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Resolution approving a sublease agreement with Joanne Wan, DBA Milk Tea Lab, LLC, for the commercial space at 636 El Camino Real, Suite C.
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WHEREAS, Milk Tea Lab opened in 2019 at 636 El Camino Real, Suite C in South San Francisco and is part of a Bay Area franchise with nine locations, offering a variety of milk teas, fruit refreshers, smoothies, and other specialty beverages; and
WHEREAS, the existing sublease for Milk Tea Lab expires on September 30, 2026; and
WHEREAS Joanne Wan, the owner of Milk Tea Lab, LLC, has requested a new 10-year sublease agreement for the commercial space, and following discussions with staff, the proposed starting monthly rent was established at $3,440 for the first 12 months, with a 3% annual increase, and an option for an additional 10-year extension; and
WHEREAS, the City desires to provide one option to extend the sublease agreement for 10 years, requiring that the Tenant first obtain written approval from the Economic and Community Development Director to exercise the extension option; and
WHEREAS, the rent for the extension term would continue to increase 3% annually; and
WHEREAS, the City will earn $473,229.12 in rent revenue over the initial 10-year sublease period, and the City will earn $635,980.08 in rent revenue if the 10-year extension term is approved; and
WHEREAS, the City Council finds that entering into the proposed sublease agreement with Joanne Wan, d.b.a. Milk Tea Lab, LLC, aligns with the City’s goals to support economic development, preserve retail diversity, and maintain a vibrant El Camino corridor.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco does hereby authorize the City Manager to execute a sublease agreement substantially in the form of Exhibit A with Joanne Wan, DBA Milk Tea Lab, for the commercial space at 636 El Camino Real, Suite C, and any extensions provided for in said sublease agreement.
BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take further action consistent with the intent of this Resolution, including, but not limited to, approval of any edits to the draft sublease agreement that do not materially increase the City’s obligations subject to approval as to form by the City Attorney.
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