CITY COUNCIL STAFF REPORT
MEETING DATE: June 17, 2015
PREPARED BY: Chris Ghione, Community Services Director
APPROVED BY: City Manager
Title
FIFTH AMENDMENT TO GAVILAN COMMUNITY COLLEGE LEASE
END
RECOMMENDATION(S)
RECOMMENDATION
Adopt a resolution authorizing the City Manager to execute and administer a fifth amendment to the lease with Gavilan Community College.
BODY
COUNCIL PRIORITIES, GOALS & STRATEGIES:
Ongoing Priorities
Maintaining fiscal responsibility
Supporting youth
2015 Focus Areas
Stimulate Economic Development
Participate in Regional Issues
REPORT NARRATIVE:
Gavilan Community College has leased space at the Community and Cultural Center as a satellite campus for a number of years. The original lease was executed in December of 2001. Since then, four amendments have been made to the lease extending it through June 2015. Both City staff and Gavilan College staff consider the facility use a partnership and a benefit to the Morgan Hill Community. Classes are held daily at the site with thousands of students utilizing the campus each year.
For the duration of the lease, Gavilan has paid a per square foot monthly lease rate and the direct costs and fair share costs for maintenance services provided by the City. Increases in the lease have occurred annually and are tied to the consumer price index. For the future lease agreement, Gavilan has requested that some changes in responsibility be made for maintenance. In the proposed amendment, the City will begin paying for specific maintenance functions directly and in return the college will increase the monthly lease rate by $0.12 per square foot ($15,000 annually) to cover the cost of these maintenance services. Gavilan will continue to pay directly for all utilities and will also begin providing all staffing and supplies related to the janitorial service of their site. The half-time City staff member that is currently providing janitorial service at the college will be transferred to support janitorial services at other City locations as demand for services has increased.
Gavilan intends to continue to utilize the satellite campus location in Morgan Hill for an extended period. It is requesting that the lease be extended for five years with options for an additional three years.
COMMUNITY ENGAGEMENT: Not Applicable
Discussion of the lease renewal occurred with Gavilan College staff. Gavilan College has identified the need to provide a satellite campus as an educational resource in the Morgan Hill Community.
ALTERNATIVE ACTIONS:
The Council could elect to not renew the lease with Gavilan College or renew the lease at a shorter term. Both these options are not recommended as Gavilan’s use provides for educational services to the community and consistent lease revenue to the City.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
The original lease agreement was approved by Council in December of 2001. Amendments to the agreement were approved by Council in January 2003, March 2009, November 2009, and December 2012.
FISCAL AND RESOURCE IMPACT:
The Gavilan College lease will provide annual lease revenue of approximately $200,500.00. Revenue will adjust annually based upon the consumer price index.
CEQA (California Environmental Quality Act):
Categorical Exemption
The activities allowed under this amendment are categorically exempt from the provisions of CEQA pursuant to CEQA Guideline Section 15301 (Existing Facilities), as this lease amendment provides for the continued, ongoing operation of an existing facility with no expansion in use.
LINKS/ATTACHMENTS:
Resolution
Lease Agreement