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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: April 16, 2019 <br /> Action Agenda <br /> Item No. 8-e <br /> SUBJECT: Lease Modification for Hillsborough Commons <br /> DEPARTMENT: Asset Management Services <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> 1.) Lease Modification John Roberts, 919-245-2318 <br /> 2.) Exhibit F - Form of Tenant Estoppel Alan Dorman, 919-245-2627 <br /> PURPOSE: To approve a modification of the lease for Hillsborough Commons (113 Mayo <br /> Street, Hillsborough) and authorize the Chair to sign the appropriate documents upon final <br /> review of the County Attorney. <br /> BACKGROUND: In September 2018, the Board approved a five (5) year lease renewal option <br /> for the Department of Social Services spaces within the Hillsborough Commons shopping center <br /> for a term beginning January 22, 2019 through January 21, 2024. Separately, the owner of <br /> Hillsborough Commons had the shopping center re-surveyed, separating out the County leased <br /> space from the other shops within the shopping center. <br /> In the existing lease, the cost of common area maintenance ("CAM") was shared proportionally <br /> among all tenants based on square footage. CAM charges include such items as snow <br /> removal, grounds care, insurance, real estate taxes, landscaping, etc. This proposed lease <br /> modification allows CAM charges to be re-proportioned such that the County would now only <br /> pay for CAM charges associated with the space occupied by the Department of Social Services <br /> ("DSS") and its parking lot. <br /> This change is not expected to affect the cost of the lease to the County. The following will <br /> illustrate how this new framework will work in principal: <br /> The 2018 CAM charges paid by Orange County DSS, using the formulation under the <br /> existing lease, were calculated as 66% of $136,686 in CAM charges for the entire <br /> shopping center, or $65,689. The 66% figure represents the proportion of square footage <br /> occupied by DSS out of the total square footage of the Hillsborough Commons Shopping <br /> Center. Under the new framework with the shopping center and its parking lot having <br /> been sub-divided, there is no further need to subdivide CAM charges for the whole <br /> shopping center. The County will only be responsible for the CAM charges associated <br />