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HomeMy WebLinkAboutAgenda - 08-20-1996 - IX-B i 1 ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. �Y-S ACTION AGENDA ITEM ABSTRACT Meeting Date: August 20, 1996 SUBJECT: MANAGEMENT AGREEMENT; 501 WEST FRANKLIN STREET DEPARTMENT: PURCHASING AND Public Hearing: No CENTRAL SERVICES Budget Amendment Reqd? Yes ATTACHMENT(S): INFORMATION CONTACT: PAM JONES, ext. 2650 CONTRACT Telephone Number- Hillsborough 732-8181 Chapel Hill 967-9251 Mebane 227-2031 Durham 688-7331 PURPOSE: To consider approving an agreement with ESM,Associates, Chapel Hill for the property management function at 501 W. Franklin Street. BACKGROUND: The County has recently purchased the property at 501/503 West Franklin Street. While the 503 portion of the property will be used for the Skill Development Center, the 501 portion, which is presently leased to five tenants will remain as leased property. The current leasing agent, Steve Manton of ESM Associates, has agreed to remain in that capacity for a fee of 6%of the gross lease income(fee amount to be approximately$5,760 per year). Highlights of the proposed agreement for management services include the following: • ESM will provide a point of contact for the tenants of 501 W. Franklin Street for any tenant issue and present these issues to the County as may be required. Issues anticipated include maintenance items, parking locations, etc. The leasing agent would continue to be responsible for assigning parking and issuing the parking permits to the 501 tenants. • ESM will authorize expenditures for routine items for maintenance in tenants space up to $500 per expenditure. All bills for such maintenance will be reviewed by the leasing agent and then sent to the County purchasing director who will ensure that payment is made. • ESM will seek out suitable tenants to fill any vacancies which might occur in the property, however, the County will reserve"first right of refusal'before a new tenant is identified . The Board of Commissioners will continue to approve any leases with tenants in the facility. • All rent will be mailed directly to the County. Separate accounts have been established in the general fund to track the revenues and expenses for this property. The account will be funded from two sources; $20,000 from funds currently available in the CIP; and funds above the amount identified to retire debt service(approximately$16,000). As an aside, the Board may recall the following breakdown for available funds to retire debt, satisfy expenses for the leased portion of the property and upfit the Skill Development Center: 2 Revenues : CIP (prior year) $ 70,000 CIP (current) 99,240 Private Placement proceeds 1,200,000 Rental Income (approximate) 87,000 Total $ 1,456,240 Expenses: Purchase of building $1,100,000 Estimated upfit costs 150,000 Reserve for 501 obligations 36,795 ($20,000 CIP; $16,795 rent income) Debt Service 169,445 Total $1,456,240 Security deposits for tenants of 501 W. Franklin will be maintained in a liability account and will have no budgetary impact. • Term of the agreement is to be August 1, 1996 through June 30, 1996, renewable annually. Either party may extend 90 days notice to the other party and terminate the contract. RECOMMENDATION: The Manager recommends that the Board approve the agreement with ESM Associates for property management services at 501 West Franklin Street for an amount equal to 6% of gross monthly rental; and authorize the Chair to sign on behalf of the Board. 3 COUNTY OF ORANGE NORTH CAROLINA CONTRACT This Agreement entered into as of the 20th day of August, 1996 between the County of Orange, a body politic,(hereinafter referenced as"County") and ESM Associates,an unincorporated corporation, (hereinafter referenced as"ESM),Witnesseth that: WHEREAS,effective July 23, 1996 the County acquired property at 501 West Franklin Street, Chapel Hill North Carolina;and WHEREAS,this property is occupied by a number of lease paying tenants ;and WHEREAS,ESM is experienced in the business of property management and has experience with the building as well as the present tenants NOW THEREFORE,the parties hereto mutually agree as follows: 1. Employment of Manager. The County agrees to employ ESM to operate the property as exclusive manager,and ESM agrees to accept such employ,on the terms provided in this Agreement. ESM shall be an independent contract vis-A-vis the County. No representation will be made by either party to anyone that ESM is other than an independent contractor. 2. Tenn of Agreement. This agreement shall commence immediately upon action by the Board of County Commissioners and shall be retroactive to August 1, 1996,and shall be continued and renewed annually unless written notice of termination is received by one party from the other party at least ninety (90)days prior to the date termination is proposed. 3. Maintenance. (a) Condition of Property. ESM shall maintain the property in good repair and to provide the tenants with a safe and comfortable environment. (b) ESM may hire contractors/vendors deemed necessary for the proper maintenance and operation of the property within the guidelines for expenditures set forth in section 4(a). 4. Expenditures. (a) Expenditure approval. Any expenditure in excess of$500 per incident shall be made by ESM only with the prior approval of the County.Total expenditures for the year,including those items which may exceed$500 per incident and are approved by the County,shall not exceed$15,000 without written authorization from the County. However,any emergency repairs--repairs immediately necessary for the preservation or safety of the property or its occupants,or required to avoid suspension of necessary services to the property or exposure to criminal liability-,shall be made by ESM without the County's prior approval. The County shall,however,be immediately notified of such action. (b) Projecting expenditures. On or before March 1 of each calendar year during the term of this Agreement,the County and ESM will discuss the maintenance and capital needs of the facility in order to establish a projected expenditure list for the following fiscal year. 5. Payment of Invoices and Record keeping. (a) When ESM is satisfied that the work authorized has been completed in a matter that is mutually satisfactory to ESM and the County,he shall review the invoices for such work to verify its accuracy and forward the invoice for payment to the Director of Purchasing and Central Services at the address listed in the section entitled"Notices". Invoices shall be paid directly to the vendor. Questions regarding payment from the vendors/contractors may be referred directly to the County at the discretion of ESM. Invoices sent to the County will generally be paid within 10 working days of receipt. 