CC MEETING: December 3, 2024
DATE: November14, 2024
TO: Erin Rinehart, City Manager
FROM: Ravi Shah, Executive Director of Development
Shannon Hicks, Assistant City Manager
Title
Consider A Resolution Authorizing The City Manager To Execute A Lease With Agate Arts, LLC. D/B/A The Art Table For The Use of City-Owned Property Located at 1003 West Main Street.
Body
BACKGROUND:
Located along West Main Street across from Babe’s Chicken, the City owns a building at 1003 West Main Street (“Property”) which at the time of purchase was dilapidated and was considerably blighted. The City took the appropriate actions to acquire the Property and rehabilitate half of the building to become a public restroom facility, which has since closed except for during special events. The building is currently vacant, and The Art Table (“Tenant”) has proposed opening an art studio to learn and enjoy art for all ages.
The terms of the proposed lease are:
1003 West Main Street: 2,550 sq ft studio
Term: 3-year initial lease term
Extensions One 3-year extension available
Base Rental Rate: $3,718.75/month ($17.50 sq ft)
Extension Rental Rate: $4,091.62/month ($19.25 sq ft)
Monthly Property Expenses: Tenant to self-maintain the Premises, self-insure, and pay all correlating expenses, including but not limited to leasehold value taxes and utilities in the form of electricity, water, sewer and trash expenses.
Tenant Improvements: City Contribution: City will provide improvements to the vacant suite including HVAC system, electrical, plumbing, concrete flooring, demolition, basic lighting, interior and exterior painting, façade improvements and any exterior signage.
All non-branded improvements that are permanently attached to the property will remain with the property, even if the Tenant decides to vacate the property in the future. The Tenant would like to open the facility as soon as possible.
FINANCIAL IMPLICATIONS:
The lease rate for the Property is $3,718.75/mo ($17.50/sf annually). For the initial three (3) year term, the projected revenue total is $133,875. The City will benefit from the Tenant paying for all correlating expenses, including but not limited to leasehold value taxes and utilities in the form of electricity, water, sewer and trash expenses. If the extension is exercised by the Tenant, the total projected revenue would be over $281,137.50
IMPACT ON COMMUNITY SUSTAINABILITY
Having The Art Table locate at the Property would bring art education and entertainment experience concept to the Historic Downtown area. The Art Table would provide a robust educational offering to all ages with a first-class educational arts and entertainment facility and would certainly enhance the Property.
STAFF RECOMMENDATION/ACTION DESIRED:
Staff recommends authorizing the City Manager to enter into a lease with The Art Table for City-Owned Property located at 1003 West Main Street for an arts educational and entertainment facility.