HomeMy WebLinkAboutItem B: Network Charter School Lease/Purchase
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Work Session: Approval of Lease with Option to Purchase 858 Pearl Street for Network
Charter School
Meeting Date: September 30, 2009 Agenda Item Number: B
Department: Central Services Staff Contact: Kristie Hammitt
www.eugene-or.gov Contact Telephone Number: 682-5524
ISSUE STATEMENT
The council is being asked to approve the City granting to Network Charter School a two-year lease and
option to purchase 858 Pearl Street.
BACKGROUND
The City declared 858 Pearl Street (the “Property”) as surplus property. An appraisal concluded that the
fair market value of the property is approximately $1.53 million. The City listed the property at $1.6
million. Two offers were received but neither was close to the asking price.
Network Charter School (“School”) has proposed to lease the property for two years with an option to
purchase the property at the end of the two-year period. The terms of lease/option would be as follows:
?Two-year lease
?Rent of $4,000 per month, plus 50% of any sub-leases
?School could purchase property before the end of two years for the price of $1.5 million.
?Not later than 18 months, the School would have to notify the City of intent to purchase and
make a non-refundable payment to the City of 10% of purchase price ($150,000). The $150,000
would be applied to the purchase price. If the School does not notify the City of that intent (and
provide a down-payment), then lease terminates at the end of two years.
?School leases the building “as is.” The City would have no responsibility to make or pay for any
improvements during the lease term. If the School is unable to pay for needed improvements, it
has the option to terminate the lease and move out.
?If the School makes major improvements that provide a net increase in value of the Property and
the School does not purchase the property, then the City would reimburse the School for a
portion of those improvements, but only after the City realizes from the sale of the Property that
net increase in value.
Section 2.872 of the Eugene Code provides that a proposal for the sale or lease of property that is
acceptable to the City Manager shall be presented to the council for its action.
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COUNCIL OPTIONS
1.Authorize the City Manager to enter into an agreement with the Network Charter School for a lease
with option to purchase consistent with terms expressed above.
2.Modify the proposed terms of a lease/option and then authorize the City Manager to enter into an
agreement with the Network Charter School, assuming the School would accept the modified terms.
3.Disapprove lease/option.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends Option 1: Approve for Network Charter School a two-year lease with
an option to purchase 858 Pearl Street, consistent with the terms expressed above.
SUGGESTED MOTION
Move to authorize the City Manager to enter into an agreement with Network Charter School for a two-
year lease with an option to purchase 858 Pearl Street, consistent with the terms expressed in the agenda
item summary.
FOR MORE INFORMATION
Staff Contact: Kristie Hammitt
Telephone: 682-5524
Staff E-Mail: kristie.a.hammitt@ci.eugene.or.us
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