HomeMy WebLinkAboutFederal Express Corporation 2026-10-01Sage Sangiacomo
City Manager
07/21/2026
Lease Renewal-Extension LOT 11-11-20; Rev. 2 9-10-2024
February 25, 2026
Ms. Shannon Riley Sent via email: sriley@cityofukiah.com
Deputy City Manager
City of Ukiah
300 Seminary Avenue
Ukiah, CA 95482
O: 707-467-5793
RE: Ukiah, CA – #0949
Federal Express Corporation Proposed Lease Extension Amendment
Dear Shannon:
Federal Express Corporation (“Tenant”) has authorized Cresa to present this outline of the terms and
conditions (“Letter of Terms”) under which Tenant would enter into negotiations for amending the
existing lease for the above referenced facility. This Letter of Terms is subject to senior management’s
review and approval and does not in any way constitute an agreement of the parties.
This Letter of Terms shall not be binding upon the parties, EXCEPT for the parties’ agreement
(a) to negotiate in good faith, (b) to use Tenant’s standard lease amendment form, and (c) to
keep confidential all communications relating to this proposed transaction.
This Letter of Terms may be terminated or withdrawn by either party for any reason or for no reason,
and does not contain all the essential terms and conditions of an amendment. No contractual
obligations of any kind are created by the parties’ execution and delivery of this Letter of Terms or
by any incidental negotiations or conversations. A binding agreement shall not exist between the
parties until the senior management of Tenant and Landlord each approve this transaction and an
amendment agreement has been fully approved and executed by all parties.
Landlord: City of Ukiah
Tenant: Federal Express Corporation
Site Location: One Carousel Lane
Ukiah, CA 95482
(See Exhibit A)
SF of Premises: 28,000 SF
Current Lease Term: From 10/01/2020 to 09/30/2026
Extended Lease Term: From 10/01/2026 to 09/30/2031 (5 years)
New Extension Terms: Two (2) periods of five (5) years each
1st option: from 10/01/2031 to 09/30/2036
2nd option: from 10/01/2036 to 09/30/2041
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Lease Renewal-Extension LOT 11-11-20; Rev. 1 8-25-21
New Notice Dates: 1st option: 04/01/2031
2nd option: 04/01/2036
Monthly Base Rent: INITIAL TERM (60 Months)
From 10/01/2026 to 09/30/2031: $38,523.40
OPTION TERMS:
1st Option (60 Months):
From 10/01/2031 to 09/30/2036: $43,585.69
2nd Option (60 Months):
From 10/01/2036 to 09/30/2041: $49,313.20
Miscellaneous: (a) Except for the amended terms proposed herein, the Lease shall remain
in full force and effect as originally stated (and amended).
(b) Landlord shall not use Tenant’s name or logotype or issue any press
release without Tenant’s prior written consent in each instance.
Confidentiality: Tenant and Landlord acknowledge that the terms and conditions contained
herein and details of the ensuing negotiations will remain confidential
between the parties. No proposals, document drafts, amendments or
summaries of any kind will be distributed, copied or otherwise transmitted,
orally or in writing to any entity or person, except employees and agents
of Tenant and Landlord with a need to know, and applicable lenders for
the project, who have the need for such copies and/or information in order
to complete this transaction, and who have committed to the confidentiality
of this transaction.
The above terms are generally acceptable to Tenant. If the terms outlined in this Letter of Terms are
generally acceptable to Landlord, please indicate by signing below and returning a copy to the
undersigned, no later than March 11, 2026.
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Lease Renewal-Extension LOT 11-11-20; Rev. 1 8-25-21
Federal Express Corporation reserves the right to reject any and all proposals, modify the project
or cancel the project entirely without any obligation whatsoever to the proposing companies,
their agents, representatives, and/or employees. Neither Cresa nor Federal Express Corporation
will be responsible for costs incurred by Landlord for reviewing and responding to this Letter of
Terms.
