22. 4th amendment to lease 20410 Town Center Lane, Ste. 210OFFICE OF THE CITY MANAGER
10300 TORRE AVE. • CUPERTINO, CA 95014
TELEPHONE: (408) 777 -3212 • FAX: (408) 777 -3366
CUPERTINO
SUP4MARY
Agenda Item No. 22
MEETING DATE: March 16, 2010
SUBJECT
Authorize the City Manager to negotiate and execute the fourth amendment to the lease for 20410
Town Center Lane, Suite 210, in accordance to the terms of the proposal attached as Exhibit B.
BACKGROUND
The City currently leases approximately 1500 square feet of office space for the City Attorney and
staff at 20410 Town Center Lane, Suite 210 in Cupertino. The current lease expires on April 30,
2010.
In February, 1999, the City leased a 1523 sq. foot office at 10320 De Anza Blvd for $2.55 per
square foot with annual increases of approximately 5.5% for a five year term. In 2003, the lease
was amended to accommodate the relocation to 20410 Town Center Lane, Suite 210 (Civic Park
Plaza), the current location. This office is 1500 square feet. In 2003, the city exercised their option
to extend the lease for an additional five year term (2004 - 2009). In 2009 the lease was extended for
a one year term at $2.85 per square foot ($4275.00 per month). This lease expires on April 30,
2010 and the rate for following holdover months without a lease amendment will increase to $3.57
per square foot. A copy of the existing lease is attached as Exhibit A.
In an effort to retain the City as a tenant, the ownership of Civic Park Plaza has offered a reduced
rate of $2.35 per foot ($3525 per month) with 3% annual increases over a five year period and an
option to renew for an additional five year period. This lease represents a savings of $.50 per
square foot from the current rate ($750 per month). This is over a 17% reduction per month from
the current rate and establishes a stable and competitive rate over the next five years as it is
expected that lease rates will increases as the economy grows stronger. Additionally, this rate is
less than lease rates for comparable office spaces in Cupertino. Cupertino office space averaged
$2.83 per square foot in the 4 quarter. The proposal is attached as Exhibit B.
RECOMMENDATION
Authorize the City Manager to negotiate and execute the fourth amendment to the lease for 20410
Town Center Lane, Suite 210, in accordance to the terms of the proposal attached as Exhibit B.
0415
Submitted by:
David W. Knapp, City Manager
b jtj 1�rA A zi
Carol Korade, ity ttorney
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THIRD AMENDMENT TO LEASE
This Third Amendment to Lease (the 'Third Amendment ") is entered into as of this day of
November, 2008 by and between Fund VIII Cupertino, LLC, a Delaware limited liability company
( "Landlord "), and the City of Cupertino ( "Tenant "), with reference to the following recitals.
RECITALS:
A. On or about February 4,1999, Town Center Associates ( "Town Center ") and Tenant entered
'into a lease agreement (the "Original Lease ") for that certain premises commonly known as Suite 1 -D (the
"Original Premises "), 10320 South De Anza Boulevard, Cupertino, California (the "Building "). Town
Center subsequently sold the Building to CTC Funding, LLC ( "CTC "), and CTC became the landlord under
the Original Lease. On or about December 3, 2003, CTC and Tenant entered into a First Amendment to
Lease Agreement (the "First Amendment "), and pursuant to the First Amendment Tenant's premises was
relocated from the Original Premises to Suite 21.0, 20410 Town Center Lane, Cupertino, California (the
"Premises "). On or about June 21, 2004, CTC and Tenant entered into a Second Amendment to Lease
Agreement (the "Second Amendment "). The Original Lease 'as modified by the First Amendment and the
Second Amendment is hereinafter referred to as the "tease ".
B. Landlord previously purchased the Building from CTC and is now the landlord under the
Lease.
C. The term of the lease will expire on April 30, 2009 (the "Expiration Date "), and Landlord and
Tenant desire to extend the term of the Lease for.one ;1) year.
D. Landlord and Tenant wish to amend the Lease on the terms and conditions set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Extension of Term The term of the Lease is hereby extended for one (1) year, and the term
of the Lease shall expire on April 30, 2010:
2. Minimum Monthly Rent Prior to May 1, 2009, Tenant shall continue to pay the minimum
monthly rent_required by the Lease. From and after May l,'2009, Tenant shall pay minimum monthly rent in
the amount of $4,275.00 per month.
