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06-10-2008 CC Rpt A11 COUNCIL AGENDA STAFF REPORT CITY CLERK USE ONLY /'—:T-' \ Meeting Date: June 10, 2008 100 •-,--k:',k, .......:.,:-. Public Hearing: 0 Discussion Item: CITY Or LIMO MIL IA Consent Item: V ._ . • ( JUNE 3, 2008 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY MANAGER SUBJECT: AUTHORIZE STAFF TO RELEASE REQUEST FOR PROPOSALS FOR THE 2,400 SQUARE FOOT LEASE SPACE IN THE NEW CITY HALL RECOMMENDATION: Authorize staff to Request Proposals for leasing the future expansion space within the new City Hall. BACKGROUND/ANALYSIS: il. The new City Hall includes approximately 2,400 square feet of office space planned for future growth. This space is not expected to be required for City use for several years. Staff has been directed to develop a strategy to lease this space for a period of time until it is needed for City purposes. Staff is recommending that this space be leased to a tenant for professional use that is compatible with operations being conducted at the Government Center. This would be a full service gross lease, which means the landlord pays for the utilities, janitorial services and repairs to the space. The term of a lease would be for five years with an option by both parties for an additional five years. Staff is recommending that this area be marketed as single 2,400 square foot space. This recommendation is a result of several conversations with individuals with expertise in this area including Opus West and CB Richard Ellis. Staff has been told that it would be much easier to find a single professional use tenant rather than splitting the space into two smaller units. In addition, this will also eliminate the cost of additional construction to prepare the spaces, and additional costs to convert it for City use in the future. Staff is recommending that the space be fully constructed using the trade contractors currently constructing the Government Center. This would significantly reduce the construction cost, eliminate the need to establish a tenant improvement allowance and openable the area to be advertised as a finished space. In addition, this would ensure design consistency with the rest of the City Hall and eliminate construction activity from taking place after the grand opening. The current estimate to complete this work is $140,000. This additional work requires several change orders that will be taken to the City Council at a later date for approval. /L)// AGENDA DATE: JUNE 10, 2008 PAGE TWO SUBJECT: AUTHORIZE STAFF TO RELEASE REQUEST FOR PROPOSALS FOR THE 2,400 SQUARE FOOT LEASE SPACE IN THE NEW SOCITY HALL- Lastly, it is recommended that the space be marketed using City staff rather than a commercial broker. Staff is confident that this will be a highly desirable location given the quality of construction and proximity to the City Hall and the Shoppes at Chino Hills. This would eliminate the cost of broker commissions, which is typically 5% of the lease price. In the event that staff is unsuccessful,-a broker could be enlisted at a later date. If this agenda item is approved, staff will finalize the lease agreement language and begin advertising this space. Advertisements will be placed in local print media, on the City web site, and other trade publications. In addition, Chino Hills' professional services businesses currently operating under a home occupation permit will be invited to submit proposals. Staff expects to collect and begin reviewing the proposals in August. A selection committee will make a recommendation to the City Council for final approval. A copy of the draft Request for Proposal is attached to this staff report for your review. REVIEW BY OTHERS: III. This item has been reviewed by the City Attorney, the Finance Director, and the Contract Compliance Officer. FISCAL IMPACT: There is no fiscal impact associated with is agenda item at this time, however a change order to the current Government Center Construction Project will be required at a later date. Respectfully submitted, Recommended by: 79. .4/_ ,..,e4,, bouglasX. La Belle, Cit Manager 7--kci Kathleen Gotch, Assistant City Manager DLB:KG:JM:ssr 41110 • CITY OF CHINO HILLS Request for Proposals (RFP) for Lease Space in New City Hall Date: June 16, 2008 Department: City Manager's Office DRAFT Project Name: Tenant for Leased Space in New City Hall Proposal Due Date: August 4, 2008 Time: 4:00 P.M. Proposals must be submitted to the: City of Chino Hills City Clerk's Office 2001 Grand Avenue Chino Hills, CA 91709 Proposal Information — Format: Proposals will be received by the City of Chino Hills, hereinafter called the "City", at the office of the City Clerk, 2001 Grand Avenue, Chino Hills, California 91709, until 4:00 p.m., August 4, 2008. Each Proposal must be submitted in a sealed envelope, addressed to the City at the above-referenced address. Each sealed envelope containing a Proposal must be plainly marked on the outside as "Proposal for: "Leased Space in New City Hall" and prospective tenant's, name and address. If forwarded by mail, the sealed envelope containing the Proposal must be enclosed in another envelope addressed to the City of Chino Hills, c\o City Clerk, 2001 Grand Avenue, Chino Hills, California 91709. Submittal of three copies of the proposal is required. Proposals from real estate brokers, on behalf of a client/prospective tenant, will not be accepted. Real estate brokers interested in this space for their own operations as a prospective tenant are welcome to submit a proposal. Copies of the Request for Proposals may be obtained at the City Manager's office of the City of Chino Hills, 2001 Grand Ave, Chino Hills, California 91709. Questions regarding the Request for Proposal should be directed to John Mura, Assistant to the City Manager, (909) 364-2625; e-mail: jmuraAchinohills.orq • Description/Background: ORAPr Chino Hills is well known for its high quality of life and beautiful rural atmosphere. The community, with its growing population of 77,969, boasts 3,000 acres of publicly-owned open space, 40 parks, 38 miles of trails, and five community buildings. Chino Hills' reputation is known in the national arena as well, as it was featured on the list of 87 of America's hottest towns in the January 2004 issue of Money magazine. Chino Hills was ranked 8th on the list of"best places in the west with a population under 100,000." The magazine reviewed a decade of data for communities with above average population growth, income, and home prices "to see where people were most willing to devote a high multiple of their annual income to live happily ever after." Chino Hills' strong demographics and its location at the convergence of Orange, Riverside, Los Angeles, and San Bernardino Counties make it attractive to commercial developers. The City's high median household income of $86,443 (in 2002) is second only to the exclusive community of Indian Wells in the Inland Empire. Prominent retailers, like Trader Joe's, are choosing to locate in Chino Hills. Many high-end national retailers are located in the recently opened "Shoppes at Chino Hills." This lease space is located in City's first permanent Government Center, currently 0 under construction east of Peyton Drive at the new City Center Drive between the U.S. Post Office and St. Paul the Apostle Catholic Church. The new City facilities are located south of the recently opened Shoppes at Chino Hills. The area is already becoming known as the new "Main Street" Chino Hills. Lease Terms: See attached proposed lease, which is open to negotiation. Site Specific Data: See attached diagram. This is class A office space offered in the new Chino Hills City Hall building. Property highlights include: • Adjacent to the new Chino Hills Police/ Sheriffs Station and Branch Library. • Walkable to the new Shoppes at Chino Hills lifestyle center and restaurants. • Near the corner of Peyton and Grand; close to the 71 Freeway. • Approximately 2450sf available as one unit. Fully built out on the ground floor with separate entrances. • Near a no fee parking structure. • Anticipated to be a 2.65/sf full service gross/five year lease with possibility of an extension. • Space will be fully constructed and available on January 1, 2009 • 2 0 Deliverables: Each prospective tenant shall provide: 1. A copy of their business plan and a description of its operation. 04) 2. Hours of operations; number of employees; list of major clients. 3. Willingness to agree to lease terms. "IP?* 4. Copies of company's past two corporate tax returns. 5. Identity of point of contact. 6. Copy of company's credit report. 7. Preferred move-in date. 8. Evidence of no conflict between the existing rental agreement and a new lease with the City. Insurance: 1. Insurance Requirements. The selected tenant shall provide and maintain insurance acceptable to the City Attorney in full force and effect throughout the term of the lease. Insurance is to be placed with a current A.M. Best's rating of no less than A:VII with the City of Chino Hills named as an additional insured on the following: a. Minimum Scope of Insurance. Coverage shall be at least as broad as: • (1) Commercial General Liability coverage. (2) Automobile Liability coverage. (3) Workers' Compensation insurance as required by the Labor Code of the State of California and Employer's Liability Insurance and covering all persons providing service on behalf of the selected tenant. b. Minimum Limits of Insurance. Selected tenant shall maintain limits of insurance no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage. (3) Worker's Compensation and Employer's Liability: Worker's Compensation as required by the Labor Code of the State of California and Employer's Liability limits of$1,000,000 per accident. • 3 • 2. Other Provisions. Insurance policies required by this Agreement shall contain the following provisions: a. All Policies: Each insurance policy required by this paragraph shall be endorsed and state the coverage shall not be suspended, voided, canceled by the insurer, reduced in coverage or in limits except after 30days prior written notic Certified mail, return receipt requested, has been given to the City. .:opt b. General Liability and Automobile Liability Coverages: (1) City, its officers, officials, employees and volunteers are to be covered as additional insured as respects: liability arising out of activities Tenant performs, products and completed operations of Tenant; premises leased by Tenant. The coverage shall contain no special limitations on the scope of protection afforded to City, its officers, officials, employees or volunteers. (2) Tenant's insurance coverage shall be primary insurance as respects to City, its officers, officials, employees or volunteers. (3) Tenant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 4111 (4) Anyfailure to comply with the reporting or other provisions of the PY P 9 policies including the breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees or volunteers. c. Worker's Compensation and Employer's Liability Coverage. Unless the City Manager otherwise agrees in writing, the insurer shall agree to waive all rights of subrogation against the City, its officers, officials, employees and agents for losses arising from Tenant's operation. Subleasing: The selected tenant shall not sublease any part of the leased space without the written approval of the City of Chino Hills. Selection Criteria: A primary and a secondary prospective tenant will be selected and held in abeyance pending negotiations with the primary. The following criteria will be used to make these selections and recommendations to the City Council: 1.Governmental compatibility of thei business. No food or medical uses will be considered. 2. Financial strength of the prospective tenant. 3. Willingness to abide by Civic Center rules and procedures. 4 4. Evidence of no conflict between the existing rental agreement and a new lease with • the City. 5. Acceptability of any special tenant requirements or requests. Nothing contained herein shall create any contractual relation between any prospective tenant and the City. The City of Chino Hills maintains the right to reject any or all proposals for any reason at the City's discretion. A voluntary site visit is planned approximately two weeks before the proposals are due. Please contact John Mura, Assistant to the City Manager, at (909) 364-2625 to register your interest. °RA F r • • 5