TO: Mayor and City Council
THROUGH: Keith Stahley, City Manager
FROM: Kristin Retherford, Community and Urban Development Director
SUBJECT:
title
Ground lease with WattEV Salem Inc. for real property at Salem Municipal Airport.
Ward(s): 3
Councilor(s): Phillips
Neighborhood(s): SEMCA
Result Area(s): Good Governance; Strong and Diverse Economy
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SUMMARY:
summary
WattEV Salem Inc. (Umar Javed, President) (Lessee) desires to lease unimproved ground at the Salem Municipal Airport to develop a charging depot for electric trucks. In order to avoid delay of Lessee’s grant application with the State of Oregon, the City Manager has already executed the lease. City Council is being asked to ratify the City Manager’s execution of the lease.
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ISSUE:
Shall City Council ratify the City Manager’s execution of the attached lease?
RECOMMENDATION:
recommendation
Ratify the City Manager’s execution of the attached lease.
body
FACTS AND FINDINGS:
Staff and Lessee have come to terms on a ground lease (Lease) for property at the airport (Premises). The Premises is on airport property, but outside the security fence, and is located along Airway Drive SE adjacent to the City’s Public Works Waste Transfer Station. Key terms of the Lease are below.
Square Feet: 348,480 (~8 acres, subject to survey/verification)
Term: 25 years
Rental Rate: $0.35/per square foot ($128,960 annually) (2.5% annual increases, reappraised and reset to market rate in Year 6)
Rent will begin to accrue at end of Due Diligence Period and be deferred until three months after opening date. Deferred Rent will be repaid be amortized and repaid over the ensuing 3-year period in addition to Base Rent
Security Deposit: One month’s rent ($10,164)
non-refundable upon completion of Site Due Diligence Period
Site Due Diligence Period: 180 days
Site Entitlement Period: 180 days
Broker Commission: $201,296.10 - subject to final survey and Council Policy W-2 (City of Salem Policy Regarding the Compensation of Real Estate Brokers)
BACKGROUND:
Revenue from the Lease will flow to the Salem Municipal Airport Fund.
Lessee is establishing an over the road truck charging network along the west coast of the United States from the U.S./Mexico border through Washington. The Salem site is expected to open in mid-2025 and could power 40,000 trucks per year. Total investment is expected to be $10,600,000.
Clint Dameron
Real Property Services Manager
Attachments:
1. Lease