The City has entered into a five-year lease agreement with Child Development Centers, Inc. (CDI) in order to continue operation of a childcare facility at the former Raynor School. Section 2.07.030(b) of the Sunnyvale Municipal Code grants the City Manager, or his designee, the authority to sign all revenue producing leases five years or less in duration. Staff from the City Attorney’s Office has reviewed and approved the terms of the lease prior to its final execution. Under the terms of the lease, the City will receive $475,000 from CDI over the next five years. CDI is responsible for all routine maintenance of classrooms and playgrounds, janitorial, and utility costs. The City is responsible for major repairwork and maintenance of ventilation, heating, plumbing, roofing, doors, windows and electrical systems.

Child Development Centers Inc. has leased a major portion of the Raynor facility to provide childcare since 1980. At the time, the City had purchased the Raynor School site from Santa Clara Unified District and had determined that there was a significant need for childcare in Sunnyvale. A portion of the site was set aside for creation of a model childcare center. Through an RFP process, a five-year contract was awarded to CDI. CDI has operated the childcare center at Raynor (called the Sunnyvale Child Development Center) since that time.

CDI, a non-profit organization, is one of the largest child care providers in the State. The organization offers a variety of support programs in addition to licensed childcare including employer contracts for resource and referral and parent education programs, administration of food programs, and voucher programs for child care subsidies. The Sunnyvale Child Development Center at Raynor is one of seven childcare programs CDI operates in Sunnyvale serving over 700 children.

The contract with CDI at the Raynor site has been renewed six times, with the most recent renewal on June 16, 1999. This agreement expires June 30, 2002.

The terms of the new agreement include: a five-year term, licensed capacity of 162 children, and a requirement that the center maintain accreditation through the National Association for the Education of Young Children to ensure quality standards are maintained. The tenant pays for custodial services and utilities and the City provides maintenance to the structures.

The previous lease rate was $.74 a square foot. The proposed agreement reflects a rate of $.80 / square foot for 9,315 square feet of classroom space. The lease is expected to generate $475,000 over the five-year term. Patrick Henry School, which is located two blocks from the CDI Facility, is currently leasing classroom space in the $1.00 /S.F. range. The CDI lease reflects a discounted rate that takes into consideration the tenant’s long term status (22 years) and the sub-optimal condition of the buildings.

The new lease agreement became effective July 1, 2002 and is scheduled to expire on June 30, 2007. Section 2.07.030(b) of the Sunnyvale Municipal Code grants the City Manager, or his designee, the authority to sign all revenue producing leases five years or less in duration.

The proposed lease will generate approximately $475,000 in revenue over the five-year contract period. The revenue was included in the FY 2002/2003 Budget and Ten-Year Resource Allocation Plan.

Prepared by:
Michael A. Chan
Property Manager

Reviewed by:
Marvin A. Rose
Director of Public Works

Robert Walker
Director of Parks and Recreation

Mary Bradley
Director of Finance

Approved by:
Robert S. LaSala
City Manager