Sincerely,
Cresa
Jeff Kernochan, SIOR Andrew Mager, SIOR
Managing Principal Senior Vice President
cc: Lexi Lapaglia, FedEx Ground
ACKNOWLEDGE AND ACCEPTED this ____ day of ________________, 2026.
Landlord: City of Ukiah
By: ______________________________
Its: ______________________________
Exhibit A
City Manager
21 July
Page 4
Lease Renewal-Extension LOT 11-11-20; Rev. 1 8-25-21
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DM#403818v1B
FIFTH AMENDMENT TO STANDARD INDUSTRIAL/COMMERICAL
MULTI-TENANT LEASE AGREEMENT
This FIFTH AMENDMENT TO STANDARD INDUSTRIAL/COMMERICALMULTI-
TENANT LEASE AGREEMENT (the “Amendment”) is made as of the later of the dates on which
the parties hereto did sign the Amendment, between CITY OF UKIAH (the “Lessor”) and FEDERAL
EXPRESS CORPORATION (successor-via-merger to FedEx Ground Package System, Inc.), a
Delaware corporation (the “Lessee”).
W I T N E S S E T H:
WHEREAS, Carousel Carpet Mills, Inc., a California corporation (“Original Lessor”) and
Lessee entered into that certain Standard Industrial/Commercial Multi-Tenant Lease dated as of
August 30, 2007, as amended that certain First Amendment to Standard Industrial/Commercial
Multi-Tenant Lease dated as of January 17, 2012, that certain Second Amendment to Standard
Industrial/Commercial Multi-Tenant Lease dated as of March 26, 2013, that certain Third
Amendment to Standard Industrial/Commercial Multi-Tenant Lease between AE CAROUSEL, LP
and Lessee dated as of August 28, 2018; and that certain Fourth Amendment to Standard
Industrial/Commercial Multi-Tenant Lease dated as of September 15, 2020; (collectively, as
amended, the “Lease”), for certain building(s), improvements and land known as the Premises as
more particularly described in the Lease; and
WHEREAS, Original Landlord conveyed all its rights, title and interest in the Premises and
in the Lease to AE Carousel, LP by Grant Deed dated December 15, 2016;
WHEREAS, AE Carousel, LP conveyed all its rights, title and interest in the Premises and in
the Lease to City of Ukiah by Assignment and Assumption of Lease Agreement dated September 15,
2020;
WHEREAS, the Lease Term shall expire September 30, 2026; and
WHEREAS, Landlord and Tenant desire to make certain modifications to the Lease as set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements
contained herein, and intending to legally bound hereby, Landlord and Tenant hereby agree to the
following amendments to the Lease:
1. All capitalized terms used herein are as defined in the Lease unless otherwise defined in
this Amendment.
2. Lease Section 1.3 (Term) is hereby further amended by deleting “September 30, 2026” and
adding in lieu thereof “September 30, 2031”, as the Lease Term expiration date.
3. Lease Section 1.3 (Term) is hereby further amended by deleting and restating in their entirety
all reference to the Option to Extend as follows:
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DM#403818v1B
“1.3(a) Extension Term(s): Two (2) Five (5)-year extension options:
1st Extension: October 1, 2031 through September 30, 2036; and
2nd Extension: October 1, 2036 through September 30, 2041.
(b) Exercise Date(s): Tenant shall deliver to Landlord its election to exercise options to
extend the Primary Term and subsequent Extension Term(s) on or before the following
date(s):
1st Extension Term: on or before April 1, 2031.
2nd Extension Term: on or before April 1, 2036.
1. Section 1.5 (Base Rent) is hereby amended:
“Commencing on October 1, 2026 and expiring on September 30, 2031, Base Rent
shall be paid in month installments of $38,523.40.
1st Extension: Commencing on October 1, 2031 and expiring on September 30, 2036,
Base Rent shall be paid in monthly installments of $43,585.69.
2nd Extension: Commencing on October 1, 2036 and expiring on September 30, 2041,
Base Rent shall be paid in monthly installments of $49,313.20.”
