City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: OCTOBER 20, 2026 FROM: COMMUNITY & ECONOMIC DEVELOPMENT WARD: 1
DEPARTMENT
SUBJECT: THIRD AMENDMENT TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE BETWEEN THE CITY OF RIVERSIDE, AS LESSEE, AND THE STEPHEN AND LISA CAMPBELL FAMILY TRUST, AS LESSOR, FOR THE USE OF A STORAGE FACILITY LOCATED AT 4049 BURGESS WAY FOR A THREE-YEAR TERM WITH TWO ONE-YEAR OPTIONS TO EXTEND IN THE AMOUNT OF $133,197.12 FOR BASE RENT FOR THE INITIAL THREE-YEAR TERM PLUS $1,743.26 FOR THE TRANSITION PERIOD FOR A TOTAL AMOUNT OF $134,940.38 ISSUE:
Approve the Third Amendment to Standard Industrial/Commercial Single-Tenant Lease between the City of Riverside, as Lessee, and the Stephen and Lisa Campbell Family Trust, as Lessor, for the use of a storage facility located at 4049 Burgess Way for a three-year term with two one-year options to extend in the amount of $133,197.12 for base rent for the initial three-year term plus $1,743.26 for the transition period for a total of $134,940.38.
RECOMMENDATIONS:
That the City Council:
Approve the Third Amendment to Standard Industrial/Commercial Single-Tenant Lease (Attachment 1 – Third Amendment) between the City of Riverside (City), and the Stephen and Lisa Campbell Family Trust (Lessor), for the use of a storage facility located at 4049 Burgess Way for a three-year term with two one-year options to extend in the amount of $133,197.12 for base rent for the initial three-year term plus $1,743.26 for the transition period for a total of $134,940.38; and Authorize the City Manager, or his designee, to execute the Third Amendment with the Lessor, including making minor and non-substantive changes, and to execute the two one-year options to extend, if exercised, and to sign all documents necessary to complete the transaction.
BACKGROUND:
On May 30, 2018, the City, on behalf of the Riverside Metropolitan Museum (Museum), entered into a Commercial Single-Tenant Lease – Gross (Lease) agreement with the Stephen and Lisa Campbell Family Trust for the use of a 3,176 square foot warehouse (including bonus mezzanine space) and administration facility located at 4049 Burgess Way in the city of Riverside.
On June 18, 2019, City Council approved extending the Lease for three additional years, with two one-year options to extend.
On October 11, 2022, City Council approved extending the Lease for a four-year term.
DISCUSSION:
The Museum Department continues to require the facility for storage and anticipates needing additional storage space for the foreseeable future. Real Property Services contacted Lessor about a lease extension, and the parties negotiated the proposed Third Amendment.
The proposed Third Amendment extends the lease term for three years and fifteen days, commencing October 16, 2026, and expiring October 31, 2029. The period from October 16 through October 31, 2026, will serve as a transition period to align future lease years and rental adjustments with the first day of the calendar month. Beginning November 1, 2026, monthly base rent will increase from the current $3,486.51 to $3,591.11. Monthly base rent will increase to $3,698.84 effective November 1, 2027, and $3,809.81 effective November 1, 2028.
The Third Amendment also provides the City with two additional three-year options to extend the lease, which, if both are exercised, would extend the City's occupancy through October 31, 2035. The City must provide written notice to the Lessor at least 180 days prior to expiration of the then-current term to exercise each option.
Base rent for the first year of each option term will be established at the fair market rental value of the premises at the commencement of the applicable option term. The parties will negotiate in good faith to establish fair market rental value. If the parties cannot reach an agreement, a mutually selected independent MAI-designated appraiser or qualified commercial real estate broker will determine fair market rental value, with costs shared equally between the parties. Rent will increase by three percent annually during the second and third years of each option term.
The base rent for the initial three-year extension totals $133,197.12 plus $1,743.26 for the transition period for a total of $134,940.38. For planning purposes, the estimated total lease value, including both optional three-year extensions, is approximately $439,532.18, assuming three percent annual increases during the option periods. Actual rental costs during the option terms will be based on fair market rental value at the time each option is exercised and may differ from this estimate.
The Museum Department has reviewed and approved the proposed lease terms. Staff recommends approval of the Third Amendment to provide for the Museum Department's continued use of the facility and long-term flexibility through two additional extension options.
FISCAL IMPACT:
The total fiscal impact for the three-year extension, including the transition period, is $134,940.38. This amount consists of $133,197.12 in base rent for the three full lease years and $1,743.26 in prorated rent for the transition period. The Museum will pay any additional costs for monthly utilities, repairs, and maintenance.
Sufficient funds are budgeted and available in the General Fund, Museum Facilities & Operations, Professional Services account number 5305000-421000 to cover the base rent payments. Future appropriations will be included in the department’s budget submissions for City Council approval.
Prepared by: Sheryn Smay, SR/WA, Supervising Real Property Agent Approved by: Miranda Evans, Community & Economic Development Director Certified as to
availability of funds: Julie Nemes, Finance Director Approved by: Thomas Hatch, City Manager Approved as to form: James Johnson, City Attorney
Attachments:
Third Amendment
Presentation
SS:
8/19/2026
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