From
Gary Yakesch
Title
A 10-year commercial lease renewal option on 122, 125, and 126 Main Street, known as The Uptown Black Box Theater, for a CPI adjusted monthly rent amount of $3,757 or $450,840 over the 10 year renewal term; and authorize annual payments of $7,378 to landlord for the increase in ad valorem tax and property insurance from 2007
Presenter
Rick Herold, Director Of Parks, Arts, & Recreation
Recommended Action
Approve
Analysis
In September of 2007, the City Of Grand Prairie executed a 10 year commercial lease agreement with Donna Easterling for 122, 125, and 126 Main Street to be used for the Uptown Theater operations (Black Box Theater). The lease provided for a ten-year renewal option with a CPI adjusted rent rate; the CPI base month and year was to be September 2007. In 2007, the base rent was $3,200 and with the CPI adjusted amount, the renewal monthly rent payment will be $3,757; rent will be adjusted by CPI every five years during the renewal term.
Additionally, the lease provides that the City of Grand Prairie will pay for any increase in the landlord's property insurance and ad valorem taxes over the base amounts assessed in 2007. Together the increase in property insurance and ad valorem taxes are currently calculated at $7,378; these amounts are reassessed annually, based on present year valuation. In 2007 the landlord paid $1,009 in property insurance; with improvements and value increases the current property insurance premium is $4,659 or a difference of $3,650; in 2007 the landlord paid $2,049 in ad valorem taxes; with improvements and value increases the current ad valorem taxes are $5,777.
If approved, the commercial lease renewal will take effect on September 1, 2017; the original lease executed in 2007 was done so by Donna Easterling, as landlord and The City Of Grand Prairie as tenant; The renewal lease will identify the landlord as The Trust Of Donna Easterling, Lorna Rankin - Trustee and The City Of Grand Prairie as tenant.
The item was presented to the Finance & Government Committee on July 18, 2017 and received recommendation for approval by the City Council.
Financial Consideration
Funding for the lease renewal and annual increases in insurance and ad valorem tax will be available in the FY17/FY18 Parks Venue Fund - Uptown Theater accounts (351410-61630 - Rent) (351410-61485 - Insurance & Tax); funding for future year(s) will be paid from those year's approved budgets.