City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: October 20, 2026 FROM: COMMUNITY & ECONOMIC DEVELOPMENT WARD: 2
DEPARTMENT
SUBJECT: CONSIDERATION OF A COMMERCIAL LEASE AGREEMENT WITH SPT ENERGY BASE HUB FOR APPROXIMATELY 1.30 ACRES OF CITY-OWNED SURPLUS LAND LOCATED AT 670 IOWA AVENUE (APN 247-150-007) ISSUE:
Approve the Commercial Lease Agreement with SPT Energy Base Hub for approximately 1.30 acres of City-owned surplus land located at 670 Iowa Avenue, for ten (10) years with one (1) five (5) year option to extend for an initial monthly amount of $11,361.60 per month, subject to annual CPI adjustments, for the development and operation of hydrogen production, storage, dispensing, and fueling infrastructure, EV charging and related clean transportation uses.
RECOMMENDATIONS:
That the City Council:
Approve the Commercial Lease Agreement (“Agreement”) with SPT Energy Base Hub (Attachment 1) with SPT Energy Base Hub (“SPT”) for the lease of City-owned surplus land located at 670 Iowa Avenue, for ten (10) years with one (1) five (5) year option to extend for an initial monthly amount of $11,361.60 per month, subject to annual CPI adjustments; and Authorize the City Manager, or designee, to execute the Agreement, including making minor and non-substantive changes and signing all documents and instruments necessary to complete this transaction.
BACKGROUND:
Following initial site evaluation and discussions regarding the potential development of the SPT Hydrogen Production Plant and Hydrogen Fueling Station(“Project”) at 670 Iowa Avenue, City of Riverside (“City”) staff coordinated with Stored Power Technologies, Inc. (“SPT”) pursuant to the roles and scope of collaboration contemplated in the Memorandum of Understanding (“MOU”).
On March 19, 2026, the MOU was transmitted to the Economic Development Committee (“EDC”) for coordination and consideration. The MOU established a framework for collaboration between the City and SPT regarding the potential development of the proposed hydrogen production and fueling facility, including coordination of City resources, identification of development requirements, evaluation of site and infrastructure considerations, and facilitation of communication among SPT, City staff, and applicable City departments.
On March 24, 2026, the City Council authorized the MOU as part of its consent calendar, providing the City's authorization to proceed with the collaborative framework established in the MOU.
Following City Council authorization, the MOU was executed by the parties on April 12, 2026. Staff thereafter continued coordinating with SPT and City departments within the scope contemplated by the MOU to advance preliminary project planning and identify the City actions, approvals, and requirements necessary for potential development of the proposed hydrogen production and fueling facility.
Staff's coordination activities included facilitating communication between SPT and City departments regarding site requirements, utility capacity, planning and entitlement requirements, potential financing and site-control requirements, and the structure of a land lease. Staff also coordinated with the Riverside Public Utilities Department (“RPU”) regarding the anticipated electrical demand and service requirements and with Planning staff regarding development standards, site constraints, entitlement requirements, and required project submittals.
The MOU provided a framework for collaboration and coordination but did not constitute a lease, conveyance of the Property, development approval, entitlement approval, or commitment by the City to construct or finance the proposed improvements. Accordingly, subsequent staff activities were undertaken as part of the City's evaluation and coordination of the Project and remained subject to applicable City review, approval, contracting, entitlement, and real estate processes.
DISCUSSION:
The Agreement between the City, as Landlord, and SPT, as Tenant, would provide SPT with a leasehold interest in approximately 1.30 acres (56,808 square feet) of vacant City-owned property located at 670 Iowa Avenue, Riverside, California, Assessor’s Parcel Number (“APN”) 247-150-007 (“Property”).
SPT proposes to develop and operate a hydrogen production and fueling facility at the Property. The intended use includes hydrogen production, compression, storage, dispensing, and fueling infrastructure to support hydrogen-powered municipal fleet vehicles and other transportation applications.
