FIN 2020-12-14 Item 1A - Agreement - 6300 Building Lease Agreement wtih Sound Cities Association

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TO: City of Tukwila Allan Ekberg, Mayor Mayor's Office - David Cline, City Administrator Mayor Ekberg Finance Committee FROM: Brandon Miles, Business Relations Manager DATE: December 7, 2020 SUBJECT: Sound Cities Association Lease Agreement ISSUE The current lease agreement with Sound Cities Association (SCA) expires on December31, 2020. Staff is proposing to enter into a new two-year lease agreement with SCA. BACKGROUND SCA is a local non-profit corporation composed of member cities with a population of less than 150,000 people that act locally and partner regionally to create livable, vital communities through advocacy, education, leadership, mutual support and networking. The City of Tukwila is a member of SCA. SCA began leasing space from the City of Tukwila in 2006 in the 6300 Building. The current two-year lease with SCA expires at the end of the year. DISCUSSION Staff is proposing a two-year lease agreement from January 1, 2021 - December 31, 2022 to coincide with the biennium budget cycle. Due to COVID-19, staff is proposing that there be no increase in the rent from 2021 (compared to 2020 rent). For 2022 the lease will increase fifty (50) cents, which represents a 2.8% rent increase. SCA is also required to pay the applicable leasehold tax to the City as part of their rent. Per Revised Code of Washington 35A.11.010 and 35A.11.020 all lease agreements must go before City Council for authorization. FINANCIAL IMPACT The base rent for SCA will be $25,550.00 per year, to be paid in monthly installments of $2,129.17 in 2021 and $27,010.00 per year, to be paid in monthly installments of $2,250.83 in 2020. In addition to the base rent, SCA will pay leasehold excise tax pursuant to RCW 82.29A at the rate of 12.84 percent of the base rent in the amount of $273.39 per month in 2021 and $289.01 per month in 2022. Provisions also include internet services at a rate of $100.00 per month, payment of long distance and toll calls, and after-hours emergency callouts or mutually agreed upon project work at a flat rate of $150 an hour. RECOMMENDATION The Committee is being asked to move this item forward to the consent agenda of January 4, 2021 City Council Meeting for approval and authorization for execution by the Mayor. ATTACHMENTS Draft Lease Agreement for 2021-2022 Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov