COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

 

DATE:

October 18, 2010

BOARD MEETING DATE:

November 2, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

4/5ths

 

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

Third Amendment to Lease Agreement with Kiewit Infrastructure West Co. for Unimproved Land at the Half Moon Bay Airport. (Lease No. 5325)

RECOMMENDATION:

Adopt a resolution authorizing the:

    1. President of the Board of Supervisors to execute a Third Amendment to Lease Agreement with Kiewit Infrastructure West Co., which provides Kiewit with two options to extend the term for six months each, and

    2. County Manager or his designee to accept or execute notices, options and documents associated with the Third Amendment and Agreement including, but not limited to, extension or termination of the Agreement under the terms set forth therein.

 

BACKGROUND:

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. On April 14, 2009, County and Tenant entered into the Second Amendment, which extended the Term to February 28, 2010, with two additional options to extend the term by additional terms of six months each. Tenant has exercised each of the additional terms, and the Lease expires on February 28, 2011. Tenant has requested additional options to extend the Term.

 
 

DISCUSSION:

Real Property Services has negotiated a Third Amendment to the Lease Agreement, which provides Tenant with two additional options to extend the term by additional terms of six months each. As a condition of the Third 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.

 

County Counsel has reviewed and approved the Amendment and Resolution as to form. The Director of Public Works and Airport Manager concur with this recommendation.

 

Approval of the Amendment contributes to the Shared Vision 2025 outcome of a Collaborative Community by continuing to provide space for construction staging in connection with the Devil’s Slide Tunnel Project, which is essential to the Coastside communities.

 

FISCAL IMPACT:

The estimated revenue of $204,000 for the balance of the lease term and option periods and the $2,500 processing fee will be deposited into the Airport Enterprise Fund.