3. Certain Provisions Sections 7 and 9 of the First Amendment are hereby deleted in their
entirety and shall be of no further force or effect.
4. Conflict If there is a conflict between the terms and conditions of this Third Amendment and
the terms and conditions of the Lease, the terms and conditions of this Third Amendment shall control.
Except as modified by this Third Amendment, the terms and conditions of the Lease shall remain in full force
and effect. Capitalized terms included in this Third Amendment shall have the same meaning as capitalized
terms in the Lease unless otherwise defined herein. - - enant hereby acknowledges and agrees that the
Lease is in full force and effect, Landlord is not currently in default under the Lease, and, to the best of
Tenant's knowledge, no event has occurred which, with the giving of notice or the passage of time, or both,
would ripen into Landlord's default under the Lease.
5. Authority The persons executing this Third Amendment on behalf of the parties hereto
represent and warrant that they have the authority to exe ;ute this Third Amendment on behalf of said parties
and that said parties have authority to enter into this Th rd Amendment.
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EXHIBIT A
6. Brokers Tenant and Landlord each represent and warrant to the other that neither has had
any dealings or entered into any agreements with any person, entity, broker or finder other than Cornish &
Carey Commercial, who has exclusively represented Landlord, in connection with the negotiation of this
Third Amendment, and no other broker, person, or entity is entifled to any commission or finder's fee in
connection with the negotiation of this Third Amendment, and Tenant and Landlord each agree to indemnify,
defend and hold the other harmless from and against any claims, damages, costs, expenses, attorneys' fees
or liability for compensation or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the indemnifying party.
7. Confidentiality Tenant acknowledges and agrees that the terms of this Third Amendment are
confidential and constitute proprietary information of Landlord. Disclosure of the terms hereof could
adversely affect the ability of Landlord to negotiate other leases with respect to the property and may impair
Landlord's relationship with other tenants of the property. Tenant agrees that it and its partners, officers,
directors, employees, brokers, and attorneys, if any, shall not disclose the terms and conditions of this Third
Amendment to any other person or entity without the prior written consent. of Landlord which may be given or
withheld by Landlord, in Landlord's sole discretion. it is understood and agreed that damages alone would
be an inadequate remedy for the breach of this provision by Tenant, and Landlord shall also have the right to
seek specific performance of this provision and to seek injunctive relief to prevent its breach or continued
breach.
8. Counterparts This Third Amendment may be executed in counterparts. Each counterpart
shall be deemed an original, and all counterparts shall be deemed the same instrument with the same effect
as if all parties hereto had signed the same signature page.
9. _ Delivery of Amendment Preparation of this Third Amendment by Landlord or Landlord's
agent and submission of same to Tenant shall not be deemed an offer by Landlord to enter into this Third
Amendment. This Third Amendment shall become binding upon Landlord only when fully executed by all
parties and when Landlord has delivered a fully executed original of this Third Amendment to Tenant. The
delivery-of this Third Amendment to Tenant shall not constitute an agreement by Landlord to negotiate in
good faith, and Landlord expressly disclaims any legal obligation to negotiate in good faith.
10. Notices All notices provided by Tenant to Landlord pursuant to the Lease shall be sent to the
following addresses:
Fund Vill Cupertino, LLC
c/o TA Associates Realty
1301 Dove Street, Suite 860
Newport Beach, California 92660
Attention: Asset Manager /Civic Park Office Center
and
Fund Vill Cupertino, LLC
c/o TA Associates Realty
28 State Street, Tenth Floor
Boston, Massachusetts 02109
Attention: Asset Manager /Civic Park Office Center
with a copy to:
Woodmont Real Estate Services
1050 Ralston Avenue '
Belmont, California 94002
Attention: Property Manager /Civic Park Office Center
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IN WITNESS WHEREOF, the parties hereby execute this Third Amendment'as of the date first
written above.
LANDLORD:
Fund Vlll Cupertino, LLC,
a Delaware limited liability company
By: The Realty Associates Fund VIII, L.P.,
a Delaware limited partnership, its sole membE:r
By: Realty Associates Fund VIII LLC,
a Massachusetts limited. liability company,
its general partner
By: Realty Associates Advisors LLC, a Delaware
limited liability company, its Manager
By: Realty Associates Advisors Trust, a
Massachusetts business trust, its Manager
TENANT *:
Officer
City of Cu o
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Its: 0-4 �.-
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C O R N I S H & C A R E Y C O M M E R C I A L
I �ZE
O N C O R I N T E R N A T I O N A L
P A L O A L T O
March 5, 2010
Ms. Teresa Zueger
City of Cupertino
20410 Town Center Lane, Suite 210
Cupertino, CA 95014
Re: Proposal to Lease Space at 20410 Town Center Lane, Suite 210, Cupertino, California
Dear Teresa:
On behalf of TA Associates Realty, we are pleased to submit the following lease proposal for your
consideration.
1. Parties:
The Parties to this proposed transaction shall be City of Cupertino as Tenant, and Fund VIII
Cupertino, LLC as Landlord.
2. Premises:
Approximately 1,500 rentable sq. ft. located at 20410 Town Center Lane, Suite 210, Cupertino,
California.
3. Use:
General Office
4. Term:
The lease term shall be for a period of five (5) years.
5. Commencement Date:
The Lease shall commence May 1, 2010.
6. Tenant Improvements:
As — is.
7. Rent:
$2.35 Full Service per rentable square foot per month, subject to annual 3% increases.
8. Operating Expenses:
The lease shall be full service in nature. Tenant shall be responsible for its pro -rata share of any
increases in the operating expenses over and above a base year of 2010.
245 LYTTON AVENUE, SUITE 150, PALO ALTO, CALIFORNIA 94301 (650) 322 -2600 FAX (650) 321 -0719
North Amerkan Offi AtianK Baltimore, 8ostom CLioegu, Dallas, Drnwrr, Houston, Kansas ON Los Angeket, New York City, PIRaAdphin, PHorni; Portland, St, Lads
Son Diego, San F—soo, Scathe. Stamford, Tarawa, WorArngim RC laternaborml Offices: Anuierdaa BertA{ Brwrsek Copenhagen. London. AJwdch, Prague Swcthohw, Komw
Ms. Teresa Zueger
City of Cupertino
March 5, 2010
9. Option to Extend:
Tenant shall be granted one (1) option to extend the lease for an additional term of five (5) years.
Rent for the option term shall be at the then Fair market rate, arbitrated if necessary.
10. Security Deposit:
The existing security deposit of $3,884.00 sLali remain unchanged.
11. Brokerage:
Cornish & Carey Commercial represents the Landlord in this proposed transaction, and both
Parties consent thereto. Landlord shall pay such brokers a fee as set forth in a separate agreement.
12. Signage:
Per the existing lease.
13. Condition of Premises:
Landlord shall deliver the Premises to Tenant in good working condition, including but not
limited to the roof, HVAC, electrical, plumbing and lighting.
14. Parking:
Per the existing lease.
15. Disclaimer:
Any terms and conditions referenced above shall not be binding upon either party until a lease
agreement has been fully negotiated and executed.
Please indicate your acceptance of this proposal by signing where indicated below and return this
document to our office no later than 5:00 P.M. on Friday, March 19, 2010. It is understood and agreed that
the rights and obligations of the parties are conditional upon the execution of a formal Lease Agreement.
If such lease is not fully executed, neither party shall have any rights or obligations under either this letter
or such lease, it being understood and agreed that this is a letter of intent to lease only.
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03/08/10 820 AM 20410 Town Center #210- City of Cupertino 3 5 10
Ms. Teresa Zueger
City of Cupertino
March 5, 2010
We look forward to hearing from you.
Sincerely,
CORNISH & CAREY COMMERCIAL
John McKenna
Vice President
Wayne Kumagai
Vice President
ACKNOWLEDGED AND ACCEPTED:
Tenant: City of Cupertino
Date:
NOTICE TO LANDLORD AND TENANT: CORNISH & CAREY COMMERCIAL, BROKER, IS NOT AUTHORIZED TO GIVE LEGAL
OR TAX ADVICE AND NO REPRESENTATION OR RECOMMENDATION IS MADE BY CORNISH & CAREY COMMERCIAL OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT OR ANY TRANSACTION
RELATED THERETO SINCE THESE ARE MATTERS WHICH SHOULD BE DISCUSSED WITH YOUR ATTORNEY.
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03/08/10 8:20 AM 20410 Town Center it210 - City of Cupertino 3 5 10