REPORT TO COUNCIL
SUBJECT
Title
Action to Delegate Authority to the City Manager to Negotiate and Execute a Second Amendment to Lease with Gahrahmat Family Limited Partnership II, LP to Extend the Existing Lease for Office Space at 881 Martin Avenue, Santa Clara, with Total Costs Not to Exceed $6 Million
Report
BACKGROUND
The City of Santa Clara's Electric Department, Silicon Valley Power (SVP), continues to experience significant growth in customer demand and staffing.
Since 2015, SVP has leased approximately 32,500 square feet of office space at 881 Martin Avenue (881 Martin) under a lease with Gahrahmat Family Limited Partnership II, LP (Landlord). The original lease (881 Martin Lease) was approved by the City Council on October 27, 2015 (Attachment 1 - RTC# 16B.10 and 881 Martin Lease) and was subsequently amended on April 29, 2020, to extend the term (Attachment 2 - First Amendment to Lease). 881 Martin has reached capacity, with staff sharing cubicles and insufficient space for anticipated new hires.
To provide additional capacity, the City executed a separate lease agreement with the Landlord for 851 Martin Avenue, which provides 50,000 square feet of office space. This lease was authorized by the City Council in February 2025 (Attachment 3 - RTC# 25-53).
Under RTC# 25-53, the City Council also authorized the City Manager to extend the 881 Martin Lease term if needed to facilitate the transition to 851 Martin Avenue. Based on current staffing levels and projected growth, staff recommends that City Council authorize an extension of the 881 Martin Lease to allow concurrent occupancy of both 851 Martin and 881 Martin.
DISCUSSION
SVP's current lease at 881 Martin expires on October 1, 2025. Staff is seeking City Council authorization to extend the lease for up to five years, rather than a short-term extension that was originally anticipated to support the transition between the two properties.
This recommendation follows a value engineering review...
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