City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: APRIL 25, 2023 FROM: PARKS, RECREATION AND COMMUNITY WARD: 2
SERVICES DEPARTMENT
SUBJECT: THIRD AMENDMENT TO LEASE AGREEMENT TO OPERATE THE NATI FUENTES CENTRO DE NIÑOS located AT BORDWELL PARK WITH CONCILIO CHILD DEVELOPMENT CENTERS FOR $2,644.34 PER MONTH AND EXTEND THE TERM FOR AN ADDITIONAL ONE-YEAR PERIOD FROM JULY 1, 2023 through June 30, 2024 ISSUE:
Approve Third Amendment to the Lease Agreement to operate the Nati Fuentes Centro de Niños Childcare Center at Bordwell Park with Concilio Child Development Centers for total monthly rent in the amount of $2,644.34 and extend the term for an additional one-year period from July 1, 2023 through June 30, 2024.
RECOMMENDATIONS:
That the City Council:
Approve the Third Amendment to the Lease Agreement to operate the Nati Fuentes Centro de Niños Childcare Center at Bordwell Park with Concilio Child Development Centers for total monthly rent of $2,644.34 for an additional one-year period from July 1, 2023 through June 30, 2024; and
Authorize the City Manager, or designee, to execute the Third Amendment, including making minor and non-substantive changes.
BACKGROUND:
Concilio Child Development Centers (Concilio) is licensed to operate the 14,635 square foot Nati Fuentes Centro de Niños, located at Bordwell Park, to provide childcare services for low- to moderate-income families. According to the license agreement previously approved by City Council, Concilio was not required to pay rent for lease of City property during the initial three years of operation starting in 2008.
Following negotiations, effective January 1, 2013, Concilio agreed to start paying a monthly rent of $1,500 per month, negotiable every two years.
Effective November 1, 2016, Concilio and staff from Parks, Recreation and Community Services Department (PRCSD) renegotiated the terms of the agreement to include maintenance responsibilities. Concilio requested PRCSD take on additional maintenance responsibilities including on-going maintenance of the HVAC system, fire and security alarms monitoring and certification, additional landscaping and irrigation, refuse services, as well as as-needed, non-routine maintenance items. Additional rent in the amount of $1,029 per month above the base rent of $1,500 per month was negotiated in exchange for the PRCSD taking additional maintenance responsibilities. Both parties entered into a five-year agreement with the option to extend for five additional one-year terms from July 1, 2016 through June 30, 2021.
On June 15, 2021, City Council approved the first amendment to the agreement with Concilio to extend the lease period of July 1, 2021 through June 30, 2022. Per the original agreement a 2.5% increase was applied to the base rent increasing the amount to $1,537.50.
On April 26, 2022, City Council approved the second amendment to the agreement with Concilio to extend the lease period of July 1, 2022 through June 30, 2023. Per the original agreement a 2.5% increase was applied to the base rent increasing the amount to $1,575.94.
DISCUSSION:
The Third Amendment to the Lease Agreement applies a 2.5% increase to the base rent increasing the amount to $1,615.34 and will continue having PRCSD providing routine maintenance services to Concilio at a monthly cost of $1,029, for a total monthly amount of $2,644.34. Additional non-routine maintenance service requests from Concilio will be charged at cost for completion by PRCSD Staff.
Concilio is licensed to operate the Nati Fuentes Centro de Niños to provide childcare services for low- to moderate-income families. PRCSD confirms the services provided by Concilio benefit the Riverside community, and the Department recommends continuing the lease agreement.
STRATEGIC PLAN ALIGNMENT:
The agreement with Concilio Child Development Centers contributes to Strategic Priority 1 – Arts, Culture, and Recreation, which aims to provide diverse community experiences and personal enrichment opportunities for people of all ages, and Goal 1.5 - Support programs and amenities to further develop literacy, health, and education of children, youth and senior throughout the community.
The item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – Childcare is deemed a critical need for many families. This lease agreement assists the community by supporting non-profits who can provide affordable childcare to the community.
Equity – This lease agreement promotes affordable childcare services to low income and moderate income communities.
Fiscal Responsibility – Lease agreements generate rental income for the City assisting in offsetting costs for facility maintenance and lease administration.
Innovation – Lease agreement with non-profits assist the City in providing social services to address the community’s needs.
Sustainability & Resiliency – This lease agreement partners City of Riverside and Concilio in ensuring critical social service needs will continue to be met and accessible to the community.
FISCAL IMPACT:
The total fiscal impact of this amendment is $31,732.08 over the one-year term. Revenue will be deposited in the General Fund, Parks & Recreation, Land & Building Rental revenue account number 5215000-373100.
Prepared by: Pamela M. Galera, Parks, Recreation and Community Services Director Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Kris Martinez, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachment: Third Amendment to Lease Agreement
3rd Amendment Centro de Niños Childcare Center ● Page 2