Form revised May 5, 2009
FISCAL NOTE FOR CAPITAL PROJECTS ONLY
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Department: |
Contact Person/Phone: |
DOF Analyst/Phone: |
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Parks and Recreation |
Rebecca Salinas / 684-7279 |
Jennifer Devore / 615-1328 |
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Legislation Title: |
AN ORDINANCE relating to the Seattle Department of Parks and Recreation; authorizing the Superintendent to amend and restate the existing thirty-year lease with The Mountaineers for renovation and management of Building 67 at Magnuson Park.
Summary and background of the Legislation:
Ordinance 122034, adopted in March 2006, authorized the Superintendent to enter into a thirty-year lease, with two five-year extensions, with The Mountaineers for Building 67 and adjacent property. The Mountaineers funded all capital improvements for the renovation of Building 67, including fundraising for purchase and installation of the south climbing facility (Climbing Facilities) that includes a rock wall, climbing boulder and hiking trail. In addition, The Mountaineers added a climbing component to the north wall and the adjacent 20 feet of the east wall (North Climbing Wall). In October 2009 The Mountaineers exercised their right to lease the major portion of the ground floor effectively changing the agreement from the leasing of rooms within a building to leasing a building (less184 square feet for use by the Parks Department).
The overall building renovation project and the climbing plazas were completed in October 2008. The original estimate for the project was $1,700,000. The final cost was $4,800,000. Due to the increased capital expenditure, Parks agreed to an extension of two ten-year terms to the thirty- year lease. In addition to the financial outlay, The Mountaineers contributed hundreds of volunteer hours to the project. Management and operation of the Climbing Facilities was originally conceived as a joint venture; however, later consideration resulted in a determination that the Climbing Facilities would be more efficiently managed and operated solely by The Mountaineers, but jointly scheduled by the City and The Mountaineers for maximum public benefit. The North Climbing Wall will be maintained, scheduled, managed and operated solely by The Mountaineers.
Project Name: |
Project I.D. |
Project Location: |
Start Date: |
End Date |
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· Please check any of the following that apply:
____ This legislation creates, funds, or anticipates a new CIP Project. (Please note whether the current CIP is being amended through this ordinance, or provide the Ordinance or Council Bill number of the separate legislation that has amended/is amending the CIP.)
____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)
_XX___ This legislation has financial implications. (Please complete all relevant sections that follow.)
This legislation does not amend the 2010 Budget. This legislation does, however, authorize an amended and restated Lease Agreement between the City and The Mountaineers. This new Lease Agreement includes a rent increase from $4,970 per month to $5,989 per month ($1,019 increase).
This rent increase does not have any direct financial impact to the City, however. Under the terms of the Original and the restated Agreements, The Mountaineers may offset 100% of eligible capital improvement expenditures, plus $2,665 per month for the value of the public benefits received through the public use of the Climbing Facilities. Net of these two offsets – under both the original and the restated Agreements – The Mountaineers are expected to pay the minimum rent of $200 per month, indexed for inflation each five years, for the duration of the original thirty-year term and the two five-year extensions.
The extended term authorized in the restated Agreement results in a direct financial benefit to the City in years 41 to 50, during which the City will receive the minimum rent of $200 per month, plus inflation. This also results in an opportunity cost to the city; the City will not be able to lease the property to another tenant, or use it for other municipal or parks purposes, during this time.
