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COUNTY OF SAN MATEOInter-Departmental Correspondence |
County Manager's Office |
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DATE: |
May 20, 2002 |
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BOARD MEETING DATE: |
June 18, 2002 |
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TO: |
Honorable Board of Supervisors |
FROM: |
Paul T. Scannell, Assistant County Manager |
SUBJECT: |
First Amendment To Lease/Concession Agreement with The Hertz Corporation for the Mary Griffin Ramseur Terminal Building, San Carlos Airport (Lease No. 5289) |
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Recommendation
Adopt a resolution authorizing the President of the Board of Supervisors to execute a First Amendment To Lease/Concession Agreement with The Hertz Corporation for office space at the Mary Griffin Ramseur Terminal Building. |
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Background
The Mary Griffin Ramseur Terminal Building is occupied by the Airport Manager's office with the remainder of the building being rented to various companies. The Hertz Corporation has leased office space at the Airport since last October. Under the terms of the original lease, Hertz pays $540 per month as "Base Rent" for office space, $750 per month for the use of 15 parking stalls, and 5% of monthly gross revenues generated by Hertz at the site ("Percentage Rent"). Due to unanticipated levels of car rental activity from a variety of Peninsula sources, the 5% of Hertz' gross revenue as provided in the original contract has caused the rent to go so high that Hertz is able to rent space elsewhere at a more attractive rate, and Hertz is prepared to cancel the lease with appropriate notice. The Airport Manager reports that 95% of the Hertz revenue generated from this location is unrelated to the airport location. The First Amendment To Lease/Concession Agreement has been negotiated to adjust the elements of the rent to accurately reflect fair market rent, and to retain Hertz as a tenant at the Airport. |
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Discussion
The First Amendment To Lease/Concession Agreement increases the Base Rent and reduces the Percentage Rent. The Percentage Rent will now be the amount by which 2% of monthly gross revenue exceeds $1,000, rather than 5% of all gross revenue as originally set forth. In exchange for this reduction, Hertz has agreed to pay an increase in the Base Rent from $540 to $1,540 per month. The amendment also incorporates increased control of Hertz employee parking and maintenance operations.
The attached Rental Comparison shows the effect of the proposed changes, and the impact on the Airport Enterprise Fund should Hertz relocate after providing the required six months notice. |
County Counsel has reviewed and approved the First Amendment To Lease/Concession Agreement as to form. The Director of Public Works concurs in our recommendation.
Vision Alignment
The First Amendment To Lease/Concession Agreement keeps the commitment of responsive, effective and collaborative government and goal number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. The amendment contributes to this commitment and goal since it establishes a working agreement with benefits to both the County of San Mateo and The Hertz Corporation while also providing a service to the public at the airport.
Fiscal Impact The monthly rent payments will be deposited into the Airport Enterprise Fund. The Department of Public Works budget for Fiscal Year 2002/03 reflects the changes in rent.
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