R2016-36 AUTHORIZING LEASE AGREEMENT Board of Library Trustees

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CITY COUNCIL MEMORANDUM NO.2016-09 DATE: April 4, 2016 TO: The Honorable Mayor and City Council Members FROM: Timothy A. Gleason, City Manager Wendy L. Morthland, Corporation Counsel SUBJECT: Resolution Authorizing Lease Agreement—Board of Library Trustees SUMMARY RECOMMENDATION: City Administration recommends City Council approval of the attached Lease Agreement regarding 130 N. Franklin Street, the space currently occupied by the Decatur Public Library. BACKGROUND: The Board of Library Trustees, recognizing that there were issues of financial and property management several years ago, began efforts to address those concerns. Positive efforts were made in the financial management area through reorganization, employee cuts and a loan from the City. The property management issue remained more elusive and options were explored to transfer ownership of the Library property to another person or entity and lease the space they needed. Recognizing the importance of the Library to the community and its location in the central business district, the City began exploring options regarding the property in 2015. As a result of the City's interest in having ownership of the property transferred from the Library to the City, negotiations began for a Lease. The Lease Agreement presented has the following main provisions: • Rent of$575,000 per year with a 2.5% increase every 5 years • Term of 20 years with six five year renewals beginning May l, 2016 • Utilities will be included as part of rent • City will provide maintenance for the property • Library will continue paying for its allocation of insurance costs • City may transfer, lease or sell property Library isn't leasing • Project Read and Friends of Library will continue using space in Library • City may transfer or sell Library Building but will relocate the Library to reasonably similar space • City will make repairs to HVAC control system and chiller by April 30, 2017 � City will use best efforts to repair or resurface parking area by April 30, 2017 and if not, will repair and patch significant areas of damage • Library's rent shall not exceed 22%of the property tax levied by the City • City agrees to conduct a study and review of the Annex Building, its safety and potential use by April 30, 2017 • City will no longer pay for record storage space in amount of$20,000 annually