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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 08/21/2007 - FIRST READING OF ORDINANCE NO. 098, 2007, AUTHORIZ ITEM NUMBER : 20 REVISED AGENDA ITEM SUMMARY DATE : August 21 , 2007 FORT COLLINS CITY COUNCIL STAFF : Patrick Rowe SUBJECT First Reading of Ordinance No . 098 , 2007, Authorizing the Lease of City-owned Property at 214 North Howes Street, Along with Related Parking Rights at 220 North Howes Street, for up to Five Years, and the Related Extension of Triad Systems Engineering ' s Current Lease of City-owned Property at 200 West Mountain Avenue until 214 North Howes Street is Available for Occupancy. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading . FINANCIAL IMPACT Utilities and tenant finish costs shall be the obligation of the Tenant, and the City shall be responsible for the maintenance costs . The City will receive a minimum of $61 ,036 annually in gross rent, which will be used to cover operation expenses and the balance shall go to the general fund. EXECUTIVE SUMMARY Upon the completion of the new Northside Aztlan Community Center, as part of a facility consolidation effort, the Recreation Department will relocate from its existing location at 214 North Howes to 215 North Mason and the new Northside Aztlan Community Center. Aside from approximately 1 , 100 square feet of remaining storage, the City has no immediate use for the Recreation Department facility at 214 North Howes Street. This Ordinance authorizes the lease of this City-owned property, along with nine parking spaces located in the parking lot of 220 North Howes Street, and six parking spaces on the south side of 214 North Howes Street. The Ordinance also authorizes an extension of the proposed tenant ' s current lease at 200 West Mountain Avenue until 214 North Howes is available . BACKGROUND The new Northside Aztlan Community Center will be completed this Fall. After the Recreation Department staff, currently located at 214 North Howes, is relocated to the Northside Aztlan Community Center, staff recommends that the facility at 214 North Howes be leased as office space at current market rates, no less than $ 10 . 50 per square foot annually, for a period of up to five years to offset maintenance expenses and generate revenue . The property at 214 North Howes Street is located on block 32 along with the City ' s main building, and it is anticipated that this property will be included in future facility plans . August 21 , 2007 -2 - Item No . 20 After an initial 1 -year term, the lease will be terminable by either party, City or Lessee, upon ninety days notice . This will allow the City adequate flexibility to include this property in addressing future facility needs . The City anticipates leasing this property to Triad Systems Engineering, a current participant in the City ' s Incubator Program, at current market rates. Triad Systems ' lease for its City-owned Incubator space at 200 West Mountain expires October 18 , 2007 . However, 214 North Howes will not be available for Triad Systems to move in at that time . Therefore, staff is requesting that Triad Systems ' lease for their current space be extended until December 31 , 2007 , or until 214 North Howes is ready for occupancy, whichever comes first. ATTACHMENTS 1 . Location map . ATTACHMENT 1 214 N . HOWES LEASE LOCATION MAP Maple istreet _ i I 2 Z CITY HALL G70 ti cry ny'v0 — R5 9� SO I i — �vlountain v-enue_ -- i - � N ® Lease Property Location REVISED ORDINANCE NO. 0989 2007 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE LEASE OF CITY-OWNED PROPERTY AT 214 NORTH HOWES STREET, ALONG WITH RELATED PARKING RIGHTS AT 220 NORTH HOWES STREET, FOR UP TO FIVE YEARS , AND THE RELATED EXTENSION OF TRIAD SYSTEMS ENGINEERING ' S CURRENT LEASE OF CITY-OWNED PROPERTY AT 200 WEST MOUNTAIN AVENUE UNTIL 214 NORTH HOWES STREET IS AVAILABLE FOR OCCUPANCY WHEREAS , the City of Fort Collins is the owner of the property legally described as Lots 34 and 35 , Block 32, City of Fort Collins, Colorado, commonly known as 214 North Howes Street, and Lot 33 , Block 32, City of Fort Collins, Colorado, a portion of the property commonly known as 220 North Howes Street (collectively, the "Property") ; and WHEREAS , the building at 214 North Howes is currently occupied by the City' s Recreation Department, which will be relocating to the Northside Aztlan Community Center and office space at 215 North Mason once the new Northside Aztlan Community Center facility is completed; and WHEREAS , the parking lot on the north side of 214 North Howes is part of a separate parcel of property known as 220 North Howes, and is currently used for parking City vehicles ; and WHEREAS , the Property will likely be included in future City facility plans; however, after the Recreation Department moves out of the building at 214 North Howes, the City will not have an immediate need for most of the space within that building; and WHEREAS , the City desires to lease portions of the Property, consisting of 5 , 813 square feet of office space at 214 North Mason, six parking spaces on the south side of the building at 214 North Mason, and nine parking spaces in the lot at 220 North Mason (the "Lease Premises") for up to five years, with the lease being terminable by either party after the first year upon ninety days notice ; and WHEREAS , the lease would include the right of access on and across the Property for the purpose of accessing the tenant ' s designated parking spaces ; and WHEREAS , the City would continue to occupy and use the storage area and parking spaces at the east end of the building at 214 North Howes, and would have the right to continue using the rest of the parking lot at 220 North Howes; and WHEREAS , rent for the first year of the lease would total at least Sixty-One Thousand Thirty- Six Dollars ($61 ,036 . 00), based on an annual per square foot rent of Ten Dollars and fifty cents ($ 10 . 50) ; and REVISED WHEREAS , the proposed tenant for the Lease Premises is Triad Systems Engineering ("Triad") , which currently leases space from the City at 200 West Mountain Avenue as part of the Technology Incubator Program; and WHEREAS , under Ordinance No. 080 , 2006, Technology Incubator clients may only lease space at 200 West Mountain for a total of three years; and WHEREAS , the third year of Triad' s lease of its space at 200 West Mountain will expire on October 18 , 2007, at least several weeks before the Lease Premises is vacant and available for lease; and WHEREAS , the City desires to extend Triad ' s current lease at 200 West Mountain until the Lease Premises is available for occupancy or until December 31 , 2007 , whichever comes first, at Triad' s current rate of rent, provided Triad enters into a lease with the City for the Lease Premises ; and WHEREAS , under Section 23 - 111 (a) of the Code of the City of Fort Collins, the Council is authorized to sell, convey or otherwise dispose of any and all interests in real property owned in the name of the City, provided that Council first finds that such disposition is in the best interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows : Section 1 . That the Council hereby finds that leasing the Lease Premises located at 214 and 220 North Howes Street under the terms listed above is in the best interests of the City. Section 2 . That the Council hereby finds that extending Triad Systems Engineering ' s current lease for space located at 200 West Mountain under the terms listed above is in the best interests of the City. Section 23 . That the City Manager is hereby authorized to execute a lease agreement for the Lease Premises consistent with the terms of this Ordinance and in substantially the form as is on file in the office of the City Clerk, 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, including any necessary changes to the legal description of the Lease Premises that do not result in a material increase or change in character thereof. Section 4 . That, should Triad Systems Engineering enter into the lease described in Section 3 , the City Manager is hereby authorized to execute an amendment to Triad' s current lease for space at 200 West Mountain extending such lease as described herein, together with such other 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. REVISED Introduced, considered favorably on first reading, and ordered published this 21 st day of August, A.D . 2007 , and to be presented for final passage on the 4th day of September, A.D . 2007 . Mayor ATTEST : City Clerk Passed and adopted on final reading on the 4th day of September, A . D . 2007 . Mayor ATTEST : City Clerk