Starting in January, a real estate firm will lease the Arroyo Grande City Hall building, allowing City Hall staff to move into a building down the street.
The City Council on Tuesday voted 5-0 to approve a five-year lease with Re/Max Del Oro, which will bring in more than $38,000 annually.
The lease will give the city the money it needs to move all of its employees working in the three city buildings in the Village into the former Farm Credit building at 300 E. Branch St.
Two full-time and four part-time employees from the building and engineering divisions have already moved, City Manager Steve Adams said.
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Adams said the city will install an elevator in the building, which would make the building accessible to people with disabilities.
That could cost $120,000. Adams said reserve funds may be used to pay for the work, which would then be reimbursed with revenues from the lease payments.
The council in February approved an agreement to buy the building from developer Nick Tompkins of NKT Commercial, who in turn purchased two city buildings, the Conrad House at 208 E. Branch St., and the one at 200 E. Branch St., known as the “malt shop,” as well as the parking lot between them. The deal, according to city officials, cost $1.2 million.
In August, the council approved final design plans for Tompkins to move ahead with plans to demolish the malt shop and construct a 5,802-square-foot commercial building at East Branch and Short streets.
Re/Max Del Oro will pay the city $3,210 a month for use of the building’s 3,110-square-foot main floor from 2011 through 2103. The City Hall building is at 214 E. Branch St.; the city purchased it in the late 1940s for use as a city hall, Adams said.
The city will pay half of the base rent for the first four months of the lease, from January through April, according to the lease. The rent increases to $3,274 in 2014 and $3,339 in 2015.
The city will allow Re/Max to use half the building’s basement at no additional cost; the city will continue to use the other half for storage.
The company can at its expense clean, paint and make other improvements to the building’s interior; however, any proposed changes that might impact its historical integrity must be reviewed by the city’s Historic Resource Committee, according to the lease agreement.
Reach Cynthia Lambert at 781-7929.