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HomeMy WebLinkAboutR-2013-080 City On-Site Clinic; Sunfair Building Lease Agreement Amendment; Sunfair Professional Associates, LLCA RESOLUTION RESOLUTION NO. R-2013-080 authorizing the City manager to execute an agreement amending commercial lease between Sunfair Professional Associates, LLC and City of Yakima. WHEREAS, the City of Yakima (City) and Sunfair Professional Associates, LLC have previously entered into a Lease Agreement for office space within the Sunfair Building, which space is used to accommodate the operation of the City's MiCare facilities, and WHEREAS, the City and Sunfair Professional Associates, LLC have negotiated an amendment to such Lease Agreement, which amendment provides for the extension of the lease for an additional two years with set rental rates, and modifies provisions related to tenant improvements; and WHEREAS, the City Council finds and determines that approval of such amendment will promote the operation of the City's MiCare health facilities and provide established rental rates for an additional two years, and will promote the general health, safety and welfare, therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized to execute the First Amendment to Lease Agreement with Sunfair Professional Associates, LLC, a copy of ehich amendment is attached hereto as Exhibit "A" and by reference made a part hereof; now, therefore, ADOPTED BY THE CITY COUNCIL this 2nd day of July, 2013. Micah Cawley, I)Olayor FIRST AMENDMENT TO LEASE AGREEMENT Sunfair Professional Associates, LLC and City of Yakima THIS FIRST AMENDMENT amends the Commercial Lease Agreement dated November 1, 2012, entered into by and between Sunfair Professional Associates, LLC ("Landlord") and City of Yakima ("Tenant") for commercial space within the "Sunfair Building," 103 South 3`d Street, Yakima, Washington. IN CONSIDERATION of the mutual covenants, conditions and promises herein the parties agree to amend the Lease Agreement as follows: 1 Lease Termination Date Subsection 1(c) of the Lease Agreement is amended to read as follows: c. Lease Termination Date.The term of this Lease shall terminate at midnight on December 31, 2017 or such earlier or later date as provided in Section 3 (the "Termination Date"). Tenant shall have no right or option to extend this Lease unless otherwise set forth in a rider attached to this Lease (e.g., Option to Extend Rider, CBA Form OR) [footnote 1]. 2. Tenant Improvements. Exhibit C, Section 1 (Tenant Improvements to be Completed by Landlord) is amended to read as follows: Landlord has provided Tenant with a turn -key tenant improvement package. Tenant shall be responsible for $17,917.16 of said improvements. This amount shall be broken down. as $1,312.03 for purchase of materials used and $16,605.13 reimbursed to the Landlord. Said reimbursement shall be due in full 10 days after this amendment document is fully executed. 3. Base Monthly Rent Schedule. Section 1 of the Rent Rider is hereby amended to read as follows: 1. BASE MONTHLY RENT SCHEDULE. Tenant shall pay Landlord base monthly rent during the Lease term according to the following schedule: Lease Year (State in Years or Months) Base Monthly Rent Amount Year 1 Year 2 Year 3 Year 4 Year 5 1 $1,352.50 plus NNN charges $1,399.83 plus NNN charges $1,448.83 plus NNN charges $1,499.54 plus NNN charges $1,552.02 plus NNN charges 4. Effect of Amendment. Except as amended herein, the provisions of the Lease Agreement previously executed by the parties and dated November 1, 2012 shall remain unchanged. 5. Effective Date. This First Amendment shall be effective on the date executed by the last party to sign below. CITY OF Y A KIMA Y‚11l _ Mgr: Oue, City Manager B: Date: July �'' 3 ATTEST: Sonya Cl.. r Tee, Clerk ,I-- Ick a, CITY CONTRAC r NO. tt RESOLUTION NO: I L t 3ro2O STATE OF WASHINGTON ) ss County of Yakima SUNFAIR PROFESSIONAL ASSOCIATES, LLC By: Date: /S"/ 2491,s - By: 13 By: KCI mercial, c. • ent Date: /' -/3 ATTESTATION I certify that I know or have satisfactory evidence that TONY O'ROURKE is the City Manager of the City of Yakima, and that he appeared before me and acknowledged that he signed this instrument, and on oath stated that he is duly authorized to execute such instrument on behalf of the City of Yakima, and that such action as the free and voluntary act and deed of such party for the uses and purposes mentioned in the instrument. DATED this 3"day of , 2013 2 NQfiARY PUBIC in' and for the State of shington, residing at: *AA j" My appointment expireVt.(/-.)