First Amendments to Drews Substation & Century Substation Lease w Alliance Colton LLC

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CITY OF COLTON AGENDA REPORT For the City Council Meeting of April 3, 2001 TO: Honorable Mayor and City Cocil APPROVAL: Henry T. Garcia, City Manager �(�j-� FROM: Thomas K. Clarke, Utilities Director `" SUBJECT: APPROVAL OF FIRST AMENDMENTS TO THE DREWS SUBSTATION AND CENTURY SUBSTATION LEASE AGREEMENTS WITH ALLIANCE COLTON LLC DATE: Monday, March 12, 2001 BACKGROUND In its meeting of December 5, 2000, the City Council approved a Lease Agreement between the City and Alliance Colton LLC (Alliance) for the rental of surplus infrastructure at the City's Drews Substation. After this approval, Alliance proposed to staff that additional generating facilities were available for siting under the same financial terms and conditions as the approved Agreement. Staff reviewed available system resources and determined that space for the proposed additional generation was available at the City's Century Substation. In its meeting of December 11, 2000, City Council approved a Lease Agreement between the City and Alliance for the rental of surplus infrastructure at the Century Substation. ANALYSIS Now Alliance finds that through a revision in their designs for use of the land, they will be able to get by with less area than first anticipated. Alliance is asking that amendments be made to the original agreements to reflect these changes. There are two notable modifications to the agreements: (1) In each, under Terms, in the Option to Renew section, it would enable the Investor up to a 25 -year recovery period, should the need arise, entailing two additional terms of 5 -year periods requested in writing by Lessee at least one hundred eighty days prior to the expiration of the Term or any Renewal Term, and (2) Under Century Exhibit B (and Exhibit A of Memorandum of Lease) it would include additional property within a detailed strip illustrated on the Century Plot Plan (Included in the attached Agreement as Drawing 756-2-3), and in exchange for the use of this property, Lessee would return 2861 square feet of property included in Drews Exhibit B. There are also minor modifications to the electrical interconnections as noted in Exhibit C of both Agreements. With h she amendments, the project would be even more cost-effective by allowing for room to add another Legis further increase the efficiency of our operations by allowing for utilization of another portion of suipl n tructure. The Utility's mission to provide safe, reliable, economic and customer friendly service will be; a aced. ALTERNATIVES Council may choose to keep the Agreements as they are written but this would not be using the surplus area available to its full potential. Page 1 of 2 (with Attachments) Item #11