TITLE
Recommendation to authorize City Manager to execute all documents necessary for the Fourth Amendment to Lease No. 23509 with BANCAP Marina Center, Inc., a California corporation, for City-leased property at 241-255 Marina Drive, known as the Alamitos Bay Marina Center. (District 3)
DISCUSSION
On February 1, 1994, the City Council authorized the execution of Master Lease No. 23509 (Master Lease) with BANCAP Marina Center, Inc. (Master Tenant), for the remodeling, renovation, and management of City-owned property and improvements at the Alamitos Bay Marina Center (ABMC), formerly known as the Marine Bazaar Complex, at 241-255 Marina Drive. Following the completion of the renovations, the existing tenant leases at ABMC were assigned to the Master Tenant. ABMC is currently occupied by the following subtenants: Stan Miller Yachts (boat broker); Alan Andrews Yacht Design (custom yacht design); West Marine Products (marine retail sales); Scuba Duba (boat hull cleaning and maintenance service); Schooner or Later (restaurant); and the Seal Beach Yacht Club (social club). The Master Lease will terminate on June 30, 2019.
Under the Master Lease, the City receives base rent in the current amount of $37,803 per month and 70 percent of Net Operating Income (NOI) generated from the project’s cash flow. As the City’s property manager, the Master Tenant receives a monthly fee equal to 6 percent of subtenant rents and 30 percent of NOI. Under the terms of the Master Lease, one percent of monthly subtenant rents are deposited in a Maintenance Reserve Fund (Maintenance Reserve), which is approximately $6,000 annually for the ongoing replacement and repair of capital items. The Master Tenant may contract for capital improvements on behalf of the City by utilizing the Maintenance Reserve. The current balance in the Maintenance Reserve is $30,746.
The City recently commissioned a Building Assessment Report (Assessment) of ABMC to determine the condition of the majo...
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