Memorandum

City of Lawrence

Legal Services Department

TO:	David L. Corliss, City Manager
FROM:	Toni Ramirez Wheeler, Director of Legal Services
CC:	Cynthia Boeker, Assistant City Manager Jonathan Douglass, Assistant to the City Manager Vicki Stanwix, Court Manager
Date:	October 4, 2007
RE:	Municipal Court Lease Renewal

The City currently leases space from Berkeley Plaza, Inc. for Municipal Court and the Prosecutors’ Office, located at 1006 New Hampshire Street.  The ten-year lease will expire in April 2008.  Currently, the annual base rent is $86,068.00, payable in monthly installments, with an additional year-end payment for actual costs associated with building insurance, commons area and grounds maintenance. 

Staff has negotiated a new lease, with a three percent (3%) rent adjustment, making the annual base rent $88,650, payable in monthly installments.  The proposed lease also contains a year-end payment similar to the existing lease.  The new lease term is four (4) years, with the option to renew the lease for two additional three-year terms.  The base rent in the first three-year renewal period will be 3% above the initial base rent and the rent for the second renewal period will increase three percent above the base rent of the first renewal period. 

Term	Base Rent
2008 – 2012	$88,650.00
2012 - 2015	$91,309.50
2015 – 2018	$94,049.00

The shorter lease term will provide the City with flexibility should the City Commission decide to relocate the Municipal Court and Prosecutors’ Office in the future. 

The lease contains many standard lease provisions, including provisions addressing maintenance responsibilities, payment for utilities and termination of the lease.  Our experience with the Lessor, Berkeley Plaza, Inc. - Mr. Schmalberg, has been a positive one over the past ten years.  The Lessor has been responsive to our needs and the leased premises accommodate our needs for court and prosecution.

By finalizing the terms of the lease this month, we will be able to take advantage of an incentive offered by the Lessor for a month’s free rent in 2008.  This translates into a savings of nearly $8,000.00. 

Staff recommends the City Commission authorize the City Manager to execute the attached lease with Berkeley Plaza, Inc.