Item 2C: Approval of Trude Kaufman Center Lease

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\ S1005102C.doc\M100510\2010 Council Agendas organization Emerald Empire Council on Aging (EECA) to lease Kaufman Senior Center for $1.00/year, with the intention of allowing EECA the opportunity to become fully self-sufficient in providing community-based senior services. 2005-2010: Council Resolution 4846 authorized a five-year lease for EECA to provide support services, recreation, and community center activities for seniors. The lease rate was below fair market value and capped at $10,000 per year by the resolution. The City of Eugene provided preventative and major maintenance for the building. Finances: The City of Eugene has spent an average of $30,000 per year over the last five years for preventative maintenance and capital improvements. No capital preservation projects are scheduled for the building over the next two years, so an annual lease rate of $24,000 per year can be considered to be fair market value and should be adequate to cover operating and maintenance costs the City would be responsible for as landlord. Timing: A new lease needs to be signed prior to the current lease expiration date of June 30, 2010. RELATED CITY POLICIES Eugene Code 2.872: The City Manager has the authority to present a proposal for the disposition of real property that is not within a development plan, that has not been declared surplus property and for which no other procedure is specified in the Code or a council-approved intergovernmental agreement to the City Council for its action. Eugene Code 2.860: A lease is defined as a form of disposal of surplus real property. Council Goal - Fair, Stable & Adequate Financial Resources: If left empty, the property would be an economic liability to the City of Eugene. Leasing the building for fair market value will allow the City to cover its expected costs while other options for the building are pursued. COUNCIL OPTIONS 1.Lease the building to CHS for up to two (2) years, to allow time for the City to explore the best options to surplus the property while maintaining income to the City. 2.Mothball the property at the end of the current lease and explore surplus options for the property. CITY MANAGER’S RECOMMENDATION The City Manager recommends Option 1 – to execute a short-term lease of the Kaufman Senior Center to CHS for up to two (2) years, to allow time for the City to explore the best options to surplus the property while maintaining income to the City. SUGGESTED MOTION Move to direct the City Manager to negotiate a lease for up to two years with Cascade Health Solutions, based on fair market value, for use of the Kaufman Senior Center. Z:\CMO Z:\CMO\2010 Council Agendas\M100510\S1005102C.doc