Please list attachments to the fiscal note below:
Attachment A: Map of Mountaineers Facility at Magnuson Park
Attachment B: Contract Summary
Attachment C: High-Level Map of Magnuson Park
Attachment D: Mountaineers Rental Offset Credits Analysis
Attachment A: Map of Mountaineers Facility at Magnuson Park
Attachment B: Contract Summary
CONTRACT SUMMARY
Contracting Party/ Lessee/ Concessionaire/Other: The Mountaineers
Contract Title and Contract Type: Magnuson Park Building 67 Amended and Restated Lease
Non-Profit_X or For Profit______
New:______ or Renewal (or extension of existing Lease):__X____
Premises: Building 67 at Warren G. Magnuson Park
Term of Initial Lease: 30 years plus two five-year extensions
Term of Amended and Restated Lease: 30 years plus two ten-year extensions
Purpose of Restated and Amended Lease (description of license): Lessee finished Building 67 renovations and now occupies the building less184 square feet on the lower floor. The use as a recreation, training and community center, offices and meeting rooms has not changed; however, storage use on the lower floor by The Mountaineers as well as other park and recreation organizations is an added use. In this new agreement the exterior “Climbing Plaza,” built by The Mountaineers, is donated to the City. The total cost of construction was $4,800,000, approved by the Superintendent and inserted into the new agreement.
Rent: Base rent is $5,989 per month plus Additional rent at 10% of gross revenue from non-Mountaineer sales and events. Minimum rent is $200 per month. Rent is subject to CPI adjustment after five years.
Adjustments to Rent (if any): Offsets for capital improvement costs, maintenance of the south climbing wall and boulder, public programming, and value to the public of the Climbing Plaza against Base and Additional rent throughout the term of the contract.
Public Benefit (e.g., description of permitted use): Equal opportunity outreach, use by DPR internal programs, and public use of the “Climbing Plaza.”
Maintenance: Lessee is responsible for all minor and major maintenance of the Premises during the term of the lease. Lessee is responsible for repair and maintenance of the “Climbing Plaza.”
Other Pertinent Information: None.
Attachment C: High-Level Map of Magnuson Park
Attachment D: Mountaineers Rental Offset Credits Analysis
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THE MOUNTAINEERS |
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Rental Offset Credits |
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Lease Agreement with Seattle Department of Parks and Recreation |
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Base Rent |
5,989 |
per month |
Capital Improvement Rental Offset: |
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Climbing Plaza Public Program Offset |
(2,665) |
per month |
Submitted 9/09 |
4,800,000 |
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Public Program Rental Offset |
- |
per month |
Submitted 10/09 |
58,258 |
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Minimum Rent |
200 |
per month |
Total Capital Improvement Rental Offset |
4,858,258 |
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Subject to CPI adjustment in 2013 and again every 5 years |
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Climbing Plaza |
Increases to |
Remaining Bal. |
Cumulative |
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|
Year |
Year |
Base |
Public Program |
Cap. Improvement |
Minimum |
Cap. Improv. |
of Cap. Improv. |
Cap. Improv. |
Rent Paid |
Rent Paid |
|
Monthly Rent |
Rental Offset |
Rental Offset |
Rent |
Rental Offset |
Rental Offset |
Rental Offset |
Annually |
Accumulated |
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0 |
2008 |
6,970 |
(2,665) |
(2,305) |
2,000 |
4,800,000 |
4,797,695 |
2,305 |
2,000 |
2,000 |
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1 |
2009 |
64,078 |
(31,980) |
(29,698) |
2,400 |
58,258 |
4,826,255 |
32,003 |
2,400 |
4,400 |
|
2 |
2010 |
74,268 |
(31,980) |
(39,888) |
2,400 |
- |
4,786,367 |
71,891 |
2,400 |
6,800 |
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3 |
2011 |
74,268 |
(31,980) |
(39,888) |
2,400 |
4,746,479 |
111,779 |
2,400 |
9,200 |
|
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4 |
2012 |
74,268 |
(31,980) |
(39,888) |
2,400 |
4,706,591 |
151,667 |
2,400 |
11,600 |
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5 |
2013 |
74,268 |
(31,980) |
(39,888) |
2,400 |
5,000 |
4,671,703 |
191,555 |
2,400 |
14,000 |
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6 |
2014 |
86,097 |
(37,074) |
(46,623) |
2,782 |
5,150 |
4,630,230 |
238,178 |
2,782 |
16,782 |
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7 |
2015 |
86,097 |
(37,074) |
(46,623) |
2,782 |
5,305 |
4,588,911 |
284,802 |
2,782 |
19,565 |
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8 |
2016 |
86,097 |
(37,074) |
(46,623) |
2,782 |
5,464 |
4,547,751 |
331,425 |
2,782 |
22,347 |
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9 |
2017 |
86,097 |
(37,074) |
(46,623) |
2,782 |
5,628 |
4,506,755 |
378,049 |
2,782 |
25,129 |
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10 |
2018 |
86,097 |
(37,074) |
(46,623) |
2,782 |
5,796 |
4,465,928 |
424,672 |
2,782 |
27,911 |
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11 |
2019 |
99,810 |
(42,978) |
(54,432) |
3,225 |
5,970 |
4,417,467 |
479,103 |
3,225 |
31,137 |
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12 |
2020 |
99,810 |
(42,978) |
(54,432) |
3,225 |
6,149 |
4,369,185 |
533,535 |
3,225 |
34,362 |
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13 |
2021 |
99,810 |
(42,978) |
(54,432) |
3,225 |
6,334 |
4,321,087 |
587,967 |
3,225 |
37,587 |
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14 |
2022 |
99,810 |
(42,978) |
(54,432) |
3,225 |
6,524 |
4,273,180 |
642,398 |
3,225 |
40,813 |
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15 |
2023 |
99,810 |
(42,978) |
(54,432) |
3,225 |
6,720 |
4,225,468 |
696,830 |
3,225 |
44,038 |
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16 |
2024 |
115,707 |
(49,824) |
(63,483) |
3,739 |
6,921 |
4,168,906 |
760,313 |
3,739 |
47,777 |
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17 |
2025 |
115,707 |
(49,824) |
(63,483) |
3,739 |
7,129 |
4,112,551 |
823,796 |
3,739 |
51,517 |
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18 |
2026 |
115,707 |
(49,824) |
(63,483) |
3,739 |
7,343 |
4,056,410 |
887,280 |
3,739 |
55,256 |
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19 |
2027 |
115,707 |
(49,824) |
(63,483) |
3,739 |
7,563 |
4,000,490 |
950,763 |
3,739 |
58,995 |
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20 |
2028 |
115,707 |
(49,824) |
(63,483) |
3,739 |
7,790 |
3,944,796 |
1,014,246 |
3,739 |
62,734 |
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21 |
2029 |
134,136 |
(57,759) |
(73,977) |
4,335 |
8,024 |
3,878,843 |
1,088,223 |
4,335 |
67,069 |
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22 |
2030 |
134,136 |
(57,759) |
(73,977) |
4,335 |
8,264 |
3,813,131 |
1,162,200 |
4,335 |
71,403 |
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23 |
2031 |
134,136 |
(57,759) |
(73,977) |
