CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
1/24/2022
1 SUBJECT:
Adoption of a Resolution of the City Council of Pacifica Approving the Lease Agreement Between the City of Pacifica and Paul and Amy Kukielka, dba Chit Chat Café for the Premises Located at 2100 Beach Boulevard (Located at the Pacifica Pier); authorizing the City Manager to execute the lease agreement and finding the lease categorically exempt from the California Environmental Quality Act (“CEQA”).
RECOMMENDED ACTION:
Move to adopt the Resolution of the City Council of the City of Pacifica approving the Lease Agreement between the City of Pacifica and Amy Kukielka, dba Chit Chat Café for the Premises Located at 2100 Beach Boulevard (Located at the Pacifica Pier); authorizing the City Manager to execute the Lease Agreement and finding the lease categorically exempt from the California Environmental Quality Act (“CEQA”).
STAFF CONTACT:
Michael Perez, Director of Parks, Beaches and Recreation (650) 738-7381
[email protected]
BACKGROUND/DISCUSSION:
The Chit Chat Café has been leasing the premises at 2100 Beach Boulevard since 2005, operating as a retail café. The current Lease Agreement expired on October 31, 2021, and has been extended on a month to month basis during good faith negotiations. The City desires to enter into a new Lease Agreement with the Chit Chat Café owners, Paul and Amy Kukielka.
The new lease will be for an initial term of three years with two optional extensions each for an additional one-year term (for a total of five years) if both parties agree to such extensions.
The initial monthly rent shall be $1,402.67, for a total of $16,832.04 per year. Rent will increase three percent (3%) annually on the anniversary of the Lease Commencement Date.
Tenant is separately responsible for paying for utilities and services (including electric, water and sewer). The lease will commence on January 24, 2022, with the rent commencement on February 1, 2022, if approved by Council, and if both options are exercised, it would expire January 31, 2027.
The proposed Lease contains various standard provisions which would require the Chit Chat Café owners to pay rent, maintain the Premises in a good condition, indemnify the City and maintain insurance, among other things.
Like many small businesses, during COVID-19, Chit Chat Café’ owners have had challenges, impacting their ability to pay full rent. A repayment plan is included in the lease, where tenants will pay the amount of back-rent owed over the first three years of the Lease Agreement. In Pacifica City Council 2
January 24, 2022
addition, there is a provision for rent reduction based on pier or promenade closures. The Lease also contains provisions to make it clear that the Lease Agreement is subordinate and subject to any leasehold, license, or other property right or permission the City has with the State of California State Lands Commission authorizing the possession, occupancy and use of the tidal and submerged lands upon which the Pacifica Pier is built.
CEQA:
The Lease is exempt from the provisions of the California Environmental Quality Act (CEQA), pursuant to the statute (Public Resources Code Section 21000, et seq.) and the CEQA Guidelines (14 Cal. Code Regs. 15000 et. seq.), under Section 15301 as a Class 2 Categorical Exemption as there will be no expansion of previous use beyond that existing at the time of the City’s determination.
ALTERNATIVE ACTION:
The City Council may choose not to approve the Lease, in which case, City staff will continue to work with the owners of Chit Chat Café to enter into a new lease or locate a new tenant.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
This action helps to support Fiscal Sustainability and Stewardship of City Infrastructure. “Fiscal Sustainability” includes investing in economic development to increase revenues, funding a reserve/emergency fund, and being well prepared for grant opportunities. “Stewardship of City Infrastructure” includes repairing/replacing outdated city facilities such as city hall, the libraries, fire stations, etc., improving streets, and responding to impacts of sea level rise.
Approving the proposed Lease would allow the City to receive income to offset the cost of maintenance of the premises.
FISCAL IMPACT:
Annual revenue in the amount of:
Year 1 - 16,832.04, Year 2 - $17,337.00, Year 3 - $17,857.11, Year 4 - $18,392.82, Year 5 - $18,944.61.
ORIGINATED BY:
Parks, Beaches & Recreation Department
ATTACHMENT LIST:
Agreement_Lease_Kukielka_ChitChatCafe_Pier_Final_2022 (PDF) Pacifica City Council 3
January 24, 2022
RESOLUTION NO. _________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA
APPROVING THE LEASE AGREEMENT BETWEEN THE CITY OF PACIFICA AND AMY AND PAUL KUKIELKA FOR THE PREMISES LOCATED AT 2100 BEACH BOULEVARD (LOCATED AT THE PACIFICA PIER).
WHEREAS, City is the owner of the property located at 2100 Beach Boulevard, Pacifica, California, depicted on Exhibit A attached hereto; and WHEREAS, Paul and Amy Kukielka have leased the premises located on this property for 16 years, functioning as a retail cafe; and WHEREAS, Paul and Amy Kukielka wish to lease the premises from the City for three years with two options to extend the lease, each for an additional one year term, if both parties agree to such extensions; and
WHEREAS, The City desires to implement a Lease Agreement with the Paul and Amy Kukielka for use of the premises;
NOW, THEREFORE, THE PACIFICA CITY COUNCIL HEREBY RESOLVES AS FOLLOWS:
1. The City Council hereby finds that the Lease is exempt from the provisions of the California Environmental Quality Act (CEQA), pursuant to the statute (Public Resources Code Section 21000, et seq.) and the CEQA Guidelines (14 Cal. Code Regs. 15000 et. seq.), under Section 15301 as a Class 2 Categorical Exemption as there will be no expansion of previous use beyond that existing at the time of the City’s determination.
2. The City Council hereby approves the Tenant Lease with Paul and Amy Kukielka in substantially in the form attached hereto as Exhibit B.
3. The City Manager is hereby authorized to execute the Tenant Lease Agreement in the form attached hereto as Exhibit B, with minor revisions that may be approved by the City Manager and City Attorney, and to execute any other necessary documents to effectuate the terms of the Tenant Lease Agreement and take all steps necessary to carry it into effect.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on January 24, 2022 by the following vote of the members thereof:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
Pacifica City Council 4
January 24, 2022
ABSTAIN, Councilmembers:
Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney