| | | | | | | | Agenda Item - 3.c.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Lisa L. Kim
| | Dept.: | City Manager
| Dept.: | Community and Economic Development
| | Subject: | Approval to extend the Lease Agreement with the Credit Union of Southern California for property located at 11390 Stanford Avenue, Garden Grove. (Action Item) | Date: | 10/25/2022 |
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| | | | | | | | OBJECTIVE
For City Council to approve the Sixth Amendment to the Credit Union of Southern California Lease (Sixth Amendment) for the continued use of office space at 11390 Stanford Avenue, Garden Grove. |
| | | | | | | | BACKGROUND
The office located at 11390 Stanford Avenue owned by the City of Garden Grove (City) has been leased to Credit Union of Southern California and its predecessor, Golden West Cities Federal Credit Union (Golden West), since 1979. In 2002, the City and Golden West executed a lease amendment (First Amendment), extending the term for fifteen (15) additional years. In 2014, Credit Union of Southern California (CUSC) and Golden West merged and the lease was assigned to CUSC. In September 2016, Staff and CUSC negotiated another lease extension (Second Amendment) for three (3) additional years, with two (2) one-year options. In 2019, the City and CUSC executed the Third Amendment, the first of two (2) one-year options, extending the lease through December 1, 2020. In 2020, the City and CUSC executed the Fourth Amendment, extending the lease for the second one-year option through December 1, 2021, and negotiated for two (2) additional one-year lease extension options with the rent adjusted each year via Consumer Price Index (CPI), not to exceed three percent (3%). The first-year option extended the lease through December 1, 2022. |
| | | | | | | | DISCUSSION
The CUSC has requested to exercise the second, one-year lease extension option, extending the lease through December 1, 2023, the Sixth Amendment. The rent will be adjusted via CPI, calculated at 3.0% maximum, the new rent will be Five Thousand Eight Hundred and Ten Dollars and 18/100 Cents ($5,810.18) per month. Additionally, the CUSC has requested for one (1) more one-year lease extension option to be added to the Sixth Amendment with the same CPI rent adjustment terms. |
| | | | | | | | FINANCIAL IMPACT
Revenues generated from the Sixth Amendment in the amount of $5,810.18 per month or $69,722.12 for the year will be deposited into the City’s General Fund. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
- Approve the Sixth Amendment to the Lease Amendment with Credit Union of Southern California for continued occupancy of 11390 Stanford Avenue; and
- Authorize the City Manager to execute the Sixth Amendment and make minor modifications as needed on behalf of the City.
By: Paul Guerrero, Real Property Agent
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