Title
Report regarding an update on Launch Local!, the Vacant Retail Activation Pilot Program and a resolution approving a sublease agreement with Christopher Nguyen, d.b.a. Six Bicycles, for the commercial space at 634 El Camino Real. (Katie Donner, Management Analyst I)
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RECOMMENDATION
Recommendation
Staff recommends City Council adopt a resolution approving a 12-month sublease agreement with Christopher Nguyen, d.b.a. Six Bicycles, for the commercial space located at 634 El Camino Real, based on Launch Local! sublease terms consistent with the previously approved program guidelines.
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BACKGROUND
On February 12, 2025, the City Council held a study session on a proposed Vacant Retail Activation Pilot Program (Program) designed to reduce vacant storefronts and support first-time brick-and-mortar small businesses. Council directed staff to finalize the Program Guidelines and a Request for Interest (RFI) for Council consideration.
On March 26, 2025, the Council approved the Program, named Launch Local!, with the following key terms:
• Use of City-controlled commercial spaces to pilot short-term, below-market leases;
• $1.00 per square foot triple net (NNN) leases with a $2.00/sf security deposit;
• Up to $10,000 in Tenant Improvement (TI) allowance as a rent credit;
• Minimum operating hours of seven hours per day, five days per week;
• Priority for first-time, for-profit brick-and-mortar businesses located in South San Francisco, and clients of the Renaissance Entrepreneurship Center at the Economic Advancement Center (EAC); and
• Exclusion of food service uses during the pilot phase at 634 El Camino Real.
Request for Interest (RFI) Process
Following Council direction, an RFI was issued on April 1, 2025, for the vacant City-owned storefront at 634 El Camino Real, with applications due May 30, 2025. Applications were accepted through the City’s procurement platform and evaluated on concept strength, readiness, financial capacity, activation potential, and completeness.
To ensure accessibility, staff promoted the RFI through the City’s website, social media, and Chamber of Commerce, and hosted four informational sessions - two on-site at 634 El Camino Real and two virtually on Zoom - with materials provided in English and Spanish, and other languages available upon request.
DISCUSSION
Applications Received
A total of six applications were received from: Cheenu Chai Stall, Elevate Healing, Nirel the Yogini, Six Bicycles, Studio Roots, and YSIPIX Photography.
Five of the six met eligibility criteria. Two finalists - Six Bicycles and YSIPIX Photography - were selected for interviews based on alignment with program goals, readiness, and activation potential.
Additional Site Update - 244 and 246 Grand Avenue
244 and 246 Grand Avenue were initially identified as potential Launch Local! candidate sites. Following Council’s February direction and subsequent outreach, staff received several market-rate lease proposals from existing South San Francisco businesses that did not meet Launch Local! eligibility criteria.
Given the City’s fiscal stewardship responsibilities and the strong private-market interest in this address, staff removed these spaces from the Launch Local! inventory to pursue market-rate leasing opportunities. Staff continues to actively engage with multiple interested parties and is preparing to discuss lease proposals for 244 and 246 Grand Avenue with Council in Closed Session on December 10, 2025.
Finalists Overview
YSIPIX Photography proposed a photography studio offering portrait, family, and event photography along with classes and community workshops. Six Bicycles proposed a full-service bicycle shop providing repairs, tune-ups, rentals, and sales, supported by community programming such as group rides and maintenance workshops.
Recommended Tenant: Six Bicycles
Staff recommends entering into a sublease agreement with Six Bicycles, owned by Christopher Nguyen. The business directly addresses a service gap in South San Francisco, supports active transportation goals, and aligns with the City’s broader mobility and economic vitality objectives.
Key highlights include:
• Location Fit: The space at 634 El Camino Real fronts the El Camino corridor, adjacent to South San Francisco High School and Centennial Way Trail, making it ideal for a bicycle shop.
• Community Benefit: Six Bicycles will offer education and maintenance workshops, promote safe cycling, and contribute to a healthier and more vibrant community.
• Readiness: The operator has over a decade of experience in business development and bicycle retail and is prepared to activate the space promptly following sublease approval.
Tenant Improvement (TI) Allowance
As outlined in the Launch Local! Program, tenants are eligible for up to $10,000 in a Tenant Improvement (TI) allowance, provided as a rent credit to help offset initial build-out costs. The draft sublease included as an exhibit to the associated resolution delegates authority to staff to determine the final TI amount based on verified bids and eligible improvements, provided such TI allowance is below the Launch Local! program threshold of $10,000. The credit will be applied once improvements are complete and inspected.
Sublease Summary
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Term |
Details |
|
Tenant |
Six Bicycles |
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Location |
634 El Camino Real |
|
Square Footage |
1,600 sq. ft. |
|
Monthly Rent |
$1.00/sf NNN ($1,600/month) |
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Term Length |
12 months |
|
Security Deposit |
$3,200 (two months’ rent) |
|
Tenant Improvement Rent Credit |
Up to $10,000, final amount to be determined |
|
Operating Hours |
Minimum 7 hours/day, 5 days/week |
|
Move-In Timeline |
Keys provided by end of calendar year 2025; anticipated grand opening Spring 2026 |
Prior to the conclusion of the 12-month sublease, staff will evaluate the business’s performance and overall program success. Based on outcomes - including tenant interest, financial viability, and the City’s available properties - staff will return to Council with recommendations regarding renewal, rent adjustments, or program expansion.
FISCAL IMPACT
The sublease will generate $1,600 per month in rental revenue, totaling $19,200 over the 12-month term. The tenant may receive up to $10,000 in Tenant Improvement (TI) rent credit upon completion and verification of eligible improvements. Staff will negotiate the final TI credit amount consistent with Launch Local! Program guidelines and available program funding.
Minor building maintenance costs, including restroom and patch repairs, will be covered using reserve funds collected from previous lease revenues for the property. No additional General Fund impact is anticipated.
CONCLUSION
The first year of the Launch Local! Vacant Retail Activation Pilot Program has successfully demonstrated strong community interest and the City’s capacity to activate vacant spaces in support of local entrepreneurship. The proposed sublease with Six Bicycles represents a key milestone in advancing corridor activation goals along El Camino Real and aligns with broader City objectives for economic vitality, mobility, and public health.
With Council approval, staff will proceed with executing the sublease and finalizing the Tenant Improvement (TI) allowance to facilitate timely build-out and activation. Staff will continue monitoring the program’s outcomes and return to Council after the first sublease term with recommendations on program continuation or expansion. In addition, staff will publicly announce the grand opening of this retail space at a future City Council meeting to celebrate and invite the community to participate in this milestone.
Attachments:
1. PowerPoint Presentation