Item 09 - Summit Lab Lease Amendment — original pdf

Backup

Item 9 Water & Wastewater Commission: May 21, 2025 Council: May 22, 2025 ..Title Posting Language Recommend approval to authorize negotiation and execution of a fifth amendment to the Industrial Lease Agreement with Pre Summit LLC, to extend for an additional 18 months, until November 30, 2026, the lease of approximately 8,850 square feet of office and laboratory space for the Laboratory Services Division of Austin Water, located at 14050 Summit Drive, Suite 121, Austin, Texas 78728, for a total amount not to exceed $359,802. Funding: $78,824 is available in the Operating Budget of Austin Water. Lead Department Financial Services Department Prior Council Action: August 20, 2015 – Council approved a 120-month lease renewal with BT1 Austin, LLC, for the Laboratory Services Division of Austin Water. January 31, 2008 – Council approved a 60-month lease renewal with Equastone Austin I, LP, for the Laboratory Services Division of Austin Water. August 1, 2002 – Council approved an 84-month lease with Lend Lease Real Estate Investments, Inc., for the Laboratory Services Division of Austin Water. Council Committee, Boards and Commission Action: May 21, 2025 - To be reviewed by the Water and Wastewater Commission. Additional Backup Information: The proposed lease amendment is for the approximately 8,850 square feet water quality testing laboratory space located at 14050 Summit Drive, Suite 121, Austin, Texas 78728 that Austin Water has occupied since May 2003. The current lease agreement for this space expires on May 31, 2025, and additional time is needed at this location to continue to conduct water quality testing while the facility at 712 Huntland Drive is made ready for Austin Water. Once this lease extension expires and the finish-out of the Huntland Drive facility is completed, the water quality testing laboratory will relocate. The proposed base rent for the laboratory is $18.50 per square foot per year ($13,644 per month), and operating expenses are currently estimated at $6,062 per month. The base rent will increase annually by 4%, and operating expenses are estimated to increase annually by 5%. An independent third-party appraisal was procured to establish the fair market rental rate. The appraisal supports the proposed lease terms. The following table summarizes the rent and operating expenses. Term Monthly Base Rent Estimated Monthly Operating Expense Months 1-12 Months 13-18 $13,644 $14,190 $6,062 $6,365 Total Monthly Rent $19,706 $20,555 Total Annual Rent $236,472 $123,330* $359,802 Total: *Calculation based on 6-months. The Strategic Facilities Governance Team has reviewed and approved the proposed lease agreement. Page 1 of 1 Item 9 Lease Renewal at Summit Park Lab - 14050 Summit Dr, Suite 121, Austin, TX 78728±0250500FeetThis product is for informational purposesand may not have been prepared for orbe suitable for legal, engineering, or surveyingpurposes. It does not represent anon-the-ground survey and represents only theapproximate relative location of property boundaries.This product has been produced by the FinancialServices Department for the sole purpose ofgeographic reference. No warranty is made by theCity of Austin regarding specific accuracy orcompleteness.Produced by Robert Starke - 3/31/2025Nearmap US Vertical Imagery by ESRI05,00010,00015,000Feet±City Council DistrictsLease Renewal at Summit Park Lab - 14050 Summit Dr. Ste. 121Austin 2-mile ETJLease Renewal at Summit Park Lab - 8,850 Sq. Ft.Austin 2-mile ETJCity of Austin Council Meeting Backup Date: May 22, 2025 File ID: 25-0844Page 1 of 1