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AGENDA REPORT
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| | | | | | | | DATE:
| January 21, 2020
| TO:
| Mayor and City Council
| FROM:
| Stefan T. Chatwin, City Manager 
| | SUBJECT: | Resolution 2020-06 of the City Council of the City of Fairfield Approving and Authorizing the Execution of the Second Amendment to the Standard Multi-Tenant Office Lease Agreement by and between the City of Fairfield and Balfour Beatty Infrastructure, Inc. for Space Located at 5050 Business Center Drive |
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| | | | | | | | | RECOMMENDED ACTION | | Adopt resolution. |
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| | | | | | | | | STATEMENT OF ISSUE | | Staff recommends the City of Fairfield (“City”) enter into the Second Amendment to the Standard Multi-Tenant Office Lease (“Second Amendment”) with Balfour Beatty Infrastructure, Inc. (“Balfour Beatty”). This Second Amendment will extend the lease term for an additional two (2) years from January 31, 2020 to January 31, 2022 for office space located in the Cordelia Library building, 5050 Business Center Drive. |
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| | | | | | | | | DISCUSSION | On September 28, 2010, Balfour Beatty signed a five (5) year Standard Multi-Tenant Office Lease (“Lease”) to lease 7,045 square feet of space at the Cordelia Library located at 5050 Business Center Drive, Suite 250 (“Premises”), for the purpose of housing general and administrative office functions for its Western region. The Lease included an option to extend for an additional three (3) years through January 31, 2019.
On January 17, 2019 Balfour Beatty and the City signed the First Amendment to Standard Multi-Tenant Lease Agreement extending the Lease for an addition twelve (12) months through January 31, 2020.
Balfour Beatty is requesting the City extend the Lease for two (2) years through January 2022 and include two additional options to extend for three (3) years each. The rent amount beginning February 1, 2020 will be $13,385.50 per month with 2% annual increases each February 1st.
Balfour Beatty is a national recognized commercial construction company with offices located in seven states across the United States. Balfour Beatty specializes in the construction of commercial and office buildings in addition to bridges, highways, rail, and water infrastructure. Its clients include school districts, cities, banks, airports, hospitals, colleges, counties, hotels, other government entities, as well as private commercial and residential developers. Currently, 20 to 30 employees work out of the leased office space.
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| | | | | | | | | FINANCIAL IMPACT | | Rent payments will increase from $12,856.09 per month to $13,385.50 per month effective February 1, 2020 and will increase 2% annually each February 1st. All collected income will be deposited into the Cordelia Library Fund (Fund Code 011-Responsibility Code 99-233-6512) to offset costs to maintain the building. |
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| | | | | | | | | CITY COUNCIL WORKPLAN | Community Safety
| Community Infrastructure | Quality of Life | | Financial and Operational Sustainability | Economic Development | Travis Air Force Base |
| City Council Goal this item supports:
Economic Development |
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| | | | | | | | | PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION | None.
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| | | | | | | | | ALTERNATIVE ACTION | | The City Council may choose not to approve the Second Amendment or may modify the terms of the Amendment. However, not approving the Amendment would require Balfour Beatty to relocate its office and employees and create 7,045 square feet of vacant office space that would need to be re-leased. During the re-leasing period, the City would not be collecting any lease income, but would still be responsible for maintenance and operational costs for the vacant office space. |
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| | | | | | | | | COORDINATED WITH | City Attorney's Office
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| REVIEWERS: | | Reviewer | Action | Date | | Answerer | Approved | 1/6/2020 - 7:47 PM | | Feinstein, David | Approved | 1/6/2020 - 8:40 PM | | Alexander, Amber | Approved | 1/7/2020 - 11:53 AM | | Answerer | Approved | 1/7/2020 - 12:04 PM |
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