Title
Substitute Ground Lease with American Greyhound Racing - Amendment 1 (Ordinance S-47567)
Description
Request to authorize the City Manager, or his designee, to execute an amendment to Agreement 154016 with American Greyhound Racing, Inc to allow Greyhound Racing, Inc to implement a Fire Watch and secure a company to remove Fire Load from the Grandstand Building located at 3801 E. Washington St. in exchange for rent credits. Further request to authorize the City Controller to disburse all funds related to this item. Rent credits allowed in exchange would not to exceed $336,000.
Report
Summary
The Grandstand Building (Grandstand) is located on land owned by the City at 3801 E. Washington St. In the past year, the Grandstand has been targeted by copper thieves who illegally removed copper wire and pipes from the fire alarm and fire suppression systems rendering the systems inoperable. A subsequent inspection by the Fire Department led to the issuance of a Notice of Non-Compliance due to the inoperable condition of the systems. The Aviation Department appealed the Notice of Non-Compliance and the Fire Department approved the appeal with stipulations that a Fire Watch be implemented, which requires the Grandstand to be monitored 24/7 and internally inspected every hour. The Fire Department also required that all non-affixed flammable items, referred to as Fire Load, be removed from the building. The Fire Department requires these stipulations remain in effect until the Grandstand is demolished. The Aviation Department has initiated the demolition process which is estimated to take up to 11 months.
Financial Impact
Expenses for implementing the Fire Department's requirements are estimated to be $16,000 per month for the Fire Watch and $160,000 for removal of the Fire Load. Greyhound has agreed to provide the Fire Watch in exchange for a monthly rent credit of up to $16,000 and will secure a company to remove the Fire Load in exchange for additional rent credits of up to $160,000. The total expenditures paid through rent credits will not exceed $336,000 over the estimated 11-month Fire Watch period.
Concurrence/Previous Council Action
The City Council approved Substitute Ground Lease Agreement 154016 (Ordinance S-47363) on March 3, 2021.
Location
3801 E. Washington St.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.