2003 AGN JAN 21 I12 - Laserfiche WebLink

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3. Creates an asset for the Chamber that they can leverage and possibly divide for rental space – creating income for them. D. Disadvantages 1. The City loses an asset. 2. The Chamber incurs additional costs by having to cover utility and maintenance expenses –further challenging their financial capacity (however, this may be more than offset by rental income). Alternative 2 A. Lease the building to the Chamber for at least a 30 -year period at $1 per year. B. Pay $50,000 in one-time relocation costs. C. Advantages 1. City retains asset 2. Chamber does not incur additional operating expenses for utilities and maintenance. D. Disadvantages 1. City retains liability. 2. City is responsible for ongoing utility and maintenance costs. 3. The Chamber does not gain an asset that they can leverage –thereby making rental opportunities for additional income difficult. All things considered, staff recommends Alternative 1. This restores equity to the original transaction and intent between the City and the Chamber (the Chamber gets a building of equivalent value to $30,000 41 years ago) and eliminates the City's ongoing liability and responsibility for operating costs. The Chamber also benefits by obtaining an asset they can borrow against, rehabilitate, and rent out portions of for additional income. This alternative creates a better "arms -length" relationship between the City and the Chamber relative to office space. FINANCIAL IMPACT Proposed relocation costs of $50,000 to be paid to the Chamber will be taken from the City Hall Remodel project budget, which is being funded by excess "one-time" General Fund CIP reserves of at least $550,000. If Alternative 1 is approved by the City Council, General Fund annual utility and maintenance costs will be reduced by approximately $12,000. If Alternative 2 is approved there will be no reduction in General Fund annual costs. ENVIRONMENTAL IMPACT This project/transaction is exempt under section 15301 of the California Environmental Quality Act (CEQA). RECOMMENDATION Direct staff to begin the process of preparing necessary legal documents for the transfer of ownership of the building at 655 North LaCadena from the City of Colton to the Chamber of Commerce, and prepare all related legal documents for items such as joint use parking and temporary leaseback, if necessary, to the City of a portion of the building. 2. Authorize the payment of $50,000 to the Chamber of Commerce for relocation expenses to be released as follows: A. $10,000 on or before January 31, 2003 B. $10,000 on or before April 30, 2003 C. $30,000 upon Chamber's vacation of existing site TEAM ONLY rney:, 2,044 i-- Finance Director del— i