HomeMy WebLinkAboutCAO-12-040 - Leasing of City Hall Retail SpaceREPORT TO:
Council
DATE OF MEETING:
October 1, 2012
SUBMITTED BY:
Rod Regier, Executive Director of Economic Development
PREPARED BY:
Cory Bluhm,
Manager of Downtown Community Development
WARD(S) INVOLVED: 10
DATE OF REPORT: September 25, 2012
REPORT NO.: CAO – 12 – 040
SUBJECT:
Leasing of City Hall Retail Space
RECOMMENDATION:
That staff be directed to undertake negotiations with prospective tenants in lieu of conducting an
additional Request For Proposals process.
BACKGROUND:
Staff carried out a request for proposals (RFP) process for the vacant retail space at City Hall in
the summer of 2010. The RFP process included an initial one month submission window,
followed by a one month extension. Only three prospective businesses picked up the RFP and
no submissions were received.
Since the summer of 2010, staff have shown the unit to multiple businesses with limited success
in finding an interested tenant which i) would be a good fit for the space; and ii) would be
capable of paying market rent.
The space is currently leased to the Region of Waterloo. The Region intends to vacate the
space by December 31st, 2012.
REPORT:
Staff exhausted the RFP process for the City Hall retail space in 2010, which allowed any
prospective business the opportunity to submit a proposal. ‘For Lease’ signs were immediately
placed in the windows for any inquiring business to contact staff. As such, staff believe the City
has marketed the space in a fair and open manner, providing ample opportunity for all
prospective businesses.
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As a result of efforts by Economic Development staff and the Downtown Kitchener BIA, the City
has three interested businesses, of which two appear to be very serious. With multiple
interested parties, staff feel subsequent negotiations should occur in a fair process to all. The
following are two options to consider:
1) Re-initiate the RFP process. Doing so would open the negotiation process to any and all
prospective businesses, beyond the three that are currently interested. However, based on the
results of the previous RFP, combined with the limited level of interest in the space, staff do not
feel a full RFP process would attract any other serious proposals. The most significant risk with
a full RFP process, however, is time. An RFP process would likely take 4-6 weeks to complete.
All of the interested parties have been, or are currently looking at other options for their
business. A lengthy process could result in the City losing either or all prospects.
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2) Initiate a fair negotiation process with the interested parties only. Staff would develop a
scoped submission package, similar to an RFP. Each business would be required to provide
information, such as description of their business, proposed rent, floor plan, signage, etc. Staff
would develop an evaluation criteria to assess each proposal. Ultimately, Council would get to
decide which proposal they wish to accept. Such a process could be completed in 2-3 weeks.
Staff recommend option 2 as it is both fair to the existing proponents, yet minimizes the risk to
the City of all proponents finding alternate locations.
FINANCIAL IMPLICATIONS:
Proceeding with Option 2 not only reduces staff time and advertising costs, but most
importantly, is the option most likely to secure a long-term tenant. Council has the ultimate
authority to approve the final rental rates for all units.
CONCLUSION:
Staff have concluded that a fair and open RFP process was undertaken for the City Hall retail
space, and as it did not produce any bids, that it is now appropriate to undertake a scoped
submission process with interested parties only.
ACKNOWLEDGED BY:
Rod Regier, Executive Director of Economic Development
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