REPORT TO THE CITY COUNCIL FROM: BRIAN BARR, Director General Services Department SUBJECT ..Title Approve a lease agreement between the City of Fresno and Bericon Partners, LLC, a California limited liability company, to lease office space in amount of $69,561.60 annually in rent payments for three years, totaling $208,684.80 in rent plus the cost of utilities ..Body RECOMMENDATION Staff recommends Council authorize the Director of General Services to renew a lease agreement with Bericon Partners, LLC, to lease office space located at 5051-5059 East McKinley Avenue in Fresno for the total rent amount of $208,684.80 plus the City's proportionate share of utility costs. EXECUTIVE SUMMARY The City seeks to renew an existing lease agreement with Bericon Partners, LLC, for 7,246 square feet of office space located at 5051-5059 East McKinley Avenue in Fresno. The term of the proposed lease shall be three years ending June 30, 2025. The proposed negotiated lease rate is $0.80 per square foot ($5,769.80 per month) for rent and shall remain flat through the end of the term. In addition to the monthly rent due, the City shall also pay its proportionate share of utilities costs. Depending upon the season, utility costs range from approximately $2,500 to $5,000 per month. BACKGROUND Since 1977, the City has leased office space located at 5051-5059 East McKinley Avenue. The City is seeking to renew its lease agreement for 7,246 square feet of office space with an effective term of July 1, 2022, through June 30, 2025. The proposed negotiated lease rate is $0.80 per square foot ($5,796.80 per month) for rent and shall remain flat through the end of the term. The lease rate is a net decrease from the prior lease agreement term of $0.85 per square foot ($6,195.02 per month). In addition to the monthly rent due, the City shall also pay its proportionate share of utilities costs for electricity, natural gas, water, garbage, and sewer services. The City's share of utility costs is proportionate to the square footage of the leased office space to the total rentable square footage of the property. Depending upon the season, utility costs range from approximately $2,500 to $5,000 per month. After the first full year of occupancy, the lease may be terminated by the City, without cause at any time, with a 180-day prior written notice. The lease agreement also includes a non-appropriations termination clause which allows the City to terminate the lease with a 90-day prior written notice, should funding not be approved in the annual adopted budget. The lease agreement has been reviewed and approved by the City Attorney's Office. ENVIRONMENTAL FINDINGS Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378, this item is not a project for the purposes of CEQA . LOCAL PREFERENCE Local preference was not considered because this item does not include a bid or award of a construction or service contract. FISCAL IMPACT The lease payments have been included in the adopted FY2023 General Fund budget. Funding for future years will be included in the appropriate fiscal year's budget subject to Council approval. Attachment: Lease Agreement