Agenda - 02-20-2007-5j - Laserfiche WebLink

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• The County will provide upfit plans to the Lessor's architect. An upfit allowance of $800,000 is allowed. The County will be responsible for upfit costs in excess of the upfit allowance. The Lessor will perform the upfit according to the upfit plans. • The Lessor will be responsible for all exterior maintenance of the building and common areas. The County will have an option to purchase Condominium Unit 200 and Condominium Unit 300 at the end of the lease term for the sum of $5,490,449 which option must be exercised, if at all, 90 days before the end of the lease term. Board action on February 6, 2007 endorsed the Manager's recommendation that the Register of Deeds, Land Records, Tax Assessor and the Revenue office occupy the Gateway Building. The Board is also being asked to approve the form of the Declaration of Condominium of Gateway Center (the Declaration). The building will consist of three condominiums. Unit 100 (the ground floor) is expected to be owned by Hillsborough Community, LLC, a non profit corporation doing business as Weaver Street Market. The County will lease Unit 200 and Unit 300 and will have the option of buying those units at the end of the year and one day lease term. The Declaration, including its Plans and Specifications, creates the condominium legal structure and allocates among the condominium unit owners the various components of the Gateway Center property. It creates "common elements" and an Association responsible for those of the common elements that will not expressly be allocated to particular Units. For example, some of the parking at the building, some of the walkways around the building and the building structure itself are common elements. The Association will consist of and be managed by the condominium Unit owners. The Condominium will not legally come into existence until the Gateway Center is complete. And, it is possible that some changes will have to be made to the Condominium Declaration between now and then. Ultimately though, the County will have to be satisfied with the form and the substance of the Condominium Declaration at the time it is required to exercise its option to purchase Unit 200 and Unit 300 of the Gateway Center Condominium. FINANCIAL IMPACT: Monthly lease payments of $47,120 will be included in the County's annual operating budget for fiscal year 2007-2008 ($376,960 to cover the eight-month period from November 2007 through June 2008) and fiscal year 2008-09 ($188,480 to cover the four- month period from July through October 2008. In addition, utility costs for the facility, which are unknown at this time, will be included in each of the two fiscal years' budgets. It is not anticipated that a reserve for repairs and maintenance will be needed during the lease term because the building and the upfit will be new due to the fact that necessary repairs should be covered by warranties during this period. The County's September 2006 Debt Issuance Plans include $5,490,449 to purchase Condo Units 200 and 300 should the Board decide to exercise its option to purchase them. RECOMMENDATION(S): The Manager recommends that the Board approve: (1) the lease and option to purchase agreement for Unit 200 and Unit 300 of the Gateway Center Condominium;(2) authorize the Board chair, the Clerk to the Board, the County Manager, the County Finance Director, the County Director of Purchasing and Central Services and the County Attorney to act on the County's behalf and execute and deliver the lease to Telesis Construction Management, LLC in form substantially similar to the copy of the document attached to this abstract; and (3) approve the Condominium Declaration in form substantially similar to the copy of the Declaration attached to this abstract.