HomeMy WebLinkAboutReso 83-2014RESOLUTION NO. 83 -2014
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
RESOLUTION AUTHORIZING THE CITY MANAGER TO
TERMINATE THE EXISTING SUBLEASE AGREEMENT WITH
SUMITA SAHA AND ALEX ZAMMATARO FOR THE
COMMERCIAL SPACE AT 636 EL CAMINO REAL, SUITE A
AND TO EXECUTE A NEW SUBLEASE AGREEMENT WITH
SUMITA SAHA AND LINDA SAHA FOR THE COMMERCIAL
SPACE AT 630 EL CAMINO REAL
WHEREAS, on August 14, 2013, the City Council authorized the City to enter into a
Sublease Agreement ( "Existing Sublease ") with Sumita Saha and Alex Zammataro to open a cafe at
636 El Camino Real, Suite A, also known as 630 El Camino Real; and
WHEREAS, in April 2014, Ms. Saha notified staff that she planned her to end her
partnership with Mr. Zammataro and bring in a new, stronger business partner. Subsequently in May
2014, staff was notified that the partnership between Ms. Saha and Mr. Zammataro had been
terminated and both parties requested that the Existing Sublease be terminated; and
WHEREAS, Ms. Saha has a new business partner, Linda Saha, and has requested that the
City enter into a new sublease agreement with her and Linda Saha ( "Cafd Tenant ") for the same
commercial space, 630 El Camino Real ( "New Sublease "); and
WHEREAS, on April 23, 2014, the City Council awarded a construction contract for the
tenant improvements at 636 El Camino Real in the amount of $449,909 to Southland Construction.
At the time the City Council awarded the contract, staff reported to the City Council that based on
the Southland Construction's bid, Cafd Tenant's share of the construction costs would be $77,975;
and
WHEREAS, staff reviewed the Contractor's bid and schedule of values and found that the
Caf6 Tenant's share had included costs for improvements that the City was obligated to provide.
More specifically, the Caf6 Tenant's share included the cost of drilling the concrete foundation and
installing all necessary water supplies, drainage and electrical service which is to be provided by the
City per Exhibit C of the sublease. Therefore, staff reevaluated the City's share using the
Contractor's schedule of values and found that the City's portion of the tenant improvement should
have included $39,975 incorrectly assigned to the tenant. The Tenant's actual share of the expense is
$38,000; and
WHEREAS, the Caf6 Tenant is a local, small -scale business owner with limited capital.
Therefore, staff recommends providing the Caf6 Tenant with a Thirty -Eight Thousand Dollars
($38,000) tenant improvement loan ( "Loan ") amortized over the five -year term of the sublease with
an interest rate of three percent (3 %) instead of the $12,000 tenant allowance provided for in the
lease. The Loan would cover all the costs of the tenant improvements not provided by the City. The
monthly loan payments would be added to the scheduled monthly Base Rent based on a graduated
amortization schedule. The graduated loan payment schedule will allow for smaller initial loan
payments while the business is stabilizing and for higher loan payments once the business is strong
and thriving; and
WHEREAS, the New Sublease will contain the same provisions and lease rates as the
Existing Sublease with the following exceptions: 1) the partner changes from Alex Zammataro to
Linda Saba; 2) Sections 1.16 and 17.2 of the sublease which provides the tenant with a $12,000
tenant allowance would be replaced with language indicating the City will provide the Loan to the
Caf6 Tenant for their portion of the improvements; and 3) the Work Letter in Exhibit C of the
Existing Sublease would be removed; and
WHEREAS, all funds necessary to complete the tenant improvements, which includes the
Cafe Tenant's improvements inclusive of the tenant improvement loan are available from the
$510,000 Mid - Peninsula Housing Coalition (Mid -Pen) contribution already conveyed to the City.
These funds are specifically earmarked for tenant improvements according to the agreements
between Mid -Pen and the City; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San
Francisco that the City Council hereby:
1. Terminates the Sublease Agreement with Sumita Saba and Alex Zammataro for the retail
space at 636 El Camino, Suite A
2. Approves the Sublease Agreement with Sumita Saha and Linda Saha for 630 El Camino
Real, attached hereto as Exhibit B, and incorporated herein.
BE IT FURTHER RESOLVED by the City Council that the City Manager, or his designee,
is authorized to execute the Sublease Agreement and any related documents and to take any other
actions as necessary to carry out the intent of this Resolution.
I hereby certify that the foregoing Resolution was regularly introduced and adopted by the
City Council of the City of South San Francisco at a regular meeting held on the 23rd day of July,
2014 by the following vote:
AYES: Councilmembers Mark N Addiego Pradeep Gupta and Liza Normandy
Vice Mayor Richard A Garbarino and Mayor Karyl Matsumoto
NOES:
None
ABSTAIN:
None
ABSENT:
None
ATTEST:
Anna Brown, Deputy City Clerk