City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: August 19, 2024
FROM: Carmen Gil, City Manager
THROUGH: Carmen Gil, City Manager
SUBJECT: Lease Agreement with David Ramirez DDS
RECOMMENDATION
It is recommended that the City Council renew a three-year Lease Agreement with David Ramirez D.D.S. (Dr. Ramirez) for the property located at 421 Center St. with the option to extend the lease at a new monthly rate for an additional two-year term, following expiration of the initial term (August 31, 2027).
BACKGROUND
Dr. Ramirez has been a long-time tenant of the stated location. He has been in good standing and provides much needed dental services at a low-cost to the community of Gonzales. The prior Agreement has lapsed, and Dr. Ramirez is operating on a month-to-month basis. Staff recommends that a new Lease Agreement is put in place. Due to the terms established in the prior Lease Agreement, Dr. Ramirez’s new monthly rent will be $2,622 per month, subject to 3% annual adjustment with a (60) day notice of such adjustment.
REVIEW AND ANALYSIS
Dr. Ramirez is a long-time tenant of the City and provides an essential service to the community. If the City Council determined they did not want to renew the lease it would be a loss for both the City who generates monthly revenue from renting the building, and an even grater loss to all of his established patients. The City would collect $31,464 in rent for year 1 of the lease. $32,408 for year 2 and $33,380 for year 3. For a total of $97,252 over the life of the contract.
Explain Recommendation and How it Supports the Vision
AGENDA
ITEM
14 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: Leasing out available public facilities for an essential service such as a dental office supports the City Council’s Mission and Vision while generating some much-needed revenue for the City.
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: Dr. Ramirez has an established practice that tends to serve some of the most vulnerable residents in the community. Ensuring his practice continues to stay local is important to the City Council’s vision of establishing a healthy community.
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: Staff believes this Lease Agreement ensures that the community has access to dental services while providing a revenue generating opportunity for the City.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing Yes No N/A
• Recreation Yes No N/A
• Environment Yes No N/A
• Education Yes No N/A
Explain: Staff believes that extending this lease creates a win-win situation for both the tenant and the City as continuing to support the business allows essential dental services to be accessible to the residents of Gonzales.
ALTERNATIVES
Alternative 1 – The City Council could direct staff to modify the Lease Agreement.
Alternative 2 – The City Council could determine this Lease Agreement is no longer needed. However, staff believes this Agreement allows us to provide essential dental services to the public in the community.
BUDGET IMPACT
If the Lease Agreement is approved, it will generate $2,622 in monthly rent; for a total of $97,252 over the life of the contract.
CONCLUSION
It is recommended that the City Council renew a three-year Lease Agreement with David Ramirez D.D.S. (Dr. Ramirez) for the property located at 421 Center St. with the option to extend the lease at a new monthly rate for an additional two-year term, following expiration of the initial term.
Attachments:
1. Lease Agreement with David Ramirez DDS