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4.3
CITY COUNCIL # _____________
City of Watsonville
Public Works & Utilities
MEMORANDUM
DATE:
February 24, 2015
TO:
Marcela Tavantzis, City Manager Pro Tempore
FROM:
Steve Palmisano, Director of Public Works and Utilities
Rayvon Williams, Airport Manager
SUBJECT:
Approval of Lease assignment of 220 Airport Boulevard to
Sprenkel, Inc., a corporation
AGENDA ITEM:
March 10, 2015
By Steve Palmisano at 3:27 pm, Mar 19, 2015
City Council
RECOMMENDATION:
It is recommended that the City Council approve assignment of the remainder of a five year
lease of Airport property at 220 Airport Boulevard and contiguous parking and storage lot from
Michael and Diane Tinsley, Inc. a corporation dba Mid-Valley Supply to Sprenkel, Inc., a
corporation with option for five more years.
DISCUSSION:
The Airport has leased some or all of 220 Airport Boulevard to the Tinsley’s dba Mid Valley
Supply since at least 2002. Since 2002, Mid-Valley has successfully sold janitorial and sanitary
maintenance supplies, janitorial products, paper products, cleaning chemicals, pool/spa
supplies and food service supplies to the tri-county area from 220 Airport Boulevard. In
December, 2014, Tinsley dba Mid-Valley informed the Airport that he wanted to sell Mid Valley
and retire and gave required notice of assignment of lease.
Sprenkel Inc. was incorporated November 3, 2014 by Keith A. Sprenkel of Santa Cruz.
Sprenkel Inc . Mr. Sprenkel has a general business background but not janitorial supplies. He
proposes to use his personal assets to purchase the Mid-Valley name and most if not all of the
assets of the Mid-Valley business.
In order to consummate the sale Sprenkel, Inc or Keith Sprenkel will provide the following:
1. Assignment of Lease from Michael and Diane Tinsley, Inc. to Sprenkel, Inc. and release.
2. Approval of form of personal guarantee of lease by Keith A. Sprenkel.
3. Personal Financial Statement (confidential).
4. Corporate Financial Statement (confidential).
Staff has reviewed Keith A. Sprenkel’s verified Personal Financial Statement and found it to be
adequate for this transaction.
This light industrial space leases for $6,720.00 per month. Standard Consumer Price Index
(CPI) adjustments are applied during the second year and each year thereafter. Rent adjusts to
market rate if the 5 year option is exercised.
STRATEGIC PLAN:
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This project is consistent with Strategic Plan objectives of improving and maintaining
infrastructure.
FINANCIAL IMPACT:
This assignment would a provide market rate lease and revenue of $6,720 per month to the
Airport Enterprise Fund to continue.
ALTERNATIVES:
Alternatives include not approving the lease assignment.
ATTACHMENTS:
None
cc:
City Attorney
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