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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 04/07/1998 - ITEMS RELATING TO A SUBLEASE FOR THE MINI LIBRARY AGENDA ITEM SUMMARY ITEM NUMBER: 1 DATE: April 7, 1998998 FORT COLLINS CITY COUNCIL STAFF: Brenda Cams SUBJECT: Items Relating to a Sublease for the Mini Library. RECOMMENDATION: Staff recommends adoption of the Resolution, and of the Ordinance on First Reading. FINANCIAL IMPACT: The Sublease by the City represents a discount of$9,700 below the rent the City is obligated to pay to the property owners under the lease. This incentive was necessary to secure a tenant for the premises given the change in market conditions since the City entered into the original lease agreement in 1995. EXECUTIVE SUMMARY: A. Resolution 98-59 Authorizing the Sublease of the Mini Library Site at 132 Troutman Parkway to the Salvation Army. B. First Reading of Ordinance No. 53, 1998, Authorizing the Grant of an Option to Lease 132 Troutman Parkway through May 31, 2000,to the Salvation Army. The City entered into a lease in January 1995 to obtain space for the Mini Library, which was the City's first library in south Fort Collins. The Mini Library was built according to City requirements in a very successful location on Troutman Avenue just north of the Target Store. The City entered into a five-year lease commitment that started in June 1995 and ends May 31, 2000. With the opening of the Harmony Library,the staff and collection from the Mini Library has moved to the new facility. The Mini Library space has been vacated since mid-February. The City has been seeking a sub-tenant for the Mini Library space since last fall and has listed the property with Realtec, a local commercial real estate service. Realtec has secured the Salvation Army as a tenant for the Mini Library space. The Salvation Army intends to use this space as a thrift store and has committed to a six-month lease with an option to renew for the remainder of the City's lease term. DATE: April 7, 1998 2 ITEM NUMBER: 17 A-B The Salvation Army will be required to decide whether to exercise its option to renew within 90 days after taking possession of the property. The City's original lease of the property contains an early termination provision which requires that the City pay a penalty of$47.245 if the City terminates the lease and return the premises to the landlord. The sublease to the Salvation Army represents a savings of$37,500 over the penalty option, assuming that the Salvation Anny stays for the duration of the City's leased term. The lease provides that the City cannot sublease the premises without the Lessor's written consent, which consent cannot be unreasonably withheld. The City will work with the Lessor to secure the necessary consent. The Salvation Army would like to occupy the premises as soon as possible. This is beneficial from the City's perspective because the City is currently paying rent and common area expenses in excess of$4,300 each month. The option to extend the sublease through May, 2000, being presented to Council as an ordinance because of the Code requirement that interests in real property of a duration longer than two years must be approved by ordinance. RESOLUTION 98-59 . OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE SUBLEASE OF THE MINI LIBRARY SITE AT 132 TROUTMAN PARKWAY TO THE SALVATION ARMY WHEREAS, the City of Fort Collins currently leases 132 Troutman Parkway, more particularly described in Exhibit"A;"attached hereto and incorporated herein by this reference (the "Property"), for use as a Mini Library Facility, under a Lease Agreement dated January 30, 1995 (the "Lease Agreement"); and WHEREAS,the City has no use for the Property, as it no longer operates the Mini Library Facility, having opened in early 1998 the Harmony Library, to which the Mini Library books, staff and equipment have been relocated; and WHEREAS, in the Lease Agreement the City agreed to continue to lease the Property through May, 2000, or pay a cancellation penalty of up to $47,245; and WHEREAS, City staff has worked with a local real estate brokerage to search for and negotiate with potential subtenants for the Property, in order to reduce the costs to the City associated with the lease of the Property; and WHEREAS, the Salvation Army has proposed to sublease the Property under the terms of a sublease agreement extending through September, 1998; and WHEREAS, the Salvation Army has agreed to pay to the City a monthly rent payment of 53,500, along with any amount due for related common areas maintenance, which amount will substantially offset the amount due from the City under the Lease Agreement; and WHEREAS, City staff has determined that the proposed sublease of the Property will be beneficial to the City, and represents the best opportunity for the City to sublease the Property; and WHEREAS, under Section 23-114 of the Code of the City of Fort Collins, the Council is authorized to lease any and all interests in real property owned in the name of the City,provided that Council first finds that the lease is in the best interests of the City. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. The sublease of the Property to the Salvation Army in accordance with the terms of this Resolution is in the best interests of the City of Fort Collins. Section 2. That the City Manager is hereby authorized to enter into a sublease agreement subleasing the Property to the Salvation Army, for the period ending September 30, 1998, for a monthly rent of THREE THOUSAND FIVE HUNDRED DOLLARS ($3,500)plus common area maintenance costs. Passed and adopted at a regular meeting of the City Council held this 7th day of April, A.D. 1998. Mayor ATTEST: City Clerk ORDINANCE NO. 53, 1998 . OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE GRANT OF AN OPTION TO LEASE 132 TROUTMAN PARKWAY THROUGH MAY 31, 2000, TO THE SALVATION ARMY WHEREAS, the City of Fort Collins currently leases 132 Troutman Parkway, more particularly described in Exhibit"A,"attached hereto and incorporated herein by this reference (the "Property"), for use as a Mini Library Facility, under a Lease Agreement dated January 30, 1995 (the "Lease Agreement"); and WHEREAS,the City has no use for the Property, as it no longer operates the Mini Library Facility, having opened in early 1998 the Harmony Library, to which the Mini Library books, staff and equipment have been relocated; and WHEREAS, in the Lease Agreement the City agreed to continue to lease the Property through May, 2000,or pay a cancellation penalty of up to Forty-seven Thousand,Two Hundred and Forty-five Dollars ($47,245); and WHEREAS, City staff has worked with a local real estate brokerage to search for and negotiate with potential subtenants for the Property, in order to reduce the costs to the City associated with the lease of the Property; and • WHEREAS,the Salvation Army has proposed to sublease the Property as approved by the Council in Resolution 98-59; and WHEREAS,the Salvation Army has requested that the City grant of an Option to Lease to the Salvation Army,under which the Salvation Army would pay to the City a monthly rent payment of Four Thousand Dollars ($4,000), along with any amount due for related common areas maintenance,through May 31, 2000, if it chooses to exercise such Option at least ninety (90) days prior to the expiration of the original sublease term on September 30, 1998; and WHEREAS,the rental payment to be received by the City should the Salvation Army choose to exercise the Option to Lease would substantially offset the amount due from the City under the Lease Agreement; and WHEREAS, City staff has determined that the proposed sublease of the Property and grant of the associated Option to Lease will be beneficial to the City, and represents the best likely opportunity for the City to sublease the Property through the expiration of the Lease Agreement; and WHEREAS, Section 23-111 of the City Code provides that the City Council is authorized to sell, convey or otherwise dispose of real property owned by the City, provided the Council first finds by ordinance that any sale or disposition of real property owned by the City is in the best • interests of the City of Fort Collins. NOW, THEREFORE, BE IT ORDANED BY THE COUNCIL OF THE CITY OF FORT COLLINS, as follows: Section 1. That the grant of the above-described Option To Lease the Property is in the best interests of the City of Fort Collins. Section 2. That the City Manager is authored to grant to the Salvation Army an Option to Lease the Property through May 31, 2000, and to execute such documents as may be necessary and appropriate for such grant. Introduced, considered favorably on First Reading, and ordered published this 7th day of April, A.D. 1998, and to be presented for final passage on the 21 st day of April,A.D. 1998. Mayor ATTEST: City Clerk Passed and adopted on final reading this 21 st day of April, A.D. 1998. Mayor ATTEST: City Clerk E7a:IBIT "A" A tract of land located in the Southeast Quarter of Section 35, Township 7 North, Range 69 West of the Sixth Principal Meridian, City of Fort Collins, Larimer County, Colorado, more particularly described as follows; Considering the north line of the said Southeast quarter of Section 35 as bearing North 89 degrees 47 minutes 04 seconds West, and with all bearings contained herein relative thereto: Commencing at the northeast corner of the said Southeast Quarter; THENCE along the said north line, North 89 degrees 47 minutes 04 seconds West for a distance of 48. 00 feet to a point on the Westerly right of way of U.S. Highway No. 287 ; THENCE along the said Westerly right of way, South 00 degrees 37 minutes 52 seconds East for a distance of 145. 00 feet; THENCE continuing along the said Westerly right of way, South 00 degrees 13 minutes 08 seconds West for a distance of 270.00 feet; THENCE North 89 degrees 47 minutes 04 seconds West for a distance of 338 . 01 feet; THENCE South 00 degrees 13 minutes 08 seconds West for a distance of 220. 01 feet; THENCE North 89 degrees 46 minutes 52 seconds West for a distance of 59 . 29 feet to the TRITE POINT OF BEGINNING of this description; THENCE North 89 degrees 46 minutes 52 seconds West for a distance of 85.71 feet; THENCE South 00 degrees 13 minutes 08 seconds West for a distance of 60. 73 feet; THENCE South 89 degrees 46 minutes 52 -seconds East for a distance of 85.71 feet; THENCE North 00 degrees 13 minutes 08 seconds East for a distance of 60.73 feet to the point of beginning. Containing 5205 square feet more or less. The above described tract is subject to all easements and rights of ways now existing or of record. I hereby state that the above description was prepared by me and is true and correct to the best of my professional knowledge, belief and opinion. The description and area are based upon a previously written legal description and not upon a actual field survey. WALLACE C. MUSCOTT COLORADO P.L.S. 17497 P.O. BOX 580 FORT COLLINS, CO �>>° S' RAIG CFG/�- f- - . J f}�rFOp° jl;; GX r—f c3 � r 0 0 c6 0 0 0 N 3 C� n r ri o r r z O N 335.01' CD 0O O D O ❑ O ' a e7 :: S7:t ..j:'. 59.29" l�P��PY`::ii �s;::3tL:,.s4fii;�9 TROUTMAN PKWY Q