Title:
Visual and Performing Arts ("VAPA") Center Lease - First Amendment
Action
ACTION:
Authorize the County Manager to negotiate and execute a first amendment to the Lease between the County and VAPA Center for a 5-year lease extension and Building Improvement Allowance of up to $1,741,000.
Staff Contact: Mark Hahn, Director of Asset and Facility Management
Presentation: No
BACKGROUND/JUSTIFICATION:
On July 7, 2021 the Board authorized the County Manager to negotiate and execute a lease of the Hal Marshall Center located at 700 N. Tryon Street, with the McColl Center for Art + Innovation and/or its Assignee. The lease rate was $1/year. The McColl Center, a non-profit arts organization, formed an agreement with the VAPA Center, LLC (i.e., Visual and Performing Arts Center) to operate the facility and manage subtenants and users of the facility. VAPA Center had applied for status as a nonprofit arts organization. Upon VAPA’s attainment of nonprofit status and the County’s subsequent approval, the McColl Center assigned the lease to the VAPA Center on October 17, 2022.
The original lease term included an initial base term of 3 years (expiring on September 9, 2024) with automatic extensions up to two additional years, if not sooner terminated. The VAPA Center is seeking a more permanent lease arrangement and has requested a 5-year extension beyond the initial base term in lieu of the original automatic up to 2 additional year extensions.
The VAPA Center offers live entertainment, galleries, theater space, performer practice space, meeting space, and art studios. However, due to the previous use of the building as office occupancy, certain spaces in the building do not meet building code for VAPA’s desired use as an Assembly occupancy. Consequently, the VAPA Center hired an architectural firm with engineering consultants to determine the HVAC and other requirements needed to meet building codes for an Assembly occupancy. The design and construction of the recommended improvements are estimated to cost $1,741,000. In the FY25 County budget, the County Manager included the requested funding for the improvements.
The major business terms of the first amendment to the lease agreement are as follows:
Renewal option: One 5-year renewal term (expires on Sept. 9, 2029) instead of the original automatic extensions up to 2 additional years
Tenant Improvement Allowance: Up to $1,741,000 for the design and construction of building improvements to convert the building to an Assembly occupancy. Such allowance shall be disbursed to the Tenant based on actual costs demonstrated with appropriate documentation provided by the Tenant and approved by the County.
All other terms and conditions of the original lease shall remain in full force and effect.
PROCUREMENT BACKGROUND:
N/A
POLICY IMPACT:
N/A
FISCAL IMPACT:
Funding for the Building Improvements is included in the County’s FY25 Capital Reserve Fund.