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HomeMy WebLinkAboutAgenda - 05-06-1998 - 8cORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. $-C ACTION AGENDA ITEM ABSTRACT Meeting Date: May 6, 1998 SUBJECT: Lease Renewal; 501 West Franklin Street, Suite 105 DEPARTMENT: PURCHASING AND Public Hearing: No CENTRAL SERVICES Budget Amendment Reqd? No ATTACHMENT(S): Proposed lease INFORMATION CONTACT: PAM JONES, ext. 2650 Telephone Number- Hillsborough 732-8181 Chapel Hill 967-9251 Mebane 227-2031 Durham 688-7331 PURPOSE: To consider approving a two year lease for Rental Resources of Durham/Chapel Hill at 501 West Franklin Street, Suite 105. BACKGROUND: Rental Resources of Durham/Chapel Hill occupies suite 105 at 501 West Franklin Street. The lease expired effective April 30, 1998, however, renewal has been delayed to allow time to determine with certainty the source of water problems in the suite. As a note of background, the suite has been afflicted with water problems for some time. Evidence of a roof leak was apparent, however, when the roof was repaired the floor continued to remain wet after heavy rains. Hydrostic water was ultimately determined to be source of the water through the collaborative efforts of the Skills Development contractor, the County Engineer, the County's property manager at 501 West Franklin Street and a geologist. The renovation work for the Skills Development Center will be modified to include a permanent solution to keep the rental suite dry. With the water problem in check, the tenant has expressed a desire to renew the lease for the space under the following terms: - Term of lease to be for two years, effective June 1, 1998; - Lease amount: $1050.63 per month ($12,607.56), with a 2.5% increase during the second lease year ($1076.89/month, $12,922.68 per year); - Taxes-in-lieu assessment estimated to be $102/ month; - Tenant is responsible for all utilities; - Tenant is responsible for all cleaning services; - Tenant is responsible for maintenance to the interior of their space; - County is responsible for exterior of building maintenance as well as for HVAC plumbing system; - Parking is included. RECOMMENDATION: The Manager recommends that the Board approve a two year lease with Rental Resouces of Chapel Hill/Durham with terms and conditions substantially as presented; and authorize the Chair to sign on behalf of the Board. 3 STATE OF NORTH CAROLINA COUNTY OF ORANGE LEASE THIS LEASE, made and entered into as of the 1st day of June, 1997, by and between The County of Orange, hereinafter referred to as "County," and Rental Resources of Durham/Chapel Hill, hereinafter referred to as "Tenant;" WITNESSETH: THAT FOR and in consideration of the mutual covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows: 1. Premises. County does hereby lease and let unto Tenant and Tenant does hereby accept as Tenant those certain premises designated as Suite #105 of the Bentley Building, 501 Franklin Street, Chapel Hill, Orange County, North Carolina, as more particularly shown on EXHIBIT A appended hereto. In addition to the premises assigned adjacent to the Bentley Building in common with other tenants of the Building. The Bentley Building is a smoke free building and does not permit tobacco use inside of the building. 2. Acceptance of Premises. The Tenant represents that the lease property, the sidewalks and structures adjoining the same, any subsurface conditions thereof, and the present uses and nonuses thereof have been examined by the Tenant. The Tenant accepts the same in the condition in which they now are without representation or warranty, express or implied, in fact or by law, by the County, the nature, condition or usability thereof, or the uses to which the leased property may be put. Provided, County shall be responsible for insuring that the heating/air-conditioning system is in good operating condition; the exterior walls and roof, the lighting system (excluding such additions as may be required for Tenant's particular business operation) and the parking area and sidewalks are in good repair on the date of commencement of the lease term. County represents and warrants to Tenant that it holds unencumbered fee title to the lease premises. The County shall not be responsible for any latent defect or change of condition in such building, improvements and personality, and the rent hereunder shall in no case be withheld or diminished on account of any defect in such property, any change in the condition thereof, any damage occurring thereto or the existence with respect thereof of any violations of the laws or regulations of any governmental authority, except as hereinafter provided. 3. Term and Rental. (a) This lease shall commence on June 1, 1998 and shall continue for a term of Two 2 nears, which ends on Mav 31, 2000, both dates inclusive, unless sooner terminated as herein provided. T (b) The Tenant agrees to pay the County without demand at its office, or at such other place or places as County may from time to time designate in writing, the following rents for the aforementioned Premises for the term of this lease: Lease year 1 (June 1, 1998 through May 31, 1999): $12,607.56 per annum; $1,050.63 per month; Lease year 2 (June 1, 1999 through May 31, 2000): $12,922.68 per annum; $1,076.89 per month; (c) At the commencement of this Lease the Premises are owned by County and as such are exempt from ad valorem taxes as provided in Article V, Section 2 (3) of the North Carolina Constitution and North Carolina General Statutes 105-278.1. During the term, Tenant agrees to make payments to County in lieu of taxes, as additional rent, in amounts equivalent to Tenant's pro-rata share of property taxes that would be lawfully assessed if the Premises were taxable by County and any municipality in which the Premises is located. These payments are hereafter referred to as "the payments in lieu". This agreement to make the payments in lieu is to eliminate the competitive advantage accruing to Tenant, aprofit-making enterprise, from the use for profit of County's tax exempt property. County shall bill Tenant annually and no later than December 1 of each year during the lease term for the full amount of the payments in lieu. Tenant will submit payment to County on or before December 31, 1998 in an amount equal to the payments in lieu for the period June 1, 1998 through May 31, 1999 and on or before