HomeMy WebLinkAboutCAO-12-048 - Lease for City Hall Retail UnitREPORT TO: Finance & Corporate Services Committee
DATE OF MEETING: November 26, 2012
SUBMITTED BY:
Rod Regier, Executive Director of Economic Development
PREPARED BY: Monika Grau, Downtown Business Development Officer,
Downtown Community Development
WARD(S) INVOLVED:
10
DATE OF REPORT:
November 6, 2012
REPORT NO.:
CAO-12-048
SUBJECT:
Lease for City Hall Retail Space
RECOMMENDATION:
That the Mayor and Clerk be authorized to enter into a lease agreement with the preferred
prospective tenant for the City Hall Retail Space, located at 220 King Street West (ground floor
retail unit in City Hall), subject to the satisfaction of the City Solicitor. And further, that if the staff
are unable to come to an agreement on a lease with the preferred prospective tenant, that the
Mayor and Clerk be authorized to enter into a lease agreement with the second prospective
tenant.
BACKGROUND:
The space is currently leased to the Region of Waterloo. The Region intends to vacate the
space by December 31st, 2012.
Previously, 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. As a result of efforts by Economic Development staff and the
Downtown Kitchener BIA, the City has two interested businesses. All prospective businesses
were given an opportunity to submit a scoped submission package, similar to an RFP.
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REPORT:
Leasing Opportunity #1
A self-serve Frozen Yogurt Shoppe (non-franchise business) which will provide unique, all
natural frozen yogurt products, including specialty, lactose free and sugar free yogurts. They will
be manufacturing their products on-site, sourcing local producers for the best ingredients such
as fresh milk, yogurt and in-season fresh fruit for toppings. The local owners are passionate
about making a desirable treat and providing a healthy alternative that will draw a variety of
groups into the Downtown core throughout the entire week. An outdoor patio would be optional.
Leasing Opportunity #2
An electronics retailer, who offers computer sales, training and repair services. This business
has been operating locally for approximately eight years. The proponents have suggested a
willingness to participate in Civic Square events and potentially offer training sessions with the
Small Business Centre.
Staff feel both prospective tenants would be a good fit for the space, however, based on the
submissions, Leasing Opportunity #2 presents the better fit of the two.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
‘Dynamic Downtown’ is one of the five areas of focus in the Kitchener Economic Development
Strategy (KEDS.11). Leasing the City-owned space to a desirable business has the potential to
add vibrancy to Civic Square. The proposed tenants hope to contribute to the community and
enhance the Downtown experience.
FINANCIAL IMPLICATIONS:
The term of the lease would be 3-5 years, with an option to renew for another 3-5 years, at
market rate, with annual rent increases. The City may see additional parking revenues from
customers if they choose to park in the City’s underground parking or City lots nearby. The
Tenant will be responsible for their own utility costs, as well as the extensive leasehold
improvements. As such, the proposed lease arrangements present little risk to the Corporation.
COMMUNITY ENGAGEMENT:
An abbreviated RFP process, as ratified by Council on October 1, 2012, has been conducted for
the City Hall Retail Space. This has allowed for a fair negotiation process with the interested
parties.
ACKNOWLEDGED BY:
Rod Regier, Executive Director of Economic Development
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