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REQUEST FOR COUNCIL ACTION Date: 9/12/2005 ltem Na: 3.e Department Approval: Manager Approved: Agenda Section: �� r-� r- _ {l,, , � + .;� r � ? �.,4�r1� � ,�?f_'�-• � �in.,�nL Item Description: Consider Authorizing Staff to Execute a Renewal of the License Center Lease Background At the August 8, 2005 Council meeting, the City Council authorized Staff to proceed with final negotiations to renew the lease for the License Center at the Lexington Shopping Center. The decision to renew the lease and expand the leased area was based upon space and secure storage needs, projected growth, and a desire to improve customer service levels. The new lease will expand the premises from 2,315 square feet to 3,332 square feet. Over the next 3%years, the lease rate will range from $14.77-$15.13 per square foot inclusive of common area maintenance (CAM) charges. This lease amount is very favorable and is approximately 20- 25% below similar leasing sites. In total, lease payments will average $49,800 per year. Revised renovation estimates suggest that the City will incur one-time renovation costs of approximately $30,000-35,000 (to be authorized at a later date). It is expected that the additional lease payments and renovation costs will be offset by increased customer volume, most notably in the passport and dealership vehicle licensing areas. The License Center Fund has sufficient reserves to pay for the expansion and renovation costs. While this is a favorable lease amount, it does suggest that long-term it may be in the City's best interest to identify a city-owned site for the License Center. City Staff will be looking at this possibility in the coming year. Staff has completed its negotiations for a new 3'/z year period, along with an optional 3-year extension. The final lease agreement will be reviewed by the City Attorney. A copy of the lease terms is included in Attachment A. Attachments 1) Attachment A—proposed lease terms for the License Center Request for Council Action Upon review by the City Attorney, authorize Staff to execute a new lease agreement with the Lexington Shopping Center for a term of 3- 3% years, with an option to renew for an additional 3-year period; under the proposed lease terms.