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RiversideCA.gov
THIRD AMENDMENT TO COMMERCIAL LEASE AGREEMENT WITH RODNEY DANIELSON, STANDING CHAPTER 13 TRUSTEECity CouncilSeptember 17, 2024Community & Economic Development Department RiversideCA.gov2
1. April 18, 2012, City entered into a five-year Commercial Lease Agreement with Rodney Danielson, Standing Chapter 13 Trustee (Tenant) for space located at 3750 Market Street.2. May 22, 2017, City and Tenant entered into a First Amendment extending the lease an additional two years.3. August 7, 2019, City and Tenant entered into a Second Amendment extending the lease an additional five years.BACKGROUND 9/5/2024
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1. June 9, 2022, Staff received a letter from Tenant seeking consideration for a rent reduction and revised termination clause.2. Tenant claims that his business was impacted by the COVID-19 pandemic that resulted in the reduction of bankruptcy filings (the nature of his business), fewer employees (27 to 18), and the decision to work remotely.3. Tenant has been renting space in Garage 3 since 2012 and believes that the rental rates have decreased since he began his tenancy.DISCUSSION RiversideCA.gov4
1. Current term: 5 years; either aggrieved party, at its option, may forfeit and terminate lease2. Leased space: 6,018 sf3. Current rent: $16,274.43/mo. (approx. $2.70/sf)4. Annual increase: 4%Current lease terms Garage 33750 Market Street
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1. $2.25/sf - Supported by market, ranging from $1.20 to $3.00, per comparables retrieved from CoStar2. 3% annual increase - Standard increase used by City3. Tenant to receive rental credits for the remainder of the lease.4. City and Tenant each have the right to terminate the lease with 6-month written notice.NEGOTIATED PROPOSAL RiversideCA.gov6
Strategic Priority No. 3 –Economic Opportunity Goal 3.1 –Facilitate partnerships and programs to develop, attract, and retain innovative business sectors.Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
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That the City Council:1. Approve the Third Amendment to Commercial Lease Agreement(Attachment 1 – Agreement) with the Rodney Danielson, StandingChapter 13 Trustee, to reduce the rental amount and annual increase,reducing revenue by $87,975.30;2. Direct staff to return to City Council with an amended lease contractwith Rodney Danielson, Standing Chapter 13 Trustee for future yearsbeginning September 1, 2024; and3. Authorize the City Manager, or his designee, to execute the Agreementwith Rodney Danielson, Standing Chapter 13 Trustee, including makingminor and non-substantive changes.RECOMMENDATIONS