Commission approves lease amendment allowing Dawson Clinton to complete tenant improvements without port bonding

Port staff requested and the commission approved a first amendment to a lease involving Dawson Clinton General Contractors to change the lease commencement date and eliminate the previously required bonding and tenant guarantee requirements for initial tenant improvements.

Elsa Lam, property manager, said Dawson Clinton currently occupies space at Pier 50 (approximately 1,600 square feet of shed space and 752 square feet of office space) and had earlier agreed to construct initial tenant improvements estimated at about $191,000. Under the original lease, contractor and tenant guarantee bonds equal to 150 percent of the construction costs were required; staff said that requirement effectively demanded bonds roughly totaling $600,000 for this project and was difficult for the small-business tenant to obtain.

Staff proposed retroactively amending the lease to change the commencement date to March 15, 2011, and to eliminate the bonding/guarantee requirements on the condition that the tenant act as contractor, maintain required permits and licenses, carry builder's risk insurance that also covers the port, and provide lien release documentation for each subcontractor. The amendment also notes that the port will seek documentation of financial capacity and other due diligence prior to final execution.

Commissioners moved, seconded and approved the amendment (recorded as Resolution 11-14). The approved action includes staff follow-up to secure lien releases and insurance documentation before finalization.