Fiscal Note
The proposed resolution authorizes the termination of an existing ground lease at 704 E Gorham St and the execution of a new ground lease for the same address. The current ground lease agreement's rent schedule for the property began in 2012 starting at $4,500 with a 2% increase in each year thereafter. The first amendment to the ground lease rent schedule authorized in file 69489 and subsequently amended by files 74045 and 84986 was not executed between the City and the Lessee due to construction delays for property improvements. The City and property owners have agreed to the termination of the existing ground lease agreement and execution of a new agreement. According to the attached revised rent schedule for the new ground lease, the lease amount will be $5,821 in 2025. It will increase by 10% in 2026 and 2% each year thereafter with an additional 5% increase in 2041 and 2056. No additional City appropriation required.
Title
Authorizing the termination of the existing Ground Lease and executing a new Ground Lease for the residential structure located at 704 East Gorham Street, within James Madison Park. (District 6)
Body
WHEREAS, on April 4, 2012, the City of Madison Common Council approved Resolution RES-12-00247 (Legistar #25054), accepting a proposal from Bob Klebba and David Waugh (collectively, the “Lessees”) for the purchase of the residential structure located 704 East Gorham Street, commonly known as the Collins House (the “Property”) and authorized staff to negotiate the final terms for the sale of residential structure and a lease of the land beneath it (the “Ground Lease”) between the City of Madison (“City”) and the Lessees; and,
WHEREAS, on September 14, 2012, by Bill of Sale (Doc. #4913197) and Ground Lease (Doc. #4913196) the City sold the improvements and leased the land to the Lessees, the Ground Lease being attached as Attachment A ; and
WHEREAS, on September 24, 2024, the City’s Common Council approved Resolution RES-24-00574 authorizing an amendment to the Ground Lease, however, the City and the Lessee’s (together, the “Parties”) prefer to execute a new ground lease, hereby necessitating the present resolution; and
WHEREAS, pursuant to the terms of the Ground Lease, the Lessees will be conveying the Property and assigning the Ground Lease to the Mendota Lake House, LLC; and
WHEREAS, the parties have agreed on terms for a new ground lease reflected in Attachment B - Ground Lease, which includes a lease term of 99 years and rent payments by Lessee consistent with Attachment C - Rent Schedule.
NOW, THEREFORE, BE IT RESOLVED that the Mayor and City Clerk are authorized to execute a new ground lease with the Lessees, or their successors and assignees, substantially, though not exclusively, on the terms and conditions of Attachment B - Ground Lease and Attachment C - Rent Schedule; and
BE IT FURTHER RESOLVED that the City’s Common Council hereby authorizes the Mayor and City Clerk to execute, deliver and record the Ground Lease and any related real estate documents, and take any further action required to accomplish the purpose of this resolution in a form approved by the City Attorney.