07-23Resolution No. 07 -23
RESOLUTION
AUTHORIZING EXECUTION OF A LEASE AGREEMENT
WITH 164 DIVISION STREET, L.L.C. FOR THE ELGIN ART SHOWCASE
(164 Division Street)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that
Ed Schock, Mayor, and Dolonna Mecum, City Clerk, be and are hereby respectively authorized and
directed to execute a written lease agreement with 164 Division Street, L.L.C. for the Elgin Art
Showcase for the premises commonly known as 164 Division Street, Elgin, Illinois, a copy of which
is attached hereto and made a part hereof by reference.
s/ Robert Gilliam
Robert Gilliam, Mayor Pro Tern
Presented: January 24, 2007
Adopted: January 24, 2007
Vote: Yeas: 6 Nays: 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
s/ Jennifer Quinton
Jennifer Quinton, Deputy City Clerk
COMMERCIAL PROPERTY LEASE AGREEMENT
THIS LEASE is made and entered into this _1_ day of J + , 2007by and between
164 Division St. LLC, of 164 Division Street, Suite 705, Elgin, Illinois 60120, (hereinafter referred
to as "Lessor "), and the City of Elgin, an Illinois municipal corporation (hereinafter referred to as the
"Lessee ")
1. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the space
presently known as 164 Division Street, Suite 801 -803, hereinafter referred to as the "Premises ", in
the building located at 164 Division Street, Elgin, Illinois 60120, hereinafter referred to as the
"Building ".
2.
The Premises is
leased
for a term of 36 months, to commence on January 1, 2007, and
to continue
until December 31,
2009.
3. The monthly rent for the first year of the lease term shall be $2,916.67, the monthly
rent for the second year of the lease term shall be $3,208.33, and the monthly rent for the third year
of the lease term shall be $3,529.17. The Lessee is hereby granted an option to extend this Lease for
an additional three year term. The rent under such an additional three year term will go up at a rate
of three percent (3 %) from the previous years rent amount. To exercise the option to so extend this
Lease the Lessee shall provide the Lessor written notice to exercise such option prior to October 1,
2009.
4. Lessee shall pay rent, and any additional rental as provided below to Lessor at
Lessor's above- stated address, or at such other place as Lessor may designate in writing, without
demand, and without counterclaim, deduction or setoff. Lessee shall pay the monthly rent in two
annual installments for each year of the lease term. Lessor shall provide Lessee an invoice each
January during the term of the Lease for the monthly rent of January through June and each July
during the term of the Lease for the monthly rent for July through December. Lessee shall pay such
invoices for such rent to the Lessor within thirty (30) days of the receipt of such an invoice.
5. Lessee shall use and occupy the Premises as an art studio and live theater and for no
other purpose. Lessor represents that the Premises may be lawfully used for such purpose. It is
understood and agreed that Lessee's use of the Premises as an art studio and live theatre may include,
but not be limited to, as accessory uses, the service of food and beverages including alcoholic
beverages as authorized by the Liquor Commission of the City of Elgin.
6. Lessee shall commit no act of waste and shall take good care of the Premises and the
fixture and appurtenances therein, and shall, in the use and occupancy of the Premises, conform to all
laws, orders and regulations of the federal, state, and municipal government of any of their
departments. All improvements made by Lessee to the Premises which are so attached to the
Premises that they cannot be removed without material injury to the Premises, shall become the
property of Lessor upon installation.
7. Not later than the last day of the term Lessee shall at Lessee's expense, remove all of
the Lessee's personal property and those improvements made by Lessee which have not become the
property of the Lessor, including trade fixtures, cabinet work, movable paneling, partitions and the
like; repair all injury done by or in connection with the installation or removal of the property and
improvements; surrender the Premises in as good condition as they were at the beginning of the term,
reasonable wear and damage by fire, the elements, casualty, or other cause not due to the misuse or
neglect by Lessee or Lessee's agents, servants, visitors, servants or licensees, excepted. All property
of the Lessee remaining on the Premises after the last day of the term of this Lease shall be
conclusively deemed abandoned and may be removed by Lessor, and Lessee shall reimburse Lessor
for the cost of such removal. Lessor may have any such property stored at Lessee's risk and expense.
8. Lessee may make interior revisions to the Premises to accommodate Lessee's intended
art studio and live theater, subject to all applicable code regulations and with the prior written
approval of the Lessor, which approval shall not be unreasonably withheld. Prior to commencing
any such work approved by Lessor, Lessee shall procure certificates of insurance from all contractors
and subcontractors showing general liability and worker's compensation coverage and naming Lessor
as an additional insured.
9. Lessee shall not do or suffer anything to be done on the Premises which will cause an
increase in the rate of fire insurance on the Building.
10. Lessee shall not permit the accumulation of waste or refuse matter on the Premises or
anywhere in or near the Building.
11.
Lessee
written consent of the
shall not, without first obtaining the written consent of the Lessor, abandon the
Premises, or
allow
the
Premises to become vacant or deserted.
12. Lessee shall not, without
obtaining the
written consent of the
Lessor, assign,
mortgage, pledge, or encumber this Lease,
in whole or in
part. Notwithstanding the
foregoing, or
anything to the contrary in this Lease, it
is agreed and
understood that Lessee
may enter into
agreements with third party organizations
or individuals
to use the Premises for
the intended art
studio and live theater purposes.
13. Lessee shall observe and comply with such reasonable rules and regulations as maybe
established from time to time by Lessor, provided that such rules and regulations do not
unreasonably interfere with Lessee's intended art studio and live theatre use of the Premises.
14. If the Building is damaged by fire or any other cause to such extent that the cost of
restoration, as reasonably estimated by Lessor, will equal or exceed 60% of the replacement value of
the Building, just prior to the occurrence of the damage, then Lessor may, no later than the seventh
day following the damage, give Lessee a notice of election to terminate the Lease. In the event of
such election this Lease shall be deemed to terminate as of the date of the damage or destruction, and
Lessee shall surrender the Premises within a reasonable time thereafter, and any pre -paid rent shall
be refunded proportionally.
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15. If the Premises or any part of the Premises, or any part of the Building materially
affecting Lessee's use of the Premises, be taken by eminent domain, this Lease shall terminate on the
date when title vests pursuant to such taking. The rent shall be apportioned as of the termination date
and any rent paid for any period beyond such date shall be repaid to Lessee.
16, This Lease shall be subject and subordinate to all underlying leases and to mortgages
which may now or hereafter affect such leases or the real property of which the Premises form a part,
and also all renewals, modifications, consolidations, and replacements of the underlying leases and
mortgages. Lessee agrees to execute such estoppel letters or other documents required to confirm the
same.
17. Lessor may enter the Premises at any reasonable time, upon adequate notice to Lessee
(except that no notice need be given in case of an emergency) for the purpose of inspection of the
malting of such repairs, replacements, or additions in, to, on and about the Premises or the Building,
as Lessor deems necessary or desirable.
18. Prior to the commencement of the Lease term on January 1, 2007, Lessor at its cost
shall have provided for the improvements to the Premises as set forth in Exhibit A attached hereto
and made a part hereof by this reference. In addition thereto Lessor shall at its cost maintain the
Premises and the Building in compliance with all codes, ordinances and other requirements of law.
In the event a repair has been made necessary by the misuse or neglect by the Lessee or the Lessee's
agents, servants, visitors or licensees, Lessor shall give the Lessee written notice thereof and the cost
of such a repair shall be born by the Lessee.
19. Lessor agrees to and shall furnish at its cost all utilities for the Premises and the
Building including electricity, water and any utilities required for the heat of the Premises and the
Building. Lessee shall not use any electrical equipment which in Lessor's reasonable opinion will
overload the wiring installations or interfere with the reasonable use of such installations by Lessor
or other tenants in the Building.
20. Nothing in this Lease is intended or shall be deemed or construed as creating the
relationship of principal and agent, partnership or joint venture between the parties hereto.
21. Lessor shall, at Lessor's own cost and expense, bear, pay and discharge prior to
delinquency, all real estate taxes, special assessments, leasehold taxes or any other taxes which are or
may be levied, charged, and /or assessed upon the Premises, the Building and /or the leasehold of the
Premises during the term of this Lease.
22. The Lessee shall at all times maintain public liability insurance with a minimum
$300,000 bodily injury liability. Lessee shall provide proof of this coverage to the Lessor.
23. This document represents the entire agreement of the parties and there are no
representations not stated herein, and this agreement may only be modified by a writing executed by
both parties hereto.
LESSEE:
CITY OF ELGIN,
an Illinois municipal corporation
Attest:
LESSOR:
164 DIVISION ST., LLC
E \Legal Dept\Agreeinent \Lease- 164Division -Ste 801- 803- filginArtsCenter.doc
PHI
EXHIBIT A
Listing of improvements to be made by the Lessor to the Premises at
164 Division Street, Suites 801 -803, Elgin, Illinois
• Exit areas up to City Code.
• Bathrooms updated to make handicap accessible.
• Heating and air conditioning systems with controls in performance space.
• Electrical upgrades in performance space. Electrical in all areas; dressing room areas, Green
Room, Technical /storage room, small "Cigar Bar" area in 3rd elevator.
• Window treatments for performance area (darkening and sound absorbing heavy duty
honeycomb blinds).
• Top of performance space windows painted or covered over to block light.
• Some kind of blinds for dressing room and Green Room Area.
• Track lighting system in hall and on pillars in bay areas of performance space.
• Counters,
mirrors and
lights
in two dressing room areas.
(Electrical outlets should be on the
same wall
for curling
irons,
blow dryers, etc.).
• Flooring.
• Carpet in Green Room and Hall area.
• Cement in Tech/Storage Room.
• Tile in dressing area and bar /refreshment space.
• Change doors to match for aesthetic proposes.
• Change lock/key system.
• Performance and Green Room on one key, Tech/Storage on another.
5
December 15, 2006
TO: Mayor and Members of the City Council
Item No.
^N0 CI nECMFAl L L R U "tIIR.
FROM: Olufemi Folarin, City Managetanager
Sean R. Stegall, Assistant City
Gil Feliciano, Community Relations /Outreach Coordinator
SUBJECT: Lease of Property at 164 Division Street — Elgin Art Showcase
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider a three -year lease agreement with 164 Division Street, LLC for the
purpose of establishing a new arts center at 164 Division Street referred to as the Elgin Art
Showcase.
RECOMMENDATION
It is recommended that the City Council approve a commercial property lease agreement for a
three -year term with 164 Division Street, LLC, for a new arts center at 164 Division St., 8 "' Floor
in an amount not to exceed $115,850.
BACKGROUND
The high demand for smaller, more affordable, venues for the performing arts and gallery
exhibitions has created a need for space wherein smaller venue performances and exhibitions
may have a convenient and appropriate platform to host their projects. In 2006, the City Council
approved an allocation of $35,000 as seed money for the purpose of establishing such a venue.
The eighth (Suites 801 -803) floor of the property located at 164 Division Street is ideal for the
purpose due to its location, character, size and its availability.
Based upon the previous direction provided by the City Council, preparations have begun for
2007. The gala event or open house is scheduled for January 25 and numerous weekends have
already been booked by such groups as Janus Theatre, Independent Players, Yamaya Group and
Art for All. It is expected that well over 20 weekends will be programmed in 2007. Currently,
over eighteen Elgin -based art groups have been consulting with Cultural Arts Commission
concerning the creation and programming of the Elgin Art Showcase.
CMO — Elgin Art Showcase Lease Agreement
December 15, 2006
Page 2
The cost for the annual lease will be as follows: $35,000 for the first year (2007); $38,500 for the
second year (2008); and $42,350 for the final year (2009) with total lease payments being
$115,850. In addition, an allocation is also necessary for the related equipment, supplies and
personnel costs associated with the venue's operations. The Cultural Arts Commission has
recommended establishing a user fee of $650 for Elgin based groups and $700 for non -Elgin
based groups for a three -day rental period. In addition, rehearsal space will be charged at a rate
of $15.00 per hour. These fees will need to be re- examined during the 2008 budget process.
However, it is important to note that if it is the intent of the City to establish an affordable arts
space for the community, user fees will not cover 100 % of the City's costs and as a result the
program will be subsidized.
The 2007 proposed budget is as follows:
Revenue
20 Performances $1300
Total $13,000
Expenditures
Rental of Space
$35,000
Personnel
15,000
Supplies, Misc.
55000
Equipment
$201000
Total $75,000
With the exception of the lease agreement, these costs are
historical expenditures and will also need to be reexamined
Annual equipment costs will be lower than the present level
(lighting, furniture, sound, stages, etc.) will have been pu
$20,000 worth of equipment and furniture has already been
provided for by the 2006 budget allocation of $35,000.
estimates without the benefit of
during the 2008 budget process.
as the majority of the equipment
-chased. To date approximately
acquired. These purchases were
The most significant remaining issue at this time is the requirement that the property be in full
compliance with all City codes, ordinances and requirements of law. Specifically, the property
must conform to the Fire and Life Safety Code which has been adopted by the City. As a result
property improvements must be made to the fire alarm system, methods of ingress and egress
and signage. Additionally, improvements must be made over an agreed upon period of time as
deemed necessary by the City and as stipulated by the code. It is important to note that these
improvements would be necessary regardless of the City's interest in the property. However, we
cannot begin occupancy until the basic requirements of the code have been met. These issues are
currently being addressed by staff and the property owner.
CMO — Elgin Art Showcase Lease Agreement
December 15, 2006
Page 3
COMMUNITY GROUPSANTERESTED PERSONS CONTACTED
None
NANCIAL IMPACT
There are sufficient funds budgeted in the amount of $75,000 in the proposed 2007 Budget,
account number 010 - 0902 - 709.80 -10 (General Fund, Cultural Arts Commission). The total
estimated expenditures for the initiative are $220,850 ($115,850 for the lease and $105,000 for
supporting costs) for the three -year period before considering offsetting revenue in the amount of
$39,000 ($13,000 x 3). No revenue has been included from rehearsal rental nor has there been
any user fee increase over the three year period. Future year budgets will need to include both
program revenues and expenditures.
LEGALIMPACT
"fTThe lease agreement is attached. Exhibit A, which outlines the improvements to be made, is still
being finalized due to the outstanding code issues. This will be complete before final
consideration by the City Council.
ALTERNATIVE
1. The Council may choose to approve the three -year lease of the eighth floor of 164
Division St. building for a total sum of $115,850.
2. The Council may choose to not approve the lease agreement.
Respectfully submitted for Council consideration.
GF
Attachments