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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: September 5, 2023 <br /> Action Agenda <br /> Item No. 8-o <br /> SUBJECT: Approval for Chapel Hill-Carrboro City Schools to Lease Space at 521 S. <br /> Greensboro Street (Sheryl-Mar Building) <br /> DEPARTMENT: County Manager/Chapel Hill- <br /> Carrboro City Schools <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> 1. Resolution for Approval Al Ciarochi, CHCCS, 919-967-8211, <br /> 2. Proposed Commercial Lease Agreement — Ext. 28231 <br /> Only Provided Electronically at: Travis Myren, 919-245-2308 <br /> https://acrobat.adobe.com/link/review?uri=ur <br /> n:aaid:scds:US:e4c96190-fc06-4f54-a 17e- <br /> 40c18b137337 <br /> PURPOSE: To approve an agreement for Chapel Hill-Carrboro City Schools (CHCCS) to lease <br /> approximately 23,532 square feet of space at 521 S. Greensboro Street, Carrboro, NC (Sheryl- <br /> Mar Building). <br /> BACKGROUND: Since 2011 , CHCCS has been leasing space to accommodate support staff <br /> due to the fact that the district does not have any available space to house programs or support <br /> staff outside of the Lincoln Center which has reached capacity. CHCCS is currently subleasing <br /> the first floor of the Sheryl-Mar Building located at 521 S. Greensboro Street, Carrboro, NC from <br /> the University of North Carolina at Chapel Hill (UNC-CH). The space is utilized by departments <br /> consisting of employees within the welcome center, Pre-K program, informational technology, <br /> community schools, and instructional services, equity, and engagement (ISEED) departments. <br /> UNC-CH's current eight-year lease with the owner expires December 31, 2023. As a result, <br /> CHCCS has negotiated a new lease with the building's owner, Kerala Capital Partners, LLC, in <br /> order to continue occupancy. The term of this lease commences on January 1, 2024 and ends <br /> December 15, 2028. The annual rental for the leased space is $531,823.20 ($22.60 per square <br /> foot) and includes an annual escalation of 2% for the remaining term of the lease. <br /> Year 1 Year 2 Year 3 Year 4 Year 5 <br /> $531,823.20 542,459.66 553,308.86 564,375.03 575,662.54 <br /> The owner has agreed to waive the security deposit and pay for all costs associated with building <br /> maintenance, parking lot maintenance, snow removal, and trash disposal. CHCCS would be <br /> responsible for all costs associated with utilities, fire alarm monitoring, pest control, and custodial <br /> services. <br /> Under North Carolina General Statute §115C-530 (Operational Leases of School Buildings and <br /> Facilities), local boards of education may enter into operational leases of real property for use as <br />