OAKLEY -- The city will be spending up to $70,000 more than it originally planned to bring a specialty bakery to its downtown.
The Oakley City Council on Tuesday unanimously agreed to amend a lease agreement with Republic of Cake that originally called for the city to contribute $220,000 toward the cost of preparing the empty retail space for occupancy.
Located in Main Street's Oakley Plaza, the 1,300-square-foot store is only a shell of a building lacking necessary kitchen equipment and other features such as a heating, ventilation and air conditioning systems.
Since the council approved the lease agreement in February, however, the estimated cost of making these improvements has risen to $290,000.
Before the council meeting, business co-owner Peter McNiff emphasized that, contrary to how the staff report described the matter, he was not asking the city for additional money.
When construction bids came in as much as $136,000 higher than the city's financial commitment to tenant improvements, he said he told city officials that he could not go forward with the project.
"I was ready to walk away (from the deal)," McNiff said.
Although the terms of the lease stipulate otherwise, he said he had thought that the city would build the two bathrooms the state building code mandates as well as install an HVAC system, which McNiff said landlords typically take care of in preparing a retail space for occupancy.
Councilman Doug Hardcastle agreed: Following the council meeting he said he thinks the city should have taken the lead in equipping the building with these basic necessities.
Understanding that the restrooms and heating/cooling equipment would have to be installed regardless of who occupies the retail space, the city proposed spending the additional $70,000 rather than have his business pull out, McNiff said.
Republic of Cake will repay the funds through its rent.
The staff report describes the added expense as "relatively small," noting that more than $10 million is going into improving the city's downtown.
Efforts to find a resolution to this setback have delayed the start of construction -- McNiff hopes that will happen in mid-September -- and he now expects the store to open in late October or November.
Reach Rowena Coetsee at 925-779-7141. Follow her at Twitter.com/RowenaCoetsee.