HomeMy WebLinkAboutAgenda - 09-05-2023; 8-o - Approval for Chapel Hill-Carrboro City Schools to Lease Space at 521 S. Greensboro Street (Sheryl-Mar Building) 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 5, 2023
Action Agenda
Item No. 8-o
SUBJECT: Approval for Chapel Hill-Carrboro City Schools to Lease Space at 521 S.
Greensboro Street (Sheryl-Mar Building)
DEPARTMENT: County Manager/Chapel Hill-
Carrboro City Schools
ATTACHMENT(S): INFORMATION CONTACT:
1. Resolution for Approval Al Ciarochi, CHCCS, 919-967-8211,
2. Proposed Commercial Lease Agreement — Ext. 28231
Only Provided Electronically at: Travis Myren, 919-245-2308
https://acrobat.adobe.com/link/review?uri=ur
n:aaid:scds:US:e4c96190-fc06-4f54-a 17e-
40c18b137337
PURPOSE: To approve an agreement for Chapel Hill-Carrboro City Schools (CHCCS) to lease
approximately 23,532 square feet of space at 521 S. Greensboro Street, Carrboro, NC (Sheryl-
Mar Building).
BACKGROUND: Since 2011 , CHCCS has been leasing space to accommodate support staff
due to the fact that the district does not have any available space to house programs or support
staff outside of the Lincoln Center which has reached capacity. CHCCS is currently subleasing
the first floor of the Sheryl-Mar Building located at 521 S. Greensboro Street, Carrboro, NC from
the University of North Carolina at Chapel Hill (UNC-CH). The space is utilized by departments
consisting of employees within the welcome center, Pre-K program, informational technology,
community schools, and instructional services, equity, and engagement (ISEED) departments.
UNC-CH's current eight-year lease with the owner expires December 31, 2023. As a result,
CHCCS has negotiated a new lease with the building's owner, Kerala Capital Partners, LLC, in
order to continue occupancy. The term of this lease commences on January 1, 2024 and ends
December 15, 2028. The annual rental for the leased space is $531,823.20 ($22.60 per square
foot) and includes an annual escalation of 2% for the remaining term of the lease.
Year 1 Year 2 Year 3 Year 4 Year 5
$531,823.20 542,459.66 553,308.86 564,375.03 575,662.54
The owner has agreed to waive the security deposit and pay for all costs associated with building
maintenance, parking lot maintenance, snow removal, and trash disposal. CHCCS would be
responsible for all costs associated with utilities, fire alarm monitoring, pest control, and custodial
services.
Under North Carolina General Statute §115C-530 (Operational Leases of School Buildings and
Facilities), local boards of education may enter into operational leases of real property for use as
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school facilities. The Statute further specifies that operational leases with terms of three years (3)
or more need to be approved by resolution by the Board of County Commissioners.
The CHCCS Board of Education approved this lease agreement on August 17, 2023. Pursuant to
§115C-530, the Board of Education is requesting that the Board of Orange County
Commissioners approve a resolution (Attachment 1) approving the lease between the Kerala
Capital Partners, LLC and the Chapel Hill-Carrboro City Schools District. The proposed lease will
not be final until the BOCC has adopted and approved the resolution.
FINANCIAL IMPACT: Funds are appropriated in the FY 2023-24 capital budget for lease
expenditures. The remaining term of the contract will utilize Article 46, pay-as-you-go, and lottery
funding within the district's capital budget and will be reflected in the FY 2025-35 Capital
Investment Plan.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are associated
with this item:
GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
ENVIRONMENTAL IMPACT: There are no Orange County Environmental Responsibility Goal
impacts associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board:
1. Approve the resolution (Attachment 1) for the Chapel Hill-Carrboro City Schools District
to enter a lease agreement with Kerala Capital Partners, LLC for 23,532 square feet of
space at 521 S. Greensboro Street, Carrboro, NC; and
2. Authorize the Chair to sign the resolution.
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RES-2023-056 Attachment 1
RESOLUTION
ORANGE COUNTY BOARD OF COMMISSIONERS
ORANGE COUNTY,NORTH CAROLINA
WHEREAS, the Chapel Hill-Carrboro City Schools Board of Education wishes to enter into
a lease for real property with Kerala Capital Partners, LLC for approximately 25,532 square feet of
office space located at 521 South Greensboro Street, Carrboro,North Carolina pursuant to N.C. Gen.
Stat. § 115C-530; and
WHEREAS, the lease will require the Board of Education to pay Kerala Capital Partners,
LLC in approximate installments of$531,823.20 in the 2023-24 fiscal year, $542,459.66 in the 2024-
25 fiscal year, $553,308.86 in the 2025-26 fiscal year, $564,375.03 in the 2026-27 fiscal year, and
$575,662.54 in the 2027-28 fiscal year; and
WHEREAS, the lease is subject to the provisions of N.C. Gen. Stat. §§ 115C-441(cl) and
115C-530, including the approval of the Orange County Board of Commissioners;
NOW, THEREFORE, BE IT HEREBY RESOLVED, that the Orange County Board of
Commissioners approves the lease of real property between Chapel Hill-Carrboro City Schools and
Kerala Capital Partners, LLC, and understands that the Chapel Hill-Carrboro City Schools District
will use available funds from the School District's capital budget to meet the Kerala Capital Partners,
LLC lease obligations, so long as the amount the Board of Education shall be obligated to pay under
that lease shall be generally equal to the amounts noted above. Said funds obligated by this lease for
fiscal years 2023-24, 2024-25, 2025-26, 2026-27, and 2027-28 shall be budgeted by the Board of
Education for this purpose, and the Orange County Board of Commissioners shall not be obligated to
increase its annual appropriation to the Orange County Board of Education by the amount due under
the contract.
Adopted and resolved, this the th day of September 2023 by the Orange County Board of
Commissioners.
Jamezetta Bedford, Chair
Orange County Board of Commissioners
Laura Jensen
Clerk to the Board