December 31, 1999 in an amount equal to the payments in lieu for the period June 1, 1999 through May 31, 2000. County and Tenant recognize that the annual payments required in this subsection each span two tax years and will therefore require estimates based on estimated tax rates. Upon receipt of actual tax rates, County will reconcile the amount paid by Tenant and the actual amount due under this subsection and provide Tenant with a copy of this reconciliation. Any difference between what has been paid and what is due shall be paid on May 1 of each lease year by Tenant as additional rent or credited on May 1 by County against rent. Tenant agrees that the valuation of the Premises shall be made by County's Tax Assessor according to the Schedule of Values adopted by County from time to time and that the determination of the true value in money of the Premises shall be made by the County's Tax Assessor. Tenant may, at its expense, in good faith, contest any such taxes, assessments and other similar charges or the valuation on which the same are based, and, in the event of any such contest may pay the taxes, assessments or other charges under protest during the period of such contest and any appeal therefrom. In the event it is determined by Tenant and Landlord or by the tribunal which ordinarily has jurisdiction that such tribunal does not have jurisdiction or is otherwise not permitted to act as a forum in consequence of the fact that Tenant's liability for the tax is contractual rather than imposed by law, then either party may submit a challenge to a tax, assessment or other similar charge or valuation to arbitration by an arbitration panel made up of MAI qualified/certified appraisers. County shall select one appraiser; Tenant shall select one appraiser; the appraiser selected by County and Tenant shall select a third appraiser and the decision of the arbitration panel shall be binding on both parties. To the extent G that enforcement of the payment of any such taxes, assessments and other charges in the event of any contest are legally stayed during the period of such contest, such taxes, assessments and other charges may remain unpaid during the period of such contest and any appeal therefrom. (d) The extension of time for the payment of any installment of rent, or the acceptance by the County of any money other than of the kind herein specified, shall not be a waiver of the right of the County to insist on having all other payments of rent made in the manner and at the time herein specified. (e) If any installment of rent is not received by the fifth (5th) day of any month it is due, Tenant shall pay as additional rent a late payment fee of Fifty Dollars ($50.00). This additional rent shall be due immediately without demand therefor and shall be added to and paid as a part of the installment payment of rent with respect to which it is incurred. 4. Holdover . If the Tenant shall remain in possession of the leased property after the expiration of the original or renewal period as set out above, such possession shall be as a month-to-month tenant. During such month-to-month tenancy, rent shall be payable at the same rate as that in effect during the last month of the term immediately preceding, and the provisions of this lease shall be applicable. 5. Insurance. The County shall keep in force insurance to provide for property damage to the building for replacement cost purposes. Provided, however, Tenant shall be responsible for and pay to County any increase in County's insurance premium occasioned by the nature of the Tenant's business. The Tenant shall maintain fire and casualty insurance covering the Tenant's fixtures, equipment and other property located in the demised premises. Tenant shall keep the leased property insured, at its sole cost and expense, against claims for personal injury or property damage under a policy of general public liability insurance, with limits of at least $1,000,000 for bodily injury and $100,000 for property damage. Such policies shall name the County as additional named insured under the policy. The Tenant shall provide the County certificates of such insurance at or prior to the commencement of the term of this lease, and thereafter within ten (10) days prior to the expiration of such policies. Such policies shall provide that the same may not be canceled without at least ten (10) days prior written notice to County. 6. Rental Adjustment. In addition to the base rental, the Tenant shall assume and pay any additional fire insurance premium, hazard insurance premium, or other extended coverage insurance premium required as a result of any particular operation or use of said premises over and above the insurance premium required to be paid by County in the absence of said operation or use. 7. Signs. The County will place and maintain in and about the leased property at appropriately designated places, such neat and appropriate signs lc advertising the Tenant as such. Any special Tenant sign will be at the sole cost of the tenant but in the same styling, provided, however, that County shall not unreasonably withhold approval of such signs as Tenant may desire. Upon the termination of this lease the Tenant shall remove all signs and repair any damage to the leased property caused by the erection, maintenance or removal of such signs. 8. Repairs. The County shall maintain the roof and exterior walls of the demised property including exterior paint, provided that in the event Tenant desires to alter the exterior color scheme, said alteration must be approved by County and shall be at the Tenant's expense. In addition, County shall maintain the paved parking area and front entry to the building. The Tenant shall not cause or permit any waste, damage or injury to the leased property. The Tenant, at its sole expense, shall keep the leased property as clean and in good condition (reasonable wear and tear excepted), and shall make all repairs, replacements and renewals, whether ordinary or extraordinary, seen or unforeseen, including all structural repairs, necessary to maintain the interior of the leased property. All repairs, replacements and renewals shall be at least equal in quality of materials and workmanship to that originally existing in the leased property. The County shall be responsible for repairs and maintenance of the roof and outside walls and other structural member, including