HomeMy WebLinkAboutStaff Report 3.H 6/16/2014Agenda Item #3.H
DATE: June 16, 2014
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St. John, F.ASCE —Director, Public Works & Utilities
Leonard Olive — Operations Manager
SUBJECT: Adoption (Second Reading) Ordinance approving First Amendment to Site Lease
Agreement with Sirius XM Radio Inc. flea XM Satellite Radio Inc.
RECOMMENDATION
It is recommended that the City Council adopt an Ordinance authorizing the City Manager to
execute all documents to affect the First Amendment to Site Lease Agreement between the City
of Petaluma and Sirius XM Satellite Radio Inc., tka XM Satellite Radio Inc., dated February 20,
2001.
BACKGROUND AND DISCUSSION
On June 2, 2014, the City Council approved the first reading of an ordinance authorizing the City
Manager to execute all documents to affect the First Amendment to the Site Lease Agreement.
The Council approved the ordinance by a vote of 6-0, with Councilmember Miller absent. The
recommended action provides for second reading and adoption of the ordinance. The staff report
for the first reading of this item at the June 2, 2014 Council meeting is provided in attachment 3
for further background information.
FINANCIAL IMPACTS
The First Amendment to the Site Lease Agreement will ensure a long -tenor cash flow stream to
the City without any subsequent damages or operational constraints on the City's well site. The
monthly lease rate of $2,183.63 is fair and above current market rates for similar facilities within
the region.
ATTACHMENTS
Ordinance
First Amendment to Site Lease Agreement
Staff Report of First Reading from June 2, 2014 City Council Meeting
Agenda Review:
City Attorney Finance Director City Manager _
Attachment I
Introduced By Councilmember Seconded by Councilmember
Seconded By
ORDINANCE APPROVING FIRST AMENDMENT TO THE SITE LEASE AGREEMENT
BETWEEN THE CITY OF PETALUMA AND SIRIUS XM SATELLITE RADIO INC., fl{a XM
SATELLITE RADIO INC., DATED FEBRUARY 20, 2001 AND AUTHORIZING THE CITY
MANAGER TO EXECUTE ALL DOCUMENTS TO EFFECT FIRST AMENDMENT TO THE
SITE LEASE AGREEMENT
WHEREAS, Certain real property located in the City of Petaluma was leased under the terms and
conditions set forth in the Site Lease Agreement ("the Agreement') dated February 20, 2001, by and
between the City of Petaluma a municipal corporation, having a mailing address of P O Box 61,
Petaluma, CA 94953-0061 ("Landlord") and XM Satellite Radio Inc. ("Tenant'), a copy of which is
attached as Attachment 3 and incorporated herein by reference; and
WHEREAS, Sirius XM Satellite Radio Inc., having a mailing address of 1221 Avenue of the Americas,
37'h Floor, New York, NY 10020, was formerly known as XM Satellite Radio Inc.; and
WHEREAS, Landlord and Sirius XM Satellite Radio Inc., llta XM Satellite Radio Inc., desire to enter
into a First Amendment to Site Lease Agreement ("First Amendment') to allow for the installation of
additional antemuas, associated cabinets and cables, and other communications instruments, and provide
for up to four automatic five-year renewals as described in the First Amendment attached hereto as
Exhibit A and incorporated herein; and
WHEREAS, the installation of additional communications instruments pursuant to the First
Amendment is categorically exempt from the California Environmental Quality Act ("CEQA") pursuant
to section 15301 of the CEQA Guidelines as operation repair, maintenance, leasing and minor alteration
of existing public and private structures, facilities and mechanical equipment involving negligible
expansion of use beyond that now existing on the City property at 601 Hayes Lane.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA
AS FOLLOWS:
Section 1.
The City Manager is hereby authorized to execute the First Amendment to the Site Lease Agreement
attached hereto as Exhibit A and all documents required to affect the First Amendment.
Section 2.
The City Clerk hereby is directed to publish this ordinance for the period and in the manner required by
the City Charter.
INTRODUCED and ordered posted this _day of
ADOPTED this _ day of
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Claire Cooper, City Clerk
2014.
2014 by the following vote:
David Glass, Mayor
APPROVED AS TO FORM:
Eric Danly, City Attorney
Attachment 2 - Exhibit A
Site IO:SFX2058
FIRST AMENDMENT TO SITE LEASE AGREEMENT
This FIRST AMENDMENT TO SITE LEASE AGREEMENT ("First Amendment") is made
this day of , 201_, by and between SIRIUS XM Radio Inc. fka XM
Satellite Radio Inc, ("Lessee"), with a mailing address of 1221 Avenue of the Americas, 37th Floor,
New York, NY 10020, and City of Petaluma, a municipal corporation, ("Lessor").
WITNESSETH:
WHEREAS, Lessor and Lessee previously entered into that certain Site Lease Agreement
dated February 20, 2001, (the "Agreement"); under and pursuant to the terms of which Lessee has
the right to install, maintain, operate, repair, replace and remove the equipment at that certain
building situated at 601 Hayes Lane, Petaluma, Ca. 94952 ("Building"), as more particularly
described in the Agreement; and
WHEREAS, Lessee desires to install additional equipment at the Building and Lessor has
agreed to allow such installation subject to obtaining a Conditional Use Permit and SPAR
amendment for the proposed equipment from the City of Petaluma Planning Division subject.
WHEREAS, Lessor and Lessee desire to extend the Term of the Agreement and further
amend the Agreement upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the receipt
and sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Term. Paragraph 4 of the Agreement is hereby amended to provide that upon the
expiration of the last Extension Term, the Agreement shall automatically renew for up to four (4)
additional five (5) year terms (each an "Additional Extension Term"), upon the same terms and
conditions as set forth in this Agreement unless Lessee notifies Lessor in writing of Lessee's
intention not to renew this Agreement at least sixty (60) days prior to expiration of the then current
Extension Term or Additional Extension Term. Upon the expiration, cancellation or termination of
this Agreement, Lessee shall surrender the Premises to Lessor in sound condition, ordinary wear
and tear and uninsured casualty excepted, however if Lessee shall remain in possession of the
Premises beyond the expiration, cancellation or termination of this Agreement for up to 6 months.
Such use shall be deemed a month-to-month use and the Lessee shall pay the sum of $500 in
addition to the monthly Lease Fee in effect at the expiration of this Agreement.
2. Lessee Equipment. Lessor hereby agrees that Lessee shall have the right to
install additional Equipment at the Building as listed and attached within "Exhibit C" to this
Amendment ("Additional Equipment"), therefore Exhibit C is attached hereto which reflects a
consolidated list of Lessee Equipment and Additional Equipment.
Page 1
4
Site 10:SFX205B
3. Notice. The Agreement is hereby amended to provide that a copy of all notices sent to
any party pursuant to Paragraph 19(c) of the Agreement shall be sent to the following addresses:
Lessor: City of Petaluma
11 English Street
P.O. Box 61
Petaluma, CA 94953-0061
To Lessee: SIRIUS XM Radio Inc.
1221 Avenue of the Americas 37th Floor
New York, NY 10020
Attn: General Counsel
With a copy to: SIRIUS XM Radio Inc.
1500 Eckington Place NE
Washington, DC 20002
Attn: Lease Administration
4. Unless otherwise defined herein, or the context otherwise clearly requires, terms defined
in the Agreement shall have such meanings when used herein.
5. Lessor and Lessee agree that all other terms and conditions of the Agreement not
otherwise inconsistent with this First Amendment shall remain in full force and effect by and
between the parties.
6. Each of the parties represent and warrant that they have the right, power, legal capacity
and authority to enter into and perform their respective obligations under this First Amendment.
7. This First Amendment will be binding on and inure to the benefit of the parties herein,
their heirs, executors, administrators, successors -in -interest and assigns.
8. Effect of Amendment. Except as set forth herein, the remaining terms and condition of
the Agreement are unaffected hereby and by their assent hereto, the parties hereby ratify and
confirm the same. The parties affirm that this Amendment sets forth the entire agreement of the
parties with respect to the subject matter hereof and all verbal or written agreements to the
contrary are hereby superseded and shall be of no force and effect. In the event of any conflict
between the terms and conditions of this Amendment and the terms and conditions of the
Agreement, the terms and conditions of this Amendment shall control to the extent of any such
conflict.
Page 2
Site ID:SFX205B
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the day
and year first written above.
CITY OF PETALUMA SIRIUS XM Radio Inc.
a Delaware corporation
By:
By:
Title:
Title:
I F';56ot,LR.{t.
6 G7k.LWXa
Date:
Date:
kcQ,bi t -r
I417.013
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Site ID. SFX205B
EXHIBIT C
Lessee Equipment
Current Lessee Equipment
One (1) Til -Tek TA-2304-2-DAB(90) antenna
One (1) Til -Tek TA-2324-LHCP
One (1) Hughes HNS XM2001STD cabinet *to be replaced by cabinet below*
Additional Equipment to be added by Lessee
One (1) Til -Tek TA-2304-2-DAB(90) antenna
One (1) VSAT dish up to 1.8 meters
One (1) DRU 200W cabinet
One (1) 3 inch GPS
Lessee shall have the ability to replace the antennas for maintenance purposes with any model
antenna of the same or lesser size.
Page 4
24
DATE: June 2, 2014
Attachment 3
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St. John, F.ASCE — Director, Public Works & Utilities
Leonard Olive — Operations Manager
SUBJECT: Introduce (First Reading) Ordinance approving First Amendment to Site Lease
Agreement with Sirius XM Radio Inc. flea XM Satellite Radio Inc.
RECOMMENDATION
It is recommended that the City Council introduce the attached Ordinance approving the First
Amendment to the Site Lease Agreement between the City of Petaluma and Sirius XM Satellite
Radio Inc., &a XM Satellite Radio Inc. dated February 20, 2001, and authorizing the City
Manager to execute all documents to affect the First Amendment to Site Lease Agreement.
