HomeMy WebLinkAbout2005-01-18 City Council (3)Lease Termination Current Rental Rate Current Market Leased
Location Date Per Square Foot Rate Rental Per Square
Square Foot Footage
285 Hamilton January 31, 2007 $ 4.55 $ 3.00 6,361
1003 Elwell March 31, 2005 $ 1.30 $ 1.00 5,600
1007 Elwell August 31, 2008 $ 2.81 $ 1.00 9,202
Development Center Lease
The rent payment for the Development Center is a General Fund expense. The projected rent
and operating expenses for 2005 are anticipated to be about $420,000. Staff is exploring options
to move the Development Center into City-owned space, which would eliminate this General
Fund expense, or lessen the expense by finding space at a lower rental rate. Timing will be a
major factor due to the fact that the current lease expires January 31, 2007 and all City-owned
space is occupied. The City-owned space would have to be vacated and renovated to meet the
needs of the Development Center.
The alternative to using City-owned space is to continue leasing space and paying rent to a third
party. Coordination between the Development Center and Civic Center staff makes it imperative
that the Development Center be located as close to the Civic Center as possible. When the
sublease of 285 Hamilton for the Development Center expires in January 31, 2007, all of the
subleases in the entire building will expire and the owner will take back control of the building.
The owner has expressed an interest in continuing to rent space for the Development Center, but
is not ready at this time to make any commitment to the City. Staff plans to return to Council
with a recommendation to do one of the following:
o Move the Development Center into City-owned space;
o Negotiate a new lease for the existing location;
o Relocate the Center to another privately owned space near the Civic Center at a rent more
reflective of current market rates.
Elwell Court Utilities Leases
In 2003, the Elwell Court lease was amended to add an additional 5,600 square feet to provide a
location for the dark fiber engineers; water, gas and wastewater inspectors; and the utility library.
The lease term for this additional space was limited to two years to coincide with the decision on
whether to proceed with the Fiber-to-the Home project and is due to expire on March 31, 2005.
The lease for the larger area at 1007 Elwell Court will expire on August 31, 2008. Staff plans to
explore the possibility of using Utilities Enterprise funds to purchase property that would house
all of the Utilities Engineering staff as well as most of the remaining Utilities staff currently
located at the Civic Center. Once again, proximity to the Civic Center will be a major factor in
this option. Staff will return to Council with either a recommendation to extend the lease for the
1003 Elwell Court to match the term of the lease for 1007 Elwell Court and negotiate a more
favorable rental rate, or take advantage of the current economic situation to explore the option of
purchasing a building for the majority of the Utilities Department staff.
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