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<br /> <br /> <br />ECC <br />UGENE ITY OUNCIL <br />AIS <br />GENDA TEM UMMARY <br /> <br /> <br /> <br />Work Session: Approval of Lease with Option to Purchase 858 Pearl Street for Network <br />Charter School <br /> <br /> <br />Meeting Date: September 30, 2009 Agenda Item Number: B <br />Department: Central Services Staff Contact: Kristie Hammitt <br />www.eugene-or.gov Contact Telephone Number: 682-5524 <br /> <br /> <br /> <br /> <br />ISSUE STATEMENT <br /> <br />The council is being asked to approve the City granting to Network Charter School a two-year lease and <br />option to purchase 858 Pearl Street. <br /> <br /> <br />BACKGROUND <br /> <br />The City declared 858 Pearl Street (the “Property”) as surplus property. An appraisal concluded that the <br />fair market value of the property is approximately $1.53 million. The City listed the property at $1.6 <br />million. Two offers were received but neither was close to the asking price. <br /> <br /> Network Charter School (“School”) has proposed to lease the property for two years with an option to <br />purchase the property at the end of the two-year period. The terms of lease/option would be as follows: <br /> <br /> <br />?Two-year lease <br /> <br />?Rent of $4,000 per month, plus 50% of any sub-leases <br /> <br />?School could purchase property before the end of two years for the price of $1.5 million. <br /> <br />?Not later than 18 months, the School would have to notify the City of intent to purchase and <br />make a non-refundable payment to the City of 10% of purchase price ($150,000). The $150,000 <br />would be applied to the purchase price. If the School does not notify the City of that intent (and <br />provide a down-payment), then lease terminates at the end of two years. <br /> <br />?School leases the building “as is.” The City would have no responsibility to make or pay for any <br />improvements during the lease term. If the School is unable to pay for needed improvements, it <br />has the option to terminate the lease and move out. <br /> <br />?If the School makes major improvements that provide a net increase in value of the Property and <br />the School does not purchase the property, then the City would reimburse the School for a <br />portion of those improvements, but only after the City realizes from the sale of the Property that <br />net increase in value. <br /> <br />Section 2.872 of the Eugene Code provides that a proposal for the sale or lease of property that is <br />acceptable to the City Manager shall be presented to the council for its action. <br /> <br /> Z:\CMO\2009 Council Agendas\M090930\S090930B.doc <br /> <br />