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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 06/06/2006 - SECOND READING OF ORDINANCE NO. 080, 2006, AUTHORI ITEM NUMBER: 12 AGENDA ITEM SUMMARY DATE: June 6, 2006 FORT COLLINS CITY COUNCIL STAFF: Helen Matson SUBJECT Second Reading of Ordinance No.080,2006,Authorizing the Lease of City-Owned Property at 200 West Mountain Avenue, Suite C, For Up to Five Years. RECOMMENDATION Staff recommends the adoption of the Ordinance on Second Reading. EXECUTIVE SUMMARY The Fort Collins Technology Incubator (FCTI) provides critical business assistance to the most promising high tech startup companies in the community. As part of its service,FCTI offers below market lease space to its client companies. In 2004, the Council approved Resolution 2004-069, which authorized the lease of City-owned property at 200 West Mountain, Suite C, to FCTI and its clients. This Ordinance, unanimously adopted on First Reading on May 16, 2006, allows the lease to FCTI and its participants to continue for up to five years. ITEM NUMBER: 15 AGENDA ITEM SUMMARY DATE: May 16, 2006 FORT COLLINS CITY COUNCIL STAFF: Helen Matson SUBJECT fly« First Reading of Ordinance No. 080, 2006, Authorizing the Lease of City-Owned Property at 200 West Mountain Avenue, Suite C, For Up to Five Years. RECOMMENDATION Staff recommends the adoption of the Ordinance on First Reading. FINANCIAL IMPACT Rent collected from this lease has and will continue to vary year to year depending upon how many tenants occupied the space and what year the tenants were in the lease term. Currently, 100%of the building is leased and the tenants are in their second year of the lease tern ($8/SF). The lease generates approximately$37,00 isc u n Geral Fund. �d EXECUTIVE SUMMARY The Fort Collins Technology Incubator (FCTI) provides critical business assistance to the most promising high tech startup companies in the community. As part of its service,FCTI offers below market lease space to its client companies. In 2004, the Council approved Resolution 2004-069, which authorized the lease of City-owned property at 200 West Mountain, Suite C, to FCTI and its clients. This Ordinance would allow the lease to FCTI and its participants to continue for up to five years. BACKGROUND With support from the City of Fort Collins, Colorado State University, and the Northern Colorado Economic Development Corporation, the Fort Collins Technology Incubator ("FCTP'), formerly known as "Fort Collins Virtual Business Incubator", was created in 1998. To date, the Incubator has assisted 20 companies. InCea e sei e c ated 109 full time jobs with an average annual salary of$65, hav a ex of$40 million in equity capital. The "bottom line"of this pro eati o ood payi jobs from within the community. The program achieves its suow services such entrepreneurial advisory boards, discounted professional service providers,access to a multitude of CSU resources,internal resource sharing, counseling, training and networking. The FCTI has significantly enhanced the level of service to its client companies by offering below market lease space. In this way, the FCTI not only helps to mitigate the very tight cash flow situation encountered by most startups,but it also provides a synergistic,collaborative environment May 16, 2006 -2- Item No. 15 in which the talented young companies can thrive. Key operational aspects of the program are as follows: • Provides lease space to qualified candidates on a sliding scale depending on their year in the incu or oresponsib feor i e of the program will pay $7/SF, $8/SF in the se d year9/S r the third and final year. The rent charged will be gros, hat al xpenses are included in the lease payment. Tenan are jani oriaI services and communication expenses. • Office space for the director of the FCTI program and two small conference rooms will be provided at no cost. • The FCTI is responsible for the incubation program including selection, business assistance, annual review, graduation, etc. The City's Real Estate Services staff provides property management duties,including lease execution,rent collection,and addressing any concerns with the facility. Due to the nature of leasing the facility to several different tenants at different lease rates, it is difficult to accurately project City revenue or City expenses on a yearly basis. The costs to be paid by the City include: taxes, janitorial services for common areas, utilities, maintenance, snow removal, and trash services. SCP ex nP o of whether this space is leased to FCTI and its participants or no and B fcilit a currently occupied by the City's Natural Resources Office. Th ch look several lease possibilities and the resulting cost or revenue to the City Annual Profit and/or Subsidy (deducting on-going City expense) Based on Occupancy and Rent/SF: $7/SF $8/SF $9/SF 100 % of net building area leased - 4,626 SF $ 11,412 $ 16,038 $ 20,664 75% of net building area leased - 3,470 SF $ 3,320 $ 6,790 $ 10,260 50% of net building area leased - 2,313 SF $ (4,779) $ (2,466) $ (153) 25% of net building area leased- 1,157 SF $ (12,870) $ (11,714) $ (10,557) Staff recommends leasing 20(includ es unt e e, it C, to the FCTI and its client companies. Benefits to the Ci • replacement of primary jobs lost over the past several years, • increased economic robustness, especially in the downtown area, • retention of the City's highly talented professional workforce, • an enhanced sales tax base. In addition,the Program is consistent with and in support of strategic recommendations released by the Economic Vitality and Sustainability Action Group. ORDINANCE NO. 080, 2006 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE LEASE OF CITY-OWNED PROPERTY AT 200 WEST MOUNTAIN AVENUE, SUITE C, FOR UP TO FIVE YEARS WHEREAS, the City of Fort Collins is the owner of the property legally described as a portion of Lot 2, Replat Lots 149, Block 31, Fort Collins, Colorado and also known as 200 West Mountain Avenue, Suite C (the"Property"); and WHEREAS, the City purchased this property for the Civic Center Master Plan and has not yet finalized specific plans for the Property; and WHEREAS, since 1998, the City has supported the efforts of the Fort Collins Technology Incubator(FCTI), formerlyknown as"Fort Collins Virtual Business Incubator Program,"which has provided critical business assistance to high tech startup companies in the Fort Collins community; and WHEREAS, the City received a proposal from the FCTI in March 2004 to increase its services by working with the City to offer below market lease space to its client companies; and WHEREAS,on June 1,2004,the Council approved Resolution 2004-069,which authorized the lease of the Property to FCTI and its clients for up to two years; and WHEREAS, the FCTI will benefit the City by replacing primary jobs lost by citizens, increasing the economy in the downtown area, and enhancing the sales tax base; and WHEREAS, the City desires to lease a portion of the Property to FCTI for its Director for a term of up to five years at no cost to the Fort Collins Technology Incubator; and WHEREAS,the City desires to lease other portions of the Property to clients selected by the FCTI for a term of one year, with the option to renew for up to two additional years at a lease rate of$7/square foot for the first year, $8/square foot for the second year, and $9/square foot for the third year; and WHEREAS, under Section 23-114(a) of the Code of the City of Fort Collins, the Council is authorized to lease for a term of up to five years 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. That the Council hereby finds that leasing the Property at 200 West Mountain Avenue, Suite C, under the terms listed above is in the best interests for the City of Fort Collins. Section 2. That the City Manager is authorized to execute such lease agreements consistent with the terms of this Ordinance, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines to be necessary and appropriate to protect the interests of the City. Introduced, considered favorably on first reading, and ordered published this 16th day of May, A.D. 2006, and to be presented for final passage on the 6th day of June, A.D. 2006, Mayo ATTEST: u& S City Clerk t .;i Passed and adopted on final reading on the 6th day of June, A.D. 2006. Mayor ATTEST: City Clerk