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Negotiations continue for Town Hall

June 19, 2013
By BOB PETCHER - , Fort Myers Beach Bulletin, Fort Myers Beach Observer

Town officials are still looking into existing building options concerning negotiations with the leasing agents of Town Hall.

With the current rental lease at the 2523 Estero Blvd. location expiring this year, Town Manager Terry Stewart informed Council members during a Monday morning workshop that the facility has been secured for an automatic two extra years by way of a right of extension. However, he is not happy with what Gramercy Property Trust has initially proposed for a longer-term lease or build-out allowance regarding the interest to rent out the entire building.

Two proposals involve a 63-month lease at $16 per square foot and 126 months at $15 per square foot.

"Neither one of those (proposals) in my view is acceptable," Stewart said.

Town officials have been exploring a longer lease to provide more security for Town office space, operations and its property. An inquiry has also been made about the front of the building that used to be occupied by Bank of America.

The Town is currently paying $16.82 base rent per square foot or $9,551.34 per month or $114,616.08 per year.

Town records show lease agents report the full building has roughly 12,588 rentable square feet of which Town Hall occupies 6,815 square feet. The full building rental for 10-1/2 years would equal $188,820 per year.

The extra 5,773 rentable square feet could consolidate other Town operations by housing both Beach Water and Beach Patrol (which are on separate leases at different locations) and solve problems of crowded office space and Council accommodations. The proposals also offers estimated rent escalations, abatement and base building work allowances.

"This allows us the opportunity to not have to pay rent at those locations by bringing in those elements within our operations here," said Stewart. "We can buy down some of the cost of the rental with bringing in those operations in-house."

Councilman Dan Andre would like to review those facility rental costs to see "if the numbers justify the space." Floor layout schematics were also requested before Council holds future discussion on this subject.

Beach Mayor Alan Mandel asked Stewart to consider extra 5-year lease options during further negotiations.

"A certain number of five-year options would make sense on top of any one of these two alternatives," he said.

Stewart asked Council's permission to continue negotiations to lower the cost on extended lease options. The full building -either rented or owned- could also aid in an internal need.

"We do have a need for some space in order to operate a little more effectively," he said.

The Town has been leasing at its present location for more than 15 years by paying an average of $100,000 per year. The current lease was acquired at a 10-percent reduction from previous cost.

In past negotiations, Town officials have been unsuccessful in efforts to purchase the existing Town Hall site or get a larger lease option, due to the present owners' fear that breaking up their trust of approximately 100 properties tied up in a real estate investment to sell one would be too costly for them.

"I would hope we get to the point that one day the owners of the property would be in a financial position to sell it to us," said Stewart. "The best possible option is for us to own this building."



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