Report to General Committee Report Date: May 15, 2008
SUBJECT:
PREPARED BY: Catherine Conrad, Town Solicitor, Extension 4737
RECOMMENDATION:
That the report entitled “Markham Centennial Bocce Club – Proposed Facility Lease Terms and Upfront Payment” be received;
And that the Mayor and Clerk be authorized to enter into a 20 Year Facility Lease Agreement with the Markham Centennial Bocce Club for its 9,716 square foot facility at the Centennial Community Centre on the terms and conditions contained in this report, including the requirement for an upfront payment of $55,000;
And that the Mayor and Clerk be authorized to execute the necessary documentation to give effect to the forgoing, said documentation to be in a form and content satisfactory to the Chief Administrative Officer and the Town Solicitor;
And that all rent payments be applied against capital construction costs respecting the Bocce Facility;
And that Staff be authorized and directed to do all things necessary to give effect to this report;
And that the above resolution be reported out in public session.
EXECUTIVE SUMMARY:
Not applicable.
FINANCIAL CONSIDERATIONS:
Annual rent payments,
totaling $400,000 over 20 years will be applied against the Town’s capital
construction costs respecting the Bocce Facility.
PURPOSE:
This report responds to Council’s request for staff to report to General Committee on the terms of a complete agreement between the Town and the Markham Centennial Bocce Club for its 20 year facility lease at the Centennial Community Centre, including the amount of an upfront lease payment.
BACKGROUND:
In 2004 Council approved in principal additional recreational square footage for indoor bocce courts within the expanded Centennial Community Centre subject to, among other things, the Markham Centennial Bocce Club (the “Club”) entering into an operational agreement with the Town that included a significant contribution.
On April 26, 2005, Council approved the indoor bocce courts (the “Bocce Facility”) in the Centennial Expansion and requested staff to negotiate an upfront payment from the Club to be deducted from its total lease payments over the term of $400,000 and further that the complete agreement be presented for approval at a future meeting of the General Committee prior to its execution and that the Mayor and Clerk be authorized to execute the agreement upon Council approval.
OPTIONS/
DISCUSSION:
Pursuant to the Town’s commitment to construct the Club’s indoor Bocce Facility as part of the Centennial Community Centre expansion, the Town required the Club to enter into a 20 year facility lease agreement for the operation of the Bocce Facility and to provide a total payment of $400,000 over the term of the lease, including an upfront payment.
The Club has agreed to an upfront payment of $55,000, covering “Base Rent” for years 1, 2 and part of year 3 of the proposed 20 year lease. In addition to this upfront payment for Year 1 and to defray the Club’s start-up costs over the first three (3) years of the 20 year term, the Club proposes the following Base Rent schedule:
Year 1 - $55,000
Year 2 - $0
Year 3 - $5,000
Years 4-20 (17 years) - $20,000 per annum
Total Rent Payment - $400,000
Other recommended terms:
1.
The Club has agreed to pay to the Town, as additional rent, an annual building maintenance fee covering its proportionate share of costs associated with the maintenance and repair of the heating and air conditioning equipment serving the Bocce facility. For calculation purposes, staff estimate this cost at $6,347 per year, based on 2007 costs. This payment will be adjusted at the end of the calendar year for actual costs.
2. Utilities
Hydro/Gas: As the Bocce Facility is not separately metered for either hydro or gas, the Club has agreed to pay its proportionate share of both of these annual costs, which the Town will estimate for each year of the Term.
3. Public
Access
The Club will make the Premises available to all Town residents and provide programs targeting Special Olympics children and adults, special needs groups, other sports groups and business community groups.
Staff advise that the above terms are acceptable and recommend that the Town enter into a comprehensive Facility Lease with the Club, said lease to include compliance with Town policies and all other laws and regulations including liquor license requirements.
Staff recommend that the rental payments be applied against capital construction costs for the Bocce Facility.
ENVIRONMENTAL CONSIDERATIONS:
Not applicable
ACCESSIBILITY CONSIDERATIONS:
Not applicable
ENGAGE 21ST CONSIDERATIONS:
Not applicable
BUSINESS UNITS CONSULTED AND AFFECTED:
Asset Management, Finance
RECOMMENDED
BY: ________________________ ________________________
Catherine M. Conrad John Livey
APPENDICES
NA
Q:\Legal\REPORTS\Reports
2008\Bocce Lease Report Final.doc