Consideration and Approval of Contract:  Lease of City-Owned Property located at 203 E. Brannen known as the Murdoch Community Center

1. Approve the lease between the City and Southside Community Association, Inc.; and
2. Authorize the City Manager to execute all necessary documents.

On April 7th, 2022, the City published an invitation for bids, no. 2022-125, seeking proposals from qualified non-profit organizations to enter into a long-term lease of the City-owned Murdoch Community Center, located at 203 E. Brannen for the purpose of managing, operating, and programing a community space for the benefit of the current and future residents of the Southside neighborhood. The Southside Community Association, Inc., the current tenant, was the only bidder, meeting the minimum bid threshold set for the lease. The organization has been deemed a responsible and responsive bidder. The new lease memorializes a number of changes in the City's relationship with the facility and future tenant:

• Twenty-Five year initial term with options for and additional two, twenty-five year extensions. Extensions are at City's discretion to renew. This provides the future tenant excellent lease tenure and security which will allow for significant fund raising opportunities;
• After the initial term, the City may cancel the lease for convenience after providing eighteen-month notice.
• Modifies the relation between the tenant and the City in regards to maintenance obligations. Previous leases were strictly As-Is leases; this lease establishes the city as responsible to address structural and shell maintenance of the facility;
• The Monthly lease rate of $433.33 provides a source of revenue to plan and execute future city maintenance responsibilities; and
• Existing deferred maintenance to the facility for which the City is now responsible for will be addressed as future capital budget requests.
• City maintains use of the facility for up to 32 hours per month for City authorized uses. 

Should Council award the lease, the lease will commence upon expiration of the current lease, on August, 1st, 2022.

The current lease base payment is $1 per year. This was in recognition of City use of the premises for City meetings. The new lease will start at $433.33 per month with 2% annual escalation. This is additional revenue; however, in order to best fund the ongoing commitments to the facility, these revenues should be dedicated to facility maintenance.

Priority Based Budget Key Community Priorities and Objectives

• Livable Community: Create a welcoming community through partnerships, strong neighborhoods, civic engagement, and resident participation.
• Livable Community: Provide amenities and activities that support a healthy lifestyle.

Carbon Neutrality Plan

• DD-1: Encourage vibrancy, appropriate density, and attainability in existing neighborhoods, so that more residents live within walking distance of their daily needs.

Regional Plan

• Policy ED.3.2. Strengthen the arts, culture, and education sectors as important economic drivers in the community.
• Policy NH.2.1. Encourage the rehabilitation of historic downtown structures and contextual new structures as office, retail, entertainment, and residential space to reinvigorate the area as a destination of culture, shopping, government, and the arts.
• Policy CC.5.1. Promote first class arts, research, and educational facilities.

City Council awarded the inital lease in 2007 after a competitive invitation for bids.

• Decline to award lease and provide input for another solicitation. The current lease runs until July 31st, 2022.

The Southside Community Association has operated the Murdoch Community Center under the same lease from the City since 2007. The current lease solicitation was prepared for two reasons. First, to provide a competitive bid process for a longer term lease opportunity of the facility upon expiration of the current lease. Second, to align maintenance responsibilities to the City.

Article VII.9 of the City Charter requires leases of city property to be made to the highest bidder as a result of a public solicitation. Non-profit organizations providing significant community benefits are not exempt from this requirement; however, leases may be solicited and qualified for particular purposes, in this case the lease was only open to organizations who could provide performing arts in the facility. This use qualification in the solicitation impacts the market rent expectation for the facility, allowing organizations who can deliver the services the City wishes to program in the facility a rate decoupled from other, potentially more lucrative uses.