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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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County Manager’s Office
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DATE:
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March 25, 2009
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BOARD MEETING DATE:
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April 14, 2009
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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4/5ths
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TO:
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Honorable Board of Supervisors
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FROM:
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Steve Alms, Manager, Real Property Division
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SUBJECT:
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Second Amendment to Lease Agreement with Kiewit Pacific Co. for Unimproved Land at the Half Moon Bay Airport. (Lease No. 5325)
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RECOMMENDATION:
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Adopt a resolution:
1. Authorizing and directing the President of the Board of Supervisors to execute a Second Amendment to Lease Agreement with Kiewit Pacific Co., which extends the term to February 28, 2010 with two options to extend the term for six months each and authorizes reductions of the leased Premises, and
2. Authorizing the County Manager or his designee to execute notices, options and documents associated with the Second Amendment and the Lease including, but not limited to, extension or termination of the agreement under the terms set forth therein.
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VISION ALIGNMENT:
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Commitment: Responsive, effective and collaborative government
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Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or gain.
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The Second Amendment to Lease Agreement contributes to this commitment by continuing to provide space for construction staging in connection with the Devil’s Slide Tunnel Project, which is essential to the Coastside communities.
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BACKGROUND:
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Kiewit Pacific Co. is the Caltrans contractor constructing the new tunnel and bridge on the Devil’s Slide portion of Highway 1 on the Coast. As authorized by your Board, on April 22, 2008, County and Kiewit entered into a Lease Agreement for approximately 18,000 square feet of unimproved land at the Airport to be used for the staging and storage of materials related to the tunnel project, at a rate of $4,500 per month, for a term from May 1, 2008 to December 15, 2008. On June 24, 2008, County and Tenant entered into the First Amendment, which extended the Expiration Date of the Lease to April 15, 2009, increased the Premises to 41,000 square feet with a corresponding increase in Rent to $10,250 per month, and established a process to allow additional increases to the area of the Premises. In accordance with the process set forth in the First Amendment, on July 31, 2008, County and Tenant agreed to increase the Premises to 51,000 square feet with a corresponding increase in Rent to $12,750 per month.
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DISCUSSION:
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Tenant has requested an additional extension of the Term, as well as options to extend the Term further and reduce the area of the leased Premises. In response to this request, Real Property Services has negotiated a Second Amendment to the Lease Agreement, extending the Term to February 28, 2010, with two additional options to extend the term by additional terms of six months each. The Amendment also authorizes Tenant to reduce the leased area of the Premises upon exercise of the options in 5,000 square foot increments. As a condition of the Second Amendment, Tenant shall pay to County a processing fee of $2,500 to cover County’s costs associated with the preparation and processing of the Amendment. Any future amendments will be subject to separate processing fees.
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County Counsel has reviewed and approved the Amendment as to form. The Director of Public Works and Airport Manager concur with this recommendation.
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FISCAL IMPACT:
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The estimated revenue of $230,000 for the balance of the lease term and option periods will be deposited into the Airport Enterprise Fund.
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