28 - Event Center New Lease Agreement

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At this council meeting, it was discussed expanding the lease for other uses and possibly amending the lease through negotiation. STATUS OF ISSUE: Ms. Hughes and City Staff have worked these past few months to renegotiate the lease. Ms. Hughes initially requested to add assembly -type uses to the lease, such as educational programs, classes, adult training, youth activities, etc., utilizing the larger rooms in the building that have gone primarily unused to -date. However, an investigation in to the building code compliance of this building revealed that in order to authorize a Certificate of Occupancy for such uses, over $ l 00k in expenses would be needed in upgrading the fire suppression, fire alarm, and ADA parking lots. This was in addition to numerous smaller issues with the building (maintenance such as FRP panels in restrooms, GFCI outlets in kitchen, backflow preventer for water service, HVAC repairs, etc.). These smaller issues are of lesser expense and given they are good issues to address in order to perform basic maintenance and extend the life of the building, the City Manager has already ordered they be completed by staff and appropriate contractors. However, with the need for significant upgrades prior to assembly -type uses occurring, Ms. Hughes and Mr. Path have agreed to drop this from the negotiation and focus entirely on her food preparation services and now a tax business. The attached proposed lease consists of the following significant changes: 1. Reduction in monthly rent from $1,200.00 to $800.00 per month. 2. Reduction in rented space from the entire building to now strictly the kitchen, office, bathrooms in the northwest corner of building, and utility closet. 3. City will take on maintenance of building and parking lot. 4. Extension of lease to 2025 with options to 2027. 5. Issuance of a Conditional Certificate of Occupancy, limiting occupancy to 10 people or less at all times. 6. City will perform the above stated basic maintenance to building identified during our inspection in order to maintain the life of the building. 7. Tenant shall be responsible for basic cleaning and maintenance of leased spaces. 8. Tenant shall operate a food preparation service from the kitchen and is allowed to operate her tax service business from the office. 9. Tenant shall pay all utilities as we are unable to separate out utilities between leased spaces and the rest of the building. The majority of the rest of the lease is substantially the same as the existing lease. This new lease better defines the two parties' roles than the first lease. In addition, due to frequent breaking of