HomeMy WebLinkAboutMemo - Read Before Packet - 2/5/2013 (11)OPERATIONS SERVICES
F City
, ®f CollinsREAL ESTATE SERVICES
Y P.O. Box 580
300 Laporte Avenue, Bldg, 6
6rt V`9700. 16I22760805222!0580
970.416.2209 - fax
@fcgov.com
MEMORANDUM
DATE: February 5, 2013
TO: Mayor and City Councilmembers
THRU: Darin Atteberry, City Manager
Wendy Williams, Assistant City Manager v .
Ken Mannon, Director of Operation Services
Marty Heffernan, Community Services Director -,Ts—(-(
FROM: Jill Stilwell, Cultural Services and Facilities Director ;-
Helen Matson, Real Estate Services Manager J�,
RE: Item 923 — Resolution 2013-004 Authorizing the Lease of Space at the City -
Owned Carnegie Building Located at 200 Mathews Street to Beet Street, Inc., for
up to Two Years.
Questions from Leadership Team Meeting: (a) What is the market rate (rental/lease) for this
building and the rationale for leasing it below market rates; (b) no pays for the utilities to
operate the building, (3) Describe the types of businesses to which the City would consider
leasing below market rates or what is the criteria for being considered/qualifying for a below
market lease rate.
The lease value to Beet Street was based on what they are currently paying in the space provided
by the City at 200 Mountain Avenue, Suite A, and what Beet Street is able to pay as they start
the new Arts Incubator of the Rockies (AIR) program. This rate was negotiated with Cultural
Services as the AIR program and Beet Street offer valuable cultural programming to the
community and meet several City strategies. The subsidized rate will be in place for a two-year
term, allowing the lease to be renegotiated if needed after the program is fully up and running
with a steady revenue stream.
The approximate market rent for the spaces to be used by Beet Street is $10/square foot for 1,961
square feet of office space (S19,610) and $7/square foot for 1,378 square feet of classroom space
in the basement ($9,646). Beet Street is paying $5,500 in 2013 and $6,000 in 2014. In addition,
Beet Street is providing staff support to help the City operate and keep the facility open to the
public with a value estimate of $25,000. The total estimated market value is $29,256. This year
Beet Street is providing $30,500 in cash and in -kind value. Next year they will be providing
$31,000 in cash and in -kind value.
City of
FortCollins
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AIR provides an important public benefit in the form of professional development to the creative
sector and the community. This benefit is described as a strategic need in the City's Cultural
Plan, the Economic Health Strategic Plan, and in Plan Fort Collins. The AIR program will meet
the needs of these plans without additional cost to the City. The creative center purpose of the
building with Beet Street and AIR as a primary tenant was reviewed by City Council at a Work
Session and also approved through the 2013-2014 Budgeting for Outcomes process. The AIR
program and the other uses of the building will support the Uniquely Fort Collins Cluster, and
serve as a catalyst in creating a robust arts and culture community that has both economic and
quality of life impacts. This program is why Beet Street is getting a reduced rate.
The City (Operation Services) will continue to pay the utilities (electric, natural gas and water
and sewer) as they did when the building was operated as a Museum. Beet Street will be using
approximately 25% of the building and their estimated yearly utilities would be $4,500. The
City is also responsible for all building maintenance. The office space was in dire need of
routine.maintenance — carpet, painting, etc. These tasks are being completed prior to Beet Street
occupying the building. The estimated cost for the maintenance and renovation is $30,000.
Beet Street will incur the costs for communications (phones and computers) in the building, as
well as janitorial services. Cultural Services is responsible for supplying and paying for
communications, to the building.