CITY COUNCIL STAFF REPORT
Meeting: February 21, 2024
Subject
Coffee Society Lease Agreement, 10800 Torre Avenue, Cupertino, CA 94014.
Recommended Action
Authorize the City Manager to execute a five-year lease agreement with the Coffee Society.
Reasons for Recommendation
The existing lease of the 500 square foot café space (Café) of the Cupertino Library with Eunju Lim (dba Coffee Society) expires on February 29, 2024. Eunju Lim (Tenant) took ownership of the Coffee Society and has leased the Café since 2017. The tenant has provided timely rental payments and has been a good steward of the City of Cupertino property. Neither the City nor the Library have had any issues with the operation of the business or management of the Café.
In 2004, after the new Cupertino Library building was completed, the City advertised a request for qualifications for vendors to lease, develop, and operate a café style service within the Café. The operator of the Coffee Society was deemed the most qualified business and was awarded the lease.
The draft lease has no substantive changes from the current lease. The term of the new lease would be for five years, which is the same term as the current lease, and the draft lease continues to provide for rent increases that escalate based on the annual urban Consumer Price Index (CPI-U) for the Bay Area. The rental rate will increase by approximately $56/month for the first year of the new lease (March 1, 2024, through February 28, 2025) based on a CPI-U of 2.625%.
Due to the Tenant’s good standing, the establishment of the business within this space, the ongoing operation of the business, and the minimal need for the City to oversee or enforce requirements set within the Lease Agreement, the City recommends the execution of the new five-year lease agreement be authorized. The tenant agreed to the rent increase as outlined in Attachment A.
Sustainability Impact
No sustainability impact.
Fiscal Impact
Upon execution of the lease, effective March 1, 2024, the City of Cupertino would continue receiving monthly rental payments based on the negotiated rental rate of $2,178.62 per month for the first year. This amount will be adjusted annually by CPI-U rates for the remaining term of the lease.
California Environmental Quality Act (CEQA)
The execution of the lease is exempt from CEQA under CEQA Guidelines section 15301 (existing facilities). _____________________________________
Prepared by: Chad Mosley, Director of Public Works
Reviewed by: Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:
A – Draft Coffee Society Lease Agreement (2024)