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Home My WebLink About1998-06-08 98-238 ORDERDale:06/09/1998 Item NO.: 9b=2]9 ItemlSubje Amendment to the Lease Agreement with Hannaford Bros. Co. Responsible Department: Community and Economic Development See attached memo. ro Depammimbl ad Manager's Comments: Associated Information: d%+r*u1, it d u I Budget Approval: Legal Approval: Finance Director Introduced For X Passage First Reading Page 1 of Referral Assigned to Councilor Aube June 8, 1998 �n � CITY OF BANGOR (TITIFJ orbff Authorizing an Amendment to a Lease Agreement with the HannaforG Bros, Co. Bo dre Cpy Qoami! oft City of Baa .- 0HOE6ED, THAT WHEREAS, the Hannaford Bros. Co. has leased Building #258, 208 Maine Ave. since 1983; and WHEREAS, the Hannaford Bros. Co. has exercised its option to extend its lease for the period July 1, 1998 to June 30, 2003; WHEREAS, the lease agreement between the Hannaford Bros. Co. and the City of Bangor for said Building #258 requires that the annual rental rate be established for the period July 1, 1998 to June 30, 2003; NOW THEREFORE BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT the City Manager is hereby authorized, on behalf of the City of Bangor, to execute an amendment to the lease agreement between the Hannaford Bros. Co. and the City of Bangor for Building #258, 208 Maine Ave., in a form approved by the City Solicitor or Assistant City Solicitor, and in substantially the same form as attached hereto. IN CITY COUNCIL June 8, 1998 Passed IPY LER 98-338 o RBLH Title, Authorizing an Amendment to a Lease Agreement with Hannaford Bros. Co- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o. .................................. +,amkPG.I Assigned to Ceanciiman 98-238 THIS FIRST AMENDMENT TO INDENTURE OF LEASE, executed this th day of, May, 1998 by and between: CITY OF BANGOR, a municipal corporation organized and existing under and by virtue of the laws of the State of Maine, and having its principal offices at 73 Harlow Street, Bangor, Maine (hereinafter sometimes referred to as "Lessor'); L1CIF, HANNAFORD BROS. CO., a corporation organized and existing under the laws of the State of Maine, and having a regular place of business in Scarborough, County of Cumberland, State of Maine (hereinafter sometimes referred to as "Leasee") WITNESSETH: WHEREAS, the City of Bangor is the owner of an airport commonly known as "Bangor International Airport", formerly known as Dow Air Force Base, located in the City of Bangor, County of Penobscot, State of Maine (hereinafter sometimes referred to as the "AirpoR'); and WHEREAS, by Indenture of lease, dated April 22, 1983, the parties agreed to the lease by the Lessor of Building #258, 208 Maine Ave.; and WHEREAS, the parties hereto wish to amend said Indenture of Lease to establish rental rate for the period July 1, 1998 to June 30, 2003 and to provide additional extension periods; NOW, THEREFORE, the parties do mutually agree that the Indenture of Lease dated April 22, 1983 be and hereby is amended as follows: (1) That the following be added to Paragraph 2 of Article It - TERM: Fourth Option Period - July 1, 2003 to June 30, 2008; Fifth Option Period - July 1, 2008 to June 30, 2013; HennafoadBros Cc FiceAmeadmenf to Indenture of Lease (2) That the following be added to Article III -RENTAL D. During Me period July 1, 1998 through June 30, 2003 the annual rental rate will be $40,898 paid monthly in the amount of THREE THOUSAND FOUR HUNDRED AND EIGHT DOLLARS ($3,408.00). E. During the period July 1, 2003 through June 30, 2008 the annual rental rate will be determined as follows: the monthly lease payment of the previous five year panned plus, the product of monthly lease payment of the previous five year period multiplied by the sum of the five annual percentage changes in Me Consumer Price Index, the All Items expenditure category, for the period April, 1998 to April, 2003. The annual percentage change is calculated by subtracting the value of the index on April at the beginning of the period, eg. April, 1998, from the value of the index on April of the following year, eg. Aml, 1999 and dividing the remainder by the value of the index on April at the beginning of the period, eg April, 1998. The annual percentage change will be the percent resulting from the above calculation but in no case greater than five (5%) percent for any year. The term "Consumer Price Index" is the "monthly unadjusted Consumer Price Index for All Urban Consumers (CPI -U)" published by the United States Department of Labor, Bureau of Labor Statistics. In the event that the CPI -U index should cease to be published during the term of this lease, the rental adjustment for the subsequent five-year Penod shall be calculated as stated above by reference to the annual percentage change in any substitute index published by the U.S. Dept. of Labor or other reliable source which authoritatively represents the annual change in urban consumer prima in the United States over Me preceding five-year period. July 1 2008 to June 30 2013 The monthly lease payment during this period will be determined in a method similar to that used for the previous period with the exception that the sum of the five annual percentage changes in the Consumer Price Index, the All Items expenditure category, will be for the period of April, 2003 to April, 2008, Page 2 98-238 HannafoMarox Co. FinifAmwOnnenf to 1m fune of Lease THAT except for the foregoing, said Indenture of Lease, dated April 22, 1983, between the City of Bangor and the Hannaford Bros. Co. will remain in full force and effect in all other respects between the undersigned. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year written above. CITY OF BANGOR Date: By: (Witness) Edward A. Barrett City Manager HANNAFORD BROS. CO. Date: (Witness) Nam Thle Page 3 BANAIRCORPORATION op<ww. Jawso. romq�raa.zw�esa To: Members of the City Council From: Stephen A. Bolduc, Executive Manager Date: May 27, 1998 '`RBr Subject: Amendment to the Lease Agreement with Hannaford Bros. Co. i* THE ADVANTAGE ADVANTAGE Issue Hannaford Bros. Co. has exercised its option to extend its lease of Building #258 at 208 Maine Ave. for the period July 1, 1998 to June 30, 2003. The rent to be paid during the period must be established by the parties based upon fair market value. They have also requested two (2) additional five (5) year extension periods. Hannaford Bros. Co. has leased Building #258 at 208 Maine Ave. since 1983. The building is 9,521 sq. ft. and is used as a regional once and training center. About six (6) employees are stationed there. The lease rate during the most recent five (5) year period was $2,368 per month or $2.98 per K. ft. In the lease Hannaford Bros. Co. assumes all responsibility for utili ies, building and parking lot maintenance, snowplowing, mowing, property taxes and liability insurance. The City of Bangor has Trot incurred any expenses associated with the building including damage from the ice storm and replacement of the boiler. Hannaford Bros. Co. has proposed a lease rate of $3,408 per month during the flee (5) year extension Period or $4.30 per sq. ft., an increase of 44%. They have also requested two (2) additional five (5) year extension periods from 2003 to 2008 and from 2008 to 2013 to be exercised at their option. 73HA WSIREFr mrxx MAPJ¢J490r OO1191fA py�94 7 F rmnn: $40,898 annually paid monthly in the amount of $3,408. For the five (5) year periods beginning in 2003 and 2008 the lease rate would be adjusted in accordance with the change in the Consumer Price Index up to a maximum increase of 25%. Staff recommends that the proposed lease rate for the period tram 1998 to 2003 be accepted. Also that two (2) additional extension periods be added to the lease with the lease rate during the two (2) additional extension periods adjusted in accordance with the change in the Consumer Price Index up to a maximum increase of 25%. Action The Board of Directors of the BanAir Corpomhon and staff recommend approval of the amendment to the lease agreement under the terms and conditions outlined above.