To: HONORABLE MAYOR AND From: Jose Obregon

CITY COUNCIL

Subject: APPROVAL OF AN AMENDMENT Date: September 3, 2003

TO THE LEASE WITH

WEN Y. HUANG

COUNCIL DISTRICT: Citywide

RECOMMENDATION

The General Services Department is recommending approval of the First Amendment to Office Space Lease Between the CITY of SAN JOSE (“CITY”) and WEN Y. HUANG (“LESSOR”) reducing the monthly rent from $56,700 to $10,710 and extending the term of the lease by seven (7) months.

BACKGROUND

On April 3, 2001 the City Council approved an office space lease with Wen Y. Huang for 12,600 rentable square feet on the first floor of his building located at 1671 the Alameda, San Jose, California, designated as “Suite 100” for the Police Department Crime Prevention Unit. Paragraph 24 of this lease allows the CITY to amend the lease. At the end of July 2003 staff entered into negotiations with Mr. Huang to amend the lease.

ANALYSIS

Renegotiation of the lease will result in an amendment to reduce the rent in the last two and a half years of the lease term by approximately $552,000. The new rent amount continues to amortize the existing tenant improvements over the remaining term of the lease.

The changes to the lease contained in the amendment are as follows:

1. The term of the Lease will be extended by seven (7) months moving the expiration date of the Lease from April 30, 2006 to November 30, 2006.

2. Commencing November 1, 2003 the rent shall be reduced from $56,700 per month to $10,710 per month through May of 2004; Commencing in June of 2004 the monthly rent will be $15,750 through May of 2005; Commencing June of 2005 the monthly rent will be $17,640 through May of 2006; Commencing June of 2006 the monthly rent will be $19,530 through November 30, 2006 the end of the lease term.

3. The address for notices to both the Landlord and the City under the lease are being changed to reflect their respective current addresses.

PUBLIC OUTREACH

Not applicable.

COORDINATION

This item has been coordinated with the Police Department and the Office of the City Manager. The City Attorney’s Office has approved the document as to form.

COST IMPLICATION

This item may reduce the amount of ongoing savings originally projected in the Adopted Budget to relocate existing staff and services to other City-owned facilities. However, General Services will continue to explore possibilities of moving other staff into the City-owned facilities and continue to explore the possibility of renegotiating other leases. As a whole, it is projected that these actions will decrease the City’s General Fund lease expenditure obligations, and in fact may produce opportunities to increase lease savings.

CEQA

Exempt, PP03-09-276

JOSE OBREGON

Director, Department of General Services