Consideration and Approval of Office Lease Agreement:  Between the HOPI TRIBE ECONOMIC DEVELOPMENT CORPORATION, a federally chartered corporation, wholly owned by the Hopi Tribe, a federally recognized Indian tribe, 5200 E. Cortland Blvd., Suite E200 (Landlord) and the City of Flagstaff, a municipal corporation (Tenant);  

Consideration and Approval of Sub-Lease: For a portion of the Hopi Building at Heritage Square Between City of Flagstaff (City) and the Flagstaff Metropolitan Planning Organization (FMPO);

Consideration and Approval of Sub-Lease: For a portion of the Hopi Building at Heritage Square Between the City of Flagstaff (City) and the Downtown Business Alliance (DBA).

1. Approve the Office Lease Agreement to provide office space for City staff (ParkFlag)
2. Approve the Sub-lease with the Flagstaff Metropolitan Planning Organization (FMPO)
3. Approve the Sub-lease with the Downtown Business Alliance (DBA)

The City of Flagstaff is currently leasing office space for ParkFlag at 120 N. Beaver Street. However, this lease is expiring. Staff was tasked with finding new office space in the downtown area, to also share space with the FMPO and the Downtown Business Alliance. Several options were researched.

Staff recommends that the City Council approve an Office Lease Agreement for office space at 6 E. Aspen Ave, #200, Flagstaff, AZ 86001 (Heritage Square). The City negotiated a few changes in the landlord's lease form, and those are reflected in the First Addendum, which is attached to the Office Lease Agreement. Rental space includes:

• An accessible and well-lit public space for customers to obtain parking permits and other parking-related business;
• A private office for the Parking Manager; Space to immediately accommodate six Parking Aides;
• Downtown location, desirable for implementation and enforcement of the parking program;
• Space requires no remodeling;
• Sufficient space for sub-lessees.

The Lease Term shall be for three (3) years and shall commence on January 1, 2020, and expire on December 31, 2022. The City has an option to extend the Lease for two (2) additional years ("Extended Term").

The City will sub-lease portions of the office space to FMPO and the DBA, which will offset the rent. The attached Sub-leases are still pending final review by FMPO and the DBA so that they may request a few changes before Council approval.

The City shall pay to the Landlord monthly rent of $5,129.06, includes taxes and utilities.  A security deposit of $5,000.00 is also required prior to occupancy.  The City will receive 1/3 of the deposit from FMPO and 1/3 of the deposit from DBA, plus their monthly rent for the use of the space.

Breakdown of costs for ParkFlag, DBA,FMPO the first year (Monthly Rent: $5,129.06):

• ParkFlag= $1,915.00 per month 
• DBA= $1,300.00 per month
• FMPO=  $1,915.00 month

Additional costs:

• Internet: Approximately $140.00 for internet which can be split three ways.
• Phone: Phone costs will be split between the parties.

Division of office space:

• ParkFlag to pay rent for two offices and use of common area;
• Downtown Business Alliance to pay rent for two offices and storage room;
• Flagstaff Metropolitan Planning Organization to pay rent for two offices, common area, and storage room.

ParkFlag was created as a special revenue fund. It was decided that rent would come directly from the parking revenue and would not be supported by other City funding. The budget team has approved an on-going budget for leasing office space for ParkFlag operations.

The City anticipates it will be able to reduce its current ParkFlag office space expenses by approximately $190.00 per month, or over $2,200.00 per year, not including phone or internet costs, as a result of entering into the new Office Lease Agreement and Sub-leases. 

The FY 2020 budget of $20,000 for this lease is in account 061-07-231-0890-6-4241.  The additional funding required will be pulled from the budgeted line item: Other Operating Supplies.

CODE COMPLIANCE
Achieve comprehensive and equitable code compliance.

Council approved Resolution No. 2016-01 to adopt the Comprehensive Parking Management Plan on January 19, 2016, which established the Parking Program.

Council approved Resolution No. 2018-28 to amend the IGA between the City, County, and FMPO on June 4, 2018, which clarified that FMPO staff may procure various services from either the public or private sectors including office space. 

1. Approve the Lease Agreement and Sub-Leases.
2. Do not approve the Lease Agreement (this option is not recommended as there is currently no space for the additional employees to work at current City facilities and no available private office space to accommodate the needs of the three programs: ParkFlag, Downtown Business Alliance, and Flagstaff Metropolitan Business Alliance.

The current location at 120 N. Beaver Street met all of the space requirements for ParkFlag and was a desirable location to implement and enforce the Parking Management Plan. However, the Lessor recently preferred a month-to-month lease to have the flexibility to vacate the office space for their needs. ParkFlag would prefer the stability of a longer-term lease as the Lessor could give the notice to vacate, and ParkFlag would have 60-days to vacate. ParkFlag looked at several locations in the downtown area that were available, and none met the needs to accommodate ParkFlag, Downtown Business Alliance, and Flagstaff Metropolitan Planning Organization. The limitations included: not meeting the requirements of the Americans with Disability Act, costs exceeded current costs, locations were not centrally located in the ParkFlag management area, and office space did not meet the needs of the staff. Because of the uniqueness of the requirements it was determined that sole-source procurement was appropriate.

New Office Considerations:

• Lends efficient operations for customer service and enforcement patrols;
• Compliant with the Americans with Disabilities Act requirements;
• Size and configuration supports the program and the co-location with the Downtown Business Alliance and the Flagstaff Metropolitan Planning Organization;
• Offers safe entry and exit with adequate lighting for night shift security;
• Reduces or is equal to overall cost as compared to current parking office.

The new office location keeps the ParkFlag office operations in downtown Flagstaff which is accessible to our parking public.