5. Landlord and Tenant each warrants and represents for the benefit of the other that it has not
dealt with any real estate broker, finder or agent in connection with this Amendment other
than CRESA, to which Landlord shall pay a commission under a separate agreement at the
beginning of each term and with respect to which Landlord shall indemnify and hold Tenant
harmless.
6. The terms and provisions of the Lease shall remain confidential between the parties, and
Landlord shall not use Tenant's name or logotype and will not issue any press release or
other information pertaining to this Lease or the Tenant without Tenant’s prior written
consent.
7. Except as herein amended, the Lease shall remain in full force and effect as originally stated
and amended and is hereby ratified and confirmed. In the event of any conflict between the
terms of the Lease and this Amendment, the terms of this Amendment shall prevail.
8. This Amendment may be executed in multiple counterparts, all of which shall constitute a
single agreement, and the signature and acknowledgement pages may be removed from any
counterpart and appended to any other counterpart.
SIGNATURES ON FOLLOWING PAGE
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DM#403818v1B
4
DM#403818v1B
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
by each of their respective authorized representatives as of the dates written below.
Landlord
CITY OF UKIAH
By:
Name:
Its:
Dated:
Tenant
FEDERAL EXPRESS CORPORATION
By:
Name: Jason Pavuk
Its: Manager, Real Estate Projects
Dated:
Sage Sangiacomo
City Manager
07/21/2026
Year Start Date
Annual Rent
(2.5% Escalation)
5-Year
Term
Equivalent Flat
Annual Rent
Per Year (rent
only)
per yr.
commission fee
commission
for each 5-yr
pd
Annual Rent
plus amortized
commission
Per month
payment
1 10/01/2026 35,926.25$ Term 1 37,768.04$ 453,216.43$ 9,064.33$ 45,321.64$ 462,280.76$ 38,523.40$
2 10/01/2027 36,824.41$ Term 1 37,768.04$ 453,216.43$ 9,064.33$ 462,280.76$
3 10/01/2028 37,745.02$ Term 1 37,768.04$ 453,216.43$ 9,064.33$ 462,280.76$
4 10/01/2029 38,688.64$ Term 1 37,768.04$ 453,216.43$ 9,064.33$ 462,280.76$
5 10/01/2030 39,655.86$ Term 1 37,768.04$ 453,216.43$ 9,064.33$ 462,280.76$
6 10/01/2031 40,647.25$ Term 2 42,731.06$ 512,772.77$ 10,255.46$ 51,277.28$ 523,028.22$ 43,585.69$
7 10/01/2032 41,663.44$ Term 2 42,731.06$ 512,772.77$ 10,255.46$ 523,028.23$
8 10/01/2033 42,705.02$ Term 2 42,731.06$ 512,772.77$ 10,255.46$ 523,028.23$
9 10/01/2034 43,772.65$ Term 2 42,731.06$ 512,772.77$ 10,255.46$ 523,028.23$
10 10/01/2035 44,866.96$ Term 2 42,731.06$ 512,772.77$ 10,255.46$ 523,028.23$
11 10/01/2036 45,988.64$ Term 3 48,346.28$ 580,155.31$ 11,603.11$ 58,015.53$ 591,758.41$ 49,313.20$
12 10/01/2037 47,138.35$ Term 3 48,346.28$ 580,155.31$ 11,603.11$ 591,758.42$
13 10/01/2038 48,316.81$ Term 3 48,346.28$ 580,155.31$ 11,603.11$ 591,758.42$
14 10/01/2039 49,524.73$ Term 3 48,346.28$ 580,155.31$ 11,603.11$ 591,758.42$
15 10/01/2040 50,762.85$ Term 3 48,346.28$ 580,155.31$ 11,603.11$ 591,758.42$
Total over 15 yrs 7,730,722.55$
2% commission 154,614.45$ 154,614.45$ 7,885,337.00$
FedEx Lease - Amortized Rent Schedule