Report Prepared by: Karen Baker, Economic Development Associate, Merced Yosemite Regional Airport
Title
SUBJECT: Approval of a First Amendment Lease Agreement with the U.S. Department of Homeland Security, Transportation Security Administration (TSA) for Office Space in the Terminal Building of the Merced Yosemite Regional Airport
REPORT IN BRIEF
Considers approving First Amendment to the Lease Agreement with U.S. Department of Homeland Security, Transportation Security Administration for office space in the terminal building of the Merced Yosemite Regional Airport.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Lease Agreement First Amendment with Government Services Agency (GSA), an agent for the Transportation Security Administration (TSA) for office space at the Merced Yosemite Regional Airport; and,
B. Authorizing the City Manager or Deputy City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Adopt the motion as recommended by staff; or,
2. Modify the action (specify in motion); or,
3. Deny the action.
AUTHORITY
Section 200 of the City of Merced Charter.
CITY COUNCIL PRIORITIES
City of Merced Adopted Budget Fiscal Year 24/25.
DISCUSSION
The Merced Yosemite Regional Airport has negotiated a lease Agreement Amendment with the Government Services Agency (GSA) for office space the Transportation Security Administration (TSA) currently uses and occupies. The GSA form lease specifies a short-term lease term, with a lease renegotiation beginning June 1, 2025 when the TSA moves to the new Merced Yosemite Regional Airport Terminal. The Lease Amendment provides for rent adjustment after the first year of the agreement based on the annual percent of change in the cost-of-living index. The agreement can be terminated by the government upon 60 days written notice for specific reasons.
The lease renewal will provide TSA the same 120 square feet of private office space and access to the airport terminal. The lease renewal also will increase the revenue to $ 5,092.27 for year one and $ 5,212.27 for year two. The common area maintenance fee will be $55.00 per month for janitorial service to non-exclusive-use areas of the premises, and utilities (electricity and natural gas) to both exclusive- and non-exclusive-use areas of the premises. The renewed lease also will enable continued provision of a secure environment for the travelling public.
Lease Amendment effective date shall be May 27, 2023, and conclude on June 1, 2025. Staff will be bringing the June 1, 2025 Lease Agreement to Council in the next few months to reflect the new square footage and CAM fees of the new Airport Terminal. The GSA were paying for their lease on a month-to-month basis following the May 27, 2023 expiration of their lease. As work proceeded on the Terminal Replacement Project, staff could not secure a move in date for TSA Staff and Equipment, to procure an end date for the Amendment. Originally, the Terminal Replacement Project had a deadline with the FAA of June 2024 for funding, which was extended to June of 2025. Another determining factor was the generator for the Terminal. The Terminal cannot be commissioned until the generator is installed. City staff was given a date of February 25, 2025 for the generator arrival, but that date is fluid. Once the generator is installed, it will take several months to get it tied in and operating.
IMPACT ON CITY RESOURCES
No appropriations from the general fund are associated with this lease.
ATTACHMENTS
1. GSA Lease Agreement
2. Diagram Depicting Leased Space
3. GSA 3518A Form
4. GSA Lease Amendment No. 1