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Home My WebLink AboutMINUTES - 12161997 - C107 TO: BOARD OF SUPERVISORS Contra J � �l FROM: Barton J. Gilbert, Director of General Services Costa A= o� County res; -. ••� DATE: December 16, 1997 SUBJECT: LETTER OF INTENT FOR A LEASE WITH OPTION TO PURCHASE FOR 2530 ARNOLD DRIVE, MARTINEZ SPECIFIC REQUESTS OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION 1. REC_OIUIMENDATION APPROVE a Letter of Intent, dated December 5, 1997, with Summit Center Investors, Inc. to lease with option to purchase the premises at 2530 Arnold Drive, Martinez, for occupancy by the Health Services Department, and other County departments, under the terms and conditions more particularly set forth in said Letter of Intent, and AUTHORIZE the Director of General Services to EXECUTE said Letter of Intent on behalf of the County. The officers.of the County are hereby AUTHORIZED and DIRECTED, jointly and severally, to do any and all things which they may deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of the Letter of Intent. The Director of General Services, the Clerk of the Board of Supervisors and the officers of the County are hereby AUTHORIZED and DIRECTED to EXECUTE and DELIVER any and all Leases (after recommendation for approval by the Office of the County Administrator and approval as to form by County Counsel), Memorandums of Lease, and other documents necessary and desirable to accomplish the transactions set forth above. DETERMINE that the above project is a Class 1 Categorical Exemption under the California Environmental Quality Act. DIRECT the Community Development Department to FILE a Notice of Exemption with the County Clerk. II. RNANCIAL IMPACT Payments required are to come from the budgets of the Health Services Department and the Social Service Department. A specific financing plan will be submitted to the.Board at a later date. 111. REASO-NS-ORRECOMMENDATIO_NLBACKGROU-ND Provide for use of office space as requested by the Health Services epartment. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMDIENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): p p ACTION OF BOARD ON "�LO / / z APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS TE v UNANIMOUS(ABSENT 1 AYES: NOES: ABSENT: ABSTAIN: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN MEDIA CONTACT: BARTON J.GILBERT(313-7100) AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator(via Dep ATTESTED PHIL BATCHELOR,CLERK OF THE BOAKD OF Community Development Department County Auditor-Controller(via UM) SUPERVISORS AND COUNTY ADMINISTRATOR Lessor(via UM) Health Services Department(via UM) County Counsel(via UM) BY DEPUTY Risk Management(via UM)- Orig:General Services Department-UM 2530LIB#. PrtU.d3nd Grounds(via L/M) M382 (10188) LETTER OF INTENT FOR SUMMIT CENTRE 2530 Arnold Drive Martinez, CA 94553 Dated December 5, 1997 LESSOR: Summit Centre Investors, Inc., a Delaware Corporation LESSEE/COUNTY: Contra Costa County LOCATION: 2530 Arnold Drive, Martinez, California ESTIMATED EFFECTIVE February 1, 1998 DATE OF AGREEMENT: TERM: Ten (10) years and six months TE PORARY County shall lease Suite 300, approximately 14,023 rentable LEASED PREMISES: square feet, for eleven months (from February 1, 1998 through December 31, 1998.) County shall lease Suite 300 in "as is" condition for a rate of$13,500 per month. On January 1, 1999, Suite 300 shall become part of Primary Leased Premises (described below). PRIMARY ITASFFD County will lease 55,785 rentable square feet on the third and PREMISES: fourth floors, as of January 1, 1999 on the Rent Schedule below. GROUND FLOOR County shall continue to lease Suite 100, occupied by the PREMISES: Training Institute,which is approximately 4,108 rentable square, feet, at a rate of $1.50 per rentable square foot per month. Additionally,County shall lease at least 8,000 rentable square feet at $1.50 per square foot on the ground floor, commencing July 1, 1998. County shall have an ongoing right of first refusal to lease all ground floor space. DELI, Suite 190: County may operate the Deli, Suite 190, on the ground floor (including all fixtures within) in "as is" condition, at its convenience and at no charge to County from February 1, 1998 through December 31, 1999. Any repairs or improvements to the space shall be at County's expense,but may be allocated from the County's share of the total Tenant Improvement Allowance at County's discretion. -1- RENT SCHFDUT, Months 1-40, $1.50 per rentable square foot per month. (Commencing January 1, 1999) Months 41-80, $1.60 per rentable square foot per month. Months 81-120, $1.70 per rentable