Fiscal Note
Loss in revenue to the General Fund equal to one month's rent is estimated to
be $1,100.
Title
Authorizing the Mayor and City Clerk to execute a Lease Termination Agreement providing for the early termination of the lease with The Collins House, Inc. pertaining to 704 East Gorham Street.
Body
PREAMBLE
The City of Madison ("City") and The Collins House Inc. ("Lessee") are parties to that certain lease dated August 22, 1985, as amended by Addendum to Lease Agreement dated July 12, 1989, and by Amendment to Lease dated November 3, 2004 (the "Lease"), pertaining to the land and building located at 704 East Gorham Street, commonly known as The Collins House Bed and Breakfast. The original term of the Lease was for the period commencing September 1, 1985 and expiring August 31, 2005. In 2004 the City and the Lessee entered into negotiations for a new lease that would allow for an additional 10-year term, require the Lessee to perform approximately $96,000 in repair projects, and provide for a rent credit to the Lessee for such repair costs amortized over the term of the lease. During the negotiations for the new lease, the Lessee expressed an interest in the purchase of the building and ground lease of the land. Resolution No. 61936, ID Number 36879, adopted October 5, 2004, authorized a 6-month extension of the existing Lease term to allow the City time to consider the Lessee's request for either a new lease or purchase/ground lease of the building and land. By Amendment to Lease dated November 3, 2004, the Lease term was extended to February 28, 2006. During the past year, the City and the Lessee have had numerous discussions regarding a possible sale/ground lease scenario. In January 2005, the City obtained an appraisal of the property from the D.L. Evans Company, Inc., which appraisal established purchase and lease values of the property as a single-family residence and as a bed and breakfast establishment. In June Real Estate staff prese...
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