HomeMy WebLinkAboutReg 2014-04-21 Item 4C - Lease Agreement - 1-Year Extension for Records Center Facility with International Gateway East (Sabey) for $96,000COUNCIL AGENDA SYNOPSIS
Meeting Dale
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Mayor's review
Council review
04/21/14
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ITEM INFORMATION
ITEM No.
4.C.
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STAFF SPONSOR: BOB GIBERSON
ORIGINAL AGENDA DATE: 04/21/14
AGENDA Iris TITLE Records Storage Facility Lease Extension for 1-Year
CATEGORY E Discussion
AN Date
IK
Motion
Date 04/21/14
LiI Resolution
MtsDate
E Ordinance
AN Date
• Bid
Award
0 Public Ilearing
Mg Date
0 Other
II Date
Mtg
Arts Date
SPONSOR E Council Mayor 1 HR E DCD E Finance LI .Fire IT 0 P&R Po/ece PI'
SPONSOR'S In May 2009, Tukwila entered into a 5-year lease agreement with Sabey Corporation for
SUMMARY 6,392 rentable square feet of safe, secure, and humidity controlled indoor storage for City
Clerk and Police Department records. Sabey has offered a 1-year lease extension through
May 31, 2015 with a reasonable increase in rent. Council is being asked to formally approve
the 1-year lease extension for the Records Storage Facility lease.
REVIEWED BY E COW Mtg. D CA&P Cmte
Utilities Cmte 0 Arts Comm.
DATE: 04/08/14
[El F&S Cmte
ill Parks Comm.
E Transportation Cmte
Ill Planning Comm.
VERNA SEAL
COMMITTEE CHAIR:
RECOMMENDATIONS:
SPONSOR/ADMIN.
CommITTEE
Public Works Department
Unanimous Approval; Forward to Regular Consent Agenda
COST IMPACT / FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED
$85,825.86 in 2013 $96,000.00 $0.00
Fund Source: Reran-1Es 000.13.518
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
04/21/14
MTG. DATE
ATTACHMENTS
04/21/14
Informational Memorandum dated 04/04/14
Second Amendment to Warehouse Lease Ag No. 09-083
Minutes from the Finance & Safety Committee Meeting of 4/08/14
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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 extend 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.
1.1 Section 1.8 Expiration Date is amended and restated in its entirety as follows:
"Expiration Date" means May 31, 2015, which 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
06/01/09
— 05/31/10
$4,600.28
06/01/10
— 05/31/11
$4,988.25
06/01/11
— 05/31/12
$5,265.38
06/01/12
— 05/31/14
$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.
1.4 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 Terri of this Lease for one
(1) additional period of one (1) year (the "Option Term ") on the same terns 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 Lease. '1'o 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. If, 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 arnount equal
to the first monthly installment of Base Rent payable by Tenant during the Option Tenn.
1.5 Section 3.7 Base 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 Tern 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 thereafter 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 transactions, all reasonable factors affecting rent shall 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 Tern 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 MAI appraiser. Each appraiser must have a minimum of five (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 Tess than ten percent
(10 %) of the amount of the higher appraisal; then the market rate shall be the average of the two
appraisals. If the appraisers' opinion of market rate differs by more than ten percent (10 %) of the
higher appraisal then a third MAI appraiser satisfying the same qualifications shall be mutually
hired and paid for by both parties. The 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 market. rate estimate of the appraiser closest to it. The Base Rent for the
Option Term shall be the higher of the resultant average rent 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 of a conflict 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 of a 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 left blank; signatures' to follow;
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DATED this day of , 2013.
TENANT:
CITY OF TUKWILA
By:
Its:
LANDLORD:
INTERNATIONAL GATEWAY EAST LLC,
by Sabey Corporation, Manager
By:
Its: Treasurer & Secretary
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STATE OF WASHINGTON)
) ss,
COUNTY OF KING )
On this day of , 2013, before me, the undersigned, a Notary
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 stated that he /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 State of
Washington, residing at
My commission expires:
STATE OF WASHINGTON)
) ss.
COUNTY OF KING )
On this day of , 2013, before me, the undersigned, 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 State of
Washington, residing at
My commission expires:
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FINANCE AND SAFETY COMMITTEE
Meeting Minutes
April {,2014-5:30p.n7, Hazelnut Conference Room
��^ Tukwila
City of � ����C/��
-, �
Finance and Safety Committee
'tt
y o oo� ae
PRESENT
Councilmembers: Verna Seal, Chair; Joe Duffie, Kathy Hougardy
Staff: Bob Giberson, Peggy McCarthy, Chris Flores, Don Tomaso, Christy O'Flaherty,
Laurel Humphrey
CALL TO ORDER: Committee Chair Seal called the meeting to order at 5:31 p.m.
I. PRESENTATIONS
No presentations.
U. BUSINESS AGENDA
A. Record Storaqe Facility Lease
Staff is seeking Council approval of a one-year extension to the Record Storage Facility lease
agreement (No. 09'083) with the Sabey Corporation. This lease agneement, entered into in
May 2009. is for 6.392 square feet of safe secure and humidity controlled storage of City
Clerk and Police Department records. Annual increases to the rent were built into the base
����~�� |ease, and the rent of $5,708.78 for the extended year is reasonable based on the previous
��
rent schedule. Considering the City is currently undergoing an assessment of its fooi|iti8S, and
the location of a permanent City-owned facility is unknown, an extension of this lease through
May 31, 2015. is prudent. UNANIMOUS APPROVAL. FORWARD TO APRIL 21, 2014
REGULAR CONSENT AGENDA.
B. Fire Department 2013 Second-HaIf Report
Acting Fire Chief Chris Flores presented a 2013 Second-Half Report including Department
perfonnance, acnnmp|ishments, challenges and activities. He also distributed a
supplemental report on response statistics per the Committee request made on August 20,
2013. Councilmembers asked clarifying questions and were appreciative of the information.
INFORMATION ONLY.
U|. MISCELLANEOUS
Meeting adjourned at 6:09 p.m.
Committee Chair Approval
Minutes by LH