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3. Imagine That! will pay all the utilities on the space 4. Imagine That! will pay 10% of their gross sales, or a minimum of $453.46 per month to be phased in over the first few months of their lease as follows: Month (s) The greater of 10% of gross sales, or a minimum of: 1 $150 2 $200 3 $250 4 $300 5 $400 6 -12 $453.46 This 10% of total sales will be considered rent and CAM. There will be no cap, thus while the property owner takes a risk on the low end, the business owner takes a risk on the high end. 5. Imagine That! agrees that based on a 6 day week, they will work to achieve the following sales goals: o $200 per day or $4,800 per month by the end of the 1St six months of the lease term (This will cover the fixed cost of the CAM of 453.46 as the payments would reach $480) o $300 per day of $7,200 per month by the end of the 2nd six months of the lease term. (This will cover the fixed cost of the CAM of 453.46 as the payments would reach $720) 6. Imagine That! has the option to terminate the lease at any point with a written letter and 30- day notice. 7. The landowner would have the option to terminate the lease with a written letter and 30 -day notice if: • Imagine That! falls short of their sales goals for an extended period of time, or • the broker is able to first fill at least one of the two larger available spaces (121 or 123 S. Michigan) and then is able to produce a tenant for 117 S. Michigan who has signed a 2 -year lease at a rate higher than the Imagine That! agreement and put a deposit down. 8. At the end of the 12 month term, Imagine That! will have the option to continue their lease term at terms no less than the terms for the lease for 131 S. Michigan Street' for a period of one year. Staff seeks approval from the Redevelopment Commission to work through the details of a 12- month lease based upon the above proposal. 1 The space at 131 S. Michigan is approximately 1,530 square feet, which at $9.41 including CAM brings their monthly rent to $1,200 per month or $14,400 annually (includes rent and CAM). If these same terms were applied to 117 S. Michigan this would bring in a minimum of $867.29 per month or $10,407.46 annually (includes rent and CAM). The purpose of this clause is not to set the lease rate, but to set a bottom floor, below which we would not negotiate going forward. What We Do Today Makes A Difference!