HomeMy WebLinkAboutPW.Vanir Tower Lease Options FinalVanir Tower Lease Options
Mayor and City Council Meeting – June 17, 2020
Presented by Kris Jensen, Director of Public Works
Vanir Lease History
•April 15, 2017 – Lease commencement
•Two year lease (through April 15, 2019)
•Two (2) six-month options to extend
•April 3, 2019 – City exercised both options to extend
(through April 15, 2020)
•April 15, 2020 – Lease expired
•Currently – Hold over month to month lease
•Hold over at current rate of $1.91 sq ft
May 20, 2020 Proposal
•12 Month term – July 1, 2020 through June 30, 2021
•Retains all office space currently utilized on 1st, 3rd and 8th floors
•Rate reduced from $1.91 sq ft to $1.88 sq ft
•True up of square footage – From 23,517 to 24,538 sq. ft.
•Monthly rate $46,129.56
•All other terms remain the same
Terms of previously proposed lease extension:
May 20, 2020 MCC Direction
Options to be negotiated per Mayor and City Council:
•Shorter term lease
•Six months
•Reduction of 8th floor
office space rental
•Suite 803 – 5,428 sq ft
•Suite 808 (Mayor’s office) – 2,437 sq. ft.
•Eliminate 8th floor office
space rental
•Reduces rentable
space by 7,865 sq. ft.
•Negotiate per square
foot pricing
•$1.95 low end - $2.05
high end
Renegotiated Lease Options
Vanir Tower
Lease Options – Cost Analysis
*Savings will be not be realized for the month of July 2020 as staff will need to use this time to relocate personnel.
Lease Option Impacts to Consider
•Impacts of six-month lease options:
•Budgets will need to established for full FY2020/21
•Renegotiations will be required or another facility secured in this time frame
•Impacts of 8th floor reduction options:
•Internal costs associated with relocating/vacating space
•No savings in moth of July to allow relocations
Lease Extension Benefits
•Keeps services centrally located in downtown with adequate parking for the public and employees.
•No interruption in services or added inconvenience to public
•$315,000 in tenant improvements have been invested by the City in the Vanir Tower.
•Mayor’s Suite/City Attorney Area/Finance Area/ Call Center
•Avoid additional costs associated with moving.
•$172,000 moving costs (plans, relocation services, staff time).
•Allows staff to continue to focus resources on securing a long term plan(City Hall or other).
Mayor and City Council Meeting July 15, 2020
Facility Assessment Presentation – City Hall Facility
•Review Assessment recommendations
•Cost estimates for City Hall facility options
•Historic costs related to operations at facilities
1.Discussion regarding lease options
2.Provide direction to staff
Next Steps