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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 Ui. of �.�� , s: d"d— 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 AnCfiOrizi LL,e, Ci[ , .M... Y YNlWF€F. f➢. PxPCUte 5 g ws Lease Amendment with NSSCO Corporation CITY 18RIS ...................................... eto - (� (]IA ...... a..... on ouncI n.. Clma c* 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. Page 3 of 3