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Home My WebLink AboutStaff Report 3.A 01/26/2015Agenda Item #3. �ALU� a0� 18 5 $ 58 DATE: January 26, 2015 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Sue Castellucci, Housing �G . SUBJECT: An Ordinance (Second Reading) Authorizing Lease of Real Property Located at 951 Petaluma Blvd. So., Petaluma, CA (APN: 019-210-012) to Petaluma Ecumenical Properties, Inc (PEP) and Authorizing the City Manager to Execute the Lease and Related Documents RECOMMENDATION It is recommended that the City Council adopt the attached Ordinance Authorizing Lease of Real Property Located at 951 Petaluma Blvd. So., Petaluma, CA (APN 019-210-012) to Petaluma Ecumenical Properties Inc. (PEP) and Authorizing the City Manager to Execute the Lease and Related Documents. BACKGROUND On January 5, 2015, the City Council unanimously approved the first reading of an ordinance authorizing a lease of real property located at 951 Petaluma Blvd., So., Petaluma, CA (A.P.N. 019-210-012) to Petaluma Ecumenical Properties Inc.(PEP) and authorizing the City Manager to execute the lease and all related documents. The recommended action provides for a second reading and adoption of the ordinance. The staff report for the fust reading of this item at the January 5, 2015 Council meeting is provided for further background information. FINANCIAL IMPACTS In consideration of the important community service that PEP Housing delivers providing opportunities for the community's low-income seniors to obtain safe, clean, affordable housing, the rent on the leased space is proposed to be $2,000 per month. ATTACHMENTS 1. Ordinance 2. Staff Report of First Reading from January 5, 2015 City Council Meeting ATTACHMENT#1 EFFECTIVE DATE ORDINANCE NO. N.C.S. OF ORDINANCE Introduced by Seconded by ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING A LEASE AGREEMENT, BETWEEN PETALUMA ECUMENICAL PROPERTIES, INC, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION ("TENANT") AND THE CITY OF PETALUMA ("LANDLORD") FOR A PORTION OF IMPROVED REAL PROPERTY(APN 008-530-007) ("PREMISES"), 951 PETALUMA BOULEVARD SO., PETALUMA, CA, AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO COMPLETE THE LEASE TRANSACTION WHEREAS, Section 46 of the Charter of the City of Petaluma requires that specified actions for the acquisition, sale, or lease of real property be taken by Ordinance; and, WHEREAS, Landlord owns in fee simple real property located at 951 Petaluma Boulevard, So., Petaluma, CA (Assessor's Parcel Number: 008-530-007), which has been improved with a building ("Property"); and WHEREAS, Tenant desires to lease the premises for their corporate office, and the Landlord desires to provide a location at which the Tenant may offer such services, subject to the terms and conditions of the lease attached to and made a part of this ordinance as Exhibit A; and WHEREAS, the City Council finds this action qualifies for categorical exemption under the California Environmental Quality Act (CEQA) pursuant to Title 14, Chapter 3 of the California Code of Regulations (CEQA Guidelines), sections 15061, 15301 because the project involves operation, repair, maintenance, permitting, leasing, licensing and minor alteration of an existing facility involving negligible or no expansion of use beyond that existing at the time of the City's determination, in that leasing to PEP Housing approximately 10,000 square feet of the City owned property at 951 Petaluma Boulevard South pursuant to the lease will not result in significant expansion of use of the property in terms of impacts on the property and the neighborhood beyond the current impacts of services that PEP Housing is being offered on site. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS: Section l: The above recitals are true and correct and incorporated into this ordinance as findings of the City Council. Section 2: The City Council approves the lease, between the City of Petaluma as Landlord, and PEP Housing, as Tenant, a copy of which is attached as Exhibit A. Section 3: On behalf of the City, the City Manager is authorized and directed to execute documents substantially in accordance with Exhibit A, as determined by the City Attorney, and all other documents reasonably necessary to complete the lease transaction. Section 4: If any section, subsection, sentence, clause, phrase or work of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction or preempted by State legislation, such decision or legislation shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Petaluma hereby declares that it would have passed and adopted this Ordinance and each and all provisions thereof irrespective of the fact that any one or more of said provisions be declared unconstitutional, unlawful other otherwise invalid. Section 5: This Ordinance shall become effective thirty (30) days after the date of its adoption by the Petaluma City Council. Section b: The City Clerk is hereby directed to publish or post this Ordinance or a synopsis for the period and in the manner provided by the City Charter and any other applicable law. INTRODUCED and ordered posted this 511, day of January 2015. ADOPTED this _ day of , 2015 by the following vote: Ayes: Noes: None Abstain: None Absent: None ATTACf IML -'NT 2 DATE: January 5, 2015 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Sue Castellucci, Housing SUBJECT: Introduction (First Reading) of an Ordinance Authorizing Lease of Real Property Located at 951 Petaluma Blvd. So, Petaluma, CA (APN: 019-210-012) to Petaluma Ecumenical Properties Inc (PEP) and Authorizing the City Manager to Execute the Lease and Related Documents RECOMMENDATION It is recommended that the City Council Introduce the attached Ordinance Authorizing Lease of Real Property Located at 951 Petaluma Blvd. So, Petaluma, CA (APN 008-530-007) to Petaluma Ecumenical Properties, Inc. (PEP) and Authorizing the City Manager to Execute the Lease and Related Documents. BACKGROUND The City of Petaluma has historically acted in partnership with nonprofit developers to address the City Council's goal of providing safe, decent, affordable housing for the community's low- income seniors. As part of that goal, the City assisted Petaluma Ecumenical Properties (PEP Housing) in the purchase of property at 951 Petaluma Boulevard South to serve as a corporate office facility and a future housing development. The City's initial financial participation (2006) consisted of a "deferred second loan" in the amount of $1,432,000. That loan was secured by a Deed of "Crust and evidenced by a Note and a Memorandum of Understanding (MOU) containing certain conditions regarding future development of the site. Due to the economic downturn, a financial restructuring was necessary to provide PEP with the financial aid to more efficiently address its primary mission of providing affordable senior housing. The City paid off PEP Housing's first mortgage in the amount of $975,458.92 and tools possession of the property, leasing the building to PEP housing for their corporate office. Monthly rent was established at $2,000 per month for a 4 year term. DISCUSSION A lease was entered into between the City of Petaluma and Petaluma Ecumenical Properties, Inc. on March 1, 2011 and continues through February 28, 2015. PEP Housing wishes to renew the lease for a five year term. PEP Housing is a developer of affordable housing and uses the property as their corporate office. The cost of maintenance on the property is the responsibility of PEP Housing. Pursuant to the requirements of the California Environmental Quality Act (CEQA), Titic 14, Chapter 3 of the California Code of Regulations (C] --,QA Guidelines), sections 15061, 15301, the action qualities for a categorical exemption because it involves operation, repair, maintenance, permitting, leasing, licensing and minor alteration of an existing facility involving negligible or no expansion of use beyond that existing at the time of the City's determination. FINANCIAL IMPACTS In consideration of the important community service that PPP Housing delivers providing opportunities for the community's low-income seniors to obtain safe, clean, affordable housing , the rent on the leased space is proposed to be $2,000 per month which is below market rent. ATTACHMENTS 1. Ordinance 2. Lease (Exhibit A)