4 (b) ESM will maintain records which may be necessary to document expenses authorized by him. ESM will also document tenant complaints and share their concerns with the County as may be appropriate. 6. Renting of premises. (a) As vacancies occur,and in the event the County has no need to fill the vacancy with a County function,ESM will use its best efforts to lease space in the property on such terms as are agreed by the County. ESM will collaborate with the County in negotiating leases,extensions,renewals, licenses or other agreements for the rental or use of space by non-public tenants and present same for approval by the Board of Commissioners. (b) Under no circumstances shall ESM permit any person or entity to occupy any space in the building without a written lease or agreement,and/or without paying any rent for it,unless the prior consent of the County has been obtained. ESM agrees to notify the County, in writing,immediately upon receiving knowledge that any space is occupied by any person or entity that is not paying rent or that does not have a lease or written agreement covering such space. (c) When authorized by the County,the ESM may enter into periodic leasing of parking spaces on a month to month basis,subject to availability,and at a rental rate agreeable to the County and the tenant. This income will be considered part of the gross income for the property and will be included in the property management fee for service. 7. Rent Collection. ESM will advise all tenants of the address for all rental payments to be made payable to. The County will advise ESM of the rental payments received monthly and to advise ESM of any late payments,special conditions or arrangements made with/for any tenants. 8. Management Fee. The County shall pay ESM a monthly management fee for all services provided under this agreement for a total which equals 6%of the gross monthly rental for the 501 West Franklin Street property as well as any parking revenue which may derived from tenants other than those in the property. In the event that a County department resides as a tenant in the facility,a base rent equivalent to the average of all rents in the facility will form the basis for the management fee. The County will submit to ESM an accounting of the gross monthly rents along with the management fee check monthly,on or about the 15th of each month. In addition to the management fee any extraordinary and authorized out of pocket expenses will be paid monthly and identified as "reimbursables". 9. Fidelity Bond. ESM shall maintain in effect a fidelity bond to secure the faithful performance of the obligations contained in this Agreement. 10. Insurance. (a) County agrees to carry and keep in effect property and liability insurance covering the property. Property coverage shall not include the contents in tenant space. (b) ESM agrees to make a timely written report to the County concerning any accidents and claims relating to the property or its operation which are insured against by the County. 11. Indemnification. (a) County's obligation. The County agrees to indemnify ESM to the extent permitted by law and insurance policies owned by the County from and against any liability, loss,damage,cost or expense by reason of any act or omission,except in the circumstances involving fraud or gross negligence. (b) ESM's obligation. ESM agrees to indemnify and hold the County harmless from and against any and all claims,damages,losses,and expenses arising out of or resulting from gross negligence or willful misconduct on the part of ESM or its agents in the performance of ESM's duties under this agreement. (c) Third party. Nothing contained in this paragraph shall be deemed to create any rights in any person or entity that is not a parry to this Agreement. 5 k 12. Right to assign. ESM shall not,without County's prior written consent,assign any of its rights or obligations under this Agreement. 13. Notices. Any notice required by the terms of this Agreement shall be deemed given and received on the date of the mailing of such notice in writing to the County or to ESM,as the case may be,provided such notice is transmitted by certified or registered mail,return receipt requested,postage prepaid,and addressed to the party due such notice as shown,or such other address as either the Countyy or ESM may give in writing to the other for such notices: ESM: ESM Associates PO Box 4523 Chapel Hill,NC 27515-4523 COUNTY: Orange County c/o Director of Purchasing and Central Services PO Box 8181 Hillsborough,NC 27278 14. Entire Agreement. This Agreement shall constitute the entire agreement between the parties and no modification of it shall be effective unless made by supplemental agreement in writing executed by the parties. 15. Severability. If any one or more of the provisions of this Agreement,or the applicability of any such provision to a specific situation, is deemed invalid or unenforceable,then such provision shall be modified to the minimum extent necessary to make it or its application valid or enforceable,and the validity and enforceability of all other provisions of this Agreement and all other applications of such ,provisions,shall not be affected. IN WITNESS WHEREOF,the County and ESM have executed this agreement as of the date first written above. ATTEST: County of Orange By: BY: Beverly A.Blythe Moses Carey,Jr.,Chair Clerk to the Board ESM Associates Stephen J.Manton