01-09-2017 BPU RPT 09 - Laserfiche WebLink

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W A I= R h N h R L Y I. l F F -- RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: JANUARY 9, 2017 ITEM NO: 9 SUBJECT: THIRD AMENDMENT TO LEASE AGREEMENT WITH VARNER & BRANDT, LLP— MISSION SQUARE OFFICE BUILDING, 3750 UNIVERSITY AVENUE, SUITE 610 — FIVE YEAR TERM FOR $2,278,320 IN REVENUE ISSUE: Approve the Third Amendment to Lease Agreement for an additional five (5) years with Varner & Brandt, LLP of Riverside, California for approximately 13,936 square feet of rentable space in the Mission Square Office Building located at 3750 University Avenue, Suite 610. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: Approve the Third Amendment to the Lease Agreement with Varner & Brandt, LLP (Attachment); and 2. Authorize the City Manager, or his designee, to execute the Third Lease Amendment, including making minor, non -substantive changes, and to sign all documents and instruments necessary to complete the transaction. BACKGROUND: On October 13, 2015, the City acquired the Mission Square Office Building at 3750 University Avenue (Property), which was funded by Riverside Public Utilities (RPU). As such, RPU is now the Landlord of the Property. The Property consists of approximately 127,533 square feet of rentable office and retail space in a six -story building, plus a basement level and a 489 parking stall garage situated on approximately 2.5 acres of land. On January 26, 2016, the City Council approved an Exclusive Authorization of Lease Agreement with Newmark of Southern California, Inc. dba Newmark Grubb Knight Frank (NGKF) to provide broker leasing services for the Property. RPU staff has been coordinating the leasing process for the Property with the Real Property Services Division of the Community & Economic Development Department and NGKF as the broker for the Property. DISCUSSION: Varner & Brandt, LLP, has been a tenant in the Property since 1998 when it was initially operating as Varner, Saleson & Dobler, LLP, which was subsequently merged into Varner & Brandt, LLP (VB). The existing lease with VB expires on February 28, 2017. Under the terms of the lease agreement, VB is exercising its last remaining five-year option to renew through February 28, 2022.