June 27, 2023
Economic Development
Port Division
DATE: June 27, 2023
TO: Mayor Martinez and Members of the City Council
FROM: Nannette J. Beacham, Director of Economic
Development
Lizeht Zepeda, Senior Business Assistance Officer
Subject:
Marine Spill Response Corporation (MSRC) First Lease
Amendment to Lease Agreement
FINANCIAL IMPACT: MSRC currently leases and occupies Finger Pier Number One at 1314 Canal Blvd. at a monthly rate of $31,905.54, for an annual total of $382,866.48. This action authorizes the receipt of annual lease revenue for the Port of
Richmond for a ten-year period in the range of
$396,266.81 - $553,242.83, with (3.5%-4% Consumer
Price Index (CPI) adjustment), for Fiscal Years (FY)
2023-2024 through FY 2032-2033, and two (2)
successive five-year options to extend and rent to be
determined based on annual CPI increase through FY
2033-2034 through FY 2042-2043(Account String
40162780-362801).
PREVIOUS COUNCIL
ACTION:
01/01/1993
STATEMENT OF THE
ISSUE:
City staff is seeking approval of a First Lease
Amendment to Lease Agreement with MSRC for Finger
Pier Number One located at the Point Potrero Marine
Terminal.
AGENDA
REPORT
June 27, 2023
RECOMMENDED ACTION:
APPROVE a First Lease Amendment to Lease
Agreement with Marine Spill Response Corporation
(MSRC), for a ten-year term commencing July 1, 2023,
and two successive five-year extension options that could potentially extend the lease term through June 30, 2043 – Economic Development Department (Nannette
Beacham/Lizeht Zepeda 510-620-6653).
DISCUSSION:
Marine Spill Response Corporation (MSRC) is the largest dedicated oil spill and emergency response organization in the United States. MSRC is an independent, not- for-profit, U.S. Coast Guard Classified Oil Spill Removal Organization (OSRO). MSRC was formed in 1990 to offer oil spill response services and mitigate damage to the environment.
MSRC currently leases and occupies Finger Pier Number One at Point Potrero Marine Terminal at a base rent of $31,905.54 per month for an annual total of $382,866.48.
MSRC has been a tenant in good standing with the Port of Richmond since 1993. The lease was for a ten-year period and included four (4) five-year extension options. MSRC has exercised its four extension options, and the current lease is set to expire on June 30, 2023. Marine Spill Response Corporation has expressed interest in continuing to lease Finger Pier Number One from the Port.
The items for the First Amendment are as follows:
1. Initial Term and Extensions. The term of this Lease shall be ten (10) Lease Years commencing at 12:01 on July 1, 2023, as may be extended as follows (“Term”). Tenant shall have two (2) successive options to extend the Term each for an additional five (5) year period.
2. Amount of Rent. Commencing with the Term on July 1, 2023, and for the first Lease Year, Tenant shall pay to Landlord monthly rent (“Base Rent”) equal to Thirty-Three Thousand Twenty-Two Dollars and Twenty-Three Cents ($33,022.23). For Lease Years 2 through 5 of the Term, Base Rent shall be increased annually by the CPI Increase (as defined below) but not more than three and a half percent (3.5%) for each such Lease Year. For Lease Years 6 through 10 of the Term, Base Rent shall increase by CPI Increase but no less than three and a half percent (3.5%) and no more than four percent (4%) for each such Lease Year; and
3. For each Lease Year during an Extended Term, Base Rent shall increase by actual Consumer Price Index (CPI) increase as defined in the First Amendment.
June 27, 2023
It is critical that MSRC is in Richmond as this non-profit organization provides important maritime services, including oil spill response services for coastal and inland environments.
DOCUMENTS ATTACHED:
Attachment 1 – First Lease Amendment
Attachment 2 – Lease Agreement
Attachment 3 – Exhibit A Area Map
Attachment 4 – New Lease Year Rent Schedule