City Council Minutes 2015 10 06 - Laserfiche WebLink

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City Council Meeting Minutes October 6, 2015 Page 7 of 26 Council member Loo asked the applicants who did not get appointed to stay involved. RESOLUTION No. 69, SERIES 2015 — A RESOLUTION APPROVING A LEASE AGREEMENT BY AND BETWEEN THE CITY OF LOUISVILLE AND HUMAN MOVEMENT INC. Mayor Muckle requested a staff presentation. Economic Development Director DeJong reviewed the 1501 Empire Road Lease with Human Movement, Inc. Background: The City Operations is out of the building and occupying the new City Services Facility. Council expressed an interest in leasing the 1501 Empire Road property. An RFP was issued in June 2015. On July 28th Council directed staff to negotiate a lease with Human Movement Inc., a Louisville -based event company, whose current location is being redeveloped. Human Movement has 75 employees. The leased property consists of 3 structures; main operations building; maintenance building, brown storage building, which totals, 20,104 square feet. The total property is 3.63 acres. Lease Terms: 10 -year initial term with three 5 -year renewal terms. Year 1: $160,832 annual rent ($8 per square foot); $248,900 per year in Year 10 ($12.38 per square foot). The renewal term rates reflect market rents in the Colorado Technology Center. $160,832 maximum tenant improvement allowance reimbursed at a $10 to $1 ratio. The Tenant will be responsible for all maintenance on the building. The City has a right to terminate the lease to use the Property for providing City services. (Relocation costs within Initial Term Reimbursement of a portion of Tenant Improvements within Initial Term). Human Movement may sublease portions of the property with the City's written consent. Human Movement has a right of first refusal to purchase the property. Fiscal Impact: $160,832 in annual rental revenue growing to $248,900 in 2025; $160,832 maximum tenant improvement allowance. Costs must be incurred prior to 12/31/2016. No City ongoing costs for the property as Human Movement responsible for maintenance. Staff recommended the City Council approve Resolution No. 69, Series 2015. COUNCIL COMMENTS Council member Lipton stated generally he is comfortable with the economic development packages as presented, but had some concerns over the term of this lease, with the renewals. He expressed his concern with regard to Article 8, Assignment and Subletting and felt the term was too broad. He suggested a standard change relative to the landlord's discretion for subletting to a subsequent tenant. He asked City Attorney Light if the standard could be changed to reflect something in the landlord's reasonable discretion. He wanted more approval rights of a subsequent tenant.