A portion of the City's La Cresta water reservoir site located at 601 FIayes Lane was leased
under the terms and conditions set forth in the Site Lease Agreement dated February 20, 2001 by
and between the City of Petaluma ("Landlord") and XM Satellite Radio Inc. XM Satellite
Radio Inc. has merged with Sirius Satellite Radio to form Sirius XM Radio, Inc. ("Tenant").
Sirius XM Radio Inc. desires to enter into a First Amendment to the Site Lease Agreement to
allow for the installation of additional antennas, associated cabinets and cables, and other
communications instruments as described in Exhibit C to the First Amendment. The proposed
additions will not interfere with the operations of the City reservoir facility. The First
Amendment also provides for up to four (4) five (5) year automatic lease renewals. The
department has sent out mailers to citizens living within 500 radius feet of the site. The mailer
includes a technical memo from Sirius Radio, Inc. demonstrating no increase to transmission or
outgoing radiation, with the only changes being in the enhancement of their ability to receive
transmissions. The mailer provided Staff contact information for questions and feedback, and
specified the proposal would be considered at the June 2"d Council meeting. To date, there has
been no feedback received.
The proposed action meets Council Goal: "Achieve fiscal stability and maintain financial
sustainability".
Agenda Review:
City Attorney Finance Director_ City Manager 25
The First Amendment to the Site Lease Agreement (Attachment 3) includes a plan set submitted
to the City by Sirius XM Radio Inc. in December 2013. This Amendment allows the tenant to
update existing equipment and install new equipment at the site. Sheet C -IA of the plan set
shows existing Sirius XM Radio Inc. equipment as well as the proposed new equipment. The
First Amendment also allows the Site Lease Agreement to automatically renew for up to four (4)
additional five (5) year terms, thus providing a level of security that the tenant requires in order
to justify the significant expense of their upgrade investment. All other provisions of the Site
Lease Agreement remain unchanged. All renewals are subject to the original inflation (CPI)
factors included in the original agreement. Current monthly lease rate is $3,183.63. Based on a
recent February 2014 market study of other Bay area sites of similar footprint, the current
monthly lease rate to the City exceeds the average prevailing market by approximately 40%.
FINANCIAL IMPACTS
The First Amendment to the Site Lease Agreement will ensure a long-term cash flow stream to
the City without any subsequent damages or operational constraints on the City's well site. The
lease rate is fair and above current market rates for similar facilities within the region. The lease
revenue is budgeted in the water enterprise fund.
ATTACHMENTS
Ordinance
26
Ntip]UJI NG L� ►
Introduced By Councilmember Seconded by Councilmember
Seconded By
ORDINANCE APPROVING FIRST AMENDMENT TO THE SITE LEASE AGREEMENT
BETWEEN THE CITY OF PETALUMA AND SIRIUS XM SATELLITE RADIO INC., flea XM
SATELLITE RADIO INC., DATED FEBRUARY 20, 2001 AND AUTHORIZING THE CITY
MANAGER TO EXECUTE ALL DOCUMENTS TO EFFECT FIRST AMENDMENT TO THE
SITE LEASE AGREEMENT
WHEREAS, Certain real property located in the City of Petaluma was leased under the terms and
conditions set forth in the Site Lease Agreement ("the Agreement") dated February 20, 2001, by and
between the City of Petaluma a municipal corporation, having a mailing address of P O Box 61,
Petaluma, CA 94953-0061 ("Landlord") and XM Satellite Radio Inc. ("Tenant"), a copy of which is
attached as Attachment 3 and incorporated herein by reference; and
WHEREAS, Sirius XM Satellite Radio Inc., having a mailing address of 1221 Avenue of the Americas,
37°i Floor, New York, NY 10020, was formerly known as XM Satellite Radio Inc.; and
WHEREAS, Landlord and Sirius XM Satellite Radio hie., flea XM Satellite Radio Inc., desire to enter
into a First Amendment to Site Lease Agreement ("First Amendment') to allow for the installation of
additional antennas, associated cabinets and cables, and other communications instruments, and provide
for up to four automatic five-year renewals as described in the First Amendment attached hereto as
Exhibit A and incorporated herein; and
WHEREAS, the installation of additional communications instruments pursuant to the First
Amendment is categorically exempt from the California Environmental Quality Act ("CEQA") pursuant
to section 15301 of the CEQA Guidelines as operation repair, maintenance, leasing and minor alteration
of existing public and private structures, facilities and mechanical equipment involving negligible
expansion of use beyond that now existing on the City property at 601 Hayes Lane.
27
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA
AS FOLLOWS:
Section 1.
The City Manager is hereby authorized to execute the First Amendment to the Site Lease Agreement
attached hereto as Exhibit A and all documents required to affect the First Amendment.
Section 2.
The City Clerk hereby is directed to publish this ordinance for the period and in the manner required by
the City Charter.
INTRODUCED and ordered posted this _day of
ADOPTED this _ day of
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Claire Cooper, City Clerk
2014.
2014 by the following vote:
David Glass, Mayor
Eric Danly, City Attorney
28