HomeMy WebLinkAbout1993-08-09 93-395 ORDERCOUNCIL ACTION
Date: 7126193 Item NO.: '93-395
Item/Subject:
Authorizing the City manager to execute an amendment to a lease
agreement with MSCO Corporation for a building at 233 Odlin Rd.
Responsible Department: Community and Economic Development
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Associated Information:
Finance Director
City Solicitor
Introduced For
z Passage
_First Reading Page 1 of 3
_Referral
93-393:--'
Moped to Cosaodor Cohen, August 9. 1993
CITY OF BANGOR
(TITLE.) (01!berruthorizing the _City Manger to Execute a,. Lease ,.._
Amendment with BESCO Corporation
BY City CoaxB eltho City ofBmlyef:
TEAT
the City Manager is hereby authorized and directed, o
behalf of the City of Motor, to execute an amendment to a lease
agreement dated .July 1, 1933, with EESCO Corporatlon for a
building at 233 Odlin M. The amendment authorizes an extension
of the lease agreement on a month-to-month basis.
93-395
I
ORDER
IN CITY COUNCIL
Title,
August 9, 1993
Passed
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Lease Amendment with NSSCO Corporation
CITY 18RIS
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93-395
Memorandum
To: members of the Bangor City Council
From: Stephen A. Bolduc, Economic Development Officer
Date: July 26, 1993 �s Q,S
Subject: Authorizing the City manager to execute an amendment
to a lease agreement with NESCO Corp. for a building at 233
Odlin Rd.
NESCO Corp.
Issue
NESCO Corp. has requested to continue, with a reduction in square
footage, their lease of a building at 233 Odlin Rd. used as a
warehouse and office for the wholesaling of laminate products and
equipment. The lease will terminate on August 31, 1993.
Background
NESCO Corp. is a wholesaler of laminate products and equipment.
They are a division of Nelson 6 Small, Inc. a Portland based
distributor. NESCO Corp., which also has an operation i
Portland, has operated in Bangor and leased a building in the
airport complex since 1983. The building is a 9000 sq. ft.
former USAF storage building at 233 Odlin Rd. Upon leasing the
building NESCO Corp. Performed approximately $20,000 of
Improvements in consideration for a reduced lease rate schedule.
Because of a decrease in business from the Bangor area in the
last several years, NESCO has transferred the statewide
distribution of its product to its Portland location. They have
reduced their workforce in Bangor from 12 employees in 1990 to 8
n 1992 and currently have 4 employees. The change in their
business operations requires less space in which to operate.
NESCO has proposed to lease 4,000-5,000 sq. ft. of the building
at their current lease rate.
NESCO Corp.'s current lease rate is $1,895 per month or $2.50 per
square fact on a NNN basis (insane pays utilities, maintenance,
liability insurance and taxes). If NESCO Corp. is granted a
lease for 5,000 sq. ft. their lease payment would be $1,042 per
month.
Page 2 of 2
93-395
Other leasee for manufacturing or warehouse properties within the
Airport Complex are:
Penton Hill American (Warehouse) $4.06 NN
Enterori6e Center
Morrison's Custom Catering (Warehouse)
$3.00
N
ASCO Corrugated (Manufacturing)
$2.00
N
Imperial Sheet Metal (Warehouse)
$3.00
N
Life Safety Manufacturing (Manufacturing)
$2.50
NNN
Other Pmcert'lea
739 Odlin Rd.
$4.00
NNN
1114 Hammend St.
$3.75
NNN
366 Griffin Rd.
$5.00
NNN
149 Target Industrial Circle
$4.00
NNN
229 Bomarc Rd.
$2.00
Gross
54 Perry Rd.
$5.50
Grose
Recommendation
The Board of Directors of the Ban it Corporation has considered
this request and recommends that the sive of the leased area not
be reduced. The Board of Directors recommends that the lease be
extended on a month -to month basis at its current rate of $1,875
Per month for the following masons:
First, leasing the building to multiple tenanta would be
difficult because of the building's layout and systems. The
building's size, 9,000 sq. ft., and location make it marketable
to other clients, while its only -average" condition does not
detract significantly from its marketability.
Second,the current lease rate of $2.50 per sq. ft. is below the
market rate. NESCO, Inc. has received the benefit of below market
lease rates for 10 years and any extension of the lease should be
a market rates.
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