Commissioners Court Meeting

Issue viewing agenda items? Click here to switch to the old format.

Return to the Search Page Return to the Agenda

Meeting Date:	10/23/2017
USDA Building Lease
Submitted for:	Joe Lopez	Submitted By:	Joe Lopez
Department:	Purchasing

Subject:

Discussion and possible action to approve a Five (5) year office Space lease agreement between Webb County and United States Department of Agriculture (USDA) for office space located at 7209 E. Saunders, Suite 7 for approximately 2,050 square feet of office space for an annual rental amount of $33,271.50 for years two (2) through five (5). Year one (1) annual rental will be $43,456.29 which includes $10,184.79 of improvements being reimbursed to Webb County equally throughout the first 12 months of year one (1) and authorizing the County Judge to sign all relevant documents and any other matters incident thereto. [Account #1001-1250-362000]

Issue: office lease between Webb County and USDA has expired.

Solution: Approve 5 year lease agreement with USDA at recommended rental rates with improvements.

Result: Generate $176,542.29 in rental revenue over a five (5) year term.

Background:

USDA has expressed interest in continuing to lease out the office space located at 7209 E. Saunders consisting of approximately 2,050 sq.ft. The cost to remodel the office space is valued at $10,184.79 of which Webb County would only spend $4,891.59 in materials as an upfront cost to initiate the remodeling improvements. The difference is the value of County workers doing the in-house work. USDA has agreed to add the value of the remodeling project as part of the first years annual rental. Increasing the annual rent for year one (1) by $10,184.79.

The proposed lease term is for 5 years with one (1) option to extend for another 5 years. Subject to approval by both Webb County and USDA.

Total revenue that will be generated if approved over the 5 year lease period is $176,542.29. Staff recommends approval.

Previous Court Action:

None

Fiscal Impact

Budget Account Number:	1001-1250-362000
Funding Source:	lease revenue
Balance:	TBD
Financial Impact:
Rental Revenue account: 1001-1250-362000 Revenue over a 5 yr. period: $176,542.29 Detailed breakdown of rental revenue: USDA will pay County as follows: 1. Year 1 - $43,456.29 (33,271.50 + 10,184.79) reimbursement for improvements will be included on monthly rental. 1st year only. 2. Year 2 - $33,271.50 3. Year 3 - $33,271.50 4. Year 4 - $33,271.50 5. Year 5 - $33,271.50 1 option to extend for 5 years.