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Department Approval <br />��. ,�: �t <br />Item Description: <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Date: <br />Item No.: <br />Date: 2/09/09 <br />Item: 12.b <br />1/26/09 <br />12.f <br />City Manager Approval <br />� / <br />Approve a 4-Year Lease Extension for the Roseville License Center <br />BACKGROUND <br />In 1999, the Roseville City Council authorized a long-term lease to relocate the License Center at the <br />Lexington Shopping Center located immediately north of the City Hall campus. Previously the License <br />Center was located in the Fire Station # 1 building, but the success of the operation necessitated additional <br />space. The current lease expires on January 31, 2009. <br />Over the past few months, City Staff has been in negotiations with the shopping center to extend the lease <br />for an additional term. In entering into these negotiations, it was recognized that although it is in the City's <br />best long-term interest to have the License Center in a City-owned facility, it is unlikely that such a facility <br />will be available in the foreseeable future. At this time, there does not appear to be any community <br />momentum to finance additional City facilities. With the current economic climate and in recognition of <br />other high-priority needs, we do not expect this to change anytime soon. <br />The License Center currently occupies 3,332 square feet in the shopping center. Sased on transaction <br />volume projections, it is recommended that the License Center retain the same space. <br />Representatives of the Lexington Shopping Center had initially proposed a 4-year lease extension which <br />includes a zero dollar increase in the first year of the lease, with increases thereafter. Over the 4-year term, <br />the lease payments carried an average increase of 5% per year. However, the Council was unsatisfied with <br />these terms and asked Staff to continue negotiations. <br />After further meetings with the Shopping Center representatives, Staff was able to negotiate the following <br />terms: <br />❖ 0% increase in year 1 <br />❖ 6% increase in year 2 <br />❖ 4% increase in year 3 <br />❖ 4% increase in year 4 <br />Over the 4-year term, the average increase is 3.5% per year. <br />Page 1 of 2 <br />