City Council Agenda Report
December 3, 2024
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Alex Hamilton, Interim Director of Community Development SUBJECT: THIRD AMENDMENT - LEASE EXTENSION AGREEMENT FOR THE PROPERTY AT 12405 ROSECRANS AVENUE – NORWALK AUTO AUCTION Background:
Aquirecorp has leased the property located at 12405 Rosecrans Avenue (Norwalk Auto Auction) from the City of Norwalk (“City”) since September 1, 1985. The current lease expires at the end of December 2024. The City (“Landlord”) and Aquirecorp (“Tenant”) entered into an agreement to extend the terms of the ground lease in accordance with the provisions set forth in the “First Amendment” executed on September 16, 2020, and subsequently pursuant to the “Second Amendment” dated January 12, 2021.
Terms of the Extension:
This amendment will include changes effective for the months of January and February 2025 to the base rent, term, and required alterations. Per the updated terms, the base rent will be $69,689 per month, with an inflation adjustment of 3%, bringing the total to $71,776.58 per month. Additionally, the agreement mandates vital landscaping, building, and perimeter wall alterations to address the property's needs. This extension will enable the City Manager to negotiate the terms and conditions for a new ground lease agreement.
To date, the perimeter wall project outlined in Section 8.3.2(a) has been completed; however, other agreed enhancements remain to be finalized. Once all improvements are finished, the monthly rent will be lowered by five percent.
City Council December 3, 2024
Amendment No. 3 to the Agreement with Aquirecorp Page No. 2 1 0
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Fiscal Impact:
If the rent remains at $71,776.58 per month for the remainder of the fiscal year ending June 30, 2024, the lease agreement between the City and Aquirecorp will generate approximately $848,775 in General Fund revenues.
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
N/A
Recommended Action:
Staff recommends City Council approve Amendment No. 3 to the agreement with Aquirecorp extending the ground lease to a month-to-month rental term in the amount of $71,776.58 per month through March of 2025; and authorize the City Manager to execute the amendment on behalf of the City, in a form approved by the City Attorney.
Attachments:
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