Report Prepared by: Taylor Gates, Economic Development Associate
Title
SUBJECT: Approval of a Three (3) Year Lease Agreement with James G. Moulton, Trustee, and Lynda S. Moulton, Trustee, for a 9,000 Square Foot Facility with Initial Base Rent of $6,750/NNN Per Month and the Option to Extend for an Additional Three (3) Years
REPORT IN BRIEF
Considers approving a three-year lease agreement with James G. Moulton and Lynda S. Moulton for property to be utilized by criminal justice agencies in Merced County.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the lease agreement between the City of Merced and James G. Moulton, Trustee, and Lynda S. Moulton, Trustee; and,
B. Authorizing the City Manager, the Deputy City Manager, or the Finance Office to make necessary adjustments and execute the document.
Body
ALTERNATIVES
1. Approve as recommended by staff; or
2. Approve, subject to conditions as specified by the City Council; or
3. Deny the request; or,
4. Refer back to staff for reconsideration of specific items as requested by the Council; or
5. Defer action until a specified date
AUTHORITY
Charter of the City of Merced, Section 200
CITY COUNCIL PRIORITIES
As provided for in the 2022-2023 Adopted Budget
DISCUSSION
The previous Lease Agreement approved on September 3, 2019 is expired, and staff has negotiated another three-year lease and option for an additional 3-years with Jim Moulton and Lynda Moulton, Trustees. The subject building and property will continue to be used by a unit composed of criminal justice agencies in Merced County to combat violent crime and gang violence across the county. Federal, state and local agencies assign personnel that are co-located and work cooperatively, each bringing their unique resources to the team.
The proposed Lease Agreement reflects a starting market lease rate of $6,750 per month and allows for annual increases based on the State of California Consumer Price Index (CPI). The annual rent adjustment shall not be less than three percent (3%) or greater than eight percent (8%) per year, regardless of the actual change in the CPI.
Lease payments are made by the City of Merced; however, funding for the lease payments comes from the U.S. Department of Justice. Funding is not provided by the General Fund. The City serves as the financial fiduciary passing the lease payments through to the Moultons.
Notable terms of the proposed Lease Agreement are as follows:
Term: Three (3) years with the option to renew for an additional three (3) years.
Rent: Six-Thousand Seven-Hundred and Fifty Dollars ($6,750) per month plus annual hazard insurance and property taxes.
Utilities: Cost of utilities such as gas, power, telephone, and so on, are the responsibility of the Tenant.
IMPACT ON CITY RESOURCES
The rent and use of the property will be paid for with Asset Forfeiture Funds. General Fund dollars are not used to pay the lease.
ATTACHMENTS
1. Property Lease Agreement