of Ordinance to Approve
Lease Amendment for Building 41 (650
West Tower Avenue) with DOER
Marine Operations, a California
corporation
September 1, 2026
Building 41: 650 West Tower Avenue
• Building 41 was constructed in 1945, contributing structure • Open interior layout, 50’ clear height
• East & West facing hanger doors
• Approximately 118,041 SF in total plus yard space
• B41 located within the Waterfront Town Center Precise Plan & near the entrance to Adaptive Reuse Area.
• Highly desirable building, adjacent to new infrastructure installed as part of the City’s Master Infrastructure Plan (MIP). • City plans for eventual building sale, with proceeds contributing to the (estimated) $43 million cost of Phase 2 of MIP .
• Leasing is an interim use as the building has not been fully conveyed by the Navy.
DOER Marine Operations (“DOER”)
3 Deep Ocean Exploration and Research, is a marine consulting firm founded in 1992
• DOER relocated to Alameda Marina in 2003 and then to Building 41 in 2017 • DOER currently occupies a portion of the building
• Current lease is expiring September 1, 2026
• Building 41 houses office space, fabrication workshop for prototyping and assembly of undersea marine vehicles, space for educational activities, and a retail dive shop.
Use: Warehouse, beverage distribution, food grade equipment leasing, maintenance and repair, beverage bottling, and retail fountain bar
Premises: Interior space plus non-exclusive vehicular access and parking & exterior yard area Term: twenty-five (25) months to be coterminous with adjacent leases.
Rent: $14,198 per month w/ 3% increase in year 2.
Tenant pays share of all services, utilities and taxes (including possessory interest taxes) As-is condition, no-rent credits
Lease Amendment Terms
Approx. PSFMonthly RentMonths
$0.70$21,0001-6
$0.74$22,0507-12
$0.77$23,13013-18
$397,080Total over 18 months
• Use: Office, research and development, manufacturing, prototyping workshop, testing, instruction, service, repair, retail dive and related uses, including light assembly of vehicle components
• Premises: 30,000 SF of interior plus exclusive parking & exterior fenced yard space (w/ability to expand during term)
• Amended Term: adding a 6-month extension with two (2) 6-month Renewal Options (potential of 18 total months of continued occupancy) • Monthly Rent*: $0.70 PSF increasing 5% for each Renewal Term Yard Area
Parking Area
W. Tower Ave.
* As-is, no rent credits
Tenant pays proportional share of utilities, fees, taxes, etc.
Building
• Approve the first reading of the ordinance authorizing the City Manager to execute the new lease with DOER Marine Operations, a California corporation on the terms described in the staff report. • The short-term nature of the lease amendment will not interfere with the City’s plans for marketing the entire building over the next 4-6 months.
• Tenant will continue to maintain the property as occupied, thus reducing security concerns at Alameda Point.
• Flexible length of term, Renewal Options require mutual agreement.
Recommendation