CITY COUNCIL STAFF REPORT
March 5, 2024 {{section.number}}g
AUTHORIZE THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT AND ADDITIONAL OPTIONS WITH YACHT AND HOME, INC., DOING BUSINESS AS CORONADO YACHT AND
HOME, FOR OFFICE SPACE IN THE GLORIETTA BAY MARINA BUILDING FOR A SINGLE
YEAR TERM WITH TWO ADDITIONAL TWO YEAR OPTIONAL TERMS
RECOMMENDATION:
Authorize the City Manager to execute the Lease Agreement with Yacht and Home, Inc., doing business as Coronado Yacht and Home, for office space in the Glorietta Bay Marina building for a single year term, with two additional two-year optional terms.
BACKGROUND:
Construction of the marina support building was completed in 2009. California Yacht Marina, the City’s Marina management company, currently occupies Tenant Space A. Tenant Space B is 230 square feet and Tenant Space C is 410 square feet. Spaces B and C were previously rented by Dupree Law, a maritime law firm, from 2009-2022 and all three spaces are rated Class B office.
City staff and California Yacht Marina have actively marketed the office space since last summer to find a suitable tenant. This includes issuing advertisements in local maritime newspapers and engaging marina operators and others within the maritime community. Prospective tenants must be engaged in a maritime related use, such as yacht sales and leases, maritime attorney, environmental nonprofit, or maritime professional services due to the office space occupying Port of San Diego Tidelands.
ANALYSIS:
The term of the lease is for one year, with two addition two-year options to extend. City staff conducted a market analysis of similar office spaces in San Diego to determine the appropriate range for the monthly lease. The monthly payment is $3,040 and is within the range of comparison properties. Other agreement provisions include an annual San Diego area Consumer Price Index (CPI) adjustment to the rent, deposit, care and use of premises, payment of possessory interest taxes, insurance, and other pertinent covenants.
The lease also includes a contribution from the City of a maximum $6,000 for minor tenant improvements to the office space to include dividing walls between Tenant Space B and C, allowing for more flexible use of the space for meetings. Improvements will be executed by the tenant.
The tenant, Coronado Yacht and Home, is a local business that provides residential realty sales and services and maritime yacht sales and management services. The City has conducted a background check on the tenant to determine stability of credit, including rental and income history.
FISCAL IMPACT:
The agreement will generate potential lease income of $126,036 during the five year term.
Revenues are deposited into the General Fund Non-Departmental account #10010000-43050.
ALTERNATIVE:
The City Council could direct staff to negotiate different lease terms or leave the office space vacant.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Lease Agreement between City and Yacht and Home, Inc.
Submitted By: City Manager's Office / Tony Winney