square foot per month. EARLY OCCUPANCY: In the event that County desires to occupy a portion of Primary Leased Premises (except Suite 300) prior to January 1, 1999, County may do so at a rate of$1.50 per rentable square foot per month. TENANT IMPROVEMENT Lessor shall make funds available for Tenant Improvements on an ALLOWANC .; as needed basis, not to exceed the amount of$2,276,000, which shall be the total Tenant Improvement Allowance. Tenant Improvement Allowance shall comprise three different portions: "Lessor's Share," Tenant's Share," and "Ground Floor Allowance." These terms are strictly used as points of reference; the Tenant Improvement Allowance may be allocated to any space leased by County at County's discretion. However, any improvement cost exceeding the total Tenant Improvement Allowance will be at County's sole expense. It will be Lessor's responsibility to undertake and contract for Tenant Improvements. using consultants and contractors acceptable to County. LESSOR'S HARE: $836,775 (55,785 sq ft x $15.00 per sq ft) shall be provided by Lessor, the unamortized portion of which shall be repaid to Lessor at the close of escrow described in Purchase Option below. COUNTY'S SHARE: $1,394,625 (55,785 sq ft x$25.00 per sq ft) shall be provided by Lessor,bearing ten percent(10%) simple interest, which shall be paid in the form of$11,621.87 per month until close of escrow, at which time the entire balance of County's Share shall be repaid to Lessor by County. In the event County does not exercise the purchase option described below, the County's Share will be amortized over the remaining term of the lease. GROUND FLOOR Lessor shall contribute $5.00 per rentable square foot of space TENANT IMPROVEMENT leased by County on the ground floor. This amount may be ALLOWANCE: applied and used at the County's discretion and is not to be refunded or amortized. -2- ARCHITECTURAL In advance of an executed lease document, Lessor and County DUE DILIGENCE: shall each contribute up to $50,000 to cover architectural and consultant costs for preparation of Tenant Improvement plans and for due diligence inspections. These planning costs shall be charged against the Tenant Improvement Allowance. PURCHASE OPTION: County shall have the right to purchase Lessor's fee simple (112,904 sq ft rentable) interest in 2530 Arnold Drive,Martinez,together with all leases, personal property,contracts,licenses and rights applicable thereto for $12,200,000 on or before December 31, 1999 with at least sixty(60)days prior written notice to Lessor. At close of escrow, Lessor shall convey to County a good and marketable title to the premises free and clear of all liens, encumbrances, and clouds upon the title except for easements and exceptions acceptable to the County. At close of escrow, the County shall pay to Lessor the unamortized portion of the Tenant Improvement Allowance. Cho Hung Bank and the holder of any lien or mortgage on the premises will recognize the County's Purchase Option. AGRFEMF_.NT: It is expressly understood that this letter shall not constitute a binding agreement between the parties, but only reflects the present understanding of the discussions and negotiations regarding the proposed transaction. No binding contract shall exist or be effective between Summit Centre Investors, Inc. and the County until a final lease is signed by all parties. The parties further agree that until a final lease is signed by all parties, any letters (including but not limited to this letter), drafts, other communications or conduct of the parties shall not be used to impose any legally binding obligation on another party. This Letter of Intent is subject to execution and delivery by both parties hereto of a valid lease with an option to purchase in form and substance acceptable to both Lessor and County. The lease shall contain such representations and warranties as are agreed to by Lessor and County and shall require the delivery of Tenant estoppels in form and substance satisfactory to County. -3- Upon execution of this Letter, all parties agree to proceed in good faith towards the preparation and execution of a lease with an option to purchase evidencing the terms and conditions contained herein. Accepted and Agreed to this day of December, 1997. COUNTY LESSOR COUNTY OF CONTRA COSTA, SUMMIT CENTRE INVESTORS, INC., a political subdivision of the a Delaware Corporation State of California By By Director of General Services Title RECOMMENDED FOR APPROVAL: By Title By Deputy County Administrator By Deputy General Services Director By Lease Manager APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel By Deputy -4-