the foundation of the _ leased premises. The County shall be responsible for maintenance of the heating plant and air-conditioning systems in such condition as existed at the commencement of this lease, which County warrants to be in good working condition as of the date of this lease. The County shall be responsible for the removal of snow (in a timely manner) from the parking lot and the walkways. The County shall in no event be required to make any repair, alteration or improvement to the interior of the leased property. Any equipment replaced by the Tenant shall belong to the Tenant, save equipment replaced in connection with Tenant's obligation to maintain the premises in the same condition as exists at the commencement of this lease, and all proceeds from the disposition thereof may be retained by the Tenant. The Tenant shall indemnify the County against all costs, expenses, liabilities, losses, damages, suits, fines, penalties, claims and demands including responsible counsel fees, because of Tenant's failure to comply with the foregoing. Maintenance of the paved parking area shall be defined as and limited to maintaining and keeping the parking area in good condition with a hardtop surface pavement and proper striping. 9. Improvements. No substantial alteration, addition or improvement to the leased property shall be made by the Tenant without the written consent of the County. Any alteration, addition or improvement made by the Tenant after such consent shall have been given and any fixtures permanently installed as part thereof, shall at the County's option, become the property of the County upon expiration of or other sooner termination of this lease; provided however, that the County shall have the right to require the Tenant to remove such fixtures at the Tenant's cost upon such termination. This clause shall not preclude Tenant from decorating the interior of the leased premises from time to time in Tenant's discretion. 10. Liens for Improvements by Tenant. The Tenant shall not permit any mechanic's lien to be filed against the fee of the property by reason of work, labor, services or materials supplied or claimed to have been supplied, whether prior or subsequent to the commencement of the term hereof, to the Tenant or anyone holding the leased property, through or under the Tenant. If any such mechanic's lien shall at any time be filed against the leased property, the Tenant shall, within 30 days after notice of the filing thereof, cause such lien to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction, or otherwise. If the Tenant shall fail to cause such lien to be discharged within such 30 day period, then, in addition to any other right or remedy of the County, the County may, but shall not be obligated to, discharge such lien either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings, and in any such event the County shall be entitled, if the County so elects, to compel the prosecution of an action for the foreclosure of such mechanic's lien by the lienor and to pay the amount of the judgment for and in favor of the lienor, with interest, costs and all other allowances. Any amount paid by the County for any such purposes, with interest thereon at the rate of 6% per annum from the date of payment, shall be repaid by the Tenant to the County on demand, and if unpaid may be treated as additional rent as provided for elsewhere in this lease. Nothing in this lease shall be construed in any way as constituting the consent or request of the County, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer or materialmen for the performance of any labor or the furnishing of any materials for any property or as giving the Tenant the right, power of authority to contract for or permit the rendering of any service or the furnishing of any material that would give rise to the filing of any mechanic's lien against the fee of the leased property. 11. Tenant's Warranty of Non-Disturbance. Tenant hereby expressly covenants and agrees that the Tenant shall be responsible for controlling the noise level emanating from the Tenant's use of the demised premises in such a way that other occupants of the building of which the demised premises area part shall not be disturbed. Tenant shall be responsible for and pay for the installation of any special padding for other noise suppression devices which may be required for control of the level of sound emanating from the demised premises. 12. Tenants Obli4ation to Comply Applicable Laws and Compliance with Requirements of Insurance Policies. The Tenant shalt throughout the term of this lease, at its sole expense, promptly comply with all laws and regulations of all federal, state and municipal governments and appropriate departments, commissions, boards and officers thereof, and the orders and regulations of the National Board of Fire Underwriters, or any other body now or hereafter exercising similar function, which may be applicable to the leased property, the fixtures, and equipment therein, and the sidewalks and curbs adjoining the leased property. The Tenant shall comply with the requirements of all policies of public liability, fire and all other types of insurance at any time in force with respect to the building and other improvements on the leased property. 13. Utilities. The Tenant shall pay charges for gas, electricity, light and power used, rendered or supplied upon or in connection with the leased property. The County shall be responsible for the payment of all charges related to the supply of water to the leased property. i~ STATE OF NORTH CAROLINA ORANGE COUNTY I, , a Notary Public for said County and State, do hereby certify that Beverly A. Blythe personally appeared before me this date and acknowledged that she is the Clerk to the Board of Commissioners of Orange County, and that by authority duly given and as the act of Orange County, the foregoing instrument was signed in its name by Margaret W. Brown, Chair, sealed with its official seal, and attested by herself as its Clerk. Witness my hand and official seal, this the day of , 1997. Notary Public My Commission expires: STATE OF NORTH CAROLINA COUNTY OF ORANGE I, , a Notary Public, do hereby certify that ,personally appeared before me this day and acknowledged the due execution of the foregoing Lease Agreement. WITNESS my hand and official seal this the day of , 19 Notary Public My commission expires: