Title
Emergency Youth Placement Facility / Star Mountain West, LLC Lease - First Amendment
Action
ACTION:
Authorize the County Manager to negotiate and execute a first amendment to the Lease between the County and Star Mountain West, LLC.
Staff Contact: Mark Hahn, Director of Asset and Facility Management Department
Kimberly Henderson, Director of Child, Family & Adult Services Department
Presentation: No
BACKGROUND/JUSTIFICATION:
On the effective date of June 21, 2024, the County entered a lease with Star Mountain West, LLC for the renovation and lease of a facility at 4024 Triangle Drive (near the intersection of Freedom Drive and I-85). The lease terms require the Landlord to renovate the building to house an Emergency Youth Placement Facility for the County, and the County to reimburse the Landlord for the total cost of construction. The Landlord is currently required to provide a $300,000 Improvement Contribution toward the total cost of construction.
Renovation of the building is about 80% complete, but an unforeseen construction condition has occurred. Construction of a new required exit stairwell from the basement of the facility requires the general contractor to perform substantial excavation adjacent to a two-story residential accessory structure with finished habitable space and storage (“garage”), which is also owned by the Landlord on a separate parcel. Due to the close proximity, this required excavation would undermine the garage foundation. The general contractor has determined that demolition of the garage is the only way to safely perform the excavation and complete the renovation project.
The Landlord is willing to have the garage demolished, but wants to be compensated $150,000 for loss of the garage and leasable space. The County’s Asset and Facility Management Department and Child, Family and Adult Services Department both find the value to be reasonable for the Landlord’s loss of the garage. The Landlord is willing to accept a $150,000 reduction in the Landlord’s Improvement Contribution amount as compensation for the garage and leasable space.
Accordingly, the major business term of the first amendment to the lease agreement is as follows:
Improvement Contribution: Landlord accepts, as full satisfaction and compensation of its interest in the garage the sum of $150,000 from Tenant. The form of this compensation shall be a reduction in the Improvement Contribution from the Landlord, thereby reducing the Improvement Contribution from $300,000 to $150,000. The remaining terms regarding the Improvement Contribution and all other terms of the Lease shall remain unchanged as set forth in the Lease.
PROCUREMENT BACKGROUND:
N/A
POLICY IMPACT:
N/A
FISCAL IMPACT:
Funding for the renovation of the lease space and this first amendment to the lease is included in the Child, Family and Adult Services budget (DSS Unit 8144).