07/24/2001 RA RPT 08 - Laserfiche WebLink

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CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: July 24, 2001 Item No.: 8 Subject: Request Authorization to Lease Modification Agreement with Uniglobe Maxima Travel 3737 Main Street, Suite 101 Background Uniglobc Maxima Travel entered into a Lease for 1,635 square feet on June 9, 1995 at 3737 Main Street, Suite 101 within the California Tower Building. This Lease was amended on June 30, 1998. The tenant wishes to renegotiate their lease to enable them to extend for an additional five year period and one (1) five (5) year option period, based upon the following business terms identified below: Business Terms The extended term of the full service gross lease is for five years with one (1) five-year option. The monthly rent shall be as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $3,188.25 per month ($ t .95/sf) $3,270.00 per month ($2.00/sf) $3,351.75 per month ($2.05/sf) $3,433.50 per month ($2.10/sf) $3,515.25 per month ($2.15/sf) Rent during the option period shall be adjusted according to the Consumer Price Index for this area. The Agency will repaint restroom, clean/shampoo carpeting, replace with new carpeting two years fi'om execution, repaint a portion of the space and refinish two doors, at a cost of approximately $6,000. Commercial brokerage commission for this transaction has been reduced by Inland Pacific Advisors, Inc. (IPA) to 5% from the effective 6% outlined in their now expired management agreement. (IPA's rate for lease renewals will be further reduced to 3% under the terms of their contract renewal, which has been submitted for consideration under separate cover.) IPA has further agreed to absorb the cost of any commission charged by Gregory M. Frantz, the broker representative for Uniglobe. The commission cost to the Agency is $10,055. Fiscal Impact The extension of the lease will result in continued rental revenue to the Agency of approximately $201,000. There are sufficient funds available for the maintenance items identified above in the California Tower Project Account No. 9725610-440446, which has an approximate balance of $14,900. In addition, there are sufficient funds available for IPA's commission in the California Tower Professional Services Account No. 2830831 - 421000, which has an approximate account balance of $260,000. Committee Action The Agency Board, in Closed Session on June 5,2001, directed staff to pursue a lease extension with U niglobe Maxima Travel. However, the Agency stipulated that a separate commission would not be paid to Gregory M. Frantz, as the lease was an extension with an existing versus a new lease with a different tenant.