HomeMy WebLinkAbout2016 Resolution No. 057,,
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RESOLUTION NO . 15.2
SERIES OF 2016
A RESOLUTION AUTHORIZING THE CITY OF ENGLEWOOD TO ENTER INTO A
LEASE WITH HARVEY CONSTRUCTION INC. dba AMERICAN STRIPING COMPANY
TO LEASE THE TEJON FIRE STATION LOCATED AT 3075 SOUTH TEJON STREET
ENGLEWOOD, COLORADO.
WHEREAS, the Englewood Fire and Rescue Department is no longer utilizing the Tejon Fire
Station; and
WHEREAS, Harvey Construction Inc dba American Striping Company submitted a Letter of
Intent to Lease the Tejon Fire Station located at 3075 South Tejon Street, dated May 27, 2016;
and
WHEREAS, the reasoning for the lower lease rate up front relates to the capital cost of tenant
improvements that are proposed at the Tejon Station to make it work for their striping business;
and
WHEREAS, American Striping Company will cover the cost of utilities and maintaining the
interior of the building related to their usage of the facility and American Striping will also be
responsible for the care and maintenance of the grounds; and
WHEREAS, American Striping has requested a first right of refusal to purchase the real estate
should the Englewood City Council determine that they would declare the facility surplus; and
WHEREAS , any sale of the property shall be by ordinance.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO, THAT:
Section 1. The Englewood City Council hereby authorizes entering into the Lease for the
Tejon Fire Station between the City of Englewood and Harvey Construction Inc. dba American
Striping Company, attached hereto as Exhibit A.
Section 2 . The City Manager of the City of Englewood is hereby authorized to sign and attest
said Lease for and on behalf of the City of Englewood.
ADOPTED AND APPROVED this 20th day of June, 2016.
ATTEST :
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I, Loucrishia A. Ellis, City Clerk for the City of Englewood, Colorado, hereby certify the
above is a true copy ofReso!ution No. fi!).._, Series ~ ~16
Loucrishia A. Ellis , City Clerk
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LEASE AND OPTION
THIS INDENTURE, dated ________ , is between THE CITY OF ENGLEWOOD , COLORADO
the Landlord and HARVEY CONSTRUCTION INC . dba AMERICAN STRIPINC: , the Tenant.
In consideration of the payment of the rent and the keeping and performance of the co\'enants and agreements by
the Tenant herein, the Landlord leases to the Tenant , the following described premises (the ·'Premises") located in the
County of Arapahoe, City of Englewood in the State of Colorado, to wit:
Lot 4 and Lot 7 , Block 10, Vista Heights 2nd Filing , Except Streets .
Also known as: the City of Englewood Tejon Fire Station , 3075 South Tejon Street, Englewood, CO 80110.
The Premises described above, with all the appurtenances, are leased to the Tenant for the full term , from the date
of July, 2016 until the date of __ J_ul~y_3_1_, 2_0_3_6 ___________ _
for a rental of$ See Exhibit A , payable
SEE EXHIBIT A ATTACHED HERETO , FOR THE MONTHLY RENTAL AND ANNUAL PAYMENTS ..
THE TENANT, IN CONSIDERATION OF THE LEASING OF THE PREMISES, COVENANTS AND AGREES
AS FOLLOWS:
To pay the rent above;
To keep the Premises in good condition and repair and at the expiration of this lease to surrender and deliver up the
same in a, good order and condition as when entered upon , lo ss by fire, inevitable accident, act of God or ordinary wear
excepted;
To not assign this lease or any interest therein without prior written consent of the Landlord;
To use the Premises for no unlawful or questionable purpose and to obey the laws , ordinances and police regula-
tions in relation to the use and condition thereof and of the roads a nd streets adjoining .
IT IS AGREED that a ll assessments for wate r that may be levied against the Premises during the continuance of this
lease will be paid by Tenant a nd that all charges for heating and lighting the
Premises shall be paid by Tenant as they become due . Also, if the Premises become
untenantable on account of damage by fire, flood or act of God, the term of this lease may be terminated by the Tenant.
IT IS FURTHER AGREED that if the Premises are left vacant, then the Landlord may, without being obliged to do
so and without terminating this le ase, retake possession of the Premises. If any part of the rent herein reserved is unpaid,
the Landlord may rent the same for such rent and upon such conditions as the Landlord may think best , making suc h
changes and repairs as may be required, giving credit for the amount of rent received , less all expenses created thereby,
and the Tenant shall be liable for the balance of the rent herein reserved until the expiration of the term of this lease .
A security deposit in the amount of $ See below s hall be returned to the Tenant, or a written accounting
listing the exact reasons for the retention of any portion of the sec urity deposit, within sixty (60) days after termination
of the lease or surrender and acceptance of the premises . The Landlord will mail the written statement to the last known
address of the Tenant.
It is agreed that if the Tenant is in arrears in the payment of any installment of rent , or any portion thereof. or in
default of any of the covenants or agreements herein to be performed by the Tenant, and the default is uncorrected for a
period of three (3) days after Landlord has given written notice , Landlord ma y. at Landlord 's option . without liability for
trespass or for damages ; enter into and upon the Premises, or a portion thereof: declare the term of this le ase ended:
repossess the Premises as the Landlord·s former estate; peacefully expel and remove the Tenant , those claiming under
him, or any person or persons occupying the same and their effects; all w ith out prejudice to any other remedies aYail-
able to the Landlord for arrears of rent or breach of cownant.
In the event any payment required hereunder is not made within ten (10 ) day s after the payment is due. a late charge
in the amount of 5 St of the payment will be paid by the Tenant.
'.'lo. e902. Rev. 4-00. LEASE A.'ID OPTJO'.'I Cop)Tight 1987 (Page I of 3)
Bradford Publishing. I 743 Wazee St.. Denver. CO 80202 -303-292-2500 -www.bradfo rdpubLi shing.com -eForm
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IT IS FURTHER MUTUALLY AGREED that the Landlord, in consideration of the performance of all the covenants •
and agreements herein to be performed by the Tenant. herebv inves to the Tenant a Right of First Refusal to purchase
· the premises in the future should the Landlord declare the premises as surplus . The sum of the purchase shall be determined by
an MAI Appraisal at the time the premises may be declared surplus.
The Landlord, upon payment of this purchase money, will convey the Premises by Warranty Deed to the Tenant free from
all encumbrances except
none
and will furnish title insurance , so showing. The rent, water, taxes and insurance are to be adjusted to the date of
transfer. If a security deposit has been made, upon completion of the lease and purchase of the Premises, it will be treated
as follows:
the security amount is credited as first and last months rent as desired by the City in the published offering.
Additional orovisions :
Tenant accepts the terms of the lease as being gross. Water, sewer, electrical and gas shall be paid at tenant expense. Tenant
sha_ll be responsible for the _insi_irance of building contents. Tenant shall be responsible for internal building and grounds
mamten~ce. All tenant fimsh improvements shall be made at tenant expense. The existing air compressor shall be deemed a
fixtu~e wit~ the pro~erty and transferred at time of sale with no warranty. Tenant requests occupancy as soon as reasonably
practical ~th the City of Englewood and is willing to enter the premises with a prorated lease arrangement at a mutually agreed
upon earlier date .
Should any provision of this Lease . violate any federal, state or local law or ordinance, that provision
shall be deemed amended to so comply with such law or ordinance, and shall be construed in a manner so as to comply.
Where used herein, the singular shall include the plural and the use of any gender shall include both genders .
IT IS FURTHER UNDERSTOOD AND AGREED that all the covenants and agreements contained in this Lease shall
extend to and be binding upon the heirs , personal representatives , successors and assigns of their respective parties .
Landlord Tenant(s)
Name and Address of Person Creating Newly Created Legal Descriptio n (§38-35 -106.5, C.R.S.)
ASSIGNMENT AND ACCEPTANCE
For value received _________________________ , as assignor, assigns all right,
title and interest in and to the within Lease to ______________________ , as
assignee, and assignee's heirs and assigns. And in consideration of this assignment, the assignee accepts this assignment
and agrees to make all the payments and perform all the covenants and agreements in this Lease that apply
to the leasee .
Executed on _____________ _
Page 2 of 3
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CONSENT TO ASSIGNMENT
Consent to the assignment of the within Lease to _______________________ _
is given, on the condition that the assignor will remain liable for the prompt payment of the rent and performance of the
covenants on the part of the lessee as therein mentioned, and that no further assignment of the Lease or subletting of the
Premises, or any part thereof, will be made without further prior written agreement.
Executed on _____________ _
Page 3 of 3
EXHIBIT A
Payable monthly on the first of each month.
Year 1: $2,500 Per Month -$30,000 Annual plus taxes, insurance, maintenance, utilities.
Year 2: $2,500 Per Month -$30 ,000 Annual plus taxes, insurance, maintenance, utilities.
Year 3 : $3,500 Per Month-$42,000 Annual plus taxes, insurance, maintenance, utilities.
Year 4: $3,500 Per Month -$42,000 Annual plus taxes, insurance, maintenance, utilities.
Year 5: $4,000 Per Month -$48,000 Annual plus taxes, insurance, maintenance, utilities.
Years 6 -10: $49,440 Annual plus taxes, insurance, maintenance, utilities.
Years 11-15: $50,923 .20 plus taxes, insurance, maintenance, utilities.
Years 16-20: $52,450.00 plus taxes, insurance, maintenance, utilities.
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COUNCIL COMMUNICATION
Meeting Date: Agenda Item: Subject: Lease of the
20 June 2016 Tejon Fire Station
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Initiated By: City Manager's Office Staff Source: Eric A. Keck, City
Manager
PREVIOUS COUNCIL ACTION
No previous City Council action has been taken on this item.
RECOMMENDED ACTION
The City Manager's Office recommends that the City Council enter into a lease
agreement with Harvey Construction, Inc. OBA American Striping Company .
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
With the Englewood Fire and Rescue Department no longer utilizing the Tejon Fire
Station located at 3075 South Tejon Street, the City desires to have a tenant utilizing
the building. Given the City Council's desire to hold onto assets rather than declare
them surplus and sell them, staff determined that a lease of the property made best
sense. Toward this effort of having a tenant in the facility, the Englewood Procurement
Division conducted an RFP for the lease of the Tejon Fire Station. RFP-16-07 for the
lease of the Tejon Fire Station was open from 12 April 2016 through 3 May 2016. The
RFP process yielded only one formal response from Harvey Construction Inc. doing
business as American Striping Company . During the RFP process, several brokers and
companies did call the City Manager's Office with the desire to purchase the real estate
but not lease the site.
The City had an appraisal of rental rates performed on comparable industrial buildings
through the use of Metropolitan Appraisers, Inc. which is an Englewood commercial real
estate appraisal firm. The resultant study indicated rents ranging from $7.25 to $10.00
per square foot. The proposal from American Striping Inc. suggested a base rental rate
of $6.48 per square foot for the first two years, $9.07 in years three and four and then it
climbs to $10.37 per square foot in year five. Please see attached Letter of Intent. The
reasoning for the lower lease rate up front relates to the capital cost of tenant
improvements that are proposed at the Tejon Station to make it work for their striping
business. These improvements are seen more specifically on the attached
improvement page but include buildout of new office space, new carpet and paint,
installation of a security fence, installation of vehicle lifts in bays, and other
miscellaneous improvements.
This is a gross lease with the tenant covering the cost of utilities and maintaining the
interior of the building related to their usage of the facility and American Striping will also
be responsible for the care and maintenance of the grounds. The initial term is five
years with three additional five year lease options that include an automatic 3% lease
rate escalation . American Striping has also requested a first right of refusal to acquire
the real estate should the City Council determine that they would declare the facility
surplus.
Staff has reviewed the lease terms and spoken with commercial realtors who believe
that this lease rate is fair, equitable and close to market rates initially and then surpass
market over time . This particular company will be a great complimentary use of the
property and appears to be poised to grow and care for the site.
FINANCIAL IMPACT
The City will realize the following through the term of the lease :
Year 1: $30,000
Year 2: $30,000
Year 3: $42,000
Year 4: $42,000
Year 5 : $48,000
Year 6-10: $49 ,440
Year 11-15: $50 ,923.20
Year 16-20: $52,450 .90
LIST OF ATTACHMENTS
Letter of Intent
Proposed Improvement List
Lease Agreement
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Attention:
Proposal:
Parties:
Item c:
Lease Rate:
City of Englewood, Procurement Division
1000 Englewood Parkway
Englewood, CO. 80110-2373
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RFP-16-007 Lease of the Tejon Fire Station Building
3075 South Tejon Street, Englewood, CO. 80110
Landlord: City of Englewood
Tenant: Harvey Construction Inc. OBA American Striping Company
"The proposal is to include the period for which proposer would like to lease the
property, and the proposed payment/rent amount schedule."
Proposed lease start date would be as soon as a fully executed lease projected date of
June 15th 2016, (pending contractual obligations having been met by both parties). We
are requesting a lease term of 5 years with an option to purchase anytime during or
thereafter the 5 years. Request to renew lease would be submitted for an additional 5
years pending the inability to purchase. This request renewal would be submitted in the
1st month of the fifth year. Proposed payment and schedule is as follows based on a
gross rate not including Water/Sewer/Concrete/Storm are charged as one bill on a
quarterly basis. The sewer charges are estimated at $214.00 per Quarter and water is
$83.25 up to 22,000 gallons, add $3.29 per thousand gallons over that .
Year 1: $2,500 Per month -$30,000 Annual
Year 2: $2,500 Per month -$30,000 Annual
Year 3: $3,500 Per month -$42,000 Annual
Year 4: $3,500 Per month -$42,000 Annual
Year 5: $4,000 Per month -$48,000 Annual
Extension Option: Three (3) Five (5) Year extensions options. Each option will incur a 3% escalation
on base rate per term.
Additional Provisions: Tenant will have a "First Right Of Refusal" per this lease .
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Item e :
Response:
"The Proposal is to include a specific proposed use for both the Facility and the
Property."
We are a Licensed Disadvantaged Business Enterprise Contractor who specializes in
Roadway Pavement Markings . Our current facility which we are presently sharing with 2
other businesses does not have the capacity to warehouse our temperature and
weather sensitive materials . Nor the ability to house our over-sized trucks to protect
them from the elements. The facility portion of the premises would be used for office
space as well as storage . If we were the selected recipient any and all interior changes
would be submitted for approval, and if deemed necessary we would return the facility
to its current configuration at the conclusion of our lease term. The bay area of the
facility would be used to house, and maintain (light maintenance) our trucks and
equipment. We would video the area and upon the conclusion of our lease term would
ensure that the area was the same if not better than when we started our term . The
Property at this time I would like to propose would not be disturbed with the exception
of adding a perimeter fence at our expense to protect employee's vehicles, company
equipment and materials. We would maintain the grass, trees, shrubs, sprinkler system,
and would be responsible for snow removal. If in the future any alterations to the yard
were to be required the plan would be submitted to the City for approval with the
condition that any changes would be reverted to the current condition at the conclusion
of our lease term .
Security Deposit: "A one month rental deposit will be required in advance on any lease
agreement made as a result of the RFP ."
Authorized Agent
Alejandra Harvey
-Ill
Date
May 27 th , 2016
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Year Improvement
1 Demo out existing living area • 1 Build out new small office space
1 Run additional electrical for office space
1 Repair carpet and paint
1 Run new networking cable to office space
1 Misc. repairs throughout property
1 Install safety fence around yard
1 Remove sod and install road base for yard
2 Build out addtional office space
2 Install lifts in bays
2 Run additional electrical and plumb air to bays
2 Additional office buildout
2 Run new Eletrical to office space
2 Additional improvements to yard space
3 TBD
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