pages: AlamedaReuseandRedevelopmentAuthority/2005-03-02.pdf, 3
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| AlamedaReuseandRedevelopmentAuthority | 2005-03-02 | 3 | Chair Johnson stated that the information given at the workshops should include the fact that some solutions are never going to happen because they are so expensive, or at least not in the foreseeable future. There are some solutions that are feasible long term, but we're looking at short term feasible solutions that can get started even before base development starts. REGULAR AGENDA ITEMS 4-A. Recommendation to approve a 10-year lease agreement with Nelson's Marine for Building 167. Nanette Banks, Finance and Administration Manager introduced David Jaber, regional vice- president of PM Realty Group. Mr. Jaber presented a short analysis regarding the Nelson's Marine issue. Mr. Jaber recommends the lease and supports the market rent for Nelson's Marine. He also analyzed the $34M difference that was presented by the boat yard attorney at the last ARRA board meeting. Mr. Jaber gave a brief background and discussed how the fair market value of the Nelson's Marine rent was determined: Nelson's Marine was one of the first groups out to Alameda Point, with a 5 year lease which contained a clause that allowed for renewal at 90% of fair market value. This survey was performed by Dunn Associates and that helped determine the fair market value. The fair market value component provided by Dunn & Associates was on the base rent. When the rent survey was done, the focus was on four things: 1) review of the lease and the leases, 2) site coverage ratio, 3) the gross rent and net rent conversion, 4) the review of the rent per square foot. Mr. Jaber gave a review of the leases, comparing the costs between two boat yard leases for taxes, insurance, and maintenance. He analyzed the numbers -- using a 20 yr. term to help explain the differential -- which showed that the $34M loss, proposed by the opposing four boatyards, was not supported. His analysis further justified that the net lease proposed comes out with the appropriate rate. Mr. Jaber concluded that the fair market value -- the 31.5 % based upon the 90% of fair market value -- is appropriate for the lease. He included percentage rent, the ability to prosper as the tenant prospers, sublease recapture, which doesn't allow the tenant to profit by bringing in subtenants, rental increases, 2% every year, justified considering there is the ability to reduce the land space by 75,000 sq feet, and lastly a 10 yr term is very appropriate. Mr. Jaber recommended the Nelson lease for approval. Mayor Johnson called a few speakers. Richard Lyons of Wendell, Rosen, Black and Dean spoke on behalf of Nelson's Marine and addressed the legal aspects of the lease, explaining Mr. Nelson's rights to extend the lease, right of first negotiation and the price for that right, and the contractual obligation on the part of the City and Mr. Nelson to abide by determination of the appraiser regarding the lease term. He requested that the two leases be approved. Carl Nelson, president of Nelson's Marine thanked Mr. Jaber and Mr. Lyons and looks forward to having his business here for at least another 10 years. 3 | AlamedaReuseandRedevelopmentAuthority/2005-03-02.pdf |