HomeMy WebLinkAboutFS 2014-04-08 Item 2A - Lease Agreement - Amendment #2 to Records Center Lease (Ending 5/31/2015)TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
FROM: Bob Giberson, Public Works Director
DATE: April 4, 2014
SUBJECT: Record Storage Lease Extension
Amendment No. 2 to Agreement No. 09-083
ISSUE
The Record Storage Facility lease agreement (No. 09-083) with the Sabey Corporation
(Sabey) expires on May 31, 2014.
BACKGROUND
In May 2009, the City of Tukwila entered into a 5-year lease agreement with Sabey for
6,392 rentable square feet of safe, secure and humidity controlled indoor storage of City
Clerk and Police Department records storage.
In December 2011, the City of Tukwila entered into Amendment No. 1 to Agreement No.
09-083, amending the base lease to revise the square footage based on separate
renovation of the building common space and a relocated restroom facility. Sabey has
offered the City of Tukwila a 1-year lease extension through May 31, 2015.
ANALYSIS
The increased rent for year 6 is reasonable based on the previous annual increases
built into the base lease. The 1-year lease extension is reasonable and prudent, based
on the status of the Facilities Plan. The location of a permanent city-owned records
storage location is unknown at this point in time. The City of Tukwila will have to
negotiate any addition lease terms beyond this new period ending May 31, 2015.
RECOMMENDATION
The Council is being asked to formally approve this 1-year lease extension and authorize
the Mayor to sign the 1-year lease amendment and to consider this item on the Consent
agenda at the April 21, 2014 Regular Meeting.
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SECOND AMENDMENT TO THE WAREHOUSE LEASE AGREEMENT
This Second Amendment to the Warehouse Lease Agreement ("Amendment") is entered
into by and between International Gateway East LLC ("Landlord"), as Landlord, and City of
Tukwila, ("Tenant") as Tenant, under that certain Warehouse Lease Agreement ("Lease"), dated
May 4, 2009, as amended by that certain First Amendment to the Warehouse Lease Agreement,
dated December 12, 2011, between the parties hereto.
RECITALS
A. Landlord and Tenant desire to exte d the Term of the Lease and add an option to
renew in accordance with the terms herein.
B. Except as may be expressly provided otherwise in this Amendment, capitalized
terms in this Amendment shall have the meaning given such terms in the Lease.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
Landlord and Tenant agree as follows:
1. Amendments.
Section 1.8 Expiration Date is amended and restated in its entirety a fol ows:
"Expiration is the date that is six (6) years after the
Commencement Date, unless sooner terminated or extended in accordance with this Lease.
1.2 Section 1.9 Term is amended and restated in its entirety as follows:
"Term" means a period of six (6) years, commencing on the Commencement Date and
terminating on the Expiration Date, unless sooner terminated or extended in accordance with this
Lease.
1.3 Section 1.10 Base Rent is amended and restated in its entirety as follows:
Base Rent for Suite 110 shall be payable by the following schedule:
Term
Base Rent/Month
00/01/09-05/31/10
$4,600.28
O0/0U\0-05/3\/l\
$4,988.25
06/01/11 —O5/3l/l2
$5,265.38
O6/O|/\2—O5/3|/|4
$5,542.50
06/01/14 — 05/31/15
$5,708.78
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Base Rent shall be payable as provided in Section 4.
,4 Section 3.6 Extension Option is added to the Lease as follows:
Provided that Tenant is in compliance with all the terms and conditions of this Lease and has not
been in default of this Lease beyond any applicable cure period during the last twelve (12) months
of the Lease Term, Tenant shall have the option ("Option") to extend the Term of this Lease for one
(1) additional period period of one (I) year (the "Option Term") on the same terms and conditions of this
Lease as are provided for in the initial Term, except as provided below in this Section 3.6 or in
Section 3,7 and without any free rent periods or Tenant improvement allowances. The Option
Term shall commence upon the date of expiration of the initial Term of this I....ease, To exercise its
Option, Tenant must give written notice to Landlord that Tenant is exercising its Option at least six
(6) months before the date of expiration of the initial Term. Once such notice is delivered to
Landlord, such notice shall be irrevocable by Tenant. lf, in Landlord's reasonable discretion,
Landlord determines that the creditworthiness of Tenant is materially less than the creditworthiness
of Tenant as of the Lease's execution date, Landlord may nullify Tenant's exercise of its Option by
written notice to Tenant. Tenant acknowledges and agrees that notwithstanding anything to the
contrary in this Lease, the right to exercise the Option shall not extend to any assignee or subtenant
of Tenant, or to any space assigned or subleased by Tenant, and any attempt to exercise the Option
by any such assignee or subtenant, or by Tenant in connection with such assigned or subleased
space, shall be deemed null and void. Tenant further acknowledges and agrees that the amount of
the Security Deposit payable by Tenant for the Option Term may be increased to an amount equal
to the first monthly installment of Base Rent payable by Tenant during the Option Tenn,
1.5 Section 3.7 Ba e Rent During Option Term is added to the Lease as follows:
In the event that Tenant elects to exercise its Option to extend the Term of this Lease in accordance
with the terms of Section 3.7, the Base Rent for the Option Term shall be equal to the then-market
rent for similarly improved space in comparable buildings for comparable use in the Seattle region
as determined by Landlord; provided, however, that in no event shall the Base Rent during the
Option Term be less than the Base Rent for the last year of the initial Lease Term. The adjusted
Base Rent shall commence on and be payable on the first day of the Option Term and shall
continue therealer throughout the Option Term. The market rate shall be determined on a triple net
basis by analyzing comparable lease transactions and lease renewals in the Seattle region. In
analyzing comparable Unouuctimns,oU reasonable factors affec inArmkxhxU be taken into
consideration, including, but not limited to, the building age, size, style and condition and the date
of the comparable lease.
