HomeMy WebLinkAbout2011 Resolution No. 037llliSOLUT IDN NO
SER IES OF 201 1
37
A Rt:SO LUTI ON SUl'PORTING THE E LEWO O D/MCLEL LAN RE SERVOIR
FOUNnAT ION (EMRF) IN T l 1£ NEGOTI/\ TION OF A LEASE OF A POR TION OF THE
M LELL A.!\/ PR OPERTY TO BENJI\ HJ\ fR/\NKUN CHART ER SC HOOL.
\Vl-l ER EAS, the Englcwoodflvtc Lcll an Rese rvoir Foun da ti o n (E MRF) wn s fo1Tncd 10 ovt"rscc
the de velop ment of the Mcl ell an Res erv oir propc 11 y; and
WHEREAS, the En glewoo d Cit y Co un cil supported the En glewoo d/Mc l ell an Rese rv oir
fo undatio n in the nego ti ati on of a lease of a pOl1i on o f MeLella n prope11 y wi th Benja min
Fran khn Cha11e r Schoo l by th e pass age 0 1 Re soluti on No . 89, se rie s 20 10 ; and
\VlfERf·.AS, a ch:mgc of loca tion was ne<.·e ss irnt cd due to 1hc rcJec tion fl f th c prev iou.c.ly
prOJJO 'a<i sit e by Douglas Cou my; and
\Vl-fE REAS, th e Lease is for up prox11n a1cly 10. l ncrcs of the Englcwoo!VMclellan Rese rvoir
Fo undati ou pro pc11y ; an d
\VHEREA S, Benjamin Frn nk.lln Chaner Schoo l su..,m111tXI ,1 U::tt c1 oflntcrt:st \1,hid1 wa s
prrvious\y submillt'<l 10 the Fn clewood Ci 1y C011n cil : .md
WHEREAS, EMRF had re vte -.ed the fma nc1 al tcnns of the Let1er ol Interest wit h Cll y
Counc il nn ci Cit y Counci l hn s in ~tru ctcd Efl.{RF l o begin lhc; !"f'[':O ttation o f ftnal lc.1sc lcml...:; and
WHEREAS , up on completio n of negotia tion EMRF sha ll obt ai n a rec ommendat ion fro m Ci ty
Co un ci I; and
NOW, 'llfEREFORE , BE IT RE~OLVED BY nw CITY COUN CIL OF TI-lE C ITY OF
ENG LEWOOD , COLO R/\DO, T HA T
Scclto n I. The Cit y Council oft , City of Englewoo d, Co lorn do, here by suppo rt s the
rn:goliat ion fu r .i Lea se of propt:11y bct wc:t:11 tJ1 c Cu ~lewood/M cLcUan Reservo ir f oWlda tion an d
Renia mi n Franklin Char1er Sc hool.
ADOPTED AND !\l'l'R OVED this 22 11d day of February, 201 1
----+-~ _.....__): ~'
Jam es K. Wo odwar d , Mayor
( \
COUNCIL COMM UNICA TION
o ,te: Age nda llem: Subj ec1 :
Fc hru ary 22, 201 1 11 C i Reso lulion o f supp o rt fo r the En glewood M clell, n
Rt:!!i~1v ui 1 Fouml.iti u 11 tu u ..1111 µ11:!t~ n t:)julit1 l iu11s frn
lease of approxi rn alely 10.1 ac res 10 Benj amin
Fr anklin Charte r Sc hoo l, LL C.
lniti aterl Ry: I Staff So ur ce :
Englewood Mrl P1l ;u1 Rr o;Prv n1r r 01mrlr11 ion M ichae l Fla herty, EMRF Boa rd
COUNCIL GOAL AND PREVIOU S CO UNCIL ACTION
In 1999, Ci ty Co un ci ov tho ri ze d 1he crea ti o n o f th e Eng lewood M clellan Re serv oir Foundation
(E MRF) fo r th e pur p J ;e of faci litatin g the deve lopment of p ro pert y ad1ace nt t o th e City 's M cl ell an
Res erv oir . On D ec,•1 ·"''..;e r I 7, 20 07, Co unci l suppo rt ed EM RF in the sale of approxi mate h1 1 I ac res
o f PA65 tu RTD for , L milli on . On December 1, 2008, Ci ty Cou ncil suppor t ed EMRF in leas in g
app roxima t ely 12.U acr es of PA6 4 to TT of D enver. On December 6, 201 0, City Coun cil, by
1"1:!!iU lu tiun, :,uµpo1lt!<l EM RF in it s initial nego tia uons w ith Beniamin r-rank lin Chart er Sc hool, LLC.
RKOMMENDED ACT I ON
EMRF recom mend s Ci ty Co unci l approval of the Reso lutron sup port ing the EMRF to complete
nego tiati ons w ith the Benja n ,,n Frank lin Chart er Scho ol, l LC for lease o f approx imate ly t 0 .1 JC 1e,
of EMRF p ro perty within H1ehl and Ran r h Planning Area A'i.
BAC KGR OUND
In 1999, City Co un cil au th orize d, through O rdin ance 41, the crea tion of th e tnglewood Mclell an
Re<'i crvo ir Fo und .J.ti on, ~ non pr0 f11 co rp o r;-i tion charg ed w ith furth eri ng th e develop ment of th e
M clellan Rese rv oir p ro p erty and ·ran sfe rred the property to EM RF. The fol lowing goa ls for
develo pm ent were es tablished b; Ci ty Coun cil in Ordina nce 41 .
I . Pro t ec t the q 11al1ty of tile City 's sto red wa ter at M cl ell an Re se rvoi r.
2. Pro t ec t t he rese rv oir ecosys tem.
3. E~:db 1ish arirf 11 1dx irni l e a futurt! long-teim irtLOI ,c st1 ea m lo be nefi t the City .
4. M ain1 ,in th e quali ty of th e Highline Cana l rec reat iona l faci lities an d th e wetl and s
b~tv,ee n C-4 70 and Coun!y Lin e Road .
). Min1m1 ze deve lopm en t Im pJcts on th e rese rvo ir .
6. tn han ce th e qu2 1ily of lh e of th P nP1gh ho rht)od of whic h =· is pa rt.
7. En han ce th e qua:;t\' of life for res id en ts of th e Cit y of Engl wood.
Du rin g th e Exec utiv e Sessm n of Febru ary 7, 20 1 1, Ef\1,RF Direc tors informe d City Coun cil of the
chan ge of property under consi deration for le asing to the Frank lin Charter School. Th e change of
loca I1 on w,1s necessi ta ted du, .v th e rej ec ti on o f th e prev io usly propose d ~itt pl r11 1 l1y D r,ug lr1 :,.
Cou nt y Th e developer ha s 11 1dic Jt eci Ih ei r wik •gncss to p rocee d w it h n go11,,11 o ni; o n the
,1ll n11:11 1ve sit e. A pproval o f this reso l uti o n w rl l , llow EMl<F l o co mplete for mal le;i se n egoI iatio ns
w it h Ben j,,m in Fr;1n kl in C hJ rt er School, LL
FI NANCIAL l >,\l'ACI"
Re n tal in co,n e v1 ill iri ti 11l (' d u ling !h i" h mor iii co11 1i tr11 r l ID11 perio d .i t 1ht 1Jtc o f ~4000/m onth . Th e
.:in nu.:t l b.i.~c r cn t:tl r,1t c w il l C>sc abte fr o1 11$l (·f:l,000 111 Y e;1 , 1 l f"I $1 89,000 111 Vo.1 r 5, fnr an
a~i;regr1 I e lutal of $765,000. D epending c••l II.:! sc hool'!:i abilit y to exp:\nd ,ts sIudc 111 popu lati o n,
r eve nu in yea rs b·U will total i,64/,000, wn h ,H111u:1! csc:i la11 ,1ns b a~e d 0.n th e Consumer Pri te
Ind ex ther eafte r
LI ST o r ATTAC HMENT S
Draf1 l.c11 c 1 or l111 eres t
Site Mop o f Suh jec l Prup,ar ty
Rcsulu li on
Englewood/McLellan Reservoir Fowidation
I 000 Englewood Parkway
Englewood , CO 801 10
Atteni;on : Rick Kahm
Febru ary_, 20 11
OR AIT
T11is will s uppl ement ourletter 'lf Interest dated November 17 , 2010 .
I. Property. The Property whi .~h will be subject to the Lease is descri bed tlS th e tract of land
located at acres at the S outhwest corner of Plaza Dri ve and Grtensboruui;h Drive, Highlands
Ranch, CO ., con!ainiog approx. 10 .138 acres.
2. ~-The rental terms shall be :
Construction Rent: Upon execution of a Lease, Tenant sboll pa)• monthly co n strnction
ren t of $4,000 per mouth Wltil co\lllty has iss ued a certificate of occupancy (CO).
Upo n issuance of CO rent shall be as fo ll ows:
a. Months 1-12 following CO
b . Months 13-24 fo ll owing CO
c. Months 25-36 fo llo wing CO
d. Months 37-48 following CO
c. Mouths 49-60 following CO
Annual
$108,000
$12 1,000
$14 8,000
SI 75,000
$189,000
Monthl y
$9,000.00/mo
.$ 10,083.33/mo
$12.3 33/33/mo
Sl4.58J.33/mo
$15,750.00/mo
(Provided Tenant docs not exercise its right to terminate the Lease as to the Termintioo
Parcel as described in below in Paragraph 4)
f. Months 6 l -7 l fo ll owing CO $202,000
g. Months 73 -84 fo llowing CO $216,000
h. Months 84-95 following CO $229,000
$16,833.33/mo
$18,000 00/mo
$19.008.333/mo
Months 96-300 (or commencing U onth 6 1 if Tenant exercised its right to
terminate the Lease as to the Termination Pllfcel)-Rent shall be adjusted yearly
hsed upon CPI Index for Urban Consumers, Denver, B oulder, Metro Area-All
Items Index (the "Index") 11~lb a minimum incr,,ase of I % and maximum of 3%
over previ ou s year lease amo\lllt. Original leas e term sh all be 300 mouth s (25
YRS .) w ith 5 renewable op tio n~ of IO years each. In the ovent Tenant exerc,sc rl
its fi r st option, the ren t shall be adj usted, co mmenc ing on the fi rst da y of the
30 1" :noath by an amount eq ual 10 nn y increase th e Index frn m th e Effective
Date o f the Lensc 10 th e 3001h month of tl1t Lease, an d thereafter th e rent shall
be in cr eased ann uall y with a minimun: in creas e of I% and maximum increase
of 3°/o over pr evi ous ycur lease amo unt.
3 . Rfoht to P artia: Tcrm innti on. At the end of th e 60°' m onth fo llowin g the iss uoncc of
C O. tlie Tcnnnt wi.ll have a right to •~rmtnnte !he lease as it penains 10 a par cel of' ap prox.
2.675 acres, dcscribd on Exhi bit B nttached to tl tls Lett,r, and tb e rent fo r th e rema ini ng
l'roperry, commencing wi!h the 6 1" mootl1 sha ll be $189 ,000 unnualiy, increased by Ll,e
u1crease m U,e lnJex over th e prior 17. mont os, and thereafter shall be subject 10 adj ustm ent
w ith the Index as a bove descri~cc .
4 . Oc;posit. The Ft.11111 da tio n ackuo wlccl gc .~ reccipl of tbe $10,000 de;)mit which w=11 con tin ue
,o be held pu r,;ua.:11 to the terms of we original Letter of ~11eres1.
5. Due Di ligence.
A . 111e period of tim e co mmen cin g with the original Lett er of Interest an d
ending at midnight, Mountain Sta11dar~ Time, o:i Feb nrnry 28 , 201 I is hereinaft er :cfcrred
to as th e ''Due Diligence Period ." During the Due Diligence Period, we shall h ave the right
to co nduct so il, en gineering, environmental ruid othe r tests wi th regard to the Property;
investi ga te th e availabi l ity of utilities, the app lica ble governmen t~! rcquirement5 re lating to
sign,ge and co nstructi on of improvements on the Property, the avail ab ility of necessary
permi ts and hcenses relating to signage and construction of any imp rovements , and
determine general! y the desirability and utility of th e Property for o ur proposed Cilartcr
School. We shall h ave th e ri gh t, it our so le an d abs ulu tt d iscretion, at auy time d uring U1 e
D ue Diligence P orio<l, 10 terminate the proposed leas e· transacti on by delivery of written
notice to yo u, in wh ich event y~u will have the right to re.lain the deposit, and th e parti es
shall have no furth er ri ghts or obli gati ons 10 th e other hereundei .
B . During the Due :)ili gence Peria.I, we shall h ove the right to (i) order a title
report of th e Propc-rty ("Title Co mmitment") fro m a ti tl e com pan y mutuall y accep table
(''Titl e Company"), and (ii ) obtain an ALTA survey of !he l'roperty ("Survey"). If wc foi l to
o bj ec t ia w,itin g to any item s refl ected in the Title Co mmi bne!l !, any related !s chedu le B
docu me nt, and Survey d urin g th e Due Diligence Pe1i od, th eu all ,uch items shall be d eemed
to be Permitted Exceptions (hereinafter defined). lf we do object in writing to any of the
items refl ected in the Title Commitment, au y rcleteJ ti lle doc=eots, and Sun,ey, the
Foundaito n shall have ten (10) d ays ("Title Cure Period") fo ll owing you r receip: of our
written objections in whi ch to eiU1cr advise us that : ,u decline to s ure an y of ss ch
o bjections, or yo ur intent to rt'f!lov e or cure, to our rea so nable sat:sfoct,on, any matters to
)
which we have objected . If the FoundnlJOn has commenced to cure, and thereafter is
diligently pursu ing the cure of, sucn item(s) but such itcm(s) cannot bo c ured within lhe Due
Diligen ce Period, Tenant, by written notice to the Foundation, shnll have the unilateral right
to extend lhe D ue Diligen ce Peri od with respect to its approval of title un:il such time as the
cure of such item s has been completed or until Tenant , in its sole di scretion, determines that
the item(s) cannot be cured within a periOd compatible with Tenant's intended use o f the
Pro pet1)', o, until the Fotmdation advises us in writing that they arc unable to cure the
matters objected to by us . If the Foundation declines to cure, or advi ses of its intent to curt
but thereafter fails to cure s uch it ems during th e Due Diligence Pc1i od or Tenant has
extended tl1c Due Di li gence Period and th erea fter dctcnnincs that th e item(s) cannot be
c ured witltin the ex tc nclccl [)11 e Diligence Period, T en ant shal l h ave the right (i) to tcnninate
th e le as e transaction by wntten notice to the Foundation \\ithin ten (10) days after the
expinuion of the Due Diligence Peri0d (as it may haw been extended), w which e vent the
Fo,indntion shall retain the dep osi t and tl1e parties sh all huve no further nghts or obli gations
to the other hereunder or (ii) waive the obJccUon to s uch mutters and pro:eed with the lease
transaction . "Permitted Exceptio us" shall w ean any encumbrances reflected in tl,e Title
Commitmen t and related title documents or on :lnY swve y of the P'ropcrty to whi ch we do
not object within the Due Diligence Perina or to whi ch any objection has been waived or
deem ed waive by us.
C . Title Policy. If Tenant does not elect to terminate the lease transaction prior
to the expiration of the D ue Diligen ce Period, we shall have the right to cause the Title
OJmpnny to issue to us, at our cos~ H Leasehold Owner Policy o f Title Insur11ncc in form
acceptable to us cov;nng the P rop erty.
D . .S..lll1m!'dcs Oi · ginal Letter. To the extent any provisions of tltis Paragra ph 6
relating to Title, Swv ey or any other Due Diligence matter.; conflict witl, the original Letter
;,f In terc.~~ the teims of this s upplemental letter shall control and supersede in al l respects
:he earlier terms.