AGENDA CAPTION:
Title
Consider approval of Resolution 2024-218R, approving a 20 year lease agreement with Telenetwork Properties, Ltd., a Texas Limited Partnership, for the lease of an office suite for Municipal Court use at 350 Barnes Road; authorizing the City Manager, or her designee, to execute said lease agreement; and declaring an effective date.
Body
Meeting date: November 6, 2024
Department: Municipal Court
Amount & Source of Funding
Funds Required: $308,256 (subtract 4 months of free rent) = $229,216
Account Number: 10001114-52360
Funds Available: $229,216
Account Name: Building rental
Fiscal Note:
Prior Council Action: Resolution 2013-144R and Resolution 2017-11R
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Background Information:
In 2013, City Council approved the current lease agreement for Municipal Court to lease space from Hays County out of the Hays County Government Center. In 2017, City Council approved an extension of the lease at the Hays County Government Center. In 2023, Hays County informed the City of their plans to not allow another renewal and that the lease will terminate on September 30, 2025.
The City’s Real Estate team has actively searched for a space (for sale and rental) that can accommodate the needs of the Municipal Court function and that serves as an ideal location. In March 2024, the property at 350 Barnes Drive was identified as an ideal space and location. In May 2024, FGM Architects was hired to develop schematic design documents and a probable cost estimate for building out the interior space to serve the Municipal Court function. The schematic design was completed in August 2024 and provided the assurance that the space will properly serve the Municipal Court function. The anticipated build out cost, which includes interior buildout plus upgrading of major systems to convert the building into an office space environment is estimated at $2.6 million. Every effort has been made to use as much of the interior finish-out as possible to minimize total build out costs. Because of the significant cost, staff recommends a 20-year lease term. During the term of the lease, the City will be given a right-of-first refusal if the Landlord decides to sell the building. At specific intervals during the lease, the City has the right to terminate the lease if the building has not been acquired by the City by those interval periods.
Council Committee, Board/Commission Action:
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Recommendation:
Staff recommends approval of this lease agreement.