4,335 |
8,512 |
3,747,666 |
1,236,177 |
4,335 |
75,738 |
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24 |
2032 |
134,136 |
(57,759) |
(73,977) |
4,335 |
8,768 |
3,682,457 |
1,310,154 |
4,335 |
80,073 |
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25 |
2033 |
134,136 |
(57,759) |
(73,977) |
4,335 |
9,031 |
3,617,510 |
1,384,130 |
4,335 |
84,407 |
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Climbing Plaza |
Increases to |
Remaining Bal. |
Cumulative |
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Year |
Year |
Base |
Public Program |
Cap. Improvement |
Minimum |
Cap. Improv. |
of Cap. Improv. |
Cap. Improv. |
Rent Paid |
Rent Paid |
|
Monthly Rent |
Rental Offset |
Rental Offset |
Rent |
Rental Offset |
Rental Offset |
Rental Offset |
Annually |
Accumulated |
||
|
26 |
2034 |
155,501 |
(66,959) |
(86,142) |
5,025 |
9,301 |
3,540,670 |
1,470,272 |
5,025 |
89,432 |
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27 |
2035 |
155,501 |
(66,959) |
(86,142) |
5,025 |
9,581 |
3,464,109 |
1,556,414 |
5,025 |
94,457 |
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28 |
2036 |
155,501 |
(66,959) |
(86,142) |
5,025 |
9,868 |
3,387,835 |
1,642,555 |
5,025 |
99,482 |
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29 |
2037 |
155,501 |
(66,959) |
(86,142) |
5,025 |
10,164 |
3,311,858 |
1,728,697 |
5,025 |
104,507 |
|
30 |
2038 |
155,501 |
(66,959) |
(86,142) |
5,025 |
10,469 |
3,236,185 |
1,814,839 |
5,025 |
109,533 |
|
31 |
2039 |
180,268 |
(77,624) |
(100,244) |
5,825 |
10,783 |
3,146,724 |
1,915,083 |
5,825 |
115,358 |
|
32 |
2040 |
180,268 |
(77,624) |
(100,244) |
5,825 |
11,106 |
3,057,586 |
2,015,327 |
5,825 |
121,183 |
|
33 |
2041 |
180,268 |
(77,624) |
(100,244) |
5,825 |
11,440 |
2,968,782 |
2,115,571 |
5,825 |
127,009 |
|
34 |
2042 |
180,268 |
(77,624) |
(100,244) |
5,825 |
11,783 |
2,880,320 |
2,215,815 |
5,825 |
132,834 |
|
35 |
2043 |
180,268 |
(77,624) |
(100,244) |
5,825 |
12,136 |
2,792,213 |
2,316,059 |
5,825 |
138,660 |
|
36 |
2044 |
208,980 |
(89,987) |
(116,593) |
6,753 |
12,500 |
2,688,120 |
2,432,652 |
6,753 |
145,413 |
|
37 |
2045 |
208,980 |
(89,987) |
(116,593) |
6,753 |
12,875 |
2,584,403 |
2,549,244 |
6,753 |
152,166 |
|
38 |
2046 |
208,980 |
(89,987) |
(116,593) |
6,753 |
13,262 |
2,481,072 |
2,665,837 |
6,753 |
158,920 |
|
39 |
2047 |
208,980 |
(89,987) |
(116,593) |
6,753 |
13,660 |
2,378,139 |
2,782,430 |
6,753 |
165,673 |
|
40 |
2048 |
208,980 |
(89,987) |
(116,593) |
6,753 |
14,069 |
2,275,616 |
2,899,022 |
6,753 |
172,426 |
|
41 |
2049 |
242,265 |
(104,320) |
(135,545) |
7,829 |
14,491 |
2,154,562 |
3,034,567 |
7,829 |
180,255 |
|
42 |
2050 |
242,265 |
(104,320) |
(135,545) |
7,829 |
14,926 |
2,033,943 |
3,170,112 |
7,829 |
188,084 |
|
43 |
2051 |
242,265 |
(104,320) |
(135,545) |
7,829 |
15,374 |
1,913,772 |
3,305,657 |
7,829 |
195,913 |
|
44 |
2052 |
242,265 |
(104,320) |
(135,545) |
7,829 |
15,835 |
1,794,062 |
3,441,202 |
7,829 |
203,742 |
|
45 |
2053 |
242,265 |
(104,320) |
(135,545) |
7,829 |
16,310 |
1,674,827 |
3,576,748 |
7,829 |
211,571 |
|
46 |
2054 |
280,852 |
(120,935) |
(157,516) |
9,076 |
16,799 |
1,534,111 |
3,734,264 |
9,076 |
220,646 |
|
47 |
2055 |
280,852 |
(120,935) |
(157,516) |
9,076 |
17,303 |
1,393,898 |
3,891,780 |
9,076 |
229,722 |
|
48 |
2056 |
280,852 |
(120,935) |
(157,516) |
9,076 |
17,823 |
1,254,204 |
4,049,296 |
9,076 |
238,798 |
|
49 |
2057 |
280,852 |
(120,935) |
(157,516) |
9,076 |
18,357 |
1,115,046 |
4,206,812 |
9,076 |
247,874 |
|
50 |
2058 |
280,852 |
(120,935) |
(157,516) |
9,076 |
18,908 |
976,437 |
4,364,328 |
9,076 |
256,950 |
