TO: Mayor and City Council
THROUGH: Steve Powers, City Manager
FROM: Kristin Retherford, Director Urban Development Department
SUBJECT:
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Lease extension and amendment with Shires Properties, LLC to secure proposed Salem Police Facility site.
Ward(s): 1
Councilor(s): Kaser
Neighborhood(s): CANDO
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ISSUE:
Shall the City Council authorize the City Manager to execute the attached lease amendment with Shires Properties, LLC to secure the site of the proposed Police Facility?
RECOMMENDATION:
recommendation
Authorize the City Manager to execute the attached lease amendment with Shires Properties, LLC to secure the site of the proposed Police Facility.
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SUMMARY AND BACKGROUND:
With the successful passage of the Police Facility Bond Measure, the City is proceeding with plans to construct a new facility to house the Salem Police Department (Facility). On February 29, 2016, City Council selected the former O’Brien auto dealership site (Site) (Attachment 1) as its preferred location. On June 27, 2016, Council authorized the City Manager to execute a lease with the owners to secure the Site in anticipation of a bond referendum to fund construction of the Facility (Attachment 2). The current lease expires on June 30, 2017, and must be renewed to secure the Site, allow the City to complete its due diligence and complete a Purchase and Sale Agreement with the Seller.
FACTS AND FINDINGS:
Shires Properties, LLC (Seller), whose principals are Carol T. Shires and Scott T. Shires, is the owner of the Site. Staff and Seller have come to terms on a lease extension and amendment (Attachment 3), securing the site in anticipation of a purchase and sale agreement to be completed in late summer or early fall 2017.
The substantive terms of the proposed lease are;
• One year term,
• Property, 37,000 square feet in three buildings on 3.51 acres,
• Rent:
o $200,000 due August 1, 2017 ($100,00 may be applied to purchase price),
o $100,000 due January 1, 2018 (if acquisition is not closed),
o $100,000 due April 1, 2018 (if acquisition is not closed).
• Expenses,
o City will be responsible for all normal operating, utility and routine maintenance expenses
Clint Dameron
Real Property Services Manager
Attachments:
1. Site Map
2. Current Lease
3. Proposed Lease amendment
May 25, 2017