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09. Approval of Additional Rent Relief for First Street Parking Structure TenantsFile #: 3376 Claremont City Council Agenda Report TO: TARA SCHULTZ, CITY MANAGER FROM: CHRISTOPHER M. PAULSON, ASSISTANT CITY MANAGER DATE: JUNE 23, 2020 SUBJECT: Item No: 9. Reviewed by: City Manager: TS Finance Director: AP APPROVAL OF ADDITIONAL RENT RELIEF FOR FIRST STREET PARKING STRUCTURE TENANTS (FUNDING SOURCE: GENERAL FUND) SUMMARY The City of Claremont serves as the landlord for three retail tenant spaces located on the ground floor of the First Street Parking Structure in the Village Expansion Specific Plan area. Due to the economic impacts of the County and State Orders put in place in an effort to slow the spread of COVID-19, the current tenants were unable to fully operate from mid-March through May. To provide financial assistance during these unprecedented times, the City Council voted at their April 14, 2020 meeting to forgive rent payments for the months of April and May. Although retail and on-site dining has since been permitted to reopen with some restrictions, the tenants are still experiencing reduced business due to the pandemic. For this reason, staff recommends forgiving each tenant's rent for the month of June 2020. RECOMMENDATION Staff recommends that the City Council forgive June rent payments totaling $16,812 for the tenants in the First Street Parking Structure, and authorize the City Manager to execute any documents necessary to implement the measures. ALTERNATIVES TO RECOMMENDATION In addition to the recommendation, there are the following alternatives: A. Request additional information from staff. B. Do not forgive June rent payments for tenants as outlined in the staff report. CLAREMONT Page 1 of 3 Printed on 6/18/2020 FINANCIAL REVIEW The City currently collects monthly rent from the three parking structure tenants. If the City Council approves the rent relief measures outlined in the staff report, the City will forgive $16,812 in rent payments for the month of June 2020. The staff cost to prepare this report is estimated at $551 and is included in the operating budget of the Administrative Services Department. ANALYSIS The City of Claremont serves as the landlord for the three ground floor tenant spaces in the First Street Parking Structure. Bua Thai Cuisine and 21 Choices are original tenants whose initial lease agreements began in 2007, and Stix Ride Shop entered into a lease agreement with the City in 2019. Due to the economic impacts caused by the County and State Orders put in place in an effort to slow the spread of COVID-19, tenants were unable to fully operate from mid-March through May. The City Council voted at their April 14, 2020 meeting to forgive rent payments for the months of April and May. Retail businesses have since been permitted to open, and so have restaurants, but at sixty percent occupancy. Although restrictions have been modified, the tenants are still experiencing reduced business due to the ongoing impacts of the pandemic. For this reason, staff recommends forgiving each tenant's monthly rent for the month of June. The loss of revenue for the City from the forgiveness of the rent payments for June will total $16,812. RELATIONSHIP TO CITY PLANNING DOCUMENTS Staff has evaluated the agenda item in relationship to the City's strategic and visioning documents and finds the following: Council Priorities - This item addresses the Council Priority "Increase Livability in Our Neighborhoods and Expand Opportunities for Our Businesses." Sustainability Plan - This item complies with the Sustainability Plan's Housing and Economic Sustainability Goal 6.4 ("maintain a strong diversified economy"). Economic Sustainability Plan - This item relates to the Policy Recommendation #3 ("Explore Commercial Development") in the Economic Sustainability Plan. General Plan - This item addresses Measure 1-22 of the General Plan relating to Business Retention and Attraction Program. 2019-20 Budget - This item meets the following City Manager's Office Work Plan Goal - CM -2- Coordinate and provide direction on economic development projects. CEQA REVIEW This item is not subject to environmental review under the California Environmental Quality Act CLAREMONT Page 2 of 3 Printed on 6/18/2020 (CEQA). It does not meet the definition of a "project" under CEQA Guideline 15378, and even if it did, pursuant to CEQA Guidelines Section 15061(b)(3)'s "common sense" exemption, CEQA does not apply to this item because there is no potential for causing a significant effect on the environment. It can be seen with certainty that approving rent relief measures for tenants as outlined in this report will not have a significant effect on the environment because the action will not result in or lead to a significant physical change in Claremont. PUBLIC NOTICE PROCESS Due to the current health orders related to the COVID-19 pandemic, parts of the City's regular agenda distribution process have been suspended as public review copies cannot be placed at their regular locations due to facility closures, or limited access. The agenda and this staff report are available on the City's website. If you desire a copy, please contact the City Clerk's Office. Submitted by: Prepared by: Christopher M. Paulson Jamie Earl Assistant City Manager Assistant to the City Manager CLAREMONT Page 3 of 3 Printed on 6/18/2020