2009122105MEETING DATE: 12/21/09
ITEM NO.
COUNCIL AGENDA REPORT
DATE: December 15, 2009
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
5
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE THE THIRD AMENDMENT TO THE AGREEMENT FOR
PARKING LOT LEASE BETWEEN THE TOWN OF LOS GATOS AND
VERIZON CALIFORNIA, INCORPORATED TO ALLOW VERIZON
CALIFORNIA, INCORPORATED'S PARKING AREA TO BE MODIFIED
TO INCLUDE THREE ADDITIONAL PARKING SPACES (REDUCING
THE NUMBER OF SPACES AVAILABLE FOR PUBLIC PARKING BY
THREE)
RECOMMENDATION:
Adopt resolution authorizing the Town Manager to execute the third amendment to the agreement
for parking lot lease between the Town of Los Gatos and Verizon California, Incorporated to allow
Verizon California, Incorporated's parking area (as defined in the original lease and depicted on
Exhibits A and B attached to the original lease) to be modified to include three additional parking
spaces (reducing the number of spaces available for public parking by three).
BACKGROUND:
On June 17, 2002, Council adopted a resolution authorizing the Town Manager to execute a 15
year lease agreement with Verizon California, Incorporated for the use of their parking lots located
at 15 Montebello Way. The Town currently uses the upper lot for public all day parking. The
agreement allowed a small number of parking spaces to be reserved for Verizon's exclusive use
within a designated boundary near the Montebello entrance to the lot and the lower lot adjacent to
Park Avenue. A separate Verizon parking lot located adjacent to the Post Office is subleased to the
Post Office by the Town under a separate agreement.
PREPARED BY: D LORTZ
Deputy Town Manager
BL:pg
N:\MGR\AdminWorkFiles\2009 Council Reports\12-21 Verizon Parking Lot Lease.doc
Reviewed by:Assistant Town Manager _Town Attorney Clerk Administer
4ei Finance Community Development Revised: 12/15/2009 12:45 PM
Reformatted: 5/30/02
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: VERIZON PARKING LOT LEASE
DECEMBER 15, 2009
BACKGROUND: (continued)
The Town's recent purchase of the Verizon property located at 930 University Avenue for public
recreation facilities required the relocation of the staff at the Verizon corporation.yard facility on
University to other Verizon facilities. Several of the employees have been assigned to the Verizon
facility at 15 Montebello Way. In addition, there is a need for Verizon to provide a secure area for
two backup generators. As a result of the additional staff now located at the Montebello Facility
and to provide a secure area for the two backup generators, Verizon needs to reserve three
additional parking spaces for their exclusive use. These three spaces are located on the upper lot
adjacent to the driveway that connects the upper lot to Park Avenue. Verizon proposes to prorate
the price of the three spaces, which would reduce the amount of monthly rent the Town currently
pays for the parking lot. Verizon intends to separate those three spaces from the rest of the public
lot with fencing and gates, in order to maintain it exclusively for their use. The proposed fencing
will be installed in a manner that will maintain the existing traffic flow in and around the site.
Consequently, the parking lease agreement must be amended to reflect this reduction in leased
spaces from 64 spaces to 61 spaces. The attached Third Amendment to the Parking Lot Lease
memorializes this adjustment in parking spaces leased from Verizon
DISCUSSION:
The Town of Los Gatos currently pays Verizon $4,504.98 per month for use of their parking lots
located at 15 Montebello Way. While these parking lots contain a total of 64 spaces, the Town
subleases 35 spaces on an adjacent parking lot to the Post Office for their exclusive use. This leaves
a remainder of 29 parking spaces designated for public use. There are three spaces located on the
upper lot adjacent to the driveway that connects the upper lot to Park Avenue. These three spaces
will be fenced to provide a secure an area for two backup engine generators. The loss of these
three spaces will reduce the total spaces available for public parking to 26.
The agreement allowed for Verizon to construct a fence between the main lot and the Park Avenue
portion of the lot to separate the lots and install gates to discourage through traffic between the two
areas. However, the agreement provides for the Town to keep the gates open for special events
such as the Farmer's Market and Montebello Way road closures. This is a significant benefit to
residents and visitors.
Based on the current lease amount, the Town is paying $70.39 per parking space per month.
Verizon's proposal is to regain the three parking spaces, and subsequently reduce the lease amount
to the Town by $211.17 per month. This would result in annual savings to the Town in the amount
of $2,534.04.
This modification of the lease will reduce the Town's available inventory of parking spaces in
the downtown business district. However, the recent Town purchase of property at Main and
Lyndon allowed for the expansion/reconstruction of Parking Lot 6 behind the La Canada Building.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: VERIZON PARKING LOT LEASE
DECEMBER 15, 2009
That project increased the supply of downtown public parking by 32 spaces. It is important for the
Town to maintain a good working relationship with Verizon to ensure continued public use of the
upper Verizon parking lot.
CONCLUSION:
Staff is recommending that Council adopt a resolution authorizing the Town Manager to execute
the third amendment to the agreement for the parking lot lease between the Town of Los Gatos
and Verizon California, Incorporated.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The expense for the Verizon Parking lot lease is paid out of account # 2207-6931. The contract
contains a graduated increase in lease costs of 15% each 5 year period. The next increase will occur
on 5/1/14. While the rent reduction figure of $2,534.04 is based on a current per space lease cost
multiplied by three spaces, this figure will increase each 5 years as the pricing structure is adjusted.
The overall reduction in costs for the life of this lease due to the transferring of three additional
spaces to Verizon California, Incorporated is estimated to be $27,240.93.
Attachment:
Resolution authorizing the Town Manager to execute the third amendment to the Agreement
for the parking lot lease between the Town of Los Gatos and Verizon California, Incorporated
Distribution:
Verizon, Incorporated
L
RESOLUTION
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO NEGOTIATE AND EXECUTE
THE THIRD AMENDMENT TO THE AGREEMENT FOR THE
PARKING LOT LEASE BETWEEN THE TOWN OF LOS GATOS AND
VERIZON CALIFORNIA, INCORPORATED
WHEREAS, on May 28, 2002, the Los Gatos Town Council approved a fifteen year lease
agreement with Verizon California, Inc. to use a portion of the lot located at 15 Montebello Way, Los
Gatos for public parking; and
WHEREAS, on March 17, 2003, both parties amended the lease agreement to, in part,
limit the number of Verizon's parking spaces to be constructed within the premises boundary; and
WHEREAS, on October 10, 2006, both parties amended the lease agreement again to reduce
parking spaces leased to the Town of Los Gatos by seven (7), with a commensurate, prorated reduction in
the lease cost, and install two new gates; and
WHEREAS, Verizon California, Incorporated now desires to enter into a third amendment
(attached) of the lease to further reduce parking spaces leased to the Town of Los Gatos by three (3),
with a commensurate, prorated reduction in the lease cost.
NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Los Gatos
in the County of Santa Clara, State of California, that the Town Manager is authorized, and is hereby
directed to negotiate and execute the Third Amendment to the agreement for Parking Lot Lease
with Verizon California, Incorporated
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the day of by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
N:\MGR\AdminWorkFiles\2009 Council Reports\12-21 Verizon Parking Lot Lease Resolution.doc
CLERK I)EPAftI\'1��N.I.
AGR. LP.,. • `2_-•
[HH
ORD
THIRD AMENDMENT TO PARKING LOT LEASE `ZEC� �v
This Third Amendment to Parking Lot Lease ("Amendment") dated for reference
purposes only, November 13, 2009, is made by and between by and between Verizon California
Inc., a California corporation ("Landlord") and Town of Los Gatos, a municipal corporation
("Tenant").
RECITALS
A. Landlord and Tenant entered into a Parking Lot Lease dated May 28, 2002, as
amended by that certain First Amendment to Parking Lot Lease dated March 17, 2003, and as
further amended by that certain Second Amendment to Parking Lot Lease dated October 10,
2006 (as amended, the "Lease") for a portion of the property located at 15 Montebello Way, Los
Gatos, California.
