HomeMy WebLinkAboutFS 2009-08-04 Item 2B - Agreement - Seattle Southside Visitor Center Lease Agreement at 3100 South 176th Street, SeaTacTO:
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
FROM: Katherine Kertzman, Tourism and Marketing Manager
DATE: July 28, 2009
SUBJECT: Seattle Southside Visitor Center Lease
FINANCIAL FACTORS:
City of Tukwila
Fairway Center 2009 monthly lease cost is $2,925 19.50 sq ft.
Jim Haggerton, Mayor
ISSUE:
Seattle Southside Visitor Center's lease is up for renewal August 31, 2009. After review of
available office space in the market, the staff would like to brief the Council on the deal points of
the new lease and request permission to move forward with the lease agreement. Staff is
recommending Seattle Southside Visitor Center move to a new location 3100 Building, 3100
South 176 St., SeaTac, WA 98188.
BACKGROUND:
Currently we have 1800 square ft of office space, within 2 miles of an 1 -5 exit qualifying for free
WSDOT visitor info signage on 1 -5 as long as we are open 7 days a week in the summer and
offer public bathrooms. Current building signage is visible on a seasonal basis; in the summer it
is blocked by tree leaves until cars have passed which confuses visitors about where to turn.
Additional storage, work and meeting space are needed. The Visitor Center is located 2.43
miles from the Tukwila urban core or central business district (Doubletree).
DISCUSSION:
Seattle Southside staff completed its review of available office space, based on the following
establish criteria:
Within 2 miles of an 1 -5 exit for FREE WSDOT signage
Visible building signage
Available clean public restrooms
Turnkey tenant improvements to minimize moving cost
Centrally located within the Southside tourism and travel economic cluster and
gateway to the state
Increased sq. ft. to accommodate additional storage, work and meeting space
Within Tukwila Council approved SSVS budget
3100 Building Total lease cost: 198,742 3,011 average monthly 16.41 per sq ft.
6 months FREE rent, 3% annual increases, 400 additional sq ft, less per sq ft than new Fairway
Center lease proposal. The 3100 Bldg is within the 2010 Council approved SSVS budget, no budget
amended is necessary.
Fairway Center Total lease cost 171,000 $2,630 average monthly new lease
proposal $17.27 per sq ft. 5 months FREE rent, 3% annual increases. Net variance over 5 years is
$27,742 with 400 additional sq ft.
INFORMATIONAL MEMO
Page 2
Program Benefits:
1. Focal Point as to where people enter or leave Seattle Southside...a prominent
gateway;
2. We believe this new location will increase walk -in traffic...it certainly won't hurt it;
3. One block east of the SeaTac Light Link Rail Station;
4. Two blocks east of the Sea -Tac International Airport information desk;
5. Across the street from the Hilton Conference Center and Seattle Airport Marriott
(2 largest hotel properties in Seattle Southside) and closer in proximity to the
largest group of hotels in Seattle Southside;
6. 3100 Bldg. is located 2.58 miles from Tukwila's urban core or central business
district;
7. Closer to 9 car rental agencies near the Sea -Tac International Airport (the largest
concentration of car rental agencies in King County);
8. Outdoor building signage permitted and City of SeaTac has already begun
working with their Public Works and Planning departments to insure adequate
directional signage will be implemented throughout the City of SeaTac;
9. Within 2 miles of an 1 -5 exit means continued FREE 1 -5 directional visitor info
signage;
10. Offers an impressive front desk space at the entrance to the building that would
make a striking visitor info /concierge desk;
11. Plenty of free parking with improved access for RVs and tour buses;
12. Provides the necessary space to build a visitor center volunteer program;
13. Other Seattle Southside tourism staff would be housed in offices immediately to
the right and up 6 -8 steps;
14. Should the Chamber remain in its current location, the Tukwila I -5 visitor info
directional signage could be maintained for the purpose of directing visitors to the
Chamber for minor visitor information services (2 visitor centers) SSVS would be
