City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: November 21, 2022
FROM: Carmen Gil, Community Engagement & Strat. Partnership Dir.
THROUGH: Carmen Gil, Interim City Manager
SUBJECT: Lab Corp Lease Extension - Amendment #4
RECOMMENDATION
Staff recommends the City Council Approve Amendment #4 to the Lease Agreement with Laboratory Corporation of America for continued use of a portion of the old Medical Building at 133 Fourth Street.
BACKGROUND
Laboratory Corporation of America (Lab Corp) has provided routine medical lab services at 133 Fourth Street (Old Medical Building) for several years, and have requested several extensions to their lease. The original lease was executed in 2016 and since then, we have extended it two more times. The current Amendment (Amendment #3) extends the lease through March 31, 2023, and Amendment #4 would extend it for another two years taking us to April 1, 2025.
REVIEW AND ANALYSIS
Lab Corp has been an excellent partner during the time they have been in operation in the building and provides essential access to lab services for the community. Amendment #4 will extend their lease through April 1, 2025, with a 4% annual increase, and a 90-day termination clause.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.
Explain: Having access to medical laboratory services in Gonzales is essential and supports our efforts of providing optimal community health opportunities.
AGENDA
ITEM
13 Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community.
Explain: Staff believes extending the lease is currently the best use for this City building.
City services will be delivered in a cost-effective, respectful, and friendly manner to insure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner.
Explain: This lease has cost of living increases to ensure the rent is keeping pace with inflation.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes No X N/A
• Housing Yes No X N/A
• Recreation Yes No X N/A
• Environment Yes No X N/A
• Education Yes No X N/A
Explain: Leasing space to health care providers is an excellent use of City-owned buildings.
ALTERNATIVES
Alternative 1 – The City Council could determine another use for that portion of the medical building.
Staff would work with the lab to vacate the premises.
Alternative 2 – The City Council could direct staff to change the lease amount or other terms. Staff will address areas as directed.
BUDGET IMPACT
The revenue from the lease is included in the City’s approved budget. If the lease were terminated, there would be a corresponding loss of revenue.
CONCLUSION
Staff recommends the City Council allow the Interim City Manager to extend the current Lease Agreement with Laboratory Corporation of America through April 1, 2025.
Attachments:
1. Amendment #4
2. Lab Corp Lease & Past Amendments