Agenda - 05-20-2008-4s - Laserfiche WebLink

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Structures on the site In addition to the 100,000 square foot building, the site includes two storage sheds for building materials (see attached aerial photo). The original lumber storage shed is approximately 8,000 square feet. In 2001, the Lessee requested and received approval to add an 11,000 square foot metal shed in order to increase the on-site lumber storage capacity. These three sided structures, which are open to the front to allow large truck access for pick-up and off-loading, add only nominal value to the leasehold value of the property and are not included in the square footage calculations against which rent would be assessed. The Lessee was responsible for, the total cost of the new structure. A copy of the April 1, .2008 abstract and the original lease are attached for additional background information. FINANCIAL IMPACT: The Board may recall that the original lease was set at $1/square foot, significantly below market rate, to recognize the significant capital investment needed to make the building suitable for use by Builders First Source. The recommended renewal rate of $2.50/square foot is based on lease rates for comparable properties in the area. The County may expect to receive a total of $250,000 in annual rent, an increase of $150,000 in revenue per year from previous years. Further, the lease terms require the tenant to pay taxes on the building as if it were privately owned. The taxes-in-lieu amount paid to Orange County in 2007 was $47,313. Since the company is outside of the Hillsborough city limits, no city taxes are collected. RECOMMENDATION(S): The Manager recommends that the Board approve the lease rate for Builder's First Source at 401 Valley Forge Road, Hillsborough at $2.50/square foot.