TITLE
Recommendation to authorize City Manager, or designee, to execute all documents necessary for a First Amendment to Lease No. 34894 with BLANKSPACES, LLC, to amend certain provisions of the Lease to facilitate opening of the Shaun Lumachi Innovation Center at 309 Pine Avenue. (District 1)
DISCUSSION
On December 5, 2017, the City Council authorized the City Manager to execute any and all documents necessary for the lease of City-owned property located at 309 Pine Avenue (Subject Property) with BLANKSPACES, LLC (Lessee), for the maintenance, operation, and programming of the Shaun Lumachi Innovation Center to create a hub for startup businesses and entrepreneurs. Capital improvements were required to make the facility functional and code compliant, including elevator recommission, bathroom improvements, ADA access upgrades, and interior redesign of the space to support co-working activities and entrepreneurial community events that contribute to economic growth. In addition to the planned repairs, there were several unforeseen repairs and replacements including HVAC units, roofing, and asbestos abatement which caused further delays; and, reopening was further impacted by COVID-19-related closures due to health orders that restricted certain business activities. Nearly three years of delays have resulted in economic opportunity costs for the City and over $130,000 of documented financial losses to the Lessee.
Given that the Subject Property is now ready for reopening to the public, City staff are seeking City Council approval to amend the Lease and compensate the Lessee for a portion of the economic losses caused by uncontrollable construction and pandemic-related delays. The City and Lessee have negotiated the proposed Lease amendments described below which provide reimbursements for a portion of costs required by the Lease; as well as, rent abatement to offset some of the documented costs incurred by the Lessee due to reopening delays. These costs in...
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