CITY OF SAN MATEO
4 9
7 3
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 14 Section Name: {{section.name}} Account Number: 14-1311 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: June 03, 2024
SUBJECT:
390 1st Avenue – Lease Amendment
RECOMMENDATION:
Approve the 2nd amendment to the lease between the City and Tong Sui, LLC, for the City owned property at 390 1st Avenue to assign the lease to Antoine Patisserie, LLC, dba Anton SV Pâtisserie, under the existing lease terms; authorize a security deposit amount of $1,253.76; and authorize the City Manager to execute the amendment in substantially the form presented.
BACKGROUND:
On October 12, 2021, the City Council approved the 1st amendment and an assignment of the lease to Tong Sui, LLC for the City owned property at 390 1st Avenue. The property is located in the Main Street garage on the corner of 1st Avenue adjacent to the train tracks. The retail space is approximately 355 square feet. Due to their expansion needs surpassing the space available, Tong Sui relocated from its location on 1st Avenue to 250 S B Street between 2nd and 3rd Avenues. Tong Sui closed its first location in early 2024 and has continued to meet its lease obligations to the City.
Tong Sui does not need two locations in the Downtown and has identified Anton SV Pâtisserie as the assignee to take over the remaining four years of the lease, which will expire on June 30, 2028. Anton SV Pâtisserie is a bakery that specializes in mille crepe cakes and other desserts. A mille crepe is a layer cake made of crepes stacked with different fillings. Anton SV Pâtisserie is headquartered in San Jose, with fourteen pickup locations across the Bay Area, and will operate primarily as a take-out bakery.
Prodesse Properties, the City’s commercial property manager, has performed the due diligence of evaluating Anton SV Pâtisserie and has concluded that it has adequate financial holdings and experience to operate a pickup location to Downtown San Mateo. Under the terms of the original lease agreement, the City may not unreasonably withhold its consent to a lease assignment. Accordingly, staff is proposing a second amendment to the lease to assign it to the new lessee; clarifying language stating prevailing wages must be paid for any improvements to the property because it is City- owned; and collecting a security deposit of $1,253.76, equivalent to one month’s base rent. All other terms of the lease will remain the same. Once the assignment of the lease is completed, Anton SV Pâtisserie anticipates opening the facility in the summer of 2024.
BUDGET IMPACT:
The assignment and lease amendment will have no budget impact. The 2nd Lease Amendment will generate approximately $63,000 in rental income for the City over the course of the remaining term. Commercial property revenue funds the City’s expenses for operation, maintenance, and improvements to downtown parking facilities and are also used for street cleaning services. The revenue is deposited in the Downtown Parking and Maintenance Fund (Fund 28).
CITY OF SAN MATEO
4 9
7 3
ENVIRONMENTAL DETERMINATION:
This item is categorically exempt from CEQA as an “existing facility,” because it consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use. (CEQA Guidelines Section 15301.)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Proposed 2nd Lease Amendment
STAFF CONTACT
Jennifer Chen, Economic Development Manager
[email protected]
(650) 522-7009