Bakersfield council approves lease for Truxton Towers with option to buy; due diligence follows

The Bakersfield City Council on March 11 authorized city staff to execute a five‑year lease for Truxton Towers (1430 and 1440 Truxton Avenue) and to proceed with due diligence on an option to purchase the property, a move staff said will consolidate office space, save on long‑term lease costs and provide needed space for the police department.

Key terms and rationale

City staff presented a lease with an initial monthly base rent of $34,600 (plus utilities and common area maintenance) and an option to purchase the property. The seller offered a purchase price of $13,600,000 if the city closes by Aug. 15, 2026; the price would increase to $14,150,000 if the option is exercised by Jan. 15, 2027. The site includes a 292‑stall parking structure and multiple existing tenants; staff noted expected revenue from current tenants could offset operating costs if the city purchases the property.

City Manager Mr. Kle framed the proposal as a fiscal move: “This is a good fiscal move that saves money for the city both in the short run [and] in the long run while we acquire an asset that addresses a significant space need for our police department,” he said. Gary Hen, who led the staff property briefing, highlighted that some floors are move‑in ready and emphasized the value of the parking structure for downtown operations.

Due diligence and council discussion

Staff asked the council to appropriate $400,000 to cover due diligence (structural, roof, elevator, title, and other third‑party examinations). Several council members asked for additional financial detail from the seller (profit & loss statements and comparable lease materials) before major expenditure and sought confirmation that due diligence would flag any material issues. Council Member Basher moved to continue the item to allow time to obtain seller financials; that motion failed. Council Member Smith moved to authorize the lease and begin due diligence; the motion passed with Council Member Basher voting no and Council Member Weir absent.

Outcome and next steps

Council authorized staff to execute the lease with an option to purchase and to start the due diligence process. Staff said appropriation and any large due‑diligence contracts would be brought back to council as required; the option to purchase can be executed later in the timeline permitted by the agreement (staff noted the city may close by the August 2026 deadline or delay until January 2027 with a higher purchase price).

Quote: “The parking structure alone would probably cost the same as the entire acquisition if we tried to build it today,” said Gary Hen, summarizing downtown parking value.

What’s next: Staff will request the technical inspections and financial materials needed to complete due diligence and will return to council with any contract awards above standard thresholds or new appropriation requests.