The proposed permitted uses under the Lease include:
• Hydrogen production, compression, storage, and dispensing facilities • Hydrogen fueling services for passenger vehicles, commercial vehicles, logistics fleets, transit fleets, municipal fleets, and other transportation applications • Electric vehicle fast-charging infrastructure and related equipment • Testing, validation, and demonstration activities related to hydrogen and clean transportation technologies • Workforce training, educational programs, public outreach, and technology demonstration activities related to hydrogen and clean-energy transportation infrastructure • Administrative offices, equipment enclosures, utility infrastructure, parking areas, and other ancillary improvements necessary to support site operations Lease Term
The Agreement would commence on the Effective Date and expire at the end of the tenth full calendar year following the Effective Date. SPT would have one (1) five-year (5) option to extend the Lease, subject to the conditions set forth in the Agreement. The Rent Commencement Date would occur twelve (12) months after issuance of the building permit or fifteen (15) months after the Effective Date, whichever occurs earlier, subject to the terms of the Lease. The Rent Commencement Date and Lease Expiration Date would be documented in an Acceptance Memorandum executed by the parties.
The initial Base Rent would be $11,361.60 per month and would be adjusted annually beginning on the anniversary of the Rent Commencement Date based on the applicable Consumer Price Index adjustment, subject to a minimum annual increase of two percent (2%) and a maximum annual increase of three percent (3%).
SPT would accept the Property in its existing “as-is” condition, subject to the City's express obligations under the Lease. The City would deliver the Property vacant and free of improvements, buildings, and structures.
SPT would be responsible for the design, permitting, construction, installation, maintenance, repair, and replacement of on-site and off-site improvements required for its use of the Property. These obligations include, as applicable, driveways, curb cuts, roadways, traffic control improvements, utility extensions, drainage facilities, and improvements required as conditions of Project approval.
Utilities
SPT would be responsible for all utilities serving the Property, including water, gas, electricity, communications, and related services used during the Lease term. The City has coordinated with RPU regarding anticipated electrical demand for the proposed hydrogen production and fueling operations. SPT would remain responsible for obtaining required utility connections, permits, licenses, authorizations, and related infrastructure necessary to serve the Project.
Performance Milestones and Termination Rights
The Agreement establishes specific development milestones intended to ensure that the Project advances through the entitlement and permitting process; additionally, providing the City with a limited right to terminate if SPT fails to diligently and in good faith pursue the required milestones, subject to specified notice and cure requirements.
Municipal and Clean Transportation Objectives
The Agreement would provide a site for development of hydrogen production and fueling infrastructure that can support the City's future municipal fleet needs and other clean transportation initiatives. The proposed use also provides for hydrogen fueling services, EV fast charging, technology demonstration, workforce training, and related clean-energy transportation activities.
FISCAL IMPACT:
The total fiscal impact of this recommendation is $11,361.60 per month, equivalent to $136,339.20 annually, beginning on the Rent Commencement Date. The Rent Commencement Date would occur 12 months after issuance of the applicable building permit or 15 months after the Effective Date, whichever occurs first. No rent would be due during the inspection, entitlement, and permitting period prior to the Rent Commencement Date. Base rent would be adjusted annually based on the Consumer Price Index for All Urban Consumers (CPI-U) for the Riverside-San Bernardino-Ontario metropolitan area, with a minimum annual increase of two percent (2%) and a maximum annual increase of three percent (3%) for an initial ten (10) year term and one (1) five (5) year extension option. The proceeds from the Lease shall be deposited into the Measure A Fund, Land & Building Rentals revenue account number 0000432-373100.
Prepared by: Jessica Andresen, Catalyst Real Estate Manager Approved by: Miranda Evans, Community & Economic Development Director Certified as to
availability of funds: Julie Nemes, Finance Director Approved by: Tom Hatch, Interim City Manager Approved as to form: James Johnson, City Attorney
Attachments:
Commercial Lease Agreement
Presentation
SPT Energy Base Hub Commercial Lease ● Page 2