City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: JANUARY 23, 2024 FROM: PUBLIC UTILITIES DEPARTMENT WARD: 1
SUBJECT: FIRST AMENDMENT TO COMMERICAL LEASE AGREEMENT WITH GREENBERG & GREENBERG, A PROFESSIONAL LAW CORPORATION TO AMEND THE COMMENCEMENT DATE OF LEASE TO AUGUST 1, 2020, FOR MISSION SQUARE OFFICE BUILDING, 3750 UNIVERSITY AVENUE, SUITE 550 ISSUE:
Approval of a First Amendment to Commercial Lease Agreement with Greenberg & Greenberg, a Professional Law Corporation to amend the commencement date of the lease to August 1, 2020, for the space within 3750 University Avenue, Suite 550.
RECOMMENDATIONS:
That the City Council:
Approve a First Amendment to the Lease Agreement with Greenberg & Greenberg, a Professional Law Corporation to amend the Commencement Date of the Lease and Rent Commencement Date from March 23, 2020, to August 1, 2020; Amend the Base Year from 2019 to 2020 to be consistent with the new commencement date per Section 20 of the Lease Agreement stated in the Basic Lease Information; and Authorize the City Manager, or designee, to execute the First Amendment to the Lease Agreement, including making minor, non-substantive changes, and to sign all documents and instruments necessary to complete the transaction.
BOARD RECOMMENDATION:
On December 11, 2023, the Board of Public Utilities, unanimously, with Board member Crohn absent, voted to recommend that the City Council approve the First Amendment to Lease Agreement with Greenberg & Greenberg, a Professional Law Corporation to amend the Commencement Date of the Lease to August 1, 2020, for the Mission Square Office Building, 3750 University Avenue, Suite 550.
BACKGROUND:
On October 13, 2015, the City acquired the Mission Square Building at 3750 University Avenue (Property), which was funded by Riverside Public Utilities (RPU). As such, RPU is now the Landlord of the Property. The Property consists of approximately 127,533 square feet of rentable office and retail space in a six-story building, plus a basement level and a 490-parking stall garage situated on approximately 2.5 acres of land.
On January 26, 2016, the City Council approved an Exclusive Authorization of Lease Agreement with Newmark of Southern California, Inc. dba Newmark Knight Frank (NKF) for a five-year term to provide broker leasing services for the Property.
On January 5, 2021, the City Council approved a First Amendment to California Exclusive Authorization of Lease Agreement with Newmark of Mission Square Suite 550, Greenberg & Greenberg – Page 2 Southern California, Inc., dba Newmark Knight Frank (NKF) which extended the Agreement through December 31, 2025. RPU staff has been coordinating the leasing process for the Property with the Real Property Services Division of the Community & Economic Development Department and NKF as the broker for the Property.
On September 17, 2019, the City Council approved a Commercial Full-Service Gross Lease Agreement with Greenberg & Greenberg, a Professional Law Corporation, for 3,188 square feet of rentable space in the Mission Square Building located at 3750 University Avenue, Suite 550 for a ten-year term with one additional five-year term to extend which expires on March 23, 2030.
DISCUSSION:
A Lease Agreement between the City of Riverside and Greenberg and Greenberg, a Professional Law Corporation was executed on September 23, 2019.
Greenberg & Greenberg has requested an Amendment to the Lease Agreement term and Commencement Date due to delays directly related to the Tenant Improvements and expansion of their suite. Greenberg & Greenberg were unable to obtain final approval with their building permit due to delays associated with the Covid-19 pandemic, including contractor, sub-contractor, and material supplier delays.
Staff has reviewed the proposed First Amendment to the Lease Agreement and recommends the Commencement Date be amended under the terms summarized below:
Term: August 1, 2020, to July 31, 2030.
Rent Commencement Date: Will be amended from March 23, 2020, to August 1, 2020.
Base Year: Will be amended from 2019 to 2020.
4. Other: All other terms of the original lease shall remain unmodified and in full force.
STRATEGIC PLAN ALIGNMENT:
This item contributes to the Envision Riverside 2025 City Council Strategic Priority No. 3 – Economic Opportunity and Goal 3.3 – Cultivate a business climate that welcomes innovation, entrepreneurship, and investment.
The item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The City conducted business with transparency and good faith. By bringing the Amendment before the Board of Public Utilities and the City Council, the City is providing a space for open dialogue between the Board and community stakeholders regarding all lease terms.
Equity – The City acted with inclusion and is adhering to lease terms for renewal options. Additionally, the City is ensuring that business conducted by Greenberg & Greenberg provides equal access and benefits that all members of the community can utilize.
Fiscal Responsibility – The City being a prudent steward of public funds, negotiated in good faith and the lease rates are consistent with the current fair market value for comparable commercial space.
Innovation – The City recognizes the need for accessible small businesses to community stakeholders. This City will continue to be cognizant of the community’s changing needs and will continue to be adaptive to the future by engaging in collaborative partnerships.
Sustainability & Resiliency – Committed to the needs of community stakeholders, the City is devoted to identifying, attracting, and retaining businesses that assist the community to preserve, adapt, and grow during a diverse array of economic cycles.
FISCAL IMPACT:
There is no fiscal impact associated with the correction of the Lease Agreement to reflect the date the tenant took occupancy of the space; the number of months for the lease remains the same.
Prepared by: Todd M. Corbin, Utilities General Manager
Approved by: Todd M. Corbin, Utilities General Manager
Certified as to
availability of funds: Kristie Thomas, Assistant Chief Financial Officer/Finance Director Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
First Amendment to Lease Agreement – Greenberg & Greenberg, a Professional Law Corporation Presentation
First Amendment, Greenberg & Greenberg – Mission Square - Page 1