City Council
MEETING DATE: 9/23/2015
TITLE:
Title
Civic Center Lease Space
End
FROM:
Leisa Lukes, Economic Development Manager
RECOMMENDATION:
Recommendation
Staff recommends the City Council receive the presentation and provide direction to staff.
Body
BACKGROUND:
The approximate 1,040 square-foot space located in the east wing of the Civic Center building is currently unoccupied. Since August 2012, the space has been leased to the Cathedral City Chamber of Commerce. The Chamber vacated the space on August 31, 2015. Staff is seeking Council direction before pursuing a re-use of the space.
DISCUSSION:
The Civic Center building is primarily occupied by the City's administration offices and police department and serves as City Hall for the City of Cathedral City. There is a minimal amount of space within the Civic Center building that is used for non-City Hall purposes. One such space is a small, 100 square-foot office located on the first floor facing Avenida Lalo Guerrero that is currently leased to US Senator Barbara Boxer, which will expire upon her exit from office.
There is also a 1,040 square-foot space located on the first floor in that same east wing of the facility that, until recently, served as the offices for the Cathedral City Chamber of Commerce and City Welcome Center. Prior to that, it was an integral part of City Hall operations, serving as the City's Housing Office until dissolution of the City's former Redevelopment Agency in 2012.
The City approved a lease agreement with the Cathedral City Chamber of Commerce, which commenced in August 2012. At that time, the relocation of the Chamber to the Civic Center addressed an immediate need of providing the Chamber with a more appealing environment than their previous location at East Palm Canyon and Date Palm Drive. In exchange for contractual services provided by the Chamber on behalf of the City, including serving as the City's Welcome Center, the lease rate was nominal at $1.00 per year and the lease term was intended to be temporary. The Chamber vacated the premises on August 31 and relocated to office space in the Perez Road Business District.
The following information is presented for Council consideration on possible alternative uses for the currently available space.
OPTION 1: Government Purpose
A. One or more elected officials (national, state, county) who represent this area may seek to have a local office in Cathedral City similar to that of Senator Boxer. Increasing their local presence may be of benefit to the elected, as well as to the community. It may also be a revenue generator. It is not known if the size of the space would meet or exceed the needs of any one representative.
B. Several City-recognized volunteer organizations, including the City's Public Arts Commission and the local Historical Society, have sought space to hold meetings, provide public displays, and store materials. Use of the space for this purpose could provide a benefit to the community. The use would not generate revenue and it is not known if multiple organizations would be agreeable to sharing space.
C. Storage space at City Hall is at a premium. Using the space for storage purposes could alleviate concerns of both City Administration and Public Safety for current and growing storage needs. The space would provide easy accessibility to stored items but it would not increase activity in downtown or generate revenue.
OPTION 2: Housing Offices
A. Elimination of the City's former redevelopment agency and associated housing programs has resulted in an increased need for Riverside County Housing Programs, such as Section 8 offerings and rehabilitation financing. A local presence by the Housing Authority of the County of Riverside would benefit Cathedral City residents in need of these services by providing local access, return the space to its previous use as a housing assistance office for the community and generate lease revenue. County office needs for this or other civic purpose would need to be determined.
B. The Riverside Housing Development Corporation is a non-profit private enterprise that offers owner-occupied renovations through a neighborhood stabilization program. They have indicated an interest in obtaining space in Cathedral City. Their presence in the city would provide a much-needed service to the community and increase activity in the downtown. This and other non-profit housing organizations could be contacted to determine specific interest.
OPTION 3: Market-Rate Lease
A. The space could be offered for market rate office or retail use. An estimated lease rate is between $0.85 and $1.10 per square foot, with the higher rate projected for retail use. Triple net rates (proportionate costs associated with landscape and building maintenance) may also be negotiated. The available space is more conducive to office use rather than retail; however, commercial broker services could be secured to professionally market the space and negotiate a lease agreement.
With any of these or other options, the City should not be responsible for the cost of tenant improvements. Any tenant improvements by a non-paying tenant should be discouraged due to the cost to return the premises to its original condition.
FISCAL IMPACT:
The currently-vacant space in the Civic Center building has been used for office purposes since being built out. It has generated minimal income over the years. The income that was derived came from housing program lease revenues that was then required to be used for housing program purposes. There is potential for the City to obtain some lease revenue from the space depending on the type of use that occupies the premises and the negotiated lease terms.