SR-012709-1fCity Council Meeting: January 27, 2009
Agenda Item: 1'
To: Mayor and City Council
From: Lee E. Swain, Director of Public Works
Subject: Amendment to Lease Agreement for the Property Located at 1433 4th
Street
Recommended Action
Staff recommends that the City Council authorize the City Manager to execute an
Amendment to Lease No. 8638 (CCS), between. the City and Metropolitan Pacific
Capital, LLC, relating to the property at 1433 4th Street in an amount of $9,123.73, for a
total amount not to exceed $179,124.
Executive Summary
As part of the lease agreement for the Civil Engineering and Architecture Division office
space located at 1433 4th Street, the City is responsible to pay a 2% fee for construction
oversight of tenant improvements. The building management company, Metropolitan
Pacific Capital, LLC, submitted an invoice for supervision of the tenant improvements.
This invoice exceeds the previously authorized amdunt by $9,123.73. The proposed
lease amendment would change -the total agreement to an amount not to exceed
$179,124.
Background
On September 26, 2006, the City Council. authorized the City Manager to negotiate and
execute. a five year-lease at 1433 4ch Street, with Metropolitan Pacific Capital, LLC, for
the Civil Engineering and Architecture Division. As part of the lease agreement, the City
is required to pay a 2% fee for construction oversight of tenant improvements. The
tenant improvements were completed in April 2007.
Both the City and Metropolitan Pacific Capital, LLC believed that all payments were
current. Subsequently, Metropolitan Pacific Capital, LLC discovered that the fee for
construction oversight was still owed. Therefore, they submitted a final invoice for
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construction oversight in the amount of $9,258.08. This amount equals 2% of the total
build-out cost of $462,904.41 per the original lease agreement. The 2% of total build-
out cost stipulation in Lease Agreement No. 8638 (CCS) was not calculated in the total
budget. Staff reviewed all payments to Metropolitan Pacific Capital, LLC and confirmed
that this bill had not been paid. The amount previously authorized by Council is not
sufficient to cover this additional invoice. Currently, $134.35 is remaining on the
contract.
Financial Impacts & Budget Actions
Funds are available in account 01402.522620 (Rent):
Prepared by:
Margaret Talamantes, Engineering Support Services Supervisor
Lee E. Swain, Director
Department of Public Works
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Approved: Forwarded to Council:
Reference Amendment to
Contract No. 8638 (CCS).