-/c3-a/f ATTESTATION STATE OF WASHINGTON ) ) ss. County of el eit(e ) I certify that I know or have satisfactory evidence that�( is the authorized managing member of SUNFAIR PROFESSIONAL ASSOCIATES, LLC, and that he appeared before me and acknowledged that he signed this instrument, and on oath stated that he is duly authorized to execute such instrument on behalf ofSUNFAIR PROFESSIONAL ASSOCIATES, LLC, and that such action as the free and voluntary act and deed of such party for the uses and purposes mentioned in the instrument. fl DATED this /t day of -3-6( , 2013 3 NOTARY PUBLIC in and Washington, residing at:Gty My appointment expires: for the State of 2-/5- /6 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 577" For Meeting of: 7/2/2013 ITEM TITLE: Resolution authorizing an amendment to the existing Lease Agreement with Sunfair Professional Associates, LLC for commercial office space to accommodate MiCare health facilities. SUBMITTED BY: Mark Kunkler, Senior Assistant City Attorney / 575-6030 SUMMARY EXPLANATION: The City of Yakima and Sunfair Professional Associates, LLC entered into a Lease Agreement on November 1, 2012 for office space within the Sunfair Building. The office space was leased and improved to accommodate the City's MiCare health clinic facilities. The MiCare clinic has proven to be a great success and the site serves well. During construction of improvements for the leased space, the initial estimated budget was $15,000, with the City paying 75% of the costs, and the Landlord 25% of the costs. The actual costs were nearly $30,000, in part due to the cost of specialized medical -quality fixtures and an expedited tenant improvement bidding process conducted by the Landlord. When the City was presented with a bill for tenant improvements for about $21,000, the City and Landlord entered into discussions regarding possible settlement. One of the settlement mechanisms consisted of an amendment to the Lease extending the Lease for two years, but splitting the cost of tenant improvements on a 50 • - 50 basis. Thus, each party would contribute about $16,000 to cover the costs. The extension of the Lease locks in a set rental rate for two additional years, and, as mentioned above, the space will adequately serve the City's needs for operation of the clinic for at least that period of time. Resolution: X Ordinance: Other (Specify): Contract: X Contract Term: 5 Years Start Date: 11/01/2012 End Date: 12/31/2017 Item Budgeted: NA Amount: Funding Source/Fiscal General Fund, Health Care Impact: Strategic Priority: NA Insurance Required? No Mail to: Dan Kinley, KCI Commercial, Inc., P.O. Box 1135, Tacoma, WA 98401 Phone: 253-475-4363 APPROVED FOR SUBMITTAL: City Manager RECOMMENDATION: Adopt Resolution approving amendment to Lease Agreement. ATTACHMENTS: Name: Description: Resolution - Sunfair Lease AMEND June 17 2013.docx Resolution - Sunfair Lease AMEND June 17 2013 Sunfair Professional Associates LLC - First Amendment to Lease Agreement -July 2.2013.pdf Sunfair Professional Associates LLC -First Amendment to Lease Agreement -July 2.2013 KCI COMMERCIAL INC. P.O.Box 1135/Tacoma,Washington 98401/4754363 EXTENSION OF LEASE The lease,dated November 1,2012, between Sunfair Professional Associates LLC., Landlord, and City of Yakima, Tenant, for the premises located in the City of Yakima, County of Yakima, State of Washington, described as follows: Approximately 1,623 rentable sq.ft. of office space commonly known as 103 South 3rd St., Yakima, WA, legally described as: Lot 7 and Lots 13 through 24, Block 72, THE TOWN OF NORTH YAKIMA, now Yakima,Washington,recorded in Volume"A"of Plats,Page 10, and re- recorded in Volume "E" of Plats, Page 1, records of Yakima County, Washington. It is by mutual agreement between the parties to hereby extend the lease for the term of 3 years, from the 1st day of January,2021,to the 3161 day of December,2023. The minimum rental for such extended term shall be calculated as follows: January 1,2021 thru December 31,2021 $1,780.97 per month plus NNN Charges January 1,2022 thru December 31,2022 $1,843.31 per month plus NNN Charges January 1,2023 thru December 31,2023 $1,898.61 per month plus NNN Charges In the event the Tenant decides to expand the Clinic user in 103 South 3rd St.,within the first 12 months of this extension,by taking over a portion of its Training Facility space located at 105 S 3rd St, Suite 113,the Landlord agree to contribute up to $5.00 per square foot of the rentable square feet of the Clinic space towards said expansion. It is agreed and understood by the Tenant that this extension of lease is to run consecutively with the lease dated November 1, 2012 and that default in the terms and covenants of the lease will automatically constitute default of this extension. As per Paragraph 11.(a) of the aforementioned Lease, Landlord reserves the right at any time during the term of the Lease or any Extension thereof,to impose reasonable rules and regulations concerning the use of the Common Areas. Once imposed,Tenant hereby agrees to comply and acknowledge said Rules and Regulations in writing. Except as hereinabove stated, all other covenants, agreements, stipulations or conditions of said lease shall continue and remain in full force and effect. IN WITNESS WHEREOF,the parties hereto have caused this agreement to be executed this tA day of 1 V©V. , 2020. at-41 _LANDLORD TENANT /v 70 A.) 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