B. The parties are now entering into this Amendment to reduce the number of
parking spaces leased by Tenant from sixty-four (64) parking spaces to sixty-one (61) parking
spaces and to make certain additional modifications to the Lease as set forth herein. All
capitalized terms not defined herein shall have the same meaning they are given in the Lease.
NOW, THEREFORE, in consideration of the mutual covenants herein expressed and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Tenant and Landlord agree as follows:
1. Landlord's Parking Area; Premises. The parties acknowledge and agree that
effective as of December 1, 2009, Landlord's Parking Area shall be modified to include three (3)
additional parking spaces and the number of Tenant's parking spaces contained in the Premises
shall be reduced by three (3) parking spaces, which parking spaces shall be reserved for
Landlord's exclusive use. Accordingly, as of December 1, 2009, (i) the number of Tenant's
parking spaces within the Premises shall be reduced from sixty-four (64) parking spaces to
sixty-one (61) parking spaces, (ii) Exhibit "A" (Depiction of Premises) attached to the Lease
shall be replaced and superseded with Exhibit "A" attached to this Amendment, and (iii) Exhibit
"B" (Depiction of Landlord's Parking Area) attached to the Lease (as modified by Exhibit "B"
attached to the Second Amendment to Parking Lot Lease (the "2"d Amendment")) shall be
replaced and superseded with Exhibit "B" attached to this Amendment. Tenant shall not make
any modifications to the Premises, including, without limitation, striping of parking spaces,
without Landlord's prior written consent.
2. Rent. Commencing upon December 1, 2009, the Base Rent set forth in Paragraph
2(a) of the Lease (as modified by Paragraph 3 of the 2"d Amendment) shall be amended to read
as follows:
Period Monthly Base Rent
12/01/2009 — 04/30/2014 $4,293.81
05/01/2014 — 04/30/2019 $4,937.87
\ 10140643.2
3. Notices. Landlord's notice address contained in Paragraph 15 of the Lease (as
modified by Paragraph 4 of the 2"d Amendment) is hereby deleted in its entirety and replaced
with the following:
Jones Lang LaSalle Americas, Inc.
c/o Verizon California Inc.
2200 West Airfield Drive, Dock E
Dallas/Fort Worth Airport, TX 75261
4. Patriot Act Compliance. Each party shall take any actions that may be required to
comply with the terms of the USA Patriot Act of 2001, as amended, any regulations promulgated
under the foregoing law, Executive Order No. 13224 on Terrorist Financing, any sanctions
program administrated by the U.S. Department of Treasury's Office of Foreign Asset Control or
Financial Crimes Enforcement Network, or any other laws, regulations, executive orders or
government programs designed to combat terrorism or money laundering, or the effect of any of
the foregoing laws, regulations, orders or programs, if applicable, on this Lease. Each party
represents and warrants to the other party that it is not an entity named on the List of Specially
Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury, as
last updated prior to the date of this Lease.
5. Effectiveness of Lease. All terms and provisions of the Lease shall remain in full
force and effect, except as expressly amended or modified hereby, and are hereby ratified and
reaffirmed. In the event of any inconsistency between the provisions of this Amendment and the
provisions of the Lease, the provisions of this Amendment shall control.
6. Counterparts and Facsimile. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument. The parties acknowledge the validity of signatures by
facsimile.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
\10140643.2
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment as
of the day and year first above written.
LANDLORD: TENANT:
VERIZON CALIFORNIA INC., TOWN OF LOS GATOS,
a California corporation a municipal corporation
By:
By:
Title: i'�ef iS Title:
APPROVED AS TO FORM
McGUIREW00DS LLP
By:
Date: j ►►
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By:
Title:
ATTEST:
, Clerk Administrator
APPROVED AS TO FORM:
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By: v J
Orry P. Korb, Town Attorney
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DEPICTION OF PREMISES
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