If Landlord and Tenant cannot agree on a market rate for the Option Term prior to ninety
(90) days before Lease termination, then both parties agree to use the appraisal process, outlined as
follows: Each party will hire an MM appraiser. Each appraiser must have m minimum n[fivo(5)
years appraisal experience in the Seattle area. Each appraiser shall complete his/her appraisal
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within thirty (30) days, If the appraisers' opinion of the market rate differs by less than ten percent
(10%) of the amount of the higher appraisal; then the market rate shall be the average of the two
oppruixnb. If the appraisers' opinion of market m\edi0tnhvmorrUnmteupe,onnt(\O%) o[Ue
higher appraisal then a third MAI appraiser satisfying the same qualifications shall be mutually
hired and paid for by both parties. 'l'he third appraiser will evaluate the market using the same
parameters outlined in the preceding paragraph, The market rate estimate of'the third appraiser
shall be averaged with the mai'ket 'ate estimate of the appralsel' closest to it. The Base Rent for the
Option Term shall be the higher of the resultant average tent utilizing this process or the Base Rent
being paid at the time of the renewal,
2. Entire Amendment. This Amendment sets forth the entire agreement of the parties with
respect to the subject matter set forth herein and may not be 'modified other than by an agreement
in writing signed by the parties hereto or their respective successors and interests.
3. Acknowledgement. The parties hereto each acknowledge that as expressly modified by
this Amendment, all the terms and conditions of the Lease remain unchanged and are in full force
and effect and enforceable in accordance with their terms. In the event o[oconflict between the
Lease and this Amendment, the terms and provisions of this Amendment shall control.
4. Execution. This Amendment may be executed in several counterparts and all so executed
shall constitute one Amendment, binding on all the parties hereto even though all the parties are
not signatories to the original or the same counterpart. Delivery o[n facsimile or other copy of
this Amendment has the same effect as delivery of an original.
5. Lender's Consent, The effectiveness of this Amendment is conditioned upon Landlord
receiving the consent of its lender
The rest of this page is intentionally 10 blank; signatures tojbllow;
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DATED this day of ,2013.
TENANT:
CITY OF TUKWILA
13y:
Its:
LANDLORD:
INTERNATIONAL GATEWAY EAST LLC,
by Sabey Corporation, Manager
By:
Its: Treasurer & Secretary
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STATE OF\YAS8IN TON)
COUNTY OF KING )
Onihix duvo[ 20|3, before me, the ondcmiunod,oMo�ry
Public in and for the State of Washington, duly commissioned and sworn as such, personally
appeared , to me known to be the
of CITY OF TUKWILA, a municipality that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath slated that he/she he was authorized to
execute said instrument,
WITNESS my hand and official seal the day and year in this certificate first above written.
Printed Name:
NOTARY PUBLIC in and for the State of
Washington, residing at
My commission expires:
STATE 8[lYA8BO40TON)
) ss.
COUNTY OF KING )
On this day of , 2013, before me, the under igned, a Notary
Public in and for the State of' Washington, duly commissioned and sworn as such, personally
appeared Patricia A. Sewell, to me known to be the Treasurer & Secretary of Sabey Corporation,
Manager of INTERNATIONAL GATEWAY EAST LLC, the corporation that executed the
within and foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on
oath stated that she was authorized to execute said instrument,
WITNESS my hand and official seal the day and year in this certificate first above written.
Printed Name:
NOTARY PUBLIC in and for the Slate of
Washington, residing at
My commission expires:
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