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HomeMy WebLinkAbout1992-10-26 92-490 ORDER92-490 IAS AMENDED) Ae®pmd W CwmcOor Sawyer October 26, 1992 CITY OF BANGOR (TITLE.) (Orber, Authorizing the, City Nanagez_to Execute Leese Amendment with NESCO Corporation By ehz City Caused a1Bm CHy ofBnsym: THAT the City Manager Is hereby authorized and directed, on behalf of the City of Bangor, to execute an amendment to a lease agreement dated July 1, 1983, with NESCO Corporation for a building at 233 Odlin Rd. The amendment authorizes a credit against rental payments of up to $1,800.00 for repair of the building's roof subject to inspection. STATENENT OF FACT: THIS AMENDMENT SERVES TO CLARIFY THE ORIGINAL ORDER. Aeeipted to CouncBor Sawyer October 26, 1992 CITY OF BANGOR (TITLE) (DrbVr,.mthoriz.inq the,_Gity Manager. to Execute Lease Anendvant with MBSCO Corporation. By tae Cies Coumi! of the IXty of Banter. ORDERED, THAT the City Manager is hereby authorized and directed, on behalf of the City of Bangor, to execute an amendment to a lease agreement dated July 1, 1983, with NESCO Corporation for a building at 233 Odlin Road. IN CITY COUNCIL October 26. 1992 Amended by Substitution an assed.n CITY`CLERK 92-490 ORDER Title, AltbgK5. M AM1e Aitp MaaIm to B ecate Lease Annulment with NESCO Corporation ............................�......�...........�y.. O Councilmen To: Bambara of the Bangor City Council From: Stephen A. Bolduc, Economic Development Officer Date: October 26, 1992 Subject: Authorise the City Manager to execute an amendment to a lease agreement with NESCO Corp. for a building at 233 Odlin Rd. Issue NESCO Corp. has requested a reduction in their lease payment Bud reimbursement for roof repair expenses for a building at 233 Odlin Rd. used as a warehouse and office for the wholesaling of laminate products and equipment. NESCO Corp. 'a monthly rent payment increased from $1,687 to $1,875 on August 1, 1992, as prescribed in the lease. NESCO Corp. Me requested that the monthly lease payment be maintained at the previous monthly rental amount of $1,687. =BCD Corp. Me also requested reimbursement for expenses to repair deteriorating actions of the building's roof. Expenees are estimated to be $1,800. Background NESCO Corp. is a wholesaler of laminate products and equipment. They are a division of Nelson S Small, Inc. a Portland based distributor. NESCO Coxp., which also has an operation in Portland, has operated In Bangor and leased a building in the airport complex since 1983. The building is a 9000 sq. ft. former US" storage building at 233 Odlin Nd. Upon leasing the building, =BCD Corp. performed approximately $20,000 0£ Improvements in consideration for a reduced lease rate schedule. The rate reduction is requested because of continued decreases in their business which is tied to the construction industry. NESCO Corp. reports that their sales volume has fallen in each of the last two years and that the Bangor operation is losing money for the third year. David Small, Treasurer, said that the Bangor operation is under "tremendous pressure". They reduced their workforce from 12 in 1990 to 7 In 1992. Currently there are 8 employees. The requested reduction in overhead will assist NESCO Carp. keep their Bangor operation open. NESCO Corp.'s current lease rate is $1,875 per month or $2.50 per square foot on a NNN basis (lessee pays utilities, maintenance, liability Insurance, and taxes). NESCO Corp. is requesting a reduction in lease payments to $1,687.00 per month or $2.25 per sq. ft. Other leases within the Airport Complex are: Northeast Reg. Airline $1.50 NMN Penton Hill American (Warehouse) $4.06 N Cablevision (Office) $2.13 NNN Philtrum Corp. (Office) $5.25 NN International Paper (Office) $5.87 NNN Recoveries, Center Norrison's Custom Catering (Ware) $3.00 N ASCO Corrugated (Manufacturing) $1.60 N WEPSCO (Manufacturing) $2.35 was MEPSCO (Office) $3.00 N Imperial Sheet Metal (Warehouse) $3.00 N Life Safety Manufacturing $2.52 NNN Other Pmoert'ea Byer Warehouse $2.50 NNN Maine Banana $4.00 NNN Snow 6 Neally $4.00 New Harris Baking $2.57 NNN In June, 1991, NESCO Corporation requested that the City of Bangor either reduce their lease rate or amend the lease to a ••Tenancy at Will- basis. The Community and Economic Development Committee of the Bangor City Council considered the request and decided not to reduce the lease rate but to amend the lease to a 'Tenancy at Will' basis. Regarding the roof repair, the lease states that the Lessee has the responsibility for maintaining the building, including the roof. The Board of Directors of the BanAlr Corporation has considered this request and recommends that the lease rate be maintained at its current rate of $1,875 Per month. The Board feels that the rental rate, including the August increase, is lower than comparable properties. To forgo the rate increase would be inequitable to other airport tenants and the private sector and may stimulate other requests for reductions. The Board of Directors of the Sanair Corporation recommends that the City perform the roof repair with a limit of $1,800. Although the Lessee has the responsibility for maintaining the building, the City's assumption of this expense would assist NESCO and protect the City's building from further deterioration. `AB/jp Date: October 26, 1992 Item No Item/Subject: Authorize the City Manager to execute an amendment to a lease agreement with RESCO Corporation for a building at 233 Odlin Rd. Responsible Department: Community and Economic Development Sue attached mamo. m�� t Hee Manager's Connects: 999 Associated Information: yrQ aIMj� Finance Director mg-j&;"^YI9M City Solicitor Introduced For X Passage _First Reading Page 1 of 1 _Referral