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Report regarding a resolution approving amendments to the Lease Agreements between Rest Investments and the City of South San Francisco (Lindsay D’Andrea, Assistant City Attorney).
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MOTION FOR CITY COUNCIL TO ADOPT STAFF RECOMMENDATION:
1. Move to adopt a resolution approving the First Amendment to the Parcel C Lease and the Second Amendment to the Fingers Lease between Rest Investments and the City and authorizing the City Manager to execute the Amendments.
RECOMMENDATION
Recommendation
Staff recommends that the City Council adopt a resolution approving the First Amendment to the Parcel C Lease and the Second Amendment to the Fingers Lease between Rest Investments and the City clarifying the methodology for calculation of the base rent and CPI rent adjustments pursuant to the Leases and authorizing the City Manager to execute the Amendments.
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BACKGROUND/DISCUSSION
The City of South San Francisco (“City”) is a party to two long-term parcel leases with the owner of Park SFO dba Rest Investments (“Tenant”) pursuant to which the Tenant constructed and operates parking facilities on City property. The two leases were entered into in 1998 (“Fingers Lease”) and 2006 (“Parcel C Lease”).
In Spring of 2024, the Tenant approached the City to discuss repayment of outstanding rent due under the two long-term leases with the City. The Tenant has paid all agreed upon outstanding rent and the City and the Tenant have negotiated the draft Lease Amendments. The draft Amendments clarify the methodology for calculation of the base rent and CPI rent adjustments under the Leases to avoid any future confusion and potential disagreement between the parties, as well provide for mutual releases of any claims pertaining to prior disagreements between the parties related to the Leases. In addition, the First Amendment to the Parcel C Lease provides for continued provision of maintenance services for a public space located adjacent to the parking facilities at no cost to the City.
FISCAL IMPACT
The Park SFO facilities generate a steady parking tax revenue stream for the City and staff believes that the proposed Amendments will provide greater certainty regarding the rental amount and future rent adjustments under these Leases going forward, which will benefit both the City and the Tenant.
CONCLUSION
It is recommended that the City Council take the following action:
1. Adopt a resolution approving the First Amendment to the Parcel C Lease and the Second Amendment to the Fingers Lease between Rest Investments and the City and authorizing the City Manager to execute the Amendments.
Associated Files and Exhibits
1. Resolution Approving the First Amendment to the Parcel C Lease and the Second Amendment to the Fingers Lease and authorizing the City Manager to execute the Amendments (25-1264)
a. Exhibit A: Draft First Amendment to Parcel C Lease
b. Exhibit B: Draft Second Amendment to Fingers Lease