available by phone for more in -depth (group business hotel reservations);
15. 3100 Building owners are flexible regarding exterior building signage;
16. Tenant improvements are turnkey and provide ability to build out space to meet
our current needs;
17. City of SeaTac has a relationship with the building owners which enhanced our
negotiating position;
18. Telecommunication capabilities within the building meet our current needs;
19. Out of the flood zone;
20. Five minutes from Tukwila's central business district making it easy to refer
visitors to Tukwila business for shopping and dinning;
21. Location could be a scheduled stop on the Seattle Southside Express shuttle
schedule;
22. Timed with Southside's brand rejuvenation announcement and next Tourism
Networking Meeting;
Possible Disadvantages and Mitigation Tactics:
1. Estimated one time only moving expense $60,000— Mitigated by additional
SeaTac funding with the approval of the SeaTac H/M Committee
Estimated moving expenses $3, 000
Estimated art work, flat screen, signage, kiosk (interior design) $50,000
Estimated reconfiguring phone system and installing cabling as needed
$2,000
New letterhead, business cards, envelopes, etc. in conjunction with brand
rejuvenation $5, 000
2. Additional part time extra labor at the Visitor Center information desk $15 per
hour $20,000 annually develop volunteer program for the Visitor Center
W:12009 InfoMemosISSVSLease.doc
INFORMATIONAL MEMO
Page 3
3. Net 5 year increase as compared to current location lease proposal $27,742 or
$5,548 annualized for additional 400 sq. ft. Mitigated by future budget
prioritization and reallocation
4. Separation of staff functions Mitigated by
Installing instant messaging for no additional cost
Maximizing phone intercom and headset for no additional cost
Install video cam with live internet feed TBD
Conduct regular weekly staff meetings
Other Program Enhancements to Consider for Generating Additional Revenues:
Sell Attractions Tickets Commission
Sell Exhibit Sponsorship in Visitor Center– Commission
Sell co -op sponsorship ads in Vacation Planner, website and advertisements, etc.
Charge for Tourism Networking Meetings
RECOMMENDATION:
The Council is being asked to consider authorization of new lease for (2) periods of (5) years
each for Seattle Southside Visitor Services at the 3100 Building, 3100 South 176 St., SeaTac,
WA 98188 at the August 10, 2009 Committee of the Whole Meeting and subsequent August 17,
2009 Regular Meeting.
ATTACHMENTS:
Letter of Intent (contains handwritten suggested changes by SSVS)
Floor Plan
(Photos will be presented at the meeting)
W:12009 InfoMemos \SSVSLease.doc
June 23, 2009
Richard Davidson
GVA Kidder Matthews
12886 Interurban Ave. South
Seattle, WA 98168
RE: Letter of Intent
3100 South 176th Street
Seatac, WA 98188
Dear Richard:
Thank you for your call this morning. Below please find the terms we discussed last week regarding
Seattle Southside. This letter shall serve as a non binding Letter of Intent which sets forth the basic terms
and conditions under which Dollar Development Co. "Landlord would consider entering into a lease
with Seattle Southside "Tenant in the above referenced location "Office Building
1. Landlord
2. Tenant
3. Trade Name:
4. Premises
5. Area
Dollar Development Co.
2737 78 Ave SE, Suite 201
Mercer Island, Washington 98040
Seattle Southside Visitor Center
(City of Tukwila)
14220 Interurban Ave. South 130
Seattle, WA 98168
Seattle Southside
6. Use General office use.
3100 South 176 Street, SeaTac, WA 98188
Estimated Square Footage: 1,915 (office reception area)
Plus Load Factor: 287
Total Rentable SF: 2,202
7. Term Two (2) periods of Five (5) years each. Rent during the option periods to
be negotiated,
8. Base Rent The Full Service Rent shall be:
Months 1 6
Months 7 —18
Months 19 66
$0.00 psf /yr, full service
$17.00 psf/yr, full service
3% annual increase
DOLLk
DEVELOPMENT Co.
OC;Se'c on ni 0.(kei retie,
DOLLAR
DEVELOPMENT CO.
9. Security Deposit Upon Tenant's execution of the Lease, Tenant shall pay a security
deposit in the amount of $5,000.00.
I0. NNN Cam Charges: The lease shall be a full service lease with a 2009 Base Year. Electricity
is included in the full service rent.
11. Tenant Improvements: Landlord shall provide Tenant with "Turn Key" as outlined in exhibit
"A" which shall include:
12. Utilities
14. Signage
17. Maintenance:
18. Assignability
19. Guarantor
A. 67jprivate offices IL l
B. 1
C. 1 large storage area of approximately 300 sq ft
D. 1 wall across the back of the reception area with a locking
door /screen and a 1 way window
E. 1 work area/cabinet along the back wall of the reception area
for mailing area wjit. (o f 1 31,)E -.r c "6,.bi
F. Landlord shall install dishwasher in the common lunchroom
area upstairs c 1J (ecri c3ecc or cwd phone jCdc t I c"
Y G t(1 Lin dow %fl -C; rsi office.
Included in Full Service rent. ti. She -tVvh5 ;el
wor room
e
13. Lunchroom Area: Tenant shall be allowed the use of the upstairs lunchroom area
throughout the term of the lease at no charge.
Tenant shall be allowed signage, subject to Tenant's compliance with all
applicable governmental codes, regulations, and Landlord's approval.
Signage and LCD/Plasma type screens above the reception area.
Exterior signage above the south door and on the west facing wall of the
building.
da-ir
fa P 1100
15. Parking Tenant shall have the use of six parking stalls in common with other
tenants and an additional ire- stalls that shall be marked as visitor
�vs Cti
parking for Seattle Southside. Tenant may use additional parking as
available after 6pm and on weekends. Landlord, at Landlord's discretion,
may police the parking and may make adjustments to hours and
availability as necessary. C3 i r1 no Cct e ka. (1 ±('ie.re. h 65
%cog .4 /34)( Cenfer G *c (1s.
16. Term Commencement The later of substantial completion of improvements or July T2009
i ?0,
Landlord shall maintain, repair and replace all of the structural elements
and exterior surfaces of the office building and the Premises, including
but not limited to the roof, exterior walls, exterior glass, concrete slab,
footings, electrical, and plumbing exterior to the Premises at Landlord's
sole expense. Tenant shall maintain, repair and replace the interior walls,
interior ceiling, and doors of the Premises at Tenant's sole expense.
No assignment or sublease will be allowed without the Landlord's prior
written consent.
Tenant shall provide financial statements for the principals of the
incorporated entity and shall sign a personal guaranty.
20. Lease Form: Landlord's lease form acceptable to Tenant shall be used for this
Transaction.
21. Broker's Commission: Both Parties acknowledge and agree that David Hall and Cleavon Steele
of Fursse Hall Realty, Inc. represents the Landlord and Richard
Davidson of GVA Kidder Matthews represents the tenant and represent
that no other brokers are involved in this transaction. Landlord agrees to
pay a leasing fee to Fursse Hall Realty, Inc. and a commission as per
the listing agreement of which 4% of the gross aggregate rent shall be
paid to GVA Kidder Matthews. All parties acknowledge receipt of the
pamphlet "Law of Real Estate Agency" and
This offer shall expire on July 2009, if not accepted by the Tenant.
The letter of intent is intended solely as a preliminary expression of general intentions and is to be used for
discussion purposes only. This letter of intent is not a lease for the property.
The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred
to in this letter of intent unless and until a definitive lease agreement has been fully executed and delivered by all of
the necessary parties. The parties agree that this letter of intent is not intended and does not create any agreement or
obligation by either party to negotiate a definitive lease agreement and does not impose any duty on either party to
continue negotiations, including without limitation any obligation to negotiate in good faith or in any other way
other than at arm's length. Prior to due execution and delivery of a definitive lease agreement, and without liability
to the other party, either party may propose different terms from those summarized herein; enter into negotiations
with other parties; and/or unilaterally terminate all negotiations.
Agreed to by:
Landlord
Tenant
By /o/��,'p By
l/_�/ Its
Date q/ Date
DOLLAR
DEVELOPMENT CO
(Pock (0 41
3100 BLUILDING Floor Plan
SOuth SEATTLE VISITORS CENTER / SSVS
OPTION 1 1915 S.F.