Adopt a Resolution Approving an Assignment of Lease Agreement

12.5 “Placerville, a unique historical past forging into a golden future.” City Manager’s Report August 9, 2016 City Council Meeting Prepared by: Cleve Morris, City Manager Item #: 12.5 Subject: Adopt a Resolution approving an Assignment of Lease Agreement between Mall Corp. (Assignor), Ross W. Relles Jr. and Tom Relles, (Assignee) and the City of Placerville (Lessor) for property lease located at 681 Main Street in Placerville. ______________________________________________________________________________ Background: In 2014, the California Department of Transportation (DOT) relinquished properties associated with the Highway 50 Operations Project to the City of Placerville. Most of the relinquished property was associated with vacant lands and the bike/walking trail through the City. However other areas including developed areas that had been leased to private property owners for parking. One of these areas is the property located adjacent to the trail at 681 Main Street. When this property was developed additional parking was required. At that time the property owner, Mall Corp., entered into a lease agreement with DOT for leased parking adjacent to the trail. Total leased parking is 62 Stalls. The total parking required for the facility is 122 stalls. The total number provided is 126 stalls. In May of this year, the City was contacted by Mark Len of Hallmark Realty who was representing Mall Corp and a potential buyer. In order for the sale to proceed, it is necessary for the lease to be assigned to the buyer. The current lease agreement allows for assignment upon approval of the City Council. The current agreement is an extension of the original agreement between DOT and Mall Corp which the City took over in 2014. The lease runs through July 31, 2021 and the cost for the lease is $327 per month. Discussion: The attached Assignment of lease agreement provides for the same conditions as presently exist. The Assignment releases Mall Corp of all responsibilities under the lease and is contingent on the sale of the property. The agreement has been reviewed and approved by the City Attorney and Staff is recommending approval of the agreement at this time. Options: 1. Approve the Assignment of Lease Agreement as proposed. 2. Approve the Assignment of Lease Agreement with changes.

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12.5 3. Reject the agreement and direct staff how to proceed. Cost: There is minimal cost associated with this item. The agent for the buyer prepared the agreement. Minimal cost was incurred in reviewing the agreement and preparing this report. If the assignment is not approved, the City could risk losing the lease revenue as it may put the sale of the property in jeopardy. Budget Impact: The lease revenue is budgeted in this year’s budget. If approved no budget impact would be realized. Recommendation: Adopt a Resolution approving an Assignment of Lease Agreement between Mall Corp. (Assignor), Ross W. Relles Jr. and Tom Relles, (Assignee) and the City of Placerville (Lessor) for property lease located at 681 Main Street in Placerville.

_________________________________ M. Cleve Morris, City Manager Attachments: 1. Resolution 2. Lease Assignment Agreement

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