Staff is seeking approval to lease the former Great Dane corporate office facility located at 602 E. Lathrop Avenue for renovation and use by the Police Department.   The facility will house the downtown precinct, the forensics department, the records management department, and the traffic unit as well.  The facility is a two-story corporate office building containing +/- 28,780 square feet of conditioned office space; including a lobby, conference rooms, break rooms, an elevator, bathrooms, and related facilities.   The building also offers 3,600 square feet of covered garage/storage space. It is strategically located, and prominently visible, at the northeast corner of Bay Street and Lathrop Avenue, at a signalized intersection for ease of access.

The base rent is $12/sf ($345,360) on a modified gross basis.   The base rent escalates at an annual inflation factor of 2.5% per year.  The term is for 5 years with two 1-year options to renew.  The landlord will pay electricity (since the facility is not individually metered and is part of larger holdings of the owner) and property insurance.  The City will pay all other expenses (real estate taxes, water/sewer, janitorial, preventative interior maintenance, and grounds maintenance); except structural and major HVAC issues, which the Landlord will pay. These operating expenses are projected to be +/- $86,000 ($3.00/sf) in the first year of the lease.  The City will receive a rent abatement in year 1 of $12/SF for tenant renovations to the facility. The City will use this abatement to replace floor coverings, paint walls/trim, replace ceiling tiles, install signage, and make minor modifications to the facility. The facility is fully furnished, though the City may replace some of the furnishings and add others (such as new chairs and tables in a renovated roll-call room).

Staff seeks approval of a lease consistent with these terms and requests authorization for the City Manager to execute the lease once it is finalized.

Approval