28 - Event Center New Lease Agreement

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the front glass doors by unknown individuals tearing up the parking lot, we are installing metal doors and plan to extend chains at the entrances to the parking lot. BUDGET: The current lease is for $1,200.00 per month with Ms. Hughes providing for all utilities, but substantially only being able to utilize the kitchen due to code issues with the rest of the building and limitations in the lease itself. It is debatable who is responsible for maintenance of the building, but the City has been doing it in recent months. The proposed new lease is for $800.00 per month with Ms. Hughes continuing to provide for all utilities and the City clearly taking on the maintenance of the building. As part of our research, a local realtor was approached and asked for a market rate for leasing a building such as the Event Center. The report showed a recommended monthly lease of $6,500.00 to $8,900.00. Given the condition of the building, the role the City is taking on (maintenance), the addition of her tax business, and the limitation to specific portions of the building, the City Manager simply took the square footage of the limited portions being leased, divided that by the total square footage of the building, and applied this as a ratio to the recommended rates. There is an estimated 8,500 square feet to the building and 900 square feet for the proposed leased spaces. This means the proposed lease is for 11% of the building which puts the range to about $690 - $950 per month. We settled on $800/month to bring before you tonight. Given much of the time needed to perform this negotiation was taken by the City due to other priority tasks interfering, we have not asked that Ms. Hughes resume her monthly payment while we negotiate the new lease. It took time to revisit this topic and then further time to organize an inspection and review the results. It took further time to determine next steps based on those results, which finally ended with the negotiated lease you have before you tonight. OPTIONS: 1. Approve the lease as presented. 2. Request additional information, edits to the lease, and/or further negotiation of the monthly rate. 3. Reject the lease and resume the current lease, to which Mr. Hughes must resume her monthly payment of $1,200.00/month. RECOMMENDATION: 1. Approve the lease as presented.