TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: Renewal of Warehouse Leases
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Consider authorizing the General Manager to execute addenda to extend the leases for three of the District's warehouse tenants: JAFEC USA, Inc.; Gachina Landscape Management; and Cypress Mandela Training Center, as outlined in the staff report.
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
The District benefits from the revenues collected from its warehouses in both Newark and Oakland and utilizes those funds in its operating budget.
BUDGETARY/FISCAL IMPACT:
The budgetary/fiscal impacts associated with the extension of these leases are the continuance of revenue that would otherwise terminate if the leases were not extended. The current lease with JAFEC USA, Inc. (JAFEC) has two months of remaining tenure payable at $11,119.75 per month. The proposed one-year extension would be payable at $11,453.34 per month beginning February 1, 2022. The current lease with Gachina Landscape Management (Gachina) has seven months of remaining tenure payable at $12,030.61 per month. The proposed five-year extension would be payable at $12,391.52 per month beginning July 1, 2022. The current lease with Cypress Mandela Training Center (Cypress Mandela) is month-to-month and is payable at $25,202.70 per month. The proposed two-year extension would be payable at $39,204.20 per month beginning January 1, 2022. The District would be responsible for paying a 5% commission to Colliers International for the term of the lease extensions.
BACKGROUND/RATIONALE:
The District owns and operates two warehouses, one in Newark and one in Oakland. JAFEC and Gachina both occupy space in the Newark warehouse while Cypress Mandela occupies space within the Oakland warehouse.
TENANT
WAREHOUSE
LEASE START
JAFEC
Newark
April 1, 2016
Gachina
Newa...
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