AGENDA MEMORANDUM

 

 

Meeting Date:           November 22, 2010

 

From:                          Doug Drymon, Deputy City Manager

 

Subject:                      Resolution authorizing the Second amendment to the lease with Import Sales of Lake County, LLC, d/b/a Bill Bryan Subaru (formerly Bill Bryan KIA)

 

 

Staff Recommendation:

Staff recommends execution of a second amendment to the City’s lease with Import Sales of Lake County, LLC, (d/b/a Bill Bryan Subaru).

 

Analysis:

Under the terms of the existing lease agreement beginning November 1, 2010, the monthly rent payment owed by Import Sales of Lake County, LLC, for the lots leased to the company on the Leesburg International Airport property (refer to the attached map) is scheduled to increase by 100% from the current amount to $12,050.46.  Bill and John Bryan have requested that the City lower this cost increase to a lesser amount to more realistically reflect the market conditions that their business faces during the current recession.  The Bryan’s have already decided to relocate their KIA franchise to the former site of Executive Suzuki, directly across Highway 441 from the airport on the north side of the highway.  Following this move, the Bryan’s would like to relocate their Subaru and one other automobile franchise from their Fruitland Park location to the site at the airport formerly occupied by the KIA dealership.  The Bryan’s have indicated that the lower sales volume of these import brands will make it difficult for their business to sustain the higher lease payments which are set to take effect November 1, 2010.

 

After significant negotiation, City staff and the Bryans have arrived at a lease payment schedule that both parties believe is fair and equitable in view of the economy’s current weakness and the City’s desire to retain and expand businesses inside the corporate limits of Leesburg.  This schedule is shown below and is also reflected in the attached lease amendment:

 

TIME PERIOD FOR RENTAL PAYMENTS:

MONTHLY RENT:

November 1, 2010 through October 31, 2012:

$8,500.00

November 1, 2012 through October 31, 2014

$9,500.00

November 1, 2014 through October 31, 2016

$10,500.00

November 1, 2016 through October 31, 2017

$11,028.92

 


Beginning November 1, 2017, and annually on each November 1 for the balance of the term, the amount of each monthly installment of rent shall be increased by the percentage increase during the prior lease year (November 1 to October 31) in the Consumer Price Index published by the U.S. Department of Labor (All Urban Consumers, U.S. City Average, 1982 – 1984 = 100). The CPI adjustment shall be applied to the full amount of the prior lease year’s monthly rental amount.

A table showing the difference in rent collections under the current lease arrangements and the rent collections that the City would collect under the revised lease payment schedule is attached for the Commission’s review. 

 

The Airport Advisory Board discussed the lease amendment at their November 10, 2010, meeting and voted 3-0 to recommend to the City Commission approval of the 2nd lease amendment.

 

Options:

1.  Authorize execution of the proposed second amendment for the lease with Import Sales of Lake County, LLC.

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact

The City will gain from the employment that will accompany the new automobile brands that Import Sales of Lake County, LLC, intends to sell from this location (estimated at 22 new jobs).

With the change in the existing monthly lease payments, the City’s annual rental revenue will decrease on average by approximately $37,000 per year totaling $258,692 through the remaining lease term.  Balanced against this reduction in revenue, the City will benefit from the increase in vital business occupancy along the Highway 441 corridor, an important gateway to the City.  Staff views this as a win-win for the private business sector and the City which reflects cooporative government in a time of economic need. 

 

 

Submission Date and Time:    11/23/2010 8:58 AM____

 

Department: ______________________

Prepared by:  ______________________                      

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                 

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. ______JB__________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _001-0000-362-0100___

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

RESOLUTION NO._______________

 

RESOLUTION OF THE CITY COMMISSION O THE CITY OF LEESBURG, FLORIDAAUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE SECOND AMENDMENT TO A LEASE AGREEMENT WITH IMPORT SALES OF LAKE COUNTY, LLC, D/B/A BILL BRYAN SUBARU, FOR PROPERTY LOCATED AT THE LEESBURG INTERNATIONAL AIRPORT.; AND PROVIDING AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute the  second amendment to a lease agreement with Import Sales of Lake County, LLC, whose mailing address is listed as 9039 HWY 441, Leesburg, Florida, 34788.

 

            THAT the second amendment to the lease agreement with Import Sales of Lake County, LLC, shall address certain changes in the monthly rent payments owed by the company for the use of property which is located at the Leesburg International Airport.

 

            THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the 22nd day of November, 2010.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk