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Regular City Council Meeting Monday, February 9, 2009 Page 10 12. Business Items {Action Items) • Removed from the revised Agenda on February 6, 2009. b. Approvf: Lease Extension for License Center Finance Director Chris Miller reviewed the request to approve a four year lease extension for the Roseville License Center at Lexington Shopping Center. Mr. Miller acknowledged and recognized that, in the City's long-term best interests, it was indicated that aCity-owned facility would be better; however, he noted that several years ago the City had run out of space; and that the current location and it's logistics to City Hall had proven beneficial. Mr. Miller opined that, in the current economy, the earliest the City could con- sider its own facility would be several years down the road; while allowing for a process to determine what kind of building, where it should be located, and what amenities it should provide, or whether it should be specific to only the space needs of the License Center itself. Mr. Miller provided re-negotiated terms of an average of 3.5% rather than 4% an- nual rates. Mr. Miller advised that he had completed comparative research, not- ing that the City could possibly find less expensive space elsewhere; however, he noted that it would not be in the most desirable location. Mr. Miller advised that the rate currently being paid by the City was considerably less than in other loca- tions in the City of Roseville, as well as in that complex itself. Mr. Miller pro- vided supplemental information beyond that included in the packet, showing the License Center's proposed lease gross rates over the next four years. 1;icense Center proposed lease Gross Rate Year =Rate/square foot 2009 = $15.13/sf. 2010 = $16.03/sf. 2011 = $16.52/sf. 2012 = $17.01/sf. Existing tenants at same building are paying $23/sf. on average 117arketing rate for new tenants is $21/sf. Comparable rates are $18 -$ 28/sf. for similar sized space in Roseville Proposed rates represent 26% LESS than similar situations Mr. Miller opined that the City would continue to retain a favorable lease rate, even with the proposed increases; and that those rates would remain substantially below market rates. Mr. Miller noted that the City retained a very good relation- ship with the mall owners; and that the location provided good synergies to the mall tenants, as well as to the broader